Deutsche Bank

Corporate Responsibility
Report 2015

Case study: mineral acquisition Africa 

Background

We have applied our ES due diligence processes to the potential advisory and acquisition financing for mineral assets in Africa. Deals with links to the sector require environmental and social due diligence and the involvement of Group Sustainability.

ES risk evaluation

We established a sectoral guideline for mining that requires environmental and social due diligence with a focus on, for example:

  • the quality of the Environmental and Social Management System (for example responsibilities for environmental, health and safety management system, including its alignment with internationally recognized best practices and standards such as the IFC Performance Standards and availability of certification according to ISO 14000 and OHSAS 18001); and
  • social aspects, including labor and community rights.

Findings and actions

For acquisition advisory and financing, we also evaluate ES performance of the target assets.

Our due diligence revealed that the target asset showed:

  • an excellent track record in health and safety, with zero fatalities;
  • strong social development through preferential local hiring, professional development programs, wages above the local standard, and medical services, including maternity leave; and
  • a clear contribution to the development of the local economy.

However, the investigations also revealed potential issues around labor rights of subcontractors. At the time of our review, these issues were being addressed via an independent assessment.

Decision and follow-up

We took these findings back to the regional Reputational Risk Committee. While it acknowledged the positive findings of the due diligence, it remained concerned about the labor risks. Based on these concerns, the decision was made to not support this business opportunity.