Material Issue
Local Development

GRI 103-1, 103-2, 103-3 and 413-1

Community

In the field of social responsibility, our strategy focuses on local development, encouraging initiatives that contribute to the education and training of people near our facilities, collaborating to benefit economic diversification and quality of life of these populations.

Our engagement actions are structured and designed to build strong and lasting relationships. Therefore, we act ethically, committedly and always try to keep the channels open for frank and transparent dialogue with our communities.

We restructured our Social Responsibility actions on two main fronts, designed to make them more dynamic and enhance the flow of communication with the community and how we manage projects: Stakeholder Relations and Social Projects & Local Development. While the former is aimed at obtaining a social license to operate, while recognizing the realities and potentials of each community, the latter is driven by the management of the social investments and the striving for shared value.

Local Development Plan

We prepared a Local Development Plans (LDP) for each of our operations, based on a Social Agenda that directly involved community representatives. It is a participatory process aimed at forming priorities and developing scenarios presenting a desired future and the paths to take to turn them into reality. We understand that promoting local development means the company must adopt unconventional commitments going beyond its core business values. This includes encouraging other actors in the localities to work in partnership with us.

The Social Agenda dialogues have led to the establishment of priorities involving actions for the social inclusion of young people and women. The idea is to strengthen and diversify the local economy, modernize public management, strengthen civil society’s participation and help inhibit the spread of diseases through preventive health programs; in general, these agendas are based on environmental protection concepts and promote the rational use of natural resources.

The results the LDPs seek to achieve are inserted as targets in the Nexa Sustainability Master Plan, with execution cycles through to 2025 and 2030. The Sustainable Development Objectives also are aligned in terms of themes and purposes to join up different sectors, thus helping meet shared goals. Furthermore, the concept of development that helps spur economic growth without ignoring human, social and environmental progress is taken into consideration.

We started to develop our LDPs in 2015. We first prepared local profiles that helped us better understand the territorial, socio-economic and organizational context of the communities in which our production units are located. The objective was to put together a multi-faceted overview of each municipality. We have already mapped 100% of our units in Brazil and this process is now underway in Peru.

In a second stage, we transformed this knowledge into a dialogue process, consulting with the in-company and outside audiences. This led to the preparation of the Social Agendas over the course of 2017. In this phase, we organized 72 workshops with 940 people participating, both in-house and external audiences, where studies were presented and challenges identified in the local profile characterizations. In these meetings, employees, community representatives and other groups prioritized the themes considered most material and/or urgent for each locale.

The third step was to decide upon Nexa’s Social Agenda through meetings of a Work Group consisting of employees from each unit representing different sectors, who discussed the Agenda’s priority themes and challenges. They based the selections using criteria about social relevance, social impact, legacy, execution capacity and effort level. Next, general and specific objectives and work fronts were established.

The fourth phase, also carried out in 2017, involved the preparation of the Local Development Plan itself, with the validation of goals and work fronts along with the different indicators and targets to enable monitoring and evaluation of the proposals until 2025 and 2030.

It was a very robust and pioneering joint process, featuring dialogue and preparation of the LDPs together with communities. It has also brought about significant gains in dissemination and integration within the company between the various hierarchical levels and different activity areas and, in fact, including the social aspect in the business routines, processes and priorities.

The Agenda has had a positive impact that has led to more employeevolunteer actions, greater public participation in government hearings, better quality multi-annual municipal plans, the formation of partnerships between stakeholders and to a plurality of viewpoints toward prioritization of a collective awareness — from the young to the old, from the politicians to the residents, from the urban to the rural dwellers.

Social Agenda by the Numbers:

❯ 940 participations in 72 dialogue moments, with the five units participating in the process (Fortaleza de Minas, Juiz de Fora, Três Marias, Morro Agudo and Vazante), with external participation by 543 representatives from local businesses, governments, organized civil society, educational organizations, community leaders, media and the community at large; and the involvement of 397 internal participants from different company areas, from top management to the operating level.

❯ The results from participant evaluations evidenced the importance of the activities, the moments for listening, the level of representation shown and the knowledge exchange achieved.

Key Highlights and Challenges:

❯ The process also featured substantial involvement of unit managers

❯ Boosted the social awareness of the involved in-company audience

❯ Significant external participant representation

❯ Inclusion of community members, youths and more vulnerable populations in the dialogue (in addition to the formal stakeholders)

❯ Knowledge exchanges between participants and different sectors.

❯ Low level of maturity and knowledge of the various audiences in general regarding the topics discussed and the SDGs

❯ Short-term and more immediate vision

❯ To progress the dialogue beyond just the formal institutions and stakeholders

Social Investment

During the year, the social investments with own funds, tax incentives and money that was raised from outside sources, reached US$ 14.6 million, compared to US$ 11.3 million in 2016, representing 29% growth. Overall, we sponsored 172 projects in 20 locations in Brazil and Peru, benefiting more than 10 thousand people.

These projects are structured through three transversal pillars: Education & Knowledge, Economic Diversification and Social Participation; and they meet the requirements of the five key axes we consider strategic: Economic Dynamism; Human Capital; Institutional Capital; Social Capital; and Health. We also invest in other initiatives, especially related to basic infrastructure: this includes roads, sanitation and housing, among others. In Peru, these initiatives have a government counterpart through the Works for Tax program.

All projects are constantly monitored and we publish a monthly newsletter (“Flash”) containing information about each initiative’s performance. Each unit general manager analyzes this document and, quarterly, by Executive Board, which evaluates action progress and results achieved for the community and the company.

Origin of Social Investment
(US$ 14.6 millions)

Main Programs and Results

Economic Dynamism Axis

During the year, the initiatives conducted under the Economic Dynamism axis, which stimulates the sustainable growth of the economy in the communities, received contributions totaling US$ 2.05 million. Some of the main projects supported in this area are: Empresas Comunales (Communal Companies), ReDes and Líder (Leader).

The highlight is the Empresas Comunales program, run in Atacocha, El Porvenir, Pukaqaqa, Cerro Lindo and Magistral, in Peru. The objective is to strengthen the existing community companies in these localities to enable them as part of the productive chain for our operations, thus generating jobs and local income, also assuring resources for those who cannot work.

During the year, four companies acted as service providers for our units, with a new contractor entering in 2017 with 2,870 members. They are peasant communities from Cajamarquilla (in Atacocha), Yarusyacan (Atacocha and El Porvenir), San Juan de Milpo (El Porvenir) and Chavin (Cerro Lindo). At the end of 2017, companies from two communities (Concuchos and Pampas) were being formed to work on the Magistral project. In addition to the service provision contract, we also assist the community by hiring consulting firms, which conduct orientation work, formalization, the establishment of corporate governance for the companies and train the people who are part of the production chain.

Human Capital

In 2017, we invested US$ 1.27 million in projects developed through the Human Capital axis, which includes initiatives in education, workplace, sport, culture and the rights of vulnerable populations. The highlight of this pillar is the Parceria Votorantim pela Educação (Votorantim Partnership for Education) program (PVE), an initiative supported by all invested Votorantim S.A. companies. It aims to contribute to the improvement of public education through the community social mobilization and the introduction of qualified educational management practices.

Institutional Capital Axis

For the Institutional Capital axis, we developed initiatives to support public management in partnership with the BNDES, to which we allocated US$ 836 thousand for investments in 2017.

The program is designed to assist municipalities in the adoption of more efficient management processes and tools, such as achieving fiscal and financial breakeven points. Doing so allows the city governments to capture and earmark funds to improve their municipal management practices and local infrastructure. In some locations, we also participate in the review of the Master Plan in addition to contributing to the preparation of sanitation, mobility and housing plans.

Social Capital Axis

Our Social Capital investments totaled US$ 469 thousand in 2017. The highlight of the year was the launch of Somos Todos (All Together), Nexa’s new business volunteer program. We have been developing actions in this field since 2008 and, as of 2016, we felt the need to reshape our initiatives. The program underwent complete restructuring, ranging from benchmarking through to the involvement in a number of company’s areas. The concept was to consolidate a model that included our growth aspirations and the lever represented by the voluntary potential of our employees as agents of change.

In addition to being aligned with the material themes of our Sustainability strategy, because creating shared value with society is one of the enablers, the new program is also in step with the UN Sustainable Development Goals (SDGs).

To meet volunteer profiles and program objectives — to stimulate citizenship, improve our sense of belonging and generate a positive impact in the communities — we defined three action pillars: All Together Transformation, All Together Citizenship and All Together Innovation. Based on these, each unit prepares a portfolio of voluntary activities that complement the social projects and other opportunities that have been mapped in each region. The idea is to merge recurring, one-off, face-toface or online actions. The local steering committee members are responsible for organizing and coordinating these actions, comprising volunteer employees from various areas who serve as the program’s focal point.

Our goal is to achieve 20% engagement among our employees in Brazil and Peru, with 18 thousand dedicated hours per year, by 2025. In 2017, we achieved an historic mark: we jumped from 518 hours dedicated to 5,771 hours, totaling 2,010 registered volunteers (the numbers also include the actions taken in the Volunteer Challenge, in partnership with the Votorantim Institute). Engagement jumped from 5.8% in the previous year to 11%.

All Together Pillars

ALL TOGETHER TRANSFORMATION – Frequent, recurring actions

Objective: to foster social transformation, both for the beneficiary and for the volunteer;

Ex.: Lectures, workshops and training sessions; Social inclusion of vulnerable publics; Recurrent improvements in infrastructure, institutions or public coexistence spaces.

ALL TOGETHER CITIZENSHIP – One-off, mobilization actions

Objective: Involve a large number of employees on a single day to exercise rights of citizenship and solidarity;

Ex.: Group effort to improve infrastructure; Collection campaigns; Recreation in nursing homes, daycare centers. orphanages; Events open to the community through services, recreation, etc.

ALL TOGETHER INNOVATION – Participatory innovation actions

Objective: to together seek innovative solutions for local community issues;

Ex.: Challenge Marathon (Hackathon); Battle of Concepts; Strengthening of the Community Participation Group.

All
Together’s
Numbers

simultaneous launch
in all our units, in Brazil and Peru

10 Local
committees formed,

equipped and with portfolio mounted in all units

2,010
volunteers registered
between September and December

5,771
volunteer hours conducted

Approximately,
5 thousand
people benefited

Other Initiatives GRI 203-1

In 2017, the infrastructure and service initiatives we supported received resources totaling US$ 9.2 million. The actions are linked to the thematic axes already implemented in the municipality through projects to improve management and social mobilization quality. Our goal, in addition to greater interaction with the communities, is to contribute to local progress, thereby improving the population’s quality of life. Among the highlights is a road construction in Cerro Lindo.