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Global trade promotes social cohesion and is an engine for international prosperity. Our business model underpins our social licence to operate. We work to introduce best practice and extend transparency and openness across the supply chain. Our responsible sourcing programme is advancing human rights and improving environmental standards in developing economies. We bring high-quality jobs to remote communities and help resource-rich economies compete effectively in global markets.

 

 

 

 

Stakeholder engagement

We seek to build trust and facilitate constructive, open dialogue with the many stakeholders associated with our business. Engaging transparently about our approach and our performance helps us manage risk, drive improvements and identify opportunities. It also helps us understand and respond to the topics and issues that matter most.

Our approach

Our activities generate economic and social benefits, and stimulate development in local communities and national economies. We create employment, develop skills, build infrastructure and procure from local suppliers.

At the same time, we recognise the risk that our business activities can cause adverse impacts. We endeavour to mitigate risks by acting responsibly and by exercising diligence in appointing suppliers and contractors. And where we have contributed to or are linked with negative impacts, we monitor closely, manage or mitigate those risks and encourage our counterparties and business partners to do the same.

Internationally, we are committed to contributing pro-actively to dialogue on impacts related to the commodities trading sector, the geographies in which we trade, our business relationships, and the services and products we handle.

Engagement and transparency

In 2019, we reported that the frequency and substance of our stakeholder engagement had grown markedly over recent years. Such opportunities have allowed us to explore, test and enhance our understanding of, and approach to, a diverse and growing range of subject matters.

In 2020, the COVID-19 pandemic constrained face-to-face engagement with stakeholders. We worked hard to maintain open dialogue through a range of methods, including more frequent online interaction.

Stakeholders highlighted four subjects as being of particular importance in 2020: Trafigura’s climate change strategy (see page 48), pre-finance and prepayment agreements with governments and state-owned enterprises (see page 28), the responsible sourcing of metals and minerals (see page 21), and sustainability linked financing of metals and minerals (see page 26).

Multi-stakeholder forums

Multi-stakeholder forums (MSFs) have become an integral part of Trafigura’s approach to engagement over recent years. MSFs in previous years in Mexico City, Barrancabermeja, Geneva, Johannesburg, Nairobi and Singapore have helped us to develop our understanding of our impacts – either positive or negative, real or perceived.

These extended face-to-face meetings provide the opportunity to introduce key personnel from Trafigura to a diverse range of stakeholders, including representatives of government, multilateral financial institutions, nongovernmental organisations, commercial counterparts, banks and investors. The more we know about what our stakeholders regard as important, the more accurately we can identify and prioritise our approach towards mitigating salient issues

The threat and impact of COVID-19 meant we were unable to host any in-person MSFs during 2020. We hope to be able to reinstate these valuable stakeholder forums in 2021. We continued to engage with our stakeholders online during the year and held virtual meetings with industry groups, governments, NGOs, financial partners and community groups

Grievance management

We believe that every grievance must be acknowledged, logged and managed consistently, with due respect for the complainant.

We operate a variety of channels for these purposes. At an operational level, all major installations are required to manage a comprehensive grievance process against an established Group-wide standard. Internationally, we have deployed EthicsPoint, an anonymous 24/7 multilingual telephone hotline and web reporting service provided by NAVEX Global. EthicsPoint is promoted and explained via several channels, including on Trafigura’s website where it is readily accessible from the home page.

Issues and grievances can be raised anonymously, with full confidentiality preserved throughout the process. Procedures are in place to avoid any real or perceived conflicts of interest during investigations and in our response. This is supported by a formal appeal procedure.

Improvements to our grievance management process in 2020 included a change in service provider and a revised approach to case management. Grievances can now be channelled more quickly to specific departments, including Human Resources and Compliance. We are better placed to handle each grievance with greater speed and an improved level of sensitivity to the complainant.

For detailed information about our Global Grievance Hotline, please click here.

Case study: raising fuel standards in Africa
Case study: raising fuel standards in Africa

Case study: raising fuel standards in Africa

 

 

Responsible Sourcing

Trafigura is committed to responsible sourcing. We seek to identify and mitigate salient health, safety, social and environmental risks in our supply chain. We prioritise suppliers that can demonstrate a programme of continuous improvement that aims to meet or exceed our own high standards of corporate responsibility.

The commodity trading industry is subject to rapidly evolving legislation, regulation and industry and international best practice standards. These frameworks have a direct and indirect bearing on how Trafigura – and its customers – do business. They include the London Metal Exchange (LME) responsible sourcing requirements, the EU and US Conflict Minerals regulations, modern slavery laws and the various responsible sourcing standards, guidelines and requirements issued by relevant industry associations.

Founded on Trafigura’s ‘Corporate Responsibility Policy’, ‘HSEC Business Principles’ and ‘Metals and Minerals Responsible Sourcing and Supply Chain Expectations’, our responsible sourcing management system framework and approach is also aligned with the OECD’s ‘Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas’ (the OECD Guidance), amongst other international standards.

Read more about our Responsible Sourcing Programme here.

Case study: COVID-19 support for the Mutoshi community
Case study: COVID-19 support for the Mutoshi community

Case study: COVID-19 support for the Mutoshi community

Transparency

The Extractive Industries Transparency Initiative (EITI) is a global standard that promotes transparency and accountability in the oil, gas and mining sectors. In 2014, Trafigura became the first independent commodity trading company to publicly support the EITI and to develop a disclosure policy in collaboration with the organisation.

Improved transparency not only builds trust with producer governments and civil society – it also helps facilitate access to capital from financial institutions. For Trafigura, our commitment to transparency also yields an important competitive edge.

Over recent years, Trafigura has taken a number of important steps to advance commodity trading transparency. Beyond our participation in the International Board of the EITI, as well as the Working Group on Transparency in Commodity Trading, we frequently engage with our existing as well as prospective commercial counterparts on such matters.

Our trading disclosures

Our disclosures for 2020, relating to trades executed in the 2019 calendar year, include new levels of granularity. These enhancements respond to the new EITI reporting guidance and, in some cases include minor elaborations on that guidance. Notable advancements in Trafigura’s approach includes data related to, for example:

  • Disaggregated cargo volumes on a cargo-by-cargo basis;
  • Bill of lading dates;
  • Incoterms;
  • Disclosure of payments made to state-owned enterprises for metals and minerals, as well as bulk commodities (e.g. bauxite, iron ore and coal);
  • Aggregate purchases from state-owned enterprises owned by non-EITI countries, but operating within EITI implementing countries; and
  • Prepayment deals/resource-backed loan agreements.

Trafigura’s disclosures are outlined in summary form in the following table.

Christophe Salmon Trafigura

Prepayments Demystified: Christophe Salmon, Trafigura Group CFO, explains the company’s approach to pre-payment and pre-finance agreements

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Prepayments Demystified: Christophe Salmon, Trafigura Group CFO, explains the company’s approach to pre-payment and pre-finance agreements

14 October 2020
2020 Responsibility Report
2020 Responsibility Report

2020 Responsibility Report

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