ICMM letter 2

Citation

(2007), "ICMM letter 2", Corporate Governance, Vol. 7 No. 3. https://doi.org/10.1108/cg.2007.26807caa.002

ICMM letter 2

19 February 2007

Dear Editors

Re: A failed strategy of using voluntary codes of conduct in the global mining industry

This is in response to Professor Sethi’s letter on the above topic:

1. 1.

   Professor Sethi states that he did provide us with a draft of his paper for comment In fact it was through one of our members that we got a copy of a paper written in 2004 by Professor Sethi and published on the website of the International Center for Corporate Accountability. We then requested an opportunity to comment. While the paper that appeared in your publication has a very similar story line as the 2004 paper, over half the text is new; it has a different title and authorship. Thus a draft of the subject paper was not provided to ICMM.

2. 2.

   Professor Sethi alleges that ICMM cannot be taken seriously since “the industry has not been able to create an Executive Committee in a five year period?” This is a red herring. As explained in our original letter, ICMM formed an Executive Committee soon after its formation but later disbanded it to create a more efficient management structure.

3. 3.

   Professor Sethi also argues that our Council of CEOs is not independent of the companies monitored under our Sustainable Development Framework. This is correct but this is precisely what ensures top level management ownership and accountability for the monitoring information gathered in accordance with the Global Reporting Initiative framework, a best practice in the corporate world. Nor does Professor Sethi recognize that independent verification of this information is to be carried out by third parties.Professor Sethi states that “it has been six years since ICMM’s framework was established … yet to date all ICMM … can show by way of progression is that [it] is developing the necessary toolkits … to evaluate members’ performance.” In fact the Framework began in May 2003, less than four years ago. Whether the rate of progress is adequate is a matter of judgment. We would simply note that the participatory, transparent and professional approach that we followed was implemented as quickly as was practicable. In particular the development of a sector specific reporting supplement under the Global Reporting Initiative was conducted by an international multi-stakeholder group, and involved broad stakeholder consultations. This took about eighteen months which was approximately half the time taken for the preparation of the only other then existing GRI sector supplement [telecoms]. Equally, the Assurance Procedure had to be developed from first principles because no suitable alternative existed and we also undertook consultations with external bodies at the draft stage. Following the development of such procedures, implementation by member companies takes additional time. Training and the introduction of new systems are required, with the latter including data collection systems for the new indicators plus the necessary elapsed time for meaningful data to become available.

4. 4.

   In relation to ICMM decision making, Professor Sethi makes a statement regarding the alleged failure of a meeting in London in November 2006 to agree on language as to the “need for monitoring and reporting and the timetable to accomplish them.” This is incorrect. ICMM did not meet in November 2006. Presumably the reference is to ICMM’s bi-annual meetings which were held in early October 2006, but monitoring and reporting were not on the agenda. At an earlier (May 2006) meeting the Assurance Procedure was adopted by the Council along with provision for member training and a timetable for implementation and review of the pilot phase.

Finally, Professor Sethi concludes that ICMM’s Sustainable Development Framework will achieve little. He is entitled to his views. Other knowledgeable observers of the corporate world recognize the unique complexity of the sustainable development challenge including the need to work in partnership with all actors in the sector. Many view ICMM’s progress as considerable in comparison to other industrial sectors. Of course, much remains to be done and we welcome constructive assistance with this.

Professor Sethi has invited me to the upcoming 2nd International Conference “Globalization and the Good Corporation”. While I am unable to attend I would welcome an invitation to the 3rd International Conference. In the meantime, I invite Professor Sethi to meet with our Executive Working Group at one of our quarterly meetings.

Yours sincerely

Paul MitchellPresident paul.mitchell@icmm.com