Net Positive Impact on Biodiversity: A conservation Mechanism for the private sector

1. Net Positive Impact on Biodiversity:A conservation Mechanism for the private sector IUCN World Conservation Congress Jeju Korea 2012

2. Workshop Overview • Technical Presentations • Three short technical presentations will set the scene for discussion. The presentations will describe key developments and progress achieved since the Barcelona Congress. • Panel Discussion • How can NPI lead to transformational change within the private sector? . • The panel discussion will take a broader look at the relevance and future direction of corporate NPI commitments, as part of the private sector’s response to biodiversity conservation challenges.

3. Presenters & Panellists • Stuart Anstee - Chief Adviser Biodiversity, Rio Tinto Ltd (Rio Tinto Biodiversity Action Planning) • Dr Jonathan Ekstrom - Director, The Biodiversity Consultancy (Biodiversity metrics & NPI accounting) • Dr Thomas Brooks – Chief Scientist, NatureServe (NPI Verification) • Moderator • Dr Joshua Bishop, National Manager – Markets, Sustainability and Business Partnerships: WWF-Australia • Panellists • Stewart Maginnis - Global Director - Nature Based Solutions Group: IUCN • Pippa Howard– Director Business & Biodiversity: Fauna & Flora International • William Bulmer - Director, Environment, Social and Governance Dept.International Finance Corporation • Dr Bill Jackson – Chief Executive, Parks Victoria • Peter Cunningham – Global Head: Rio Tinto Health Safety, Environment & Communities

4. What’s in it for a mining company? • Maintain access to resources • Strengthen access to capital, considering, e.g., revised IFC PS6 • Strengthen social licence to operate • Facilitate adherence to national legislation where this already exists • First-mover advantage in advance of regulation • www.riotinto.com/NPI

5. A framework of policy underpinned by mitigation hierarchy

6. Biodiversity policy • www.Riotinto.com/NPI • Rio Tinto’s biodiversity goal is to achieve a net positive impact on biodiversity by closure of our operations. And in doing so, it is our goal to be NPI positive as early in the life of the operation as possible. • We aim to achieve this by: • Avoiding unacceptable impacts to biodiversity • Reducing the impacts that may occur • Restoring impacted ecosystems • Compensating for residual impacts with offsets • Seeking additional opportunities • to contribute to local conservation

7. A framework of policy and tools • www.riotinto.com/NPI • Policy, targets, tools and methodologies have been developed to help our operations identify, plan for and manage biodiversity. • The tools include: • A Group wide Biodiversity Values Assessment profile • A Biodiversity Action Planning (BAP) tool • Biodiversity baseline survey guidance • An NPI and offset design guidance (in development) • NPI verification protocol (developing in conjunction with the IUCN)

8. Prioritization and Planning • Understanding and planning for biodiversity conservation priorities • All of our sites who rank as ‘very high’ or ‘high’ are required to have in place a Biodiversity Action Plan (BAP). • The BAP requires an operation to work with biodiversity stakeholders to: • identify the important biological features in the area in which they operate; • understand the impacts and risks that their activities might have on those features; • develop and implement a plan to avoid, mitigate, restore and offset those impacts. • The BAP provides the framework that plans and guides an operation’s progress towards NPI. • Prioritising action at our sites • In 2007, we introduced an annual group-wide Global Biodiversity Values Assessment Protocol (GBVA) to help us identify which of our operations are located in the most sensitive areas. • The GBVA assesses the biodiversity values of our land holdings and surrounding areas based on land in proximity to biodiversity-rich habitats, species of conservation significance additional site-specific biodiversity values and/or threats and the external conservation context.

9. NPI metrics and NPI accounting Jon Ekstrom The Biodiversity Consultancy

10. Species Sites/habitats Biospher Genes The Context • Like conservation planning, Rio faces the same constraints.. • Biodiversity is enormous and interconnected • Not everything can be measured and managed Genes….Species…..Ecosystems….Interactions The Rio Approach • Use precedents in conservation biology - pressure-state-response • Strict standardised prioritisation - vulnerability and irreplaceability • Use flexible metrics to incorporate many types of data • One feature = one accounting line : data are not aggregated into ‘indices’

11. The role of Biodiversity Action Planning vs the role of NPI metrics • BAP is the overall assessment and adaptive management tool for risks and impacts NPI metrics inform adaptive management in the BAP • NPI metrics + accounting is attempt to measure corporate impacts on status of biodiversity (not threats and management) • BAP is the adaptive management tool to manage biodiversity risk • NPI metrics + accounting covers the highest priority features and impacts • NPI metrics are one part of feedback mechanism to improve performance via the BAP process

12. Results of field application: Rio QMM Madagascar • IUCN-Rio Tinto publication • Prioritisation of biodiversity values • Application of Avoidance, Minimisation, Restoration and Offseting. • Quantitative Loss-Gain calculations • Stakeholder engagement • No Net Loss Accounting and Forecasting • http://data.iucn.org/dbtw-wpd/edocs/2012-049.pdf

13. 1. Prioritise biodiversity to include (Irreplaceability, Vulnerability, Stakeholders NPI Accounting 6-step Method e.g. species x, y and z; ecosystems A and B 2. Select metrics e.g. Habitat Hectares 3. Decide time period over which loss to measure loss and gain e.g. 2004 to mine closure 4. Apply mitigation hierarchy and quantify residual losses e.g. “300 hectares of forest” + “40 pairs of bird” e.g. “600 hectares of forest” + “80 pairs of bird” 5. Quantify gains generated through offsets e.g. considering uncertainty, risk, time discounting, like for not like etc 6. Apply exchange rules for No Net Loss / Net Positive Impact

14. Prioritise biodiversity • BAP Biodiversity Values Matrix • Metrics well developed for species and habitats • Metrics in development for ecosystem functions / services.

15. Developed with BirdLife, FFI, CI, Kew, and consultants (TBC & HGA) 100ha of forest at ‘optimum quality’ (100%) = 100 QH 100ha of forest at medium quality (50%) = 50QH Habitat Metrics: Quality Hectares QH 1 QH of forest 0.5 QH of forest • QH is a type of “Extent x Condition metric” as used by • Aus Governments and BBOP

16. How estimate “% Quality” in QH • Science and stakeholder consultation is critical in this process • Compare against a Benchmark 100% quality “pristine” site • Rio has no one single method for QH: context specific • Regulators may provide the required method (e.g. “BioMetric” NSW, Australia) • Or develop custom built method based on local context(e.g. Rio Tinto QMM Madagascar)

17. Species Metrics: ‘Units of Global Distribution’ (UD) • Needed where Quality Hectares are poor surrogate for species • Units of Global Distribution (UD) of a species: • 1 UD = 1% of the global population or occupied distribution of a particular species • UD is particularly useful as it gives an idea of the scale of losses (and gains) relative to the total global population • UD approach is used in recognised standards and metrics: • Critical Habitat: IFC Performance Standard 6 • KBA (Key Biodiversity Area) Criteria • IUCN Red List Criteria

18. Calculating % Area of Occupancy for a west african bird 0.4 % of Global Area of Occupancy impacted (a surrogate for population size) of Prinia leontica White-eyed Prinia at Rio Tinto Simandou, Guinea

19. Using Species Metrics (UD) in the mitigation hierarchy + Residual impact Predicted Impact Avoidance Restoration Minimisation Biodiversity Offset UD as “Area of Occupancy” AOO -

20. NPI Accounting –1 • NPI accounting is carried out at the level of the operation • Includes impact sites and offset sites • All losses and gains accounted for (avoidance, minimisation, restoration and offsets) • Goal is Net Positive Impact by closure • Aim to achieve this as early as possible • Negative and Positive Impacts counted since November 2004 (IUCN WCC Bangkok Rio NPI announcement)

21. NPI Accounting - 2 • New application of existing science to quantify losses and gains over time • Provides the principal information for external review • Provides science-based assessment of net impacts (gains – losses) • Transparent and verifiable • A planning tool for NPI programme • A communication tool for senior management and external stakeholders • Financial ($) investment planning in mitigation and offsets • Catalyses action

22. NPI accounting – the techie bit • Uses “Disaggregated Accounting Sheets” • Aggregated metrics do not satisfy stakeholders or science: “black box” and “difficult to unpack” • Accounting sheets offer transparent, clear data for internal decision making and external stakeholder inspection • Each priority biodiversity feature has its own loss / gain accounting line Portion of QMM NPI Accounting Sheet: Units of Distribution

23. NPI forecasting 2004-2065: Rio Madagascar 2004 2065

24. NPI Accounting – Applying rules of fair exchange Uncertainty and Risk • Magnitude of gains is reduced if offsets techniques are uncertain (eg restoration ecology) Precautionary principle • Rio NPI is inherently precautionary and aims to “overshoot” No Net Loss Use of background rates of loss • Static baseline is used for losses • Conservative background rate of loss (e.g. 25% of historical rate) is used to estimate gains in averted loss offsets Like for not like / out of kind • Due to ethical reasons Rio does not apply accounting and weighting to out of kind exchanges in trading up situations. Transparent comparison is provided for stakeholder inspection

25. Rio NPI is aligned with global best practice Prioritisation, metrics, and accounting systems etc aligned with: • IFC Performance Standard 6 and Critical Habitat (IFC 2012) • Government offset policies (e.g. Australia Federal: EPBC Guidelines 2012) • BBOP (2009, 2012) • IUCN Key Biodiversity Areas • IUCN Red List • Systematic Conservation Planning principles (Margules and Pressey 2000)

26. Net Positive Impact Review Thomas Brooks Natureserve

27. Net Positive Impact Review:Background 2004: Rio Tinto voluntary commitment for its operations to have NPI on biodiversity by closure 2004–10: Rio Tinto begins to implement NPI commitment through staff, consultancies, and NGO partnerships 2010: IUCN/Rio Tinto agreement, to develop NPI Review Protocol and convene NPI Review Panels

28. What’s in it for conservation?What are the risks? • Draws on the strengths of IUCN’s triple helix: membership for NPI Review; commissions for scientific expertise; secretariat to coordinate • Direct conservation benefits of NPI at Rio Tinto operations • Demonstrating feasibility of process to other institutions • Building momentum towards regulation for NPI • Scientific concerns around restoration and offsets • Requires a permanent commitment from both institutions • Mechanism to select NPI Review Panel members must be beyond reproach

29. Establishing the NPIP&RPT • Thomas Brooks (Co-chair; NatureServe; USA) • Rachel Asante-Owusu (IUCN; Switzerland) • Leon Bennun (BirdLife; UK) • Gerard Bos (IUCN; Switzerland) • Conrad Savy (CI; USA) • Melissa Tolley (UNEP-WCMC; UK) • James Watson (WCS; USA) • Stuart Anstee (Co-chair; Rio Tinto; Australia) • Sam Luccetti (RTIO; West Australia) • Sally Madden (Ex RTIO; USA) • Leon Payne (Simendyu; Guinea) • Rainer Schneeweiss (Rössing Uranium; Namibia) • Manon Vincelette (QMM; Madagascar) • Simon Wake (Rio Tinto; UK)

30. Activities to date 2010 Dec: Establish NPIP&RPT 2011 Mar: First mtg (UK) 2011 Apr: Second mtg and pre-pilot (USA) 2011 Nov: Third mtg and pre-pilot (Madagascar) 2012 Mar: Fourth mtg (UK) 2012 Aug: First pilot (Australia)

31. The draft NPI Review Protocol Pre-visit Review • Adequacy of the NPI Forecast and associated documentation • Appropriateness of targets and actions, and documentation of progress towards these On-site Review • Adequacy of process necessary for achieving NPI • Sufficiency of monitoring • Overall progress towards NPI Annexes • ToRs (Review; Leader; Members) • Glossary; Acronyms • Guidance notes

32. NPI Review Report proposedformat Metadata (1 page) • Dates, team, sites visited • Documents reviewed Introduction (1 page) Overall impressions (1 page) Findings • Short paragraphs for each Observations • Short paragraphs for each Next steps (1 page) Annexes • NPI Review Team contact details • Documentation of meetings/interviews • Copies of documents reviewed

33. Current challenges Scope of incorporation of invertebrate biodiversity • Currently under discussion with SSC ICSC Scaleability Balancing local legitimacy with technical capacity in NPI Review teams • IUCN may need to establish training mechanism, and maintain roster of global capacity

34. Anticipated NPI Review Processfor 2012–16 2013: Two additional pilots 2013: Publish revised protocol 2014: Calibrate rate of NPI Review across Rio Tinto operations 2015: Establish global roster of NPI Review specialists? 2016: Establish NPI Review training courses?