Bauxite resources are concentrated in a small number of countries, many which are developing and facing significant challenges. Over and beyond expectations of conducting business in a sustainable manner, communities also expect that companies will contribute towards the alleviation of broad development challenges. For decades, international mining companies have undertaken concerted efforts to address key issues facing the communities in which they operate. Such efforts, however, have often been ad hoc in nature and in many instances unsuccessful in bringing broad sustainable development.

Within their operating communities, some mining companies have placed themselves at the center of a web of bilateral relationships and have come to be seen as the “community patron”. As a result, these companies are often called upon to resolve issues that are simply not areas of core business competence. As this “patron” approach is often disconnected from the local planning process, it is likely to neither leverage existing work nor achieve sustainable long-term benefits for stakeholders. Moreover, all mining sites eventually cease operations, at which point the patron and the benefits it brings disappear. The bilateral relationships collapse, leaving communities with little to show for the years of extraction.

Innovation is key to Alcan’s long-term success and allows us to be a company of choice. We recognize that developing new approaches to sustainability will allow us to be more effective. As such, we have launched a pioneering pilot program in our Bauxite and Alumina group. It is based on a new multi-stakeholder partnership approach and is core to our long-term sustainable business strategy. Through the program, Alcan is seeking to secure and maintain our license to operate while ensuring that long-term benefits accrue to the local communities that surround our mining operations.

While our corporate philanthropy work continues to be important, this pilot is not about charity. We believe that this new program allows Alcan to address issues of mutual interest more effectively with our key stakeholders. By moving from a web of bilateral relationships to a collaborative multi-stakeholder approach, Alcan is now more aware of other related initiatives and is able to identify valuable synergies. This, in turn, allows us to draw upon an increased pool of financial and human resources. Collaboration also reduces the potential for duplicative and inefficient efforts. By ensuring that indicators of success are jointly agreed upon, monitored and evaluated, we establish an environment of greater trust and cooperation. As a company, this approach represents an evolution in the role we play in promoting sustainability. Alcan is no longer at the centre of all relationships but is one of many players that come together to address common concerns.

For such an approach to be successful, a deep understanding of the development priorities of our host communities is essential. At a broad level, these priorities are represented by the Millennium Development Goals (MDGs), a set of eight issues that the world leaders have prioritized and committed to address by 2015. At a more local level, community development plans highlight specific priorities that are most relevant in a given area. Ensuring that our sustainability actions are in line with the MDGs, local development plans and our own strategic priorities is at the heart of this pilot program. The program has already been put into practice at three Bauxite and Alumina sites: Awaso, Ghana; Gardanne, France; and Gove, Australia.

An illustrative example of the effective progress made to date under the program is in Ghana, where Alcan holds an 80% stake in Ghana Bauxite Company (GBC), and the Government of Ghana (GoG) the remaining 20%. In June 2006, as part of an announcement regarding potential development of a new bauxite mine and alumina refinery with the GoG, Alcan also announced a three-year commitment to support the government’s efforts to achieve the MDGs. This undertaking is also aligned with the Company’s commitment as a signatory to the United Nations Global Compact (UNGC).

At approximately the same time, GBC’s senior management held a workshop to better understand where the company’s strategic challenges overlap with community development priorities. With the workshop results laying the foundation for future engagement, Alcan then set out to build collaborative partnerships with local players. This led to the December 2006 signing of a tri-partite memorandum of understanding between Alcan, the Bibiani-Anhwiaso-Bekwai District Assembly (BABDA), and SNV Netherlands Development Organisation. In this partnership, the BABDA is the beneficiary and owner of the process, SNV acts as the technical capacity building advisory agency, and Alcan is the funding body.

With the completion of this training, the partnership will next focus on the implementation of the priority projects identified in the development plan – expected to begin in the fourth quarter of 2007. Alcan is but one of many contributors to the realization of the development plan and we recognize that we cannot take responsibility for implementation of all associated projects. Alcan is supporting, however, the implementation of specific parts that overlap with its own strategic priorities: healthcare, water and sanitation, and education. Furthermore, Alcan’s engagement effectively increases the overall level of funding available, thereby ensuring that all priorities are addressed to a greater degree.

This initiative is in addition to other ongoing work that Alcan has undertakes in Ghana. For example, GBC operates one of two hospitals in the Bibiani-Anhwiaso-Bekwai District. This hospital treats nearly 20,000 patients annually from the local community at a cost of approximately $500,000. GBC also provides scholarships and transportation services to the community which involve an additional contribution of several hundred thousand dollars per year.

Alcan is determined to engage with partners to build consensus and undertake collaborative actions that address issues of common interest. Through partnerships, we increase our ability to leverage our financial contributions and the projects they support, and also benefit from best practices, international standards and an independent ‘check and balance’. Through such a process, we are not only fostering a sustainable future for our stakeholders – we are supporting Alcan’s pursuit of sustainable business opportunities and long-term benefits for the Company and its shareholders.