In order to meet the Group’s objectives and improve competitiveness, it is important to have consistent work standards and mutually beneficial relationships with contractor companies and suppliers, and providing productivity advice for our main contractors.
The Group intends to develop stable relationships with competitive suppliers that share its values and best practices. To that end, we have established guidelines for contracting goods and services and provided technical consultancy for contract managers.
The large mining companies in Chile subcontract specialist ancillary services. Contractor companies provide ongoing support services for the operations, such as maintenance, transport and catering, and temporary services associated with projects, mainly the construction of new facilities or expansions. The number of people providing services as project contractors can vary significantly from one year to the next, according to the scale of the required works.
VALUES AND STANDARDS
The main supplies and services used by Antofagasta Minerals are energy, fuel, spare parts, reagents, maintenance, catering, construction and installation. During 2016, contractors represented 72% of the workforce so, their good management and high performance standards are key to the Group’s success and reputation. Antofagasta Minerals requires contractor companies to comply with the country’s laws and regulations, as well as the Group’s Charter of Values and Code of Ethics. In addition, as the client company, Antofagasta Minerals sets standards to ensure a safe working environment and quality of employment. For example, it sets a minimum ethical salary that is 70% higher than the legal minimum in Chile, and basic benefits that include life and health insurance. These requirements are part of the contracts with contractors and are audited regularly. At Antofagasta Minerals, contractors have access to the same camps and canteens as Group employees, and benefit from the same safety and health standards.
AUDITS OF CONTRACTORS
During 2016, 45 audits were carried out on contractor companies with a particular focus on those companies that has had had unsatisfactory results last year1. Work was also started on aligning Zaldívar’s contractor companies with the Group’s standards. The Group also progressed with the application of the UK’s Modern Slavery Act in the suppliers’ vetting processes and contract clauses. All new suppliers are pre-checked to assess possible risks so that the necessary precautions can be taken before entering into a relationship with any new company. The corporate management for Procurement, Safety and Health, Human Resources, Environment, and Public Affairs works closely with these companies in order to ensure the transfer of best practices, management models and priorities, and so far over 300 contract administrators have been trained in regulatory compliance.
1 The number of contractor audits in 2016 was significantly less than in 2015 as the emphasis was placed on them reviewing their own workers.