The nature of our business impacts the environment and communities surrounding our operations. We mitigate impacts to the extent practicable through advanced control and remediation measures. We develop infrastructure, support health, safety and education efforts, and provide local employment and business development opportunities. The products we produce are critical for sustainability and higher standards of living.

To supply essential metals to current and future generations, we are guided by our stated business objectives, principles and policies, and we work continuously to improve our sustainable development programs. Throughout this website, we discuss the daily progress our workforce is making on key issues, including those emerging, which affect our company and our stakeholders.

SUSTAINABILITY AND OUR BUSINESS

We have noted the continuous improvement and increasing maturity in our sustainability-focused, global risk management processes, particularly over the last eight years of third-party assurance. While we will continue to implement the ICMM Sustainable Development Framework, we are focusing our sustainability efforts on two key areas that provide a solid foundation for achieving our long-term business objectives.

First, we must maintain acceptance to operate through shared value at the local level in order to reinvest in our existing properties, plus new ventures, thereby increasing the production of metals needed for a healthy and prosperous world.

We also understand that our sustainability performance is critical to meeting society’s, including our customers’, responsible sourcing objectives so that we can place our products into the global marketplace today and into the future.

We will maintain our efforts to continuously improve all elements of our sustainability performance and are eager to engage with stakeholders on this continued journey.

Sustainable Development Leadership Team
The company’s Sustainable Development Leadership Team considers both imminent matters and emerging trends while providing strategic guidance for our programs. The team is sponsored by our Executive Vice President and Chief Administrative Officer, and is led by our Vice President of Environmental Services and Sustainable Development. Our Chief Operating Officer, business unit presidents, as well as Vice President-level or senior staff from the safety, supply chain, security, human resources, sales, legal/compliance, and land and water functions comprise the team.

During 2016, the team reviewed and addressed key issues and projects including:

  • Emerging global regulations and business-to-business initiatives related to product stewardship, including market access and sustainability performance in the value chain
  • Roll-out plan and training program for our updated Principles of Business Conduct: “Strength in Values”
  • Work plans for future Human Rights Impact Assessments, including at Cerro Verde in 2017
  • New ICMM position statements on Water Stewardship and the Prevention of Catastrophic Failure of Tailings Storage Facilities
  • Current and future contributions from operations to the UN Sustainable Development Goals
  • Key observations related to independent assurance of our sustainability programs, including implementation of the ICMM Sustainable Development Framework
  • Product control and custody procedures at TFM in the DRC
  • Results of engagements with the socially responsible investment community and other financial stakeholders
  • Company practice of reporting government payments, including country-level participation in the Extractive Industries Transparency Initiative (EITI)
  • Key themes and disclosures in our WTSD reporting

Audits and Assessments
To ensure implementation of our policy commitments and objectives, we utilize a combination of audit and assessment programs along with an annual program for site-level independent assurance of our sustainability framework that encompasses commitments of the ICMM Sustainable Development Framework. The health and safety management systems and environmental management systems of our operations obtain independent certification to Occupational Health and Safety Assessment Series (OHSAS) 18001 and International Organization for Standardization (ISO) 14001, respectively. These systems include corrective and preventive action tracking for internal and external audit findings. Our Tailings Stewardship Program includes inspections and reviews all active and inactive tailings storage facilities. Engineers of Record also inspect our operating TSFs on a quarterly basis. In addition to our own audit programs, customers and financial institutions periodically request to conduct sustainability-focused audits or assessments at certain facilities. Our operations are also routinely inspected by regulatory agencies of host governments.

Project Development Sustainability Review
Our Project Development Sustainability Review process allows us to integrate sustainability considerations into mine development or expansion projects. The review is designed to help multi-disciplinary project teams identify risks, unintended consequences, trade-offs and opportunities so they may be adequately addressed early and continuously through each stage of project development. Project Development Sustainability Reviews may occur at the scoping, prefeasibility, feasibility and/or engineering/construction stages of projects, and are also applicable to exploration projects.

This review complements our operational Sustainable Development Risk Register procedure for existing operations. Since its inception in 2011, we have implemented reviews for 23 projects, including one during 2016. Key areas of focus identified at scoping stages include access to water, energy and materials, potential impacts to hydrology, air quality, human rights, community receptivity to the project, economic impacts, and land acquisition and resettlement if necessary.

To Our Stakeholders

During the last decade, we have transformed Freeport-McMoRan from a single-mine company into the world’s largest publicly traded copper producer. We have accomplished much along the journey, but we couldn’t be more proud of our global team that came together to “Prove our Mettle” in 2016.

We successfully executed our plan to strengthen our balance sheet and refocused our business on our leading position in the global copper industry. Through a series of transactions, we generated cash proceeds to reduce our net debt by over $8 billion. We also completed a major expansion at our Cerro Verde mine in Peru to establish an industry-leading, large-scale operation as a strong cash flow generator for decades to come.

In 2017, our theme “Driven by Value” highlights our firm resolve to generate stakeholder value from our high quality, long-lived copper resources. The modern world requires copper for a healthy and prosperous future, and with Tier-I global assets, we are well-positioned to meet an increasing demand.

the modern world requires copper for a healthy futureOur ability to deliver value into the future is underpinned by creating and maintaining the acceptance to operate locally. This allows us to further develop our world-class assets through brownfield projects as well as to seek new ventures. We also fully understand that our performance on the ground, from sound environmental stewardship to shared value through strategic community investment, is critical to addressing societal ambition for responsibly sourced materials. We must get this right to continue to serve the global marketplace with products that significantly contribute to sustainable development.

At the core of our business is an extraordinary workforce whose safety remains our top priority. Regrettably, we lost six employees and contractors to fatal injuries during 2016, including four at our Grasberg operations in Indonesia, one at Safford in Arizona and one at our El Abra operation in Chile. In early 2017, two workers at Cerro Verde and one worker at Atlantic Copper suffered fatal accidents. Our management team places the utmost importance on fatality prevention. We are emphasizing training, technologies and enhanced supervisory oversight to avoid accidents and to mitigate operating risks inherent in our business.

The enhancement of systems that form the core of our sustainability programs, along with close stakeholder collaboration, will always be in focus. Our implementation of the UN Guiding Principles on Business and Human Rights, particularly impact assessments, helps us evaluate the effectiveness of these underlying systems in terms of preventing infringements on rights holders, including women and minority groups. If stakeholders’ rights are at risk, we want and need to know so that we can provide timely and effective remedy within our span of control. In the coming months we will review our long-standing grievance management processes and procedures with local stakeholders and international experts to ensure they remain readily accessible and fit for purpose.

Sound water management systems are fundamental to our operating plans. Water balance management within our tailings facilities, in particular, is not only key for structural stability, but allows us to maintain high rates of reclaimed water usage. We are fully resourcing the implementation of two new ICMM position statements on water stewardship and the prevention of catastrophic failures of tailings storage facilities. This work is crucial for continued local acceptance of our projects and for broader societal acceptance of our industry’s contribution to sustainability.

Since 2007, we have invested over $1.8 billion on programs for social advancement. While we continue to make significant annual community investments, including $142 million in 2016, we aim to support projects and programs that are the most impactful for individual and community capacity development. We want local communities to thrive once our operations cease. Our social investment criteria, direct input from our stakeholders and consideration of UN Sustainable Development Goal advancement help guide these investment decisions.

Our team’s dedication and positive spirit were instrumental in successfully repositioning our company in 2016. Our primary focus during 2017 will be to improve our safety performance, reach a resolution to the complex issues in Indonesia, and exercise financial discipline to achieve our balance sheet objectives. These objectives are supported daily by our sustainability programs that help us maintain acceptance of our operations while ensuring market access for our products throughout the value chain.

We thank our Board of Directors for their support and wise counsel during this challenging period. We are collectively “Driven by Value” and focused on building value for our stakeholders.

Respectfully,
gerald ford signature
GERALD J. FORD

Non-Executive Chairman of the Board
richard adkerson signature
RICHARD C. ADKERSON

Vice Chairman of the Board, President and Chief Executive Officer
gerald ford photo richard adkerson photo
June 6, 2017

Business Ethics Principles of Business Conduct  |  Policies  |  Governance  |  Transparency of Government Payments

principles of business conduct reportBusiness Ethics
We are committed to the highest level of ethical and legal conduct. The Freeport-McMoRan Principles of Business Conduct (PBC) are a commitment to integrity and define the expected behavior of all employees and our board. We conduct comprehensive training on our PBC, including annual certification of management-level employees (approximately 97 percent were trained in 2016). This process consisted of computer-based training, as well as a signed certification that the employee understands the PBC and is not aware of cases of non-compliance. Beginning in 2017, the PBC training is provided annually to all employees.

Anti-Corruption
Corruption is sometimes widespread in local government systems and cultures near our operations. We do not tolerate the offering or payment of bribes, kickbacks or other similar payments to any person or organization or government official to secure advantages for our business. Likewise, we do not accept any of these payments. Our Anti-Corruption Policy and Guidelines require compliance with the U.S. Foreign Corrupt Practices Act of 1977 (FCPA) and other relevant anticorruption laws, including local laws.

The company is deploying a new anti-corruption online training module in 2017. The training is mandatory for annual completion by select groups of employees utilizing a risk-based approach. For example, senior-level employees who may interact with government officials are required to complete the training. The online training does not replace our existing classroom training programs; rather, it has been developed to supplement existing systems and extend the reach of the company’s overall compliance efforts.

During 2016, we held in-person classroom training at our Phoenix corporate offices, Cerro Verde, Atlantic Copper, PTFI and TFM. Training was also conducted for support functions, including the Accounting, Communications, Environmental Services, Global Supply Chain, Human Resources, Legal, and Sales and Marketing departments along with senior management responsible for approval procedures and internal controls. In addition, classes were held for contractors at PTFI.

In recognition of the potential legal liability that could result from actions of our business partners under the FCPA and other laws, the company has implemented its online due diligence platform, the Freeport Compliance eXchange (FCeX). FCeX is a survey-based software platform designed to assess risk in the areas of anti-corruption, international trade and human rights. FCeX has significantly enhanced the company’s ability to identify, assess and mitigate compliance risks.

Annually, Freeport-McMoRan performs company-wide audits with the assistance of our internal audit firm to assess risk and plan for the following year’s audit strategy. Formal fraud risk assessments have been implemented at Atlantic Copper, corporate offices and PTFI, and mapped with business controls, which are tested and reviewed annually. The fraud risk assessments consist of more than 100 risk scenarios spanning across more than 15 process areas, such as Asset Management, Purchasing, Payables and Financial Reporting. All of these risk assessments include corruption as a risk factor.

freeport mcmoran awardInformation and Reporting
Among other reporting mechanisms, Freeport-McMoRan maintains a Compliance Line to provide guidance and assistance to workforce members with any questions or concerns related to our PBC, policies or procedures. To encourage our workforce to raise any potential violations of business conduct, we also provide anonymous reporting through our compliance system. Spain, which prohibits anonymous reporting in accordance with Spain’s Data Protection Act (Organic Law 15/1999 on the Protection of Personal Data), is an exception. During 2016, 220 reports were made through the Freeport-McMoRan Compliance Line relating to various topics, including employee workplace conduct; environment, health and safety; protecting company assets; and conflicts of interest. All reports are investigated and, if substantiated, appropriate disciplinary action is taken, including possible termination of employment.

Stakeholder Engagement

Project life-cycles can span decades in the mining sector, and our company maintains large, long-lived assets with significant proven and probable metal reserves. That is why early, ongoing and transparent engagement with stakeholders is critical. Doing so in a genuine and consistent manner creates mutually beneficial opportunities while reducing sustainability-related risks to our business plans. We seek strategic partnerships with host governments, communities and development partners to ensure the viability of our projects while making a positive contribution to sustainable development, including post-closure.

As part of the Company's Community Visits Program, members of the Atacama indigenous community visited El Abra to learn about the site's operations, community programs and sustainability practices.

We formally engage with community stakeholders across our portfolio, development institutions and NGOs. Annually, hundreds of entities are engaged via community foundations, formal grievance systems, community liaison officer interactions, workshops, participatory group panels, town hall meetings and surveys. Engagement also occurs through regulatory consultation processes with local governments and community groups, including indigenous peoples. Mining operations maintain five-year community engagement and development plans that specify affected or interested parties for ongoing engagement and consultation. Issues raised help inform each operation’s sustainable development risk register and assist in developing social investment and capacity-building strategies.

Freeport-McMoRan’s corporate Sustainable Development Department and senior personnel regularly work with asset owners and managers, banking institutions, multi-stakeholder initiatives and NGOs to understand issues of concern or interest and where we may have influence to advance sustainability objectives. In 2016, our corporate team engaged with over 60 of these organizations on topics including fatality prevention, human rights, environmental management, revenue transparency, water resources and community development projects.

Example Stakeholder Group Interaction Regarding Sustainability Focus Areas

Biodiversity | Community Engagement and Development | Corruption | Energy Management | Human Rights | Labor Relations |
Product Stewardship | Safety and Health | Tailings Management | Water Supply and Management

Biodiversity

Academia

Habitats within and near our operations provide local educational opportunities aligned with our focus on science, technology, engineering and mathematics (STEM)

Workforce

Through annual biodiversity photo competition

Nongovernmental organizations (NGOs)

Partnering with organizations such as Wildlife Habitat Council to promote improved habitats and educational opportunities

Community Engagement and Development

Academia

Arizona State University Lodestar training program for community capacity-building

Foundations/Trust Funds

Funding, governance and sustainable investment decision support

Governments

Engagement with the company regarding long-term capacity building in education, healthcare and economic development

Local and Regional Communities (including Indigenous Peoples)

5-year community engagement and development plans with community engagement methods and development objectives aligned with identified risks and opportunities

Investment Community

Briefings on our social development programs

Workforce

Volunteerism and Matching Gifts program

NGOs

Engagement with local development organizations to support capacity building in communities

Corruption

Governments

Implementation of the Extractive Industries Transparency Initiative (EITI)

Workforce

Anti-corruption training and awareness programs

Suppliers

Communications on expectations of proper business conduct, including our Supplier Code of Conduct

Energy Management

NGOs

Active participation in the CDP since reporting year 2006

Suppliers

Coordination on technological advances for efficiency in metals processing equipment

Human Rights

Customers

Engagement regarding our company-wide human rights programs and performance

Governments

Engagement regarding requests for impartial and independent investigations to security incidents, and human rights training/socialization of company policies and programs with government bodies and government-provided security

Local Community

Human Rights training and communications regarding grievance mechanisms

Investment Community

Program updates via teleconferences, meetings and email information exchange

NGOs

Active promotion and involvement in the Voluntary Principles on Security and Human Rights

Workforce (including security contractors)

Human Rights training programs and communications regarding grievance mechanisms

Labor Relations

Governments

Engagement and coordination with governmental bodies regarding status of collective bargaining agreements

Investment Community

Updates via teleconferences, webcasts and in-person meetings

Workforce

Ongoing engagement regarding schedule, wages, benefits, worker conduct and safe workplaces

Product Stewardship

Governments

Engagement and monitoring  governmental bodies regarding current or emerging compliance requirements associated with market access for our products

Trade Associations

Participating in and monitoring product stewardship related agendas

Customers

Proactive communication in the value chain concerning common stewardship and sustainability performance attributes of our operations and products

Safety & Health

Governments

Interaction with regulators, including operational inspections

Investment Community

Performance updates via teleconferences, webcasts and in-person meetings

Workforce (including unions)

Workforce training and outreach regarding safety performance, particularly fatality prevention with employees and contractors

Tailings Management

Governments

Engagement regarding regulatory obligations and closure planning

Local Community

Engagement with community members regarding dust prevention programs associated with our tailings storage facilities or mitigation of remediation impacts at PTFI

Investment Community

Correspondence via teleconferences, meetings and information exchange, particularly regarding Controlled Riverine Tailings Management at PTFI

Water Supply and Management

Governments

Coordination on strategies for long-term water supplies; engagement regarding regulatory obligations and projects to protect or enhance water quality

Local Community

Engagement with community groups, including indigenous peoples, on long-term mutually  beneficial options for water supplies; coordination on projects to protect or enhance access to clean water for populations near our operations

NGOs

Active participation in the CDP Water Disclosure since reporting year 2010


The table below is a broader presentation of our engagement activities with stakeholder groups.

Stakeholder Groups

Typical Areas of Interest

Typical Methods of Engagement

Communities | Customers | Employees and Contractors | Governments | Indigenous Peoples |
Nongovernmental Organizations (NGOs) | Shareholders and Financial Community | Suppliers | Unions

Communities

Local communities have important needs and interests associated with our operations and expansion projects.

  • Employment opportunities
  • Economic development
  • Education
  • Health and safety
  • Environmental protection
  • Land and water stewardship
  • Public community engagement forums (e.g., Community Partnership Panels)
  • Community Liaison Officer programs
  • Formal governance structures of community trust funds
  • Local media placements
  • Specific meeting requests
  • Community grievance systems

Customers

The natural resources that we produce are essential to the world’s economies. Our products are sold to customers in the global marketplace.

  • Quality products
  • Delivery commitments
  • Regulatory compliance
  • Product stewardship
  • Sustainability programs
  • Site-level sustainability audits or data requests
  • Daily interactions with our sales department
  • Customer satisfaction surveys
  • Operations tours
  • Product information sheets
  • Supply chain sustainability surveys

Employees and Contractors

At December 31, 2016, we employed a diverse workforce of approximately 30,000 employees and 29,100 contractors across our operations.

  • Health and safety
  • Operational change
  • Workforce management
  • Alignment with community interests
  • Training and career development
  • Health and safety programs and initiatives
  • Timely site-level dissemination of company news and events
  • Two-way communications with supervisors and management
  • Direct home mailings
  • Freeport-McMoRan Compliance Line
  • Company intranet

Governments

We work with governments at national, regional and local levels.

  • Resource access
  • Environmental protection
  • Taxes and royalties
  • Economic development
  • Water projects
  • Workforce development
  • Security and human rights
  • Interaction with company management
  • Regulatory processes and requirements
  • Governmental representation at stakeholder engagement forums
  • Engagement via national and international trade associations

Indigenous Peoples

We engage with the indigenous Papuans in Papua, Indonesia; Native Americans in the United States; and the communities of Alto Loa (Chile’s First People).

  • Land and water stewardship
  • Education
  • Employment and career development
  • Cultural heritage
  • Local leadership by tradition or election
  • Training and capacity-building programs
  • Workshops and meetings
  • Community Liaison Officer programs
  • Community development programs and trust funds
  • Grievance management systems

Nongovernmental Organizations (NGOs)

We interact regularly with NGOs (international and local) focused on a broad range of sustainability topics. These groups frequently include development agencies, educational institutions, civic organizations, environmental protection groups and groups interested in issues related to human rights.

  • Economic development
  • Education
  • Human rights
  • Health and safety
  • Biodiversity and environmental performance
  • Corporate governance
  • Ethics
  • Formal partnerships
  • Mine tours/site visits
  • Research and studies
  • Inquiries and requests for information
  • Project proposals
  • Conference participation

Shareholders and Financial Community

We regularly work with institutional investors, securities analysts, socially responsible investment (SRI) analysts and investors, banks, rating agencies and the financial media.

  • Financial performance
  • Corporate governance
  • Access to capital
  • Human rights
  • Health and safety
  • Environmental performance
  • Public news releases and presentations
  • Public filings with the Securities and Exchange Commission
  • Public presentations to the investment community
  • Communications between our Sustainable Development department and the SRI community
  • Annual meeting of stockholders/solicitation of proxies
  • Sustainability reporting
  • Topical survey participation

Suppliers

Our suppliers range from local businesses near our operations to large, international companies.

  • Adherence to our Supplier Code of Conduct
  • Safety and environmental stewardship
  • Long-term business relationships
  • Agreement terms
  • Contract administrators
  • Community development representative interaction with local businesses
  • Entrepreneurial programs

Unions

Employees at certain operating sites are represented by unions according to applicable agreements.

  • Wages and benefits
  • Work schedule
  • Health and safety
  • Job security
  • Communications with employees and labor representation on workforce related topics per governmental requirements and Collective Labor Agreements
PHOTO DESCRIPTIONS: As part of the Company’s Community Visits Program, members of the Atacama indigenous community visited El Abra to learn about the site’s operations, community programs and sustainability practices.

Sustainable Development Risk Register

The Freeport-McMoRan Sustainable Development framework is implemented based on operation-specific factors and influences, including regional context, type of operation and social setting. Essential to this framework is the Sustainable Development Risk Register process, which prioritizes risks that could have the potential for negative consequences to our business and our stakeholders as it relates to areas including health and safety, respect for human rights, the environment, and community stability and economic impacts. The Sustainable Development Department and senior corporate multi-disciplinary personnel coordinate with operations to ensure prioritization processes are consistent with corporate procedures and provide guidance to ensure alignment of priorities and mitigation plans.

Operating the controlled riverine tailings management system is a key focus at PTFI. The leveed deposition area contains the footprint of coarser tailings and other sediments being colonized by aquatic plant species.

Sustainability focus areas identified through this process at the global level are reviewed annually by our Sustainable Development Leadership Team and communicated to members of the board. The current focus areas are described in Sustainability Focus Areas, throughout our website and in the 2016 Working Toward Sustainable Development Report.

PHOTO DESCRIPTION: Operating the controlled riverine tailings management system is a key focus at PTFI. The leveed deposition area contains the footprint of coarser tailings and other sediments being colonized by aquatic plant species.

Sustainability Focus Areas

Tom Butler, ICMM CEO (fifth from left), joins Freeport-McMoRan's Red Conger along with other Freeport-McMoRan and Cerro Verde team members on a tour of company-funded water infrastructure projects in Arequipa, Peru.

Sustainability focus areas identified through the Sustainable Development Risk Register process are reviewed annually by our Sustainable Development Leadership Team and communicated to the Corporate Responsibility Committee of the board our Board of Directors. The focus areas have not changed significantly over recent years and are described here and throughout the sustainable development section of our website.

 

Sustainability Focus Areas

Biodiversity

We own, lease and operate large land holdings, some of which are in and adjacent to areas of high biodiversity value. Our operations are managed to identify potential impacts and, where practicable, implement actions that conserve and enhance biodiversity, including during reclamation activities.

Community Engagement and Development

Our social and economic development programs are designed to be responsive to issues raised by communities, including vulnerable groups and indigenous peoples, and help us maintain good relations and avoid disruptions of operations. Nevertheless, social and political instability in the areas of our operations may adversely impact our operations.

Corruption

As a U.S.-based mining company with substantial assets located outside of the U.S., our business may be adversely affected by issues related to corruption. Any violation of the U.S. Foreign Corrupt Practices Act and similar anti-corruption laws of jurisdictions in which we operate could result in significant criminal or civil fines and penalties, litigation, and loss of operating licenses or permits. We maintain a rigid anti-corruption training and reporting program.

Energy Management

Carbon-based energy is a significant input to our operations and increased regulation of greenhouse gas emissions may directly or indirectly increase our costs. In 2016, approximately 63 percent of our purchased power was from low carbon sources, including natural gas and renewable energy. We have modeled multiple carbon tax scenarios to understand the range of potential increases to our operating costs.

Human Rights

We are integrating the UN Guiding Principles on Business and Human Rights into our business systems to continue to improve management of potential human rights risks. Our operations may be adversely affected by impacts from security risks stemming from events or activities including political instability, labor strikes and civil strife. The Voluntary Principles on Security and Human Rights also serve as guidelines for our security and human rights programs.

Labor Relations

Forty-seven percent of our global labor force was covered by collective labor agreements as of December 31, 2016. We engage openly with our employees and union leadership to successfully negotiate and uphold labor agreements recognizing that prolonged strikes or other work stoppages at our operations can adversely affect our business, our workforce and regional stakeholders.

Product Stewardship

Our product stewardship team engages downstream customers and international governmental agencies on operation and product-specific sustainability issues. We believe that proactive engagement on product stewardship issues can help reduce risks associated with market access while enabling continued delivery of positive contributions to society.

Safety and Health

The safety of our global workforce is our highest priority. During 2016 we sadly incurred six fatalities and fell short of our Total Recordable Incident Rate (TRIR) target. Through implementation of our Fatality Prevention Program, we aim to completely eliminate fatalities by identifying and implementing critical controls and delivering technical training and communications throughout the workforce.

Tailings

Managing the volume of tailings, waste rock and leach material produced in our mining operations presents significant environmental, safety and engineering challenges and risks. We maintain large leach pads and tailings impoundments containing viscous material that must be engineered, constructed and monitored to assure structural stability and avoid leakages. Through our Tailings Stewardship Program we implement control systems, which include independent expert input and review to address these risks.

Water Supply
and Management

We recognize the importance of responsibly managing water resources at mining operations in both arid and wet regions. While all of our mining operations require secure and reliable quantities of water for mining and ore processing, most of our operations are located in arid regions of North America and South America. We maintain programs to promote efficient use of water and are advancing alternative water supply projects with external stakeholders.

PHOTO DESCRIPTIONS: Tom Butler, ICMM CEO (fifth from left), joins Freeport-McMoRan’s Red Conger along with other Freeport-McMoRan and Cerro Verde team members on a tour of company-funded water infrastructure projects in Arequipa, Peru.

Product Stewardship

Chino Grade AA copper cathode is loaded onto a truck headed for Freeport-McMoRan’s rod mill in El Paso, TexasEnvironmental and social performance of mining operations, as well as of the metals we produce, continues to be of interest to many stakeholders within the value chain, from customers to regulators. We view this trend as an opportunity to engage on the vital importance of our products for social progress as well as on our programs that guide responsible operating practices.

Maintaining market access for our products allows us to remain a viable business entity. Members of our Product Stewardship team engage both downstream customers and international governmental agencies on operational and product-specific sustainability issues. We believe that proactive engagement on product stewardship matters can help reduce sustainability-related risks and ultimately enable us to continue to deliver positive contributions to society.

El Abra copper cathodeOur Product Stewardship team is led by our Vice President of Environmental Services and Sustainable Development and is coordinated with our global product sales and legal teams with support from multiple technical experts.

During 2016, the team addressed issues including:

  • Business-to-business due diligence efforts related to sustainability policies, programs and performance of our operations
  • Input into development of draft Organisation for Economic Co-operation and Development (OECD) Minerals Risk Handbook
  • European Union and European Commission proposals regarding responsible sourcing objectives for minerals
  • Pending and final regulations related to chemicals management in the value chain
  • Analysis and input regarding globally emerging regulations, or policies from international governmental agencies for product labeling requirements
  • Tracking and interfacing on the product stewardship work of trade associations, including the International Copper Association, ICMM, Cobalt Development Institute and International Molybdenum Association
  • Emerging nongovernmental sustainability certification, benchmarking and reporting initiatives
PHOTO DESCRIPTIONS: (top) Chino Grade AA copper cathode is loaded onto a truck headed for Freeport-McMoRan’s rod mill in El Paso, Texas. (bottom) El Abra copper cathode.

Performance Targets

The Morenci Superintendent Team advances projects critical for achieving Safe Production goals

We set company-wide performance targets to support key objectives, including in areas prioritized in our Sustainable Development Risk Register.

Performance Targets

2016 Status 2016 Performance Description Target Date
Business Ethics
With our online training module, annually train 90% of targeted employees who interact with, or have the potential to interact with, government officials on anti-corruption laws, regulations and company policies and procedures target met We conduct comprehensive training on our Principles of Business Conduct for all employees. Management-level employees receive annual certification; approximately 97% were trained in 2016. Annually Recurring
Workforce
Increase the percentage of women in our workforce, including representation in managerial positions, to 15% target not met Women comprise 10% of our employee population and hold 10% of all managerial positions (289), which is relatively unchanged from recent years.  Ongoing
Safety & Health
Incur zero fatalitiesa target not met Sadly, we incurred six work-related fatalities at our mining operations in 2016. Annually Recurring
Meet company-wide total recordable incident rate (TRIR)a of 0.56 x target At 0.64 for 2016, we did not meet our target TRIRa. Annually Recurring
Human Rights
Incur zero grossb human rights violations at our operations caused by employees and contractors check target We did not incur any gross human rights violations at our operations caused by employees or contractors. Annually Recurring
Communities
Invest (in aggregate) 1% of the average of the previous three years annual mining operations revenue, as reported in Freeport-McMoRan’s audited consolidated financial statements, in community programs, including in-kind support and administration (2016 target of $165 million) x target We invested approximately $142 million in community programs across our operations (86% of our target). Annually Recurring
Environment
Incur zero significant environmental events (rating of three or higher on Sustainable Development Risk Register) check target We did not incur any significant environmental events. We did have 23 spills or releases that were reportable to national agencies based on applicable regulations. Annually Recurring
Incur zero penalties more than $100,000 check target Our operations did not incur any penalties exceeding $100,000. Annually Recurring
a. Workforce includes oil and gas assets.
b. There is no uniform definition of gross human rights violations under international law; however, the United Nations Office of the High Commissioner report: The Corporate Responsibility to Respect Human Rights – An Interpretive Guide, provides guidance on identifying such types of violations.
PHOTO DESCRIPTION: The Morenci Superintendent Team advances projects critical for achieving Safe Production goals.

External Initiatives

Added to our policies are external standards and initiatives in which we participate. Taken collectively, this set of internal and external commitments form the operational boundaries for working toward sustainable development. Examples of external standards and initiatives that influence our sustainable development programs are presented in the table below.

External Standards and Initiatives

  • Business for Social Responsibility
    We participate in the Business for Social Responsibility’s multi-industry human rights working group.
  • CDP
    We have participated in the CDP since reporting year 2006 and CDP Water Disclosure since 2010.
  • Extractive Industries Transparency Initiative (EITI)*
    We endorse the EITI and participate in country-level implementation where we have operations.
  • Fund for Peace Security, Rights and Development Roundtable
    We participate in the Fund for Peace Security, Rights and Development Roundtable as part of continual improvements to our human rights programs.
  • Global Reporting Initiative (GRI)
    We have reported according to the GRI guidelines since the 2005 reporting period.
  • ICMM (Sustainable Development Framework)*
    We have been an active member of ICMM since it was established in 2001.
  • International Organization for Standardization (ISO) 14001
    Our mining operations maintain Environmental Management Systems certified to ISO 14001 standards.
  • Occupational Health and Safety Assessment Series (OHSAS) 18001
    All mining and metals operations have achieved accredited OHSAS 18001 certifications of their health and safety management systems.
  • UN Guiding Principles on Business and Human Rights
    We are integrating the UN Guiding Principles on Business and Human Rights into our existing human rights program.
  • Voluntary Principles on Security and Human Rights*
    We have been an active member of the Voluntary Principles on Security and Human Rights since it was first established in 2000.
  • Wildlife Habitat Council*
    We have been a member of the Wildlife Habitat Council (WHC) since 2006 and have 15 conservation and education based programs across the mining portfolio that are certified through WHC’s Wildlife at Work and Corporate Lands for Learning programs.
* Indicates direct employee participation in committees or governance bodies and/or company funding in addition to membership   dues.

Industry Associations
We actively participate in associations at international, national, regional and local levels. Many of these organizations (examples listed below) have sustainability-related programs or initiatives. We maintain membership in these organizations and directly participate in committees or governance bodies and/or provide funding in addition to membership dues.

external standard and initiatives