A Board-level Sustainability Committee was established in 2006.  The Sustainability Committee is independent from the executive management and consists of three Non-Executive Directors and one Executive Director.  The Committee oversees all aspects of environmental and social management, setting priorities for the Group and reviewing progress in implementation.  The Committee is responsible for the  monitoring, reviewing and making appropriate recommendations to the Board on the best industry practices, the most recent requirements of the London market and the state of health, safety and environment, social and community relations issues in the Company, making use of an independent consultancy and management reports where appropriate.  The Committee is chaired by Philip Leatham and its role is to oversee the continued implementation of the Group's environmental programme including the implementation of reporting in accordance with the Global Reporting Initiative and the Group's compliance with the IFC's environmental and social requirements. 

The Group's Natural Resources Management and Ecological Department which is based in Moscow, supports the Peter Hambro Mining Plc Board, provides guidance and support to OAO Pokrovskiy Rudnik, the operating company at the Pokrovskiy mine, carries out internal environmental audits, oversees all environmental activities of the operating companies in the Group throughout Russia and liaises with the regulatory agencies based in Moscow. 

One of the most important parts of the Group’s environmental policy is a comprehensive daily mining environmental monitoring system. This system mitigates negative environmental impacts, protects subsurface and water resources and provides for the occupational safety of the workers.

The Group's laboratories are state certified and are authorised to monitor air, water and soil quality, tailings and waste management and rehabilitation and restoration programmes at the mine and in the surrounding area. 

Monitoring is undertaken both by the Company and by a number of accredited State institutions and accredited privately-owned organisations.  Irgiredmet, a well-respected scientific institute which is 98% owned by the Group, also performs extensive sampling and analysis of environmental samples from the mine. 

On a six-monthly basis, complete records of all monitoring activities are submitted for inspection to the Amur Region branch of Rosprirodnadzor (Environmental Protection Agency) for inspection.  On a bi-annual basis, records are submitted to the Moscow headquarters of Rosprirodnadzor for supervisory review. 

In 2007 we will seek to build on our significant strengths in operational monitoring by developing further our own environmental social resources and capabilities related to project design, development and providing support to construction and operational activities.  We are identifying appropriate experts to work with us at a corporate and operational level to implement good practice in mining, environmental and social management throughout the Group. 

As part of the ongoing process of implementing international good practice, we will develop a robust and systematic set of environmental, health and safety and social key performance indicators (KPIs) for use going forward.  We will develop and implement reporting systems to meet the requirements of the Global Reporting Initiative (GRI) and ICMM Sustainable Development Principles.