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Alcoa’s Juruti Mining Project Seeking to Set Sustainability Benchmark

By Fabio Abdala and Libby Archell, Alcoa

Question Eight: How can national-level governments learn from the private sector and encourage investment and decision making to promote the public good in a changing climate?

This paper describes in detail Alcoa’s approach to sustainable development in relation to its bauxite mine at Juruti in the Brazilian Amazon. A proposed model for mining and local development in the ecologically sensitive region, the project is based on three sustainability fundamentals: respect for the environment, social responsibility, and economic success. Conservation International says of the project: “Alcoa is raising the bar quite high and is creating hopefully a new model of how mining projects can be established in Amazonia without creating new waves of deforestation in the region.”

“Setting up a large, new project in any town always affects the selected region economically, environmentally, and socially. In Juruti, we must be grounded from the start in our Values, and we must be well prepared for all situations that are bound to emerge in the course of construction and operation of the mine. We must make a positive impact without altering the region's unique culture and heritage, and we must earn our social license to operate by living Alcoa's sustainability framework every single day." - Franklin L. Feder, Alcoa vice president and president of Latin America and Caribbean

In the heart of the Amazon, Alcoa’s bauxite mining project in the pristine Juruti region of Brazil has been recognized as a sustainability benchmark by generating positive social and economic effects in the local community and enhancing environmental conditions.

The Juruti region is home to 47,000 people, with 65% of them living in about 150 rural communities. The economy traditionally has been based on fishing, cattle-raising, Brazil nut extraction, and subsistence agriculture. The average per capita income is US$23 per month, and the population has an illiteracy rate of 21%.

At an estimated 700 million metric tons, Juruti has one of the single largest high-quality bauxite deposits in the world. Those new reserves are needed to meet increased global demand for aluminum that will be supported by the expansion of Alcoa's Alumar refinery in São Luís, Brazil.

Alcoa’s Juruti project, inaugurated in September 2009, consists of a bauxite mine, a port along the Amazon River, and a 55-kilometer (34-mile) railway that transports bauxite from the mine to the port.

Alcoa’s approach to sustainable development at Juruti, known as the “Sustainable Juruti Program” is a proposed model for mining and local development in the Amazon, and is based on three sustainability fundamentals: respect for the environment, social responsibility, and economic success. The concurrent implementation of (i) a Council, (ii) Development Metrics, and (iii) a Development Fund is unique to Alcoa and to the Amazon region, although the concept is now being applied to some of the other mega-projects in this region, notably hydro projects along the Madeira River.

Developing the Model

The development of the Juruti bauxite mine was predicated on the understanding of the importance of the Amazon forest within the context of climate change. In this regard, the project’s permanent footprint was optimized and reduced significantly below the parameters set out in its Installation License. Moreover, Alcoa will revegetate the mined-out areas with native species to minimize the project footprint.

Due to controversy arising from past mining projects in the Amazon, Alcoa sought to deepen its understanding of potential impacts of the Juruti project and solicit stakeholder participation early on. To initially educate residents about the project and solicit their input, Alcoa conducted two opinion surveys, held three public meetings attended by almost 8,000 people and almost 70 additional meetings with community members, and implemented a far-reaching communications program. Alcoa also conducted extensive surveys, studies, and field research.

In 2007/08, in partnership with the Getúlio Vargas Foundation (FGV) and the Brazilian Biodiversity Fund (FUNBIO), a series of surveys and discussions were carried out by a multidisciplinary team, including field research and collecting information about the local and regional reality. The resulting report, “A Sustainable Juruti: Diagnosis and Recommendations,” became the frame for Alcoa’s local sustainable development model. It consists of three pillars:

• Creation of a multi-stakeholder council, Sustainable Juruti Council (CONJUS) that serves as a channel for dialogue between civil society, the company and the public authorities;
• A system of sustainability indicators and metrics, to generate knowledge and measure progress;
• A development fund (FUNJUS) to allocate resources to be invested in sustainable initiatives proposed by the community itself.

A public opinion survey carried out by IBOPE (the Brazilian Public Opinion and Statistics Institute) in Juruti, in early 2008, showed that almost the whole population (89%) of the municipality viewed Alcoa’s plan for the installation of a mine in the region in a positive way. An overall majority (54%) was expressly in favor of the initiative and a further 35% accepted it and had no reservations.

Sustainable Juruti Council (CONJUS)

"The question of high expectations is an enormous challenge. And they come not only from the stakeholders, but also from ourselves. We need to balance these expectations with what we can realistically hope to achieve. The ‘high point’ of Sustainable Juruti occurs when all three parties (society, government and private sector) come together. This situation needs to occur, as one group shouldn’t be too far ahead of another." - Juana Galvão, Alcoa Juruti Sustainability Superintendent

The Sustainable Juruti Council (CONJUS), established in February 2008, serves as the key channel for dialogue between civil society, the company and the public authorities and brings together three representatives from the private sector, three representatives of Government institutions, and nine representatives from civil society.

The Council’s mandate is to guide and monitor the overall sustainability agenda of Juruti, whether by the private or government sector, including Alcoa’s bauxite mining operation, the Environmental Control Programs and the “Positive Agenda” initiatives, and to provide a forum for discussion and collective action. The 15-member council contains eight working groups: environment, health, education, security, infrastructure, culture & tourism, economy & labor & rural development, and citizenship.

Each stakeholder group plays a unique and vital role in the Council, with government serving an important regulatory and mediation role:

"A good example of the role of the Government sector within the framework of CONJUS occurred in 2009. A movement emerged that was opposed to the building of the mine, and it had the potential of radicalization early in the year. When this happened, the government mediated negotiations between the community and the company to address the main complaint of the movement, which concerned the regularization of land ownership. If it hadn’t been for this action by the State, the land ownership negotiations would not have happened as they did. The presence of the public authorities, therefore, is essential for the governance and sustainability of the territory." - Viviane Penna, Sustainability Officer, Alcoa Juruti

“Positive Agenda” and the Sustainable Juruti Fund (FUNJUS)

The Positive Agenda is a fund voluntarily established by Alcoa in the development phase of the project, with the objective of financing initiatives that would be of direct benefit to the local community, as well as address the social and environmental infrastructure priorities identified by the people of Juruti themselves in the areas of health, education, culture, the environment, urban and rural infrastructure, security and justice and social assistance. The fund is administered in partnership with the Municipal Administration, with initiatives implemented through partnerships with the local authorities, non-government organizations and the community.

Examples of sustainable infrastructure initiatives include:

  • Construction of the Juruti Community Hospital and the construction, refurbishment, or expansion of various health facilities throughout the region. Prior to this, many people in Juruti had to travel by boat for up to 12 hours to get needed medical attention;
  • Construction of 16 classrooms in eight municipal schools and an elementary school in the Maracanã district;
  • Construction of a legal complex, including the municipality’s first courthouse, and offices for court employees, as part of an agreement with the State Superior Court and the Juruti Municipal Administration;
  • Creation of three deep water wells to provide fresh, clean water to city residents;
  • The New Business Training Program, in partnership with the Juruti Trade and Business Association and the Supplier Development Program of the State of Para Federation of Industries;
  • Establishment of a Juruti Cultural Center.

In addition to the Positive Agenda, Alcoa provided the initial seed capital for FUNJUS, which is administered by FUNBIO and has the objective of funding initiatives within the municipality of Juruti.

Sustainability Indicators

From the outset of the Juruti project, Alcoa made a commitment to, “mine bauxite and return the area to the same, if not better, condition than when we initially arrived.” Leveraging its world-class experience in land stewardship and rehabilitation in Western Australia - for which the company was named to the UNEP’s Global 500 Roll of Honor - Alcoa is applying model mine-site rehabilitation techniques in Juruti to ensure biodiversity preservation and environmental sustainability in this pristine environment.

In addition to this operational commitment to world-class environmental management and restoration, the Juruti project developed a series of Sustainability Indicators, through multiple stakeholder workshops organized by the Center for Sustainability Studies of the Getulio Vargas Foundation, in order to monitor local development within Juruti. These also provide important input to the work of both the Council and Fund. The indicators were selected with input from over 600 community members, through town hall meetings and online consultation.

The indicators also provide valuable input to the Environmental Control Plans (PCAs), totaling 35 programs, which were part of the bauxite mine’s Installation License. These covered activities such as the monitoring of climate, air, noise and water, biodiversity conservation, environmental education, medical, sanitary and educational support, public security, valuing local culture and support for the Juruti Master Plan.

Ensuring Sustainability into the Future

The end of construction of the bauxite mine in Juruti represented the start of a new cycle of local development and dialogue with the community. In 2009, the Sustainable Juruti Council reached maturity, contributing to development of the formulation of the sustainable development agenda for the municipality and the mine. Amongst the activities involving the Council, one could highlight:

• Capability building for all members of CONJUS organized by the NGO, ISER-Institute for Religious Studies);
• Participation in the development of a security plan for Juruti, one of the requirements defined by the public authorities as part of the Installation License;
• Support for the creation of a Community Development Council, which works to protect the rights of children and adolescents. (This took place in partnership with the Catholic Church’s Child Pastoral organization, the Municipal Guardianship Council, the Municipal Welfare Department and the Camargo Corrêa Institute);
• Creation of a Board for the FUNJUS-Sustainable Juruti Fund, which received an allocation of R$2 million from Alcoa, as well as assistance for the launch of FUNJUS, the financial arm of the Sustainable Juruti tripod. The Fund’s board comprises five members of the Sustainable Juruti Council (CONJUS), one representative of the donor and one representative of the institution that operates in project funding in the region, which evaluates and selects the projects to be supported by the Fund.

In 2010, a new public opinion poll conducted by IBOPE demonstrated that 91% of the population in the municipality viewed the installation of Alcoa’s new bauxite mine in a positive way.

Alcoa’s approach to the Juruti project motivated Conservation International to say, “Alcoa is raising the bar quite high and is creating hopefully a new model of how mining projects can be established in Amazonia without creating new waves of deforestation in the region.” In November, 2010, Alcoa was recognized by the prestigious Exame business magazine, as Brazil’s Most Sustainable Company, primarily for its initiatives related to the Juruti Bauxite Mine.

Principles of the Juruti Mine Project

• Live up to the values and principles of Alcoa's human rights policy.
• Have respect for culture and diversity.
• Listen actively and respond to all stakeholders.
• Improve and preserve the region's biodiversity.
• Improve social and economic conditions.
• Develop local skills in order to minimize dependence on the project.
• Employ local and regional resources.
• Avoid paternalism at all cost.
• Apply world-class technology and management systems.
• Earn our right to operate the business day by day by living up to the foundations of Alcoa's sustainability structure.