At Peñoles, we promote and guarantee:

• Full respect for human and labor rights.
• Freedom of thought, association and political affiliation.
• A safe and healthy workplace.
• A respectful, equitable working environment, free of discrimination and harassment.
• A culture of prevention toward accidents and occupational illnesses.
• Professional training and continuing education.
• Competitive, fair compensation based on performance.

Since 2005 we have been signing members of the United Nations Global Compact on human rights, labor rights, the environment and anti-corruption.

In 2020 there were no reports of situations involving extortion, abuse, discrimination, forced or coerced labor, unfair labor practices, violation of indigenous people’s rights nor any violation of human rights. We have a Code of Conduct and a Correct Line ethical hotline to avoid practices that go against our ethics and to sanction them if they occur.

Our human resource strategy

In 2009 we introduced a Talent Development System in order to select, develop and retain top-performing and highest-potential employees. This will ensure we have the right people, now and in the future. The following are the components of the system and the highlights of its actions during this past year. Our actions are described in greater detail in the 2020 Sustainable Development Report.

At Peñoles, we consider the performance of our leaders a key factor in our ability to achieve extraordinary results. For this, we have a Leaders School based on the Peñoles Leadership Model, which defines four essential behaviors consistent with the characteristics of the ideal Peñoles leader: Inspire, Facilitate, Motivate and Recognize.

In 2020, 385 leaders participated in both types of the program: 23 in face-to-face courses and 362 online, in a virtual synchronized format developed to deal with the pandemic. The online program lasted approximately 64 hours and the classroom course, 56 hours.

Our labor strategy

Peñoles respects the right to free association and collective bargaining, according to domestic laws and international conventions and treaties. Our labor relationships are based on trust and mutual benefit, and we maintain a frank and open relationship with unions, emphasizing our commitment to continuous dialogue that strengthens labor relations.

We share the values of workplace safety and competitiveness, and we focus our efforts on being more productive, with an unremitting focus on labor modernity, which prizes safe, productive and ethical work in all our operations. Furthermore, our system of incentives for productivity, cost, safety and environmental protection results enables us to reach established goals and targets, which preserves job stability and protects sources of work.

During the year, our labor negotiations with the various unions that have agreements with our business units were conducted in a climate of respect and cooperation. There were no work stoppages or strikes, which meant we were able to operate continuously throughout the year. With the suspension of activities at the Bismark, Madero and Milpillas units, 307 employees were relocated to other operating units and 924 received their severance pay, according to the law and their respective collective bargaining contracts.

Composition and gender diversity of our personnel

At the close of 2020, the workforce of Peñoles and its subsidiaries was 13,549 employees—excluding affiliate companies—breaking down as follows:

The total number of women employees increased 3.7% over 2019. This brings us close to the national average for women in the mining-metallurgy industry which, according to figures from the Mexican Mining Chamber, was 15.7% at the close of 2019. There are also some units where the percentage of women on staff is higher than the company’s global average—for instance, at Capela (16.7%), Velardeña (16.9%) and Servicios Administrativos Peñoles (39.8%).

Workplace environment

In 2020 we continued following up on actions for improvement identified in a 2018 workplace environment survey, in which the firm Great Place to Work Mexico distinguished Peñoles as a Great Place to Work, with a satisfaction rating of 76%.

We also developed a system for tracking these actions, and determined that in 2020 progress was 94.3%, against the target of 99.8%.

A new national standard took effect in 2020, NOM-035-STPS-2018 (NOM-035), entitled “Psycho-social risk factors at work - identification, analysis and prevention,” which requires identifying and analyzing psychosocial risk, evaluating the organizational climate, measuring and controlling actions, and the application and recording of medical checkups. To guarantee correct application of this standard, we conducted an employee survey to identify and analyze psychosocial risk factors in each area of the company. We developed the NOM-035 Standard Severe Traumatic Event Practice and designed the training for medical staff in order to implement it in our workplaces. We also prepared a psychosocial risk profile.

Health and safety

Clearly, the greatest challenge of the past year was maintaining operations and protecting the health and safety of our people during the COVID-19 pandemic.

The first challenge we overcame was having mining declared an essential economic activity, which took place at the end of May. Through concerted efforts by Peñoles, working together with business organizations and union representatives, we proved the importance of the mining-metallurgy activity for the country and for the well being of its communities. Our sanitary protocols provided the foundations for a safe and gradual resumption of activities by companies in our industry.

We introduced a contingency plan to prevent the propagation of illness among our employees and the communities where we are present. Among the actions were the following:

• We set up a Crisis Committee at the highest level of the organization, which met for 274 days in a row to address, monitor and promptly manage the health emergency.
• We reinforced safety protocols by setting up sanitary checkpoints at the entrances to all our plants and units, applied rapid testing, kept medical records and followed up on personnel with respiratory symptoms, positive test results or hospitalization. We covered the cost of rapid PCR testing to all employees and direct family members that required them.
• Administrative personnel, as well as those with specific vulnerabilities or whose presence was not essential, were assigned to work from home, something that proved to us that crises are great opportunities for learning. Adapting to remote work schemes, reorganizing family dynamics, accelerating our knowledge of digital tools and guaranteeing cybersecurity to mitigate the risks posed by working in a digital environment, were all significant challenges in ensuring that we could achieve results even at a long distance.
• We developed apps for administration and control of COVID-19 and a vault to keep evidence of the compliance with the established sanitary protocols. This permitted a traceability of positive test results, a continuous follow up on employees with respiratory symptoms, or people who might have been exposed by close contact or in quarantine due to travel.
• We strengthened our occupational health team by increasing our healthcare staff of physicians and nurses by 55%.

• We introduced a communication strategy that applied to all our facilities, through which fifteen awareness campaigns were carried out through digital platforms and print media, including messages from the Chairman of the Board of Directors. We also carried out campaigns informing communities of preventive measures.
• We trained 667 leaders and employees through a course on “Recommendations for a safe return to work during COVID-19” on a platform supplied by IMSS, known as CLIMSS.
• All Peñoles’ workplaces earned Sanitary Safety distinctions from the IMSS, for having a Healthy Return Monitor, provided by CLIMSS, for complying with its COVID-19 Sanitary Safety Protocol and for obtaining a satisfactory rating in an evaluation on the New Normal platform.
• We made a number of donations to communities, including medical and protective equipment—goggles, face masks, disinfectant gel—as well as medical equipment to hospitals—oxygen tanks, respirators, hospital beds, oximeters and an X-ray machine, among others—in addition to basic food supplies and water to the most vulnerable communities. We supplied information material and health care and offered the support of five physicians in partnership with the UNAM Foundation.

The total number of positive COVID-19 contagions in our company was 2,733 people, including contractors. Of these, 96.5%, or 2,636 people had recovered at the close of the year. There were 71 active cases at that date, none of which required hospitalization nor medical follow-up. We are saddened to report however, that 26 people did not survive the illness. We will continue to take actions and preventive measures to avoid spreading the pandemic and protect the health of all our people, while standing beside our neighbors as they face this emergency.

In addition, we continued to focus on keeping our operations efficient, safe and clean, preventing and controlling occupational illnesses and workplace accidents, and to eliminate the factors and conditions that jeopardize health and safety on the job. Our risk management in the area of safety and health pursues a goal of zero work-related accidents and zero new occupational illnesses.

To achieve these goals, we assembled teams, commissions and committees at all levels of the organization, which are trained in EC0391 skills standard Verifying Workplace Health and Safety Conditions, to encourage improvements in safety and health management processes in all our business units. Our goal is to have all personnel certified at every Health and Safety Commission to improve the level and quality of the Commissions’ review processes.

We conduct ongoing awareness, training, and preparation campaigns as well as safety events among our unionized and non-unionized employees and contractors, extensive to their families. We also introduced safety and operating discipline programs and actions, investigated accidents through Root Cause Analysis (RCA) and conduct corporate safety audits, both internal and independent, to monitor and correct critical risks. Furthermore, all mining units have shelters and first-aid brigades, and emergency brigades are staffed with employees certified as firefighters, pre-hospital medical technicians and paramedics, by institutions like the University of Texas (Texas A&M Engineering Extension Service), the Mexican Red Cross, the National Council for Standardization and Certification of Job Skills (Conocer) and the Emergency Brigade Training School in Celaya, Guanajuato.

During the year, we registered less accidents in our operations. However, seven of them were fatal, which we deeply regret. We remain firmly committed to our goal of achieving zero accidents in all our operations, thus we continue to intensify and reinforce programs and actions to improve safety indicators and culture.

The Occupational Health Program continued its comprehensive, interdisciplinary work through annual plans and programs focused on individualized and epidemiological supervision. All operating units have medical personnel on staff to conduct preventive health activities through healthy lifestyle programs. These include vaccination campaigns, medical checkups to detect risk factors and early signs of illness, psychological counseling, and nutritional programs to prevent and control chronic degenerative illnesses.

During the year, our indicators on occupational and chronic-degenerative illness declined. Because most of these illnesses are preventable, we will continue to strengthen actions to care for the health of our employees by applying the strictest protocols, according to the risk factors present in each of the company’s business units.