What is the purpose of the Bettercoal initiative?
Bettercoal is a global, not for profit initiative that has been established by a group of major coal buyers to promote the continuous improvement of corporate responsibility in the coal supply chain, with an initial focus on the mines themselves.
Who is involved?
Bettercoal is a global initiative. It was established by a group of major players in the European energy market, including DONG Energy, EDF, Enel, E.ON, GDF SUEZ, RWE and Vattenfall. Since then, Fortum, Gas Natural Fenosa, Drax Power (UK) and EDP (Portugal) and Iberdrola (Spain) have also joined.
We also have Associate members such as BoZ which represents 5 Dutch ports and bulk handling companies in The Netherlands EMO and OBA.
We invite national and regional utilities, steel and cement manufacturers and any other relevant organisations involved in the coal supply-chain, to contact us regarding membership.
Why is Bettercoal needed?
There are significant ethical, social and environmental risks and impacts associated with coal mining. Whilst there have long been standards related to the mining industry in general, there is currently no agreed ethical, social and environmental standards for coal mining per se. It is clear that performance varies significantly across the world and there are some intrinsic conditions coal users expect of suppliers in terms of on-the-ground performance.
We believe that Bettercoal can play an important role in setting global expectations for what responsible coal mining looks like, and that it will help to hold mining companies accountable to such standards. It is important to bear in mind the diversity of the coal mining industry as well as the variance in national and international legal frameworks regulating the industry.
We believe that there is a growing need for greater assurance that the coal supply chain takes due consideration of general good ethical, social and environmental practices in their activities. Global coal production is projected to continue to increase in the coming years, including in parts of the world where coal sourcing has not taken place to date.
We believe that by working together, and engaging with key stakeholders including mining companies and civil society representatives, Bettercoal can help achieve greater improvements than individual companies could alone.
What will Bettercoal actually do?
The initiative has been established to do a number of things:
Engage with stakeholders and mining companies to develop the Bettercoal Code and guidance for what responsible coal mining looks like. This activity was completed in mid-2013 – and the Code has been adopted.
Work to encourage mining companies and operators to implement the Bettercoal Code and Bettercoal tools in order to improve good practices to protect workers, local communities and the environment from the potential negative impact of coal mining. Follow-up of progress and reports of this will be part of the continuous improvement objective.
Ask coal mining companies to perform self-assessments and accept independent site-assessments by 3rd party assessors at the mine level. Assessors will have appropriate experience in the mining industry and are approved by Bettercoal. Members of Bettercoal will have access to assessment results through the Bettercoal database and a specific process for access to results has been established. We will report publicly on the overall performance of mines assessed on a country-by-country basis and the progress of the initiative as a whole.
Bettercoal members will incorporate the results of the assessments into their due diligence processes and as a result be able to make better informed coal purchasing decisions.
Which mines will you be focussing on?
Site assessments will be carried out on an ongoing basis over the lifetime of the initiative with specific mines identified through an objective risk assessment carried out by the Bettercoal Secretariat and agreed for assessment on an annual basis. In principle, Bettercoal will cover all mines supplying coal to members of the initiative. In practice, we expect that Bettercoal will focus its resources on exporting mines that are likely to face challenges living up to the Bettercoal Code and that are of most importance to members.
What about mines that only produce coal for domestic use?
(84% of global coal production is consumed locally)
The current members of Bettercoal are all major users of coal that is predominantly imported from international mines therefore we’re naturally focussing on those specific suppliers at the outset. However the Bettercoal Code, tools, and experiences that come out of the initiative are open source for the benefit of stakeholders across the world. Our focus will shift as we recruit Members from different regions with different supply characteristics.
What are the success criteria for Bettercoal?
The ultimate success criterion is that Bettercoal has a measurable impact on conditions on the ground; however this is clearly a longer-term objective. Our achievements to date include undertaking a global consultation, producing the Bettercoal Code and developing the assessment toolkit. Our assessment programme is underway. These and future experiences are open source for the benefit of stakeholders across the world.
The companies behind Bettercoal only account for a small share of the world’s
coal usage. Is this really enough to influence coal suppliers?
We believe that coal users and suppliers have a shared interest in working for continuous improvements, particularly with respect to mining operations. We also expect that other major coal users will join Bettercoal, which would help to further establish the initiative.
How will Bettercoal accredit Assessors (audit companies) and why do you think
they will be independent? After all you select them.
Assessing bodies are asked to supply full information on their experiences in mining, coal mining and to demonstrate they have the competence and capability to conduct assessments against the Bettercoal Code. They will also demonstrate in which regions / countries they have prior experience. They will also need to demonstrate their qualification to assess against, for example the IFC Performance Standards and ISO Standards
After receiving this information Bettercoal has a screening process with which assessing bodies (audit companies) are qualified (or not).
Which accredited Assessors have been selected?
How does the site-assessment process work in practice?
The end-to-end process takes several months. It involves:
Engaging the supplier / mine to ensure full understanding of the Bettercoal initiative.
Selecting the appropriate competent audit company that has relevant experience with the type of mine and context within which the mines operates.
A period of engagement between the auditor and the mine to determine the scope of the audit, required stakeholder interviews, exchange of key documentation, planning for the visit.
Review of the mine’s self-assessment to help prepare for the assessment.
Site visit, report writing, comment on the report by the mine and the finalisation of the report.
Bettercoal has developed detailed procedures for both mine and auditor to follow.
Will the assessment results be made public?
No. This is not common practice in such supply chain initiatives. The assessment reports will be available for Bettercoal and the Members to review. The Civil Society Panel will be able to review Highlights reports from each assessment so that they can help Bettercoal review the assessment process and advise where solutions may be required to bring improvements on the ground. Progress information will also be reported on our website and Annual Report.
When will you review the content of the Bettercoal Code & Assessment toolkit?
We have consulted our Stakeholder Panels on this and they recommend within 5 years of adoption. Bettercoal will be in a position to understand how other similar standards setting organisations have undertaken reviews, what changes have been made so as to simplify the process.
What are Bettercoal’s targets in 2015-16 and for the next 5 years?
Bettercoal’s main priority in 2015 is the assessment of mines through self- and site assessments.
We have a target of completing 20 self-assessments in 2015.
We have a target of completing 4 site assessments in 2015.
Our engagement with mines and the resulting self-assessments will help us prioritise mines for site assessment in 2015 and beyond.
We are also supporting Members to implement Bettercoal is their coal supply due diligence.
We continue with outreach to recruit new Members into Bettercoal.
Operationalise the Stakeholder Panels so that they will be able to give strategic guidance to Bettercoal and the Bettercoal Board as well as review Bettercoal assessment process.
First Bettercoal Public Report in 2015
What is the key challenge in implementing Bettercoal?
The Bettercoal process is still recent for both coal buyers and coal suppliers. For many of the coal buyers this is an added level of due diligence that is required as part of their coal purchasing decisions. For coal suppliers, who may consider that they operate to high ethical, social and environmental standards and are already audited for compliance, the assessment process may feel like an added burden. Bettercoal is working with both buyers and suppliers as the initiative can bring efficiencies for both parties through shared assessments.