Arch believes that its long-term success depends upon achieving excellence in mine safety and environmental stewardship; conducting business in the most ethical and transparent manner; investing in its people and the communities in which it operates; and demonstrating the highest principles of corporate governance.
Arch is a demonstrated leader in mine safety, with an average lost-time incident rate during the past five years that is nearly three times better than the industry average. In the most recent awards season, Arch subsidiaries won the top safety awards in each of the four states in which they operate.
In the environmental arena, Arch subsidiaries have achieved a near-perfect compliance record since 2017, with just one notice of violation issued by state mining regulators in each of the past three years versus an average of 36 notices of violation annually by its 10 largest U.S. competitors. In the area of water management, Arch subsidiaries took more than 322,000 water quality measurements in 2019 and recorded just five minor and temporary exceedances — equating to a compliance record of 99.998 percent.
Enterprise Risk Management
The evaluation and management of risk is incorporated into Arch’s approach to governance and risk management. Arch uses a long-standing Enterprise Risk Management (ERM) process to assess risks that may affect the company’s ability to achieve its strategic and financial goals. The ERM process, which is overseen by the company’s board of directors and administered by senior management, cultivates a risk-aware corporate culture at Arch.
Our objective for economic, social, and environmental (ESG) performance is to work towards positive outcomes for our business and stakeholders. Our process for integrating risk management throughout the business includes identifying, evaluating and addressing ESG risks and opportunities on a regular basis. The risks and impacts associated with our business require effective collaboration among departments, business units and external stakeholders.
Because the company’s environmental and operational activities are inextricably intertwined, our chief operating officer acts as our environmental lead with the assistance and support of the company’s entire operational and environmental leadership. The chief operating officer reports directly to the chief executive officer, who provides further oversight and direction in this critical area of performance, and both the chief operating officer and the chief executive officer report to the board of directors on critical areas of environmental performance and on key environmental metrics at every regularly scheduled board meeting.
Compliance Management System
For more than a decade, Arch has been operating in conformance with an EPA-approved Compliance Management System (CMS), modeled after the ISO 14001 Environmental Management System standard. Under our CMS, we require each subsidiary facility to maintain full compliance with all applicable environmental regulations and to monitor that performance in alignment with the Plan/Do/Check/Act model, also known as the Deming Cycle. Each operation regularly reviews its applicable regulatory framework and its environmental operating risks, ranks those risks and mitigates those risks accordingly. Each operation regularly performs self-evaluations of compliance performance, and that performance is supplemented by corporate environmental audits and third-party audits to double-check compliance performance and minimize risk of noncompliance or environmental harm. The CMS has built-in measures to drive continuous improvement, with emphasis on risk reduction and environmental performance improvement.
Annual environmental improvement plans are developed by each facility and incentives for outstanding environmental compliance performance are awarded. Underpinning the overall environmental program, Arch utilizes an industry-leading environmental management information system (EMIS) to assist in managing and tracking environmental data; compliance obligations; audit findings and corrective actions; and regular internal reporting of environmental activities. Arch continues to build out the capabilities of its EMIS to continue to improve the efficiency of compliance administration and to reduce risks of environmental harm.
All of our mining operations maintain Environmental Management Systems (EMS) that align to ISO 14001:2015. We are working towards certification of our environmental management systems to conform to the internationally recognized ISO 14001 standard.
Arch dedicates significant amounts of operational resources to all aspects of environmental compliance assurance and risk management in an effort to ensure environmental regulations are fully addressed and that environmental resources are protected. Beyond daily attention to such details, Arch engages third-party experts to review the work of our operations in order to provide additional, external assurance that the practices and compliance measures we employ are accurate and reflective of industry standards and best practices.
Examples of operational areas to which Arch applies regular third-party review and assurance include:
- Design, construction, operation, maintenance and monitoring of refuse management areas, including both slurry impoundments and dry piles
- Design, construction, operation, maintenance and monitoring of refuse slurry pipeline systems
- Deployment and implementation of the Arch Resources Environmental Management System
Each year, Arch retains a third-party consultant to conduct an extensive and comprehensive review of its operating, safety and environmental practices. In 2020, Arch retained Hawcroft Consulting International Group — the leading global loss control engineering firm for the mining industry — to conduct this audit at each of the company’s subsidiary operations. Each of the Arch subsidiary mines was ranked by Hawcroft in the top quartile of the global mining industry in the area of risk management. While the results were highly positive, the extensive individual mine reports — which typically exceeded 100 pages — identified multiple opportunities for improvement. Arch and its operating subsidiaries have put these recommendations to use in making enhancements to their critical operating, safety and environmental processes, in keeping with the organization’s disciplined commitment to continuous improvement.
In addition to third-party audits, each facility is continuously subject to regulatory inspections, with regulators such as the U.S. Department of Labor’s Mine Safety & Health Administration (MSHA), which has inspectors at each of our mines on an almost daily basis.
State regulators overseeing the federally delegated Surface Mining Control and Reclamation Act (SMCRA) programs are required by regulation to perform at minimum monthly inspections, but many of our facilities have weekly or even more fequent inspections. Arch Resources maintains one of the best SMCRA compliance records in the industry, with only one violation across the entirety of the company for the past four consecutive years. That’s unprecedented compliance for a company as large and diverse as Arch Resources.
Other federal and state regulators randomly perform compliance and oversight inspections, including regulatory inspections required under the Clean Air Act (air permits), the Clean Water Act (NPDES permits) and the Resource Conservation & Recovery Act (waste management), as well as inspections required by the U.S. Nuclear Regulatory Commission (nuclear sources) and the U.S. Alcohol, Tobacco, Firearms and Explosives agency (explosives management). In addition, Arch operations routinely conduct inspections with state fire marshals and local and regional emergency response coordinators.
Arch maintains its diligence on all matters of environmental and safety management by performing corporate compliance and best management audits across all subsidiary facilities. The corporate functional management team provides both the guidance on requirements for full compliance, and periodically makes site visits to review practices; documentation and recordkeeping; and external reporting. All of these external oversight efforts are welcomed and encouraged by our subsidiary facilities and management teams, who recognize that additional eyes and expertise engaged in reviewing our practices and compliance efforts act to further reduce risk and to maintain diligence in protecting the environment.
Recently, one of our major customers, pursuant to its own ESG program initiatives, arranged to have a third-party assurance consultant (Intertek) visit one of our subsidiary operation’s mines — Beckley — to perform a workplace conditions assessment, as part of a sampling of its upstream vendors. Upon completion of its review, Intertek assigned a score of 100 percent to the Beckley mine, and reported to the Arch team that it had never previously issued a score of 100 percent to another operation.