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MMSD+10:Reflecting on a decade of mining and sustainable development
Sustainable Markets DiScuSSion PaPer : June 2012
www.iied.org
abbi Buxton, international institute for environment and Development
MMSD+10 i reflecting on a DecaDe
i
Published by iieD, 2012
Buxton, a. 2012. MMSD+10: Reflecting on a decade. iieD Discussion Paper. international institute for environment and Development, london.
http://pubs.iied.org/16041iieD
iSBn 978-1-84369-874-6
Printed by Park communications on recycled paper, with vegetable-based inks
Designed by andy Wilkinson
international institute for environment and Development 80-86 gray’s inn road, london Wc1X 8nH, uK
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eXecutive SuMMary
i 1
Executive summary It is 10 years since the Mining, Minerals and Sustainable Development (MMSD) initiative was completed. MMSD offered an independent review of how the mining and minerals industry performed in relation to broad-ranging sustainable development issues. Its findings were game-changing for the sector. MMSD provided a foundation for shared understanding by stakeholders from mining CEOs to community groups. Mining CEOs of the day committed to act on its agenda as a robust and credible way to maximise the sector’s contribution to sustainable development.
So where are we, 10 years on? How far have we travelled towards a sustainable and responsible mineral industry?
MMSD+10 i reflecting on a DecaDe
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in short, the past 10 years have seen
a valuable increase in the number of
standards and best practice guidance,
helping stakeholders to understand what
sustainable development means. But
despite good intentions at the strategy
level and examples of good practice, the
complexity of situations at the mine site
means implementation across the sector
is highly variable. Questions remain as to
whether current verification and reporting
regimes are sufficient to meet the needs
of key stakeholders – from investors to
communities. in a large number of cases,
there is little idea of how exactly these
should be translated into progress on the
ground. Meanwhile, new pressures on the
sector, such as competition from emerging
economies, climate change and a re-
emergence of the ‘resource nationalism’
debate, are putting the challenges and
solutions for sustainable development in
mining in a new light.
Key findings
Achievements against the sustainable development agenda set out by MMSD
l Understandingofsustainabledevelopmentintheminingandmineralssectorhasmarkedlyimprovedandthereisincreasedsophisticationintalkingabouthowminingshouldmaximiseitscontributiontosustainabledevelopment.
l TheInternationalCouncilonMiningandMetalshassucceededinimplementingmanyofMMSD’srecommendationsforindustryandprovidestheprimarybasisforcollectiveactioninthesector.Complementarymeasuresforgovernment,thesmall-scaleminingsectorandcommunitieshavenotequalledthissuccess.
l Asetofglobalrulesforbestpracticeonsustainabledevelopmentandmineralshasemerged,althoughdifficultiesintranslatingtheseatthegroundlevel(bothintermsofreportingandimplementation)andensuringconsequencesfornon-compliance(orcompliance)remain.
eXecutive SuMMary
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Ongoing challenges to maximising mining’s contribution to sustainable development
l Governmentcapacitybuilding–akeyMMSDrecommendation–remainslimited,restrictingtheabilitytoharnessminingforpositivedevelopment.
l Artisanalandsmall-scaleminingisaneglectedandunderfundedsectorinthemineralsindustry.
l Communitydevelopmentremainsacomplicatedfieldinbothrhetoricandimplementation,althoughthereisevidenceofprogressandmoresophisticatedapproachestotacklingtheseissues.
l Anintegratedapproachtomining,asarticulatedbyMMSD,isanagendaonlyjustbeginningtotakeshape,butresourceefficiencyand‘closedloopthinking’couldbecomebusinessimperativesinthefaceofincreasingpressuresonresources.
New issues that, combined with the ‘ongoing challenges’ from the last 10 years, may help shape the agenda for the next 10 years
l ThecompetitivelandscapehaschangedandinvestorsandoperatorsfromChina,Brazil,Indiaandelsewhere–notnecessarilyinvolvedindefiningtherules10yearsago–haverisentoprominence.
l Theminingindustryhasbroadlytakena‘waitandsee’attitudetoclimatechangeissues,butharsheroperatingconditionsarespurringactionanddebate.
l UNSecretary-General’sSpecialRapporteurJohnRuggie’sworkiscompellingbusinessestoengagewithhumanrightsissues.
l Thedramaticincreaseincommunityexpectations,includingforFree,PriorandInformedConsent(FPIC),mustbetackledheadonbygovernments,civilsocietyandcompanies.
l Increasingpressuresof‘ResourceNationalisation’,viewedbysomeasathreat,couldprovideanopportunitytorethinkexistingmodelsofdevelopment.
l Difficultiesofoperatinginconflictregionsandfragilestatesarehighontheinternationalagendarightnow.
l The‘greeneconomy’discourseframingthe2012EarthSummitinRiomayhelpshapearenewedagendaaroundanintegratedapproachtominerals.
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IntroductionThis review is intended as a ‘conversation starter’ – providing an initial assessment of the mining and minerals sector’s achievements against the MMSD agenda and open to further discussion. Thisreviewis
basedon36semi-structuredinterviewstogatherperceptionsofstakeholders
inminingcompanies,civilsocietygroups,industryandcommodityassociations,
andindependentconsultants(afulllistofintervieweescanbefoundinthe
Acknowledgmentssection).Thepapersynthesisesideasexpressedbymany
individualsandshouldnotbetakenasrepresentativeofanysingleperson’sopinion.
NordoesitextensivelyrevieworquantitativelyevaluateMMSD.Rather,itlooksfor
keyachievements,discussesnewandongoingchallenges,andbeginstoarticulate
issuesthatmayshapetheagendaforthenext10years.Itishopedthatthiswill
stimulatefurtherdiscussionsanddebateonthesekeyquestions,andcallsonyou,
thereader,toaddyourvoiceviablogsandonlinecommentsatwww.iied.org/mmsd
overthecomingmonthsandatIIED’sFairIdeaseventatRio+20(www.fairideas.org).
introDuction
i 5
MMSDwaspartof,butindependentfrom,theGlobalMiningInitiative(GMI)–drivenbyminingcompanies’recognitionthattheindustryneededagreementonhowtostartmeetingthechallengesofsustainabledevelopment.Theindustrywantedanalternativetotheadversarial,advocacy-basedapproachthatcharacterisedinteractionsatthetime,andwasreadyforamovetowardsasharedagendainvolvingallthemainstakeholders.MMSDwasconvenedbytheWorldBusinessCouncilforSustainableDevelopment(WBCSD)andhousedbytheInternationalInstituteforEnvironmentandDevelopment(IIED)–aresearchhomethatcouldconvenearangeofstakeholdersandprovidetheindependencecrucialtobuildingtrust.Althoughfundedlargelybyminingcompanies,anAssuranceGroup,madeupofindependentacademicsandseniormembersofsomeofthebigNGOsatthetime,wastaskedwithensuringtheprocessandfindingsremainedindependent.
MMSDaimedtocreateasharedideaoftheappropriateandnecessaryrolesforeachofthemajoractorsinminingandsustainabledevelopment–government,civilsociety,andtheprivatesector–asking‘whatisacompany’sroleandwhatisnotacompany’srole?’.Duringthetwo-yearproject,morethan700peopleparticipatedin20countriesandover130reportswerepublished.RegionalresearchandengagementprocessesinLatinAmerica,Australia,AfricaandNorthAmerica,withtheirowngovernancestructures,leadership,budgetandpriorities,wereacentralpartofthewholeeffort.
Whatemergedwasawell-developedrationaleforwhysustainabledevelopmentisavitalpartofaminingcompany’sbusiness,ratherthananactofphilanthropy.Thishelpedtoframethesector’scontributiontothe2002JohannesburgSustainableDevelopmentSummitandtheGMITorontoconference.TheTorontoConferencemarkedtheclosingofboththeGMIandMMSD,andsawagreementonamandatefortheInternationalCouncilonMiningandMetals(ICMM)–setupbytheGMItoreplacetheexistingInternationalCouncilonMetalsandtheEnvironmentasaflagshipCEO-ledorganisationthatwouldtakeforwardtheindustry’sresponsibilitiesonsustainabledevelopment.ICMM’srolewastobecomplementedbyCASM(theCommunitiesandSmall-scaleMiningbodyattheWorldBank),theIntergovernmentalForumonMining,Minerals,MetalsandSustainableDevelopment(unformedatthetime)andIUCN(theInternationalUnionforConservationofNature).
Time to reflect and refocus… Aswemoveintothenext10yearsthereisasenseoftheneedforanewagendawithinachangedcontextformineralsandsustainabledevelopment.Beforethatnewagendaisdefineditisimportanttotakestockofwhathasbeenachievedoverthelast10yearsandwhathavebeentheobstaclestoprogress.Breaking New Ground,MMSD’sfinalreport(2002),articulatedaseriesofsustainabledevelopmentchallenges,withassociatedrecommendations,andfourstepsforsupportingsustainabledevelopmentinthemineralsindustrythattogetherprovideagoodframingforthisdiscussion.
Chapter 1 – pages 6-13Progress in sustainable developmentSynthesisestheperspectivesofstakeholdersinterviewedforthisresearchinchartingprogressagainstthefourstepsofsupportingsustainabledevelopmentinthemineralssectorandasksreaderstocontributetheirthoughts
Chapter 2 – pages 14-24Tackling the challengesConsidersprogressagainsttheninechallengesidentifiedbyMMSD–bothachievementsandongoingchallenges
Chapter 3 – pages 25-31Defining a new agendaHighlightskeyissuesthatareunderdiscussionin2012andopensadiscussiononhowthismayframetheagendaforthenext10years
What was MMSD? MMSD was both an outcome and a process
– a two-year initiative to gather evidence and knowledge, and engage stakeholders around
the question of ‘how can mining and minerals best contribute to the global transition to
sustainable development?’
MMSD+10 i reflecting on a DecaDe
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Progress in sustainable development MMSD’s final report, Breaking New Ground, articulated four steps to supporting sustainable development in the mining sector. IIED spoke to a range of stakeholders about the achievements and challenges of mining and sustainable development to get an idea of where we might be in this progression. The following is a synthesis of those perspectives.
Suppo
rting s
ustai
nable
deve
lopmen
t
in the
mine
ral se
ctor
Understanding sustainable development
Creating organisational policies and management systems
Achieving cooperation among those with similar interests
Building capacity for effective actions at all levelsStep 4
Step 3
Step 2
Step 1
ProgreSS in SuStainaBle DeveloPMent i i
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MMSDhelpedcompaniesunderstandthatsustainabledevelopmentisaboutbalancingtheneedsofsociety,theenvironmentandeconomics,inthecontextofgoodgovernance.Allthecompaniesspokentoforthisresearchdemonstratedanunderstandingofsustainabledevelopment.JohanViljoen,SeniorVicePresidentSustainability(Policy&Assurance)atAngloGoldAshanti,commented:
“Health and safety, environment,
communities and security – 10 years ago
these were single silo disciplines, now
they cross boundaries.”
Goodsocialandenvironmentalpracticeisnowseentobepartofthecompany’scompetitiveadvantage,accordingtoRichardMorgan,GovernmentRelationsAdvisoratAngloAmerican,andunderstandingofsustainabledevelopmenthasincreasedinsophistication.DrJohnGroom,SafetyandSustainableDevelopmentAdviseratAngloAmericanandAngloAmerican‘Sherpa’fortheGMI,andstakeholderintheMMSDprocess,commented:
“The drivers for GMI were clear
recognition that mining companies had
problems of access to land, and access
to markets, and cost of capital. The
fundamental underlying reason was the
reputation of the industry. To tackle this
we would have to work with others and
also improve the way we worked. This
is what drove MMSD and started the
process of stakeholder engagement.
None of the problems have gone away,
but the dialogue is much better informed
and infinitely more constructive.”
But, what do you think? What does progress along these four steps look like to you?
Step 1: Understanding sustainable developmentunderstanding of sustainable development in the mining and minerals sector has markedly
improved – arguably the single biggest achievement in the last decade – but the debate has
now increased in sophistication.
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ManyseetheabilitytoengageinamoresophisticateddebateasasuccessattributabletoMMSD,whichprovidedasharedlexiconthatarangeofstakeholderscoulduseasthebasisforengagement.RobertCourt,GlobalHeadofExternalAffairsatRioTintoandpartoftheSecretariatfortheGMI,statedthatbusinessplanningatRioTintoisnow‘intrinsicallyinformedbyawillingnesstoengagewithothers’(discussedfurtherunderStep3).
However,mostofthoseinterviewedheldseniorpositionsandtheircompaniescouldbeconsideredindustryleadersonsustainabledevelopmentissues.
So what is understanding like across the industry and at the level of the mine site?
TonyAndrews,previouslyExecutiveDirectoroftheProspectorsandDevelopersAssociationofCanada(PDAC),segmentsjuniorminingcompaniesinto(1)thoseatthetopthatarewellestablishedandcrediblefirmswithgoodmanagement;(2)thesmallsegmentwhowanttoavoidsustainabledevelopmentissues;and(3)the80percentwho‘developpracticesbasedoncommonsenseinresponsetoparticularcontext’,whichinsomecasesresultsingoodworkbutisgenerallynotbenchmarkedtointernationalstandardsandcanbehighlyvariableinthequalityofbothdeliveryandoutcome.
If ‘understanding’ isn’t industry wide and looks more like ‘awareness’ in huge parts of the sector, can we say that we have taken
this first step to supporting sustainable development in the sector?
Casestudiesandpracticalguidancehavecontributedtowardsanemergingglobalstandardandpictureofwhatresponsibleminingshouldlooklike.Ahostofpracticaltoolsisavailablethrough,forexample,ICMM’swebsiteandtheWorldBank’sExtractiveIndustriesSourcebook.However,puttingtheseintopractice,particularlyinlarge-scaleprojects,canbedifficult.Thecomplexityofthechallenge,asarticulatedbyMMSD,
hasmeantthat,inpractice,certainissuesareprioritisedandothersneglected.StephenD’Esposito,nowHeadofRESOLVEandrepresentativeoftheNGOsectorintheGMITorontoconference,notedthataddressingissuesinisolation(suchasbiodiversityoffsetsandFPIC)hasledtoa‘missedopportunity’inconsideringthetrade-offsinherenttosustainabledevelopment.
TherearenowawealthofinitiativesarticulatingwhatsustainabledevelopmentmeansforcompaniesincludingtheInternationalFinanceCorporation’s(IFC)PerformanceStandards,theUnitedNationalGlobalCompactandOECDGuidelinesforMultinationalEnterprises;manyofwhichdidnotexistin2002(seeMajorinternationalinitiativesimpactingmineralsandsustainabledevelopmentonpage13).However,theredoesn’tseemtobeaclearideaofhowmanyoftheseinitiativesaremadetoworkattheminesite–whetherbycivilsocietyorganisations,communities,artisanalminersormineemployees–andhowtheinformationcollectedthroughassessmentandreportingistranslatedintovaluableknowledgeontheground.Moreover,aconclusionfromtheGEMMDialogueinVancouverinApril20121wasthatalthoughtherearemanytoolsforcompanies,thereareinsufficienttoolsandguidanceforcommunitiestohelpthemunderstandandupholdtheirrightsandresponsibilities.Thesameissaidforartisanalminers.
What has been achieved in ensuring communities and artisanal miners have the tools and knowledge to understand what it means to maximise mining’s contribution to
sustainable development? What can we learn from these successes?
Whatwasmostclearfromtheinterviewrespondentswasthatthecontexthaschanged.Theshiftingsandsofthesustainabledevelopmentdiscoursecontinuetochallengewhatsustainabledevelopmentmeansintermsofitsimplementationandthusshapingunderstandingforthenext10years(discussedfurtherinChapter 3: Beginning to define a new agenda).
ProgreSS in SuStainaBle DeveloPMent i i
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ICMMisnowconsideredthe‘portofcall’onindustrystandardsforbestpractice.Itspositionstatementscoverarangeofissuesfromclimatechangeandmininginprotectedareastoindigenouspeoplesandminingpartnershipsfordevelopment.Thesearebindingonallitsmembers,whichrepresentsasignificantproportionofglobalmineralsproduction(including52%ofcopper,48%ofplatinumgroupmetals,42%ofironore,41%ofnickel,38%ofgoldand25%ofzinc),2andsetabenchmarkforperformanceacrossthesector.
ManycompanieshaveadoptedsustainabledevelopmentpolicesthroughmembershipassociationssuchasICMM,theMiningAssociationofCanada(MAC)ortheProspectorsandDevelopersAssociationofCanada(PDAC).Aswith‘understanding’inthesector,itisnotalwaysclearhowwellthesepolicieshavetranslatedtoon-the-groundimprovements.JimCooney,formerVicePresidentandSustainabilityLeaderatPlacerDomeratthetimeofMMSD,questionswhethertherehasbeenaculturalshiftwithincompaniesbigenoughtodrivesustainabledevelopmentchangeintheminingindustry.Theproliferationofgoodpracticeandstandardshasnotnecessarilyextendedtomonitoringandevaluationofthatguidancenecessarytoensuregoodimplementationattheminesite.CarolineDigby,ResearchManageronMMSDandnowSustainabilityDirectorattheEdenProject,comments:
“Reporting and metrics that can be
independently and publicly verified
are the only way that the industry can
demonstrate that it is really succeeding
in the longer run. Is the current reporting
regime sufficient? I would say no.”
AidanDavy,DirectoratICMM,submittedthatwhileICMMhasbeenverysuccessfulinfillingout‘goodpracticeguidancegaps’tohelpcompaniesaddresstheICMM’sprinciples,
thefocus‘willincreasinglyshifttocompaniesbeingabletodemonstrateimplementationprogressonmaterialissues’.
How have organisational policies translated into improvements at the mine site? Which
management systems have worked? Is the current reporting regime for monitoring implementation of good practice sufficient? What would an effective regime look like?
OnlyinthelastyearhastheIntergovernmentalForumagreedaframeworkagainstwhichtoassessnationalpoliciesrelatedtomining–asrecommendedbyMMSD.Recentandongoingchangestonationalminingpoliciessuchasincreasedequitystakes,raisedtaxesandgreaterpolicyoversightarebeingviewed,insomecases,as‘resourcenationalism’andthreatstocompanyoperatingmodels.Butitmaybenecessarytodistinguish‘politicalopportunism’insomecaseswithgovernmentstakingamoreconsideredapproachtoforeigndirectinvestmentinothers.3
Are there examples of governments that have improved their ability to manage mineral developments for positive development?
What do their policies and systems look like?
Itmaynowbetimetoconsidernewavenuesforincentivisingchangeincompanypractice,suchasthroughinstitutionalandsocialimpactinvestors(likelytohaveaparticularimpactonjuniorsthataredrivenmorebycapitalinvestmentdemands).Consumer-driveninitiativestoo,whichhavesofarbeentoolimitedtohavesufficientscopetodrivechangethroughsupplychainmanagementsystems.ThesearediscussedfurtherinChapter 3: Beginning to define a new agenda.
Step 2: Creating organisational policies and management systems
good practice guidance and strategic level buy-in exists for improved organisational policies
and management systems – but more needs to be done to ensure good (and measurable)
practice at the operational level and across the sector. this includes for small-scale miners,
juniors and mid-tier companies.
MMSD+10 i reflecting on a DecaDe
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MMSDestablishedaprecedentforstakeholderengagementandconstructivedialogue,whichwasground-breakingfortheindustryatthetime.NicholasCotts,GroupExecutiveofEnvironmentandSocialResponsibilityatNewmontMiningCorporation,commentedthatminingcompaniesarenowbeginningtobeviewedas‘legitimatedevelopmentpartners’.AccordingtoStephenD’Esposito‘theincentivestructureforcivilsocietyhasshiftedandpartnershipswithcompaniesareseenasawaytomakegainsinwaysthatweren’tasclearbefore’.D’EspositowentontosaytherehavebeenmissedopportunitiesonissuessuchasFPIC,tailingsdisposaland‘nogo’areas,whichare‘oftenframedinblack-and-whitetermswithNGOdemandsfollowedbyindustryreactionorresponses.’This‘callandresponse’dynamictypicallypreventsconstructiveengagement.RobertCourt,too,commentedthat‘iftheworldisrunasaseriesofsingleissueagendas,itwillbeamess.’LukeDanielson,MMSDProjectDirectorandnowPresidentofSustainableDevelopmentStrategiesGroup,commented:
“My own biggest disappointment has
been the failure to create any kind of
ongoing system for dialogue among
companies, government, labour and
civil society… one of our strongest
recommendations was to create
something – an annual forum, a set of
issue-focused, meetings, or almost any
kind of way these actors could keep the
discussions going in a structured way.
This simply did not happen, and there
has been a tremendous value lost as
a result. It will be harder to recapture
this value now, because so many of the
participants have moved on.”
AnexampleofsuchaforumisTheForestsDialogue,whichwascreatedaftertheTowards a Sustainable Paper Cycleinitiativetocontinuetoaddressimportantglobalforestryissuesinmultistakeholderdialogues.4Towards a Sustainable Paper CyclewasMMSD’spredecessorexaminingtheissuesfacingthepaperandpulpsectorinsustainabledevelopment.5GivencommentssuchasthosefromD’EspositoandCourtabove:
What appetite is there for such a forum amongst mining stakeholders? Is creating a
forum still a top priority? What other avenues exist for multistakeholder dialogue?
ICMMprovidesafirmfoundationfordrivingchangethroughcollectiveeffortsattheindustrylevel.DrAnthonyHodge,PresidentofICMMandFacilitatorforMMSDNorthAmerica,describestheorganisation’sroleaspartlyaboutdesigningsolutionsbutprimarilyaboutbringingpeopletogethertoachievechangethroughcollaboration,sharedlearningandpeerpressure.
SomeintervieweesthoughtpushingtheboundariestoofarandtoofastwouldhaveriskedturningICMMintoanexclusivemembersclub.JohnGroomusedthemetaphorofanicebreakerleadingthewayintopackedice:ifitmovestoofastorgetstoofaraheadtheicemayclosebehinditandotherswon’tfollow.However,aswemovefurtherawayfromtheMMSDprocessintime,ICMMmaybecomemoresusceptibletothewhimsandpoliticsofitsindustrymembers–particularlyasnoneoftheCEOswhoengagedwithMMSDareinthatpositiontoday.Agreementandcooperationisthefoundation,andICMMwillneedtoensureitcanbothretaincollaborationandchallengetheagenda.
Thecommodityassociationsarealsofurtheringtheirrolesinfosteringcooperationforsustainabledevelopment.WhereasICMMadoptsabroadapproachtosustainabledevelopmentacrosstheminingandmetalsindustry,commodityassociationscanadoptmetal-ormineral-specificsustainabilityinitiatives—andarebeginningtodoso.TheLeadAssociation,forexample,
Step 3: Achieving cooperation among those with similar interests
this step was articulated largely in terms of principles and codes of conduct. there is no
doubt the last 10 years have seen a proliferation of initiatives and principles, many of which
are multistakeholder and articulate shared goals and interests. MMSD provided a model
for engagement, and there have indeed been more collaborative agreements between civil
society and companies during this time.
ProgreSS in SuStainaBle DeveloPMent i i
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hasrecentlyadoptedaSustainabilityCharterandisseeingbigadvantagesintellingthesustainabilitystoryoflead–suchashow95percentoftheleadforcarbatteriesisrecycledwithnoriskyexposureforhumans.
However,non-industrycounterpartsappeartohavebeenmarkedlylesssuccessful.CASMhasstagnatedandthesectorhasseenlittleadvancementinthepast10years.IUCN,workingwithICMM,agreed‘nogos’forWorldHeritageSitesbutdidnotgetfurtherthanthat.AndtheIntergovernmentalForumhasonlythisyearagreedaframeworkfornationalpoliciesonmining.Ithasalsosofarfailedtodrivegovernmentcapacitybuilding(seenextsection).Thereisnointernationalbodyforindigenouspeoplesandminingandthereislimitedjoined-upcooperationforcommunities(althoughtheworkofIFConCommDevwashighlightedbyanumberofinterviewees).
What is the evidence of successful cooperation in artisanal and small-scale mining, communities and governments?
And again, how successful has post-MMSD cooperation been in implementing change on
the ground?
Atthecommunitylevel,socialmovementsareemergingtochallengemineralinvestmentsandarebeingsuccessfulinsomecases.Amoreconnectedandawarepopulaceappearstobechangingthefaceofcooperationbetweengovernment,communityandcompany.ThisisdiscussedfurtherinChapter 3: Beginning to define a new agenda.
MMSD+10 i reflecting on a DecaDe
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Morethanhalfoftheinterviewrespondentslistedlackofgovernmentcapacitywithinthetopthreechallengestomoresustainablemining.MMSDrecommendationstoincreasegovernmentcapacitytomanagemineralinvestments,andatechnicalsupportfacilitytosupportthat,havenotmaterialised.DanielsonarguesthatinanindustrythatcanspendUS$300,000onasetoftyresforatruck,theinvestmentsneededinareasonableprogrammeofcapacitybuildingforhostcountriesshouldbeseenasminor,withmassivereturns.JonathanHobs,SeniorPolicyAdvisor,NaturalResourcesGovernanceatWWF,asked:
“Where does corporate social
responsibility stop and government
responsibility start? The threshold
will be context specific. In addition to
paying taxes, developing infrastructure,
assisting with social services, companies
often have to do more than their fair
share in situations of poor governance.
It is in their interests as much as anyone
else’s that governments are effective in
managing their natural resources.”
Butitisnotjustgovernmentsthatneedtodefinetheirrolesandbuildcapacity.Miningcompaniesneedcapacityquitedistinctfrombusinessorminingengineeringskillstoaddresssustainabilityissues.Thosewhohavethiscapacitytendtobetheindustryleaders.Feedbackinthisresearchsuggestedthatcapacityamongstthejuniorandmid-tierminingcompaniesisstilllacking–largelyduetolackofresourcesandskills.Yetnearlyalltheinterviewrespondentshighlightedchallengesofimplementationforthenextdecade.ThesechallengesaredisusedfurtherinChapter 2: Tackling the challenges
butitisworthhighlightingherethedifficulties,particularlyincommunityengagement.Socialissuesarebetterunderstoodbyminingcompaniesthantheywere10yearsagobutenvironmentalissues,withtheirtechnicalsolutions,remaineasiertoaddress.Thecomplexityofoperations–whetherbecauseofthesizeofthemineorthesocialandenvironmentalcontext–meansthatdespiteimprovementsinorganisationalpoliciesandsystems,substantialimprovementsincapacityarestillneeded.
What are your thoughts on how the sector has developed its capacity for effective action? What have been the areas of
improvement (and what are the areas where capacity is still lacking)?
Again,thisprogressneedstobeconsideredinlightofthecurrentcontextandthenewagendaforminingthatidentifiesthemostappropriaterolesforgovernment,companiesandcivilsocietyindeliveringonsustainabledevelopmentinthesectordiscussedfurtherinChapter 3: Beginning to define the new agenda.
How far do you think the mineral industry has come in its progress towards sustainable
development? What has been important in the last decade to achieving progress? And
how should those achievements and the lessons learned shape the agenda for the
next decade?
Step 4: Building capacity for effective actions at all levels
good practice guidance exists, but capacity to implement remains the single greatest
challenge to maximising sustainable development across the minerals sector.
ProgreSS in SuStainaBle DeveloPMent i i
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Major international initiatives impacting minerals and sustainable developmentGlobal Reporting Initiative: TheGlobalReportingInitiative(GRI)isanetwork-basedorganisationthatproducesacomprehensivesustainabilityreportingframeworkofprinciplesandperformanceindicatorsthatorganisationscanusetomeasureandreporttheireconomic,environmental,andsocialperformance.It(anditsMiningandMetalsSectorSupplement)isthebaselineforreportingonenvironmental,socialandeconomicperformanceinthemineralsindustries.Seefurtherhttp://www.globalreporting.org.
Extractive Industries Transparency Initiative: TheExtractiveIndustriesTransparencyInitiative(EITI)isasetofprinciplesandproceduresaimedatstrengtheningaccountableandtransparentgovernanceinresource-richcountriesthroughtheverificationandfullpublicationofcompanypaymentsandgovernmentrevenuesfromoil,gasandmining.Itisacoalitionofgovernments,companies,civilsocietygroups,investorsandinternationalorganisations.Seefurtherhttp://eiti.org.
Voluntary Principles for Security and Human Rights: TheVoluntaryPrinciplesforSecurityandHumanRightsprovideabroadframeworkthatcanhelpcompaniesoperateinwaysthatprovidesecuritytotheirfacilitieswhilerespectinghumanrightsandfundamentalfreedoms.ItwasunveiledinDecember2000bytheUSStateDepartmentandtheForeignandCommonwealthOfficeoftheUnitedKingdom,afterayear-longprocessinvolvinggovernmentofficials,oilandminingcompanies,andNGOs.ThePrinciplesprovideguidancetocompaniesoperatinginzonesofconflictorfragilestates.Seefurtherwww.voluntaryprinciples.org/files/voluntary_principles_english.pdf.
IFC Performance Standards:ThePerformanceStandardsoftheInternationalFinanceCorporationareapplicabletoallprojectssupportedbyIFCandMIGAarmsoftheWorldBankGroup.TheyarealsoapplicablebroadlytoprojectssupportedbymostprivatefinancialinstitutionsthroughtheiradherencetotheEquatorPrinciples(seefurtherwww.equator-principles.com/).ThePerformanceStandardswerebeingupdatedandrevisedin2011.Seefurtherwww1.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/IFC+Sustainability/Sustainability+Framework/Sustainability+Framework+-+2012/Performance+Standards+and+Guidance+Notes+2012/
ICMM’s Sustainable Development Framework:TheICMM10principlesofsustainabledevelopmentformthebasisforitsSustainableDevelopmentFramework,whichisbindingonitsmembercompanies.ReportingisinlinewiththeGRI,isindependentlymonitoredandverifiedandtheresultspubliclydisclosed.Seefurtherwww.icmm.com/our-work/sustainable-development-framework.
UN’s Guiding Principles on Business and Human Rights:ThesenowrepresenttheUN’sofficialpositiononcorporatedutiestowardshumanrights.TheGuidingPrinciplesareavailableathttp://www.business-humanrights.org/media/documents/ruggie/ruggie-guiding-principles-21-mar-2011.pdfandtheSpecialRepresentative’swebsite/portalisathttp://business-humanrights.org/SpecialRepPortal/Home.
OECD Guidelines for Multinational Enterprises:TheOECDGuidelinesforMultinationalEnterprisesincluderequirementsondisclosure,employmentandindustrialrelations,environment,combatingbribery,consumerinterests,scienceandtechnology,competitionandtaxation.TheGuidelineswererecentlyupdatedtoincorporatehumanrightsintocorporateduties.Seefurtherwww.oecd.org/dataoecd/43/29/48004323.pdf.
Akwe-Kon Guidelines:TheAkwe-KonGuidelinespreparedbytheSecretariatoftheConventiononBiologicalDiversityaredesignedtosetoutacceptedprocessesforconsultationwithindigenouscommunitieswheredevelopmentmayimpactindigenouslandsandresources.Seefurtherwww.cbd.int/doc/publications/akwe-brochure-en.pdf.
Framework for Responsible Mining:TheFrameworkforResponsibleMiningisajointeffortbyNGOs,retailers,investors,insurers,andtechnicalexpertsworkinginthemineralssector.Itoutlinesenvironmental,humanrightsandsocialissuesassociatedwithminingandminedproducts.Seefurtherwww.frameworkforresponsiblemining.org/.
The Natural Resource Charter:TheCharterisasetofprinciplesforgovernmentsandsocietiesonhowbesttoharnesstheopportunitiescreatedbyextractiveresourcesfordevelopment.Seefurtherwww.naturalresourcecharter.org/.
Sources:Sustainable Development Strategies Group(Danielson)andShaping Sustainable Markets(http://shapingsustainablemarkets.iied.org)
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Tackling the challengesMMSD articulated nine challenges facing the minerals industry. The tables below outline some of the progress to date – identifying both achievements and ongoing challenges based on the research undertaken for this review. It is by no means comprehensive but may help shape understanding of the last 10 years to inform the agenda for the next 10 years. Please have your say in this discussion via www.iied.org/mmsd.
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The viability of the minerals industry2002 2012
Breaking New Ground The challenges 10 years on – views from our research
Tobe viablethemineralsmarketshouldevolveto internalise the costsandincentivisesustainabledevelopmentgoodpractice.Bothregulatoryandmarket-basedinstrumentsshouldbedeveloped.
Companiesstruggletolinksustainabledevelopmentinvestmentswithfinancialsuccessandaclear business case,particularlygivenlowmargins.
Mineralscompaniesasagrouphaveapoorrecordonsafe and healthy working conditionsandmoreneedstobedone.
Sustainabledevelopmentfundamentalsmustbeembedded in company culturetohaveapositiveeffectonhealthandsafety,accesstocapital,asociallicencetooperate,theabilitytoattractandmaintaingoodmanagerialtalent,andtheopportunityforareturnoninvestment–necessitatingashiftfromacostculturetoavalue culture.
Viabilityinthemainstreamindustryisstillviewedverymuchinfinancialterms,andincreasingdemandfromemergingcountrieshascontinuedtopushupconsumptionandproductionfigures.Recyclingremainslowand,accordingtotheCommissiononSustainableDevelopment,commoditypricesstillfailtoreflecttheenvironmentalandsocialcostsinthe‘mineralslifecycle’.6
Health and safetycontinuestobeapriorityissue.Movementstowardscommunityhealthandwellbeingarebeingconsideredwithintheremitofcommunitydevelopmentandsocialprogrammes.ICMM’sworkshopsandconferenceshaveprovedafruitfulwayofsharingexperiencesandresponses.Collaborationwiththeoilandgasindustryontopicsthatarerelevanttobothisnowprovidingacross-sectorplatformforsharing.Databasesofbestpracticeexistbutitremainschallengingtofindexacthealthandsafetyfigures.Itisnotpossibletosaywithcertaintywhethertherehasbeenarealandtrueimprovementinhealthandsafetyintheminingindustry.Theobjectiveofeliminatingfatalitiesremains.
Thereisnoclearcross-industryrecognitionofthebusiness caseforinvestinginsustainabledevelopment,eventhoughsomeindustryleadersseesustainabledevelopmentasacompetitiveadvantageandarebeginningtoadheretothenotionofsharedvalue.However,sustainabledevelopmentismorefirmlyapartofoperationalriskmanagement,asfactorslikeincreasedwaterandenergyscarcity,andthegeopoliticsofmininginremoteareasforceminingcompaniestoconsidertheseissues.
Thediscussionsaboutculture and organisational policies,introducedintheprecedingsection,arealsorelevanttoissuesofviability.
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The control, use and management of land2002 2012
Breaking New Ground The challenges 10 years on – views from our research
Governmentsshouldestablishintegrated land use planning frameworks thatbalancecompetinginterestswhetherlocalandnational,socialandenvironmental.
Governmentshouldrecogniseandupholdtherights of indigenous peopleandcompaniesshouldact‘asistogainconsent’.Indigenouspeopleneedaninternational bodytoestablishandupholdgoodpractice,andevidence of good practiceengagementbetweenminingcompaniesandindigenouspeople.
Consensusisneededon ‘no-go’ zonesforminingandprotectedareaswithexamplesofgoodandbadpracticeandrecommendationstohelpregulatorssettermsfornewminingprojects.
Key action:
l Globallevelguidanceonprotectedareasandmining(ledbyIUCN)
Access to land and resourcescontinuestobeoneofthecentraldrivingforcesforindustry’sengagementwithsustainabledevelopment,and‘resourcenationalisation’,whichcanbringrenegotiationsoftaxes,mandatoryjointventuresandotherconstraints.
National development plans,mineralinvestmentsandlocalcommunityexpectationsremainatoddsandimprovedinformationsharingandcooperationbetweensectorsanddifferentlevelsofgovernmentisstillneeded.Yetthereareemergingmodelsofsuccessfulcooperation.TheWorldBank’scurrentagendaisfocusedon‘corridors’inrespectofintegratedlanduseplanning.MozambiqueandLiberiahavebothused‘growthcorridors’centredoninfrastructuredevelopmentsthatmeanmininginvestmentscanbeintegratedwithdevelopmentoflocallyappropriateactivitiessuchasagriculture,forestryandsmall-scaleminingtohelpfacilitateindirectbenefitsandemploymentfrommineraldevelopments.This‘linkages’agendaisalsoakeypartofthenewAfricaMiningVision.7
ICMMhasproducedguidanceonindigenous peoples’ rights,includingevidenceofgoodandbadpractice.YetIndigenouspeoples’groupscontinuetoidentifysocialandenvironmentalimpactsthatshowthatcompanies’commitmentslackcredibleandindependentperformancemonitoring.Therearenumerousexamplesofbadpractice,fromtheTasekoMineinCanadatotheGrasbergMineinIndonesia.Companiesareoftenshowntobeviolatingindigenouspeoples’rightsandthesituationisfrequentlymademoredifficultbygovernmentfailuretorecognisetheserights.Thereisno international body for indigenous peoples and mining.
TherighttoFree, Prior and Informed Consent(FPIC)hasbeenarticulatedininternationalconventionsandsoftlaw,butcompanieshavestruggledtoimplementitintheabsenceofagreementonwhatthatlookslike.ICMMdevelopedapositionstatementbindingitsmemberstorespectnationallawsandengagewithFPICprocesses,butitdidnotrequireconsentunlessthiswasalreadyenshrinedinnationallaws.ChangestotheInternationalFinanceCorporation’sPerformanceStandardsonFPICin2011mayforcetheindustrytoreengagewithFPICandencouragepracticalstepsforimplementation.
AnICMMpositionstatementhascommittedmembersnot to explore or mine in World Heritage properties(seeMining,mineralsandtheenvironment,below).Thisguidesbutdoesnotbindtherestoftheindustry(themajorityofcompanies)anddoesnotapplytootherconservationorprotectedareas.
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Minerals and economic development2002 2012
Breaking New Ground The challenges 10 years on – views from our research
Formineralstocontributetopovertyalleviationandeconomicdevelopment,appropriate frameworksforcreatingandmanagingmineralwealthmustbeinplacealongwithinstitutionalcapacityandpoliticalwilltoovercomepoormanagementanddistributionofresourcerents.
Governmentsmustbetransparent on revenue generation and expenditurewithaninternationalregisterofallpayments.
Companiesmustpromoteandnotjustrespect:human rights,adherencetotheVoluntary PrinciplesonHumanRightsandSecurityandotherinternationalhumanrightsstandards.Moreresearchisneededonhuman rights indicatorsandcompliancemeasuresforgovernments,companiesandcivilsociety.Companiesmustdomoretopreventmineral-relatedconflict.
Key action:
l Reviewanddevelopmentofnationallegalandpolicyframeworks
l Internationalregisterofpaymentstocombatcorruption
l Nationalcapacitybuilding
l Nationalmultistakeholderprocesses
ManyintervieweeshighlightedGovernment capacitytomanagemineralinvestmentsasthesinglegreatestchallengefacingmineralsandsustainabledevelopmentandonethathasseenlittleprogressoverthelast10years.
TheIntergovernmentalForumonMining,Minerals,MetalsandSustainableDevelopment,taskedwithtakingforwardthepolicysideofMMSD’srecommendations,finalisedtheMining Policy FrameworkinFebruary2012–10yearsafterthattaskwasset.8Itallowsgovernmentstomaptheirregulatoryandinstitutionalframeworkagainstbestpractice,andtoidentifygaps.Applyingitisvoluntary.AssuggestedbyMMSD,itincludesguidanceonaccesstoinformation,publicparticipation,andlandrights,althoughartisanalandsmall-scaleminingissuesclearlyremaincontentiousanditistooearlytoassesswhetheritwillhaveanyimpact.
TheframeworkfollowsinitiativessuchastheWorldBank’sExtractive Industries Reviewin2002-2004,ICMM’sResource Endowment Initiative(nowMining Partnerships for Development)startedin2004,andtheNaturalResourcesCharter,whichallprovidemultistakeholderguidanceonhowtomanagenaturalresourcesforeconomicdevelopment–andrepresentanongoingresearchbasefundamentaltounderstandingsustainabledevelopmentinthesector.
The Extractive Industries Transparency Initiative (EITI),startedin2005,hasmadeprogressonan international register of paymentstocombatcorruption.However,theEITI’sagendaisverynarrow.Manyarechallengingittomovebeyondtrackingpaymentstogovernmentsintotrackinggovernmentexpenditure,disaggregatedreporting,andtoachievetransparencyoncontractsandlicences.Otherchallengesaretoregisterinformalrevenuesfromartisanalminers,toachievegreaterownershipofthedataatthelocallevel,tomakegeologicaldatabasesopentothepublic,andtoconsidertheimpactoftheUSDodd-FrankAct(requiringUScompaniestodeclaretheirpaymentstogovernment)inmovingEITIfromsofttohardlaw.TheWorldEconomicForum’sResponsibleMineralsDevelopmentInitiativehasstartedworklookingatMineralDevelopmentAgreementstomaketheseamoretransparentandinclusiveprocess.
MMSDmadeonlyaminimalreviewofhuman rights issues,asitwasconsideredtooideologicallyweightyanissueatthetime.However,therehasbeenrecentprogressonthisissue.ICMMandothershavereleasedanimplementationguideontheVoluntaryPrinciples,andsomeminingcompanieshavesuggestedthePrinciplesbecomemandatoryforthesector.RecentprogressbytheUNandthe‘Ruggieprocess’(seeNewAgenda)mayforcegreaterengagementwiththehumanrightsagenda.Indeed,AngloGoldAshantiarealreadybeginningtotalkaboutthe‘rightsofcommunity’.ICMMhasrecentlyproduceddocumentsonHuman Rights in the Mining and Metals Sector thathastoobeguntheprocessofleaningwithspecificguidanceonmanagementsystems,grievancemechanismsandduediligence.
Multistakeholder processeshaveproliferatedandarediscussedinresponsetoeachofthechallengesinthissection.Howeverrulesandguidancearenotconsistentlybackedwithindependentverificationorrealconsequencesfornon-compliance–amajorongoingchallenge.
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Local communities and mines2002 2012
Breaking New Ground The challenges 10 years on – views from our research
Miningandlocalcommunitiesmustbeanareaofparticularfocus.
Tostart,allactorsneedtohaveacommitment to sustainable development,effectivecommunityparticipationindecisionmaking,proactiveandnotreactiveapproaches,andwillingnesstoshareresponsibility.
Companiesshouldwork with civil society wheregovernmentcapacityislacking.
Clearer guidanceisneededoncommunityengagementprocesses,integratedsocialandenvironmentalimpactassessmentsandeffectivemineclosureplans.
Multistakeholder forumsshouldberecognisedascapableofraisingcommunityawareness,buildingcapacityandaddressingthepowerdeferentialbetweencompanyandcommunity.
Key action:
l Integratedimpactassessments
l CommunitySustainableDevelopmentPlans
l Integratedplanningforclosure
l Labour-managementagreementforsustainabledevelopment
l Disputesandconflictresolutionmechanisms
Thepast10yearshavehelpeddefinewhatcommunitygoodpracticelookslike.Manyminingindustryassociationsnowprovidebindingpoliciesandguidanceoncommunitydevelopmentconcernsfortheirmembers.ForexampletheMiningAssociationofCanada’s‘TowardsSustainableMining’InitiativeandtheProspectorsandDevelopersAssociationofCanada,whichhavedevelopedtheE3standardtoincludemoresocialaspects–nowE3plus.ICMMisconsideredthe‘firstportofcall’forindustrystandardsongoodpractice—somethingwhichdidn’texistbefore.Industryleadersarelesspaternalisticandthereisevidenceofcommunitiesbeingaskedwhattheywant.TheideaofCommunitySustainableDevelopmentPlansistakingshapeintheformofImpactBenefitAgreementsorCommunityDevelopmentAgreementsandisspreadingfastinnationalregulations.9Theagendatoaddresssocialconcernsiscertainlymoreprevalentandsophisticatedthanitwas10yearsagoandminingcompanies–withtheskills,knowledgeandresources–haveplayedanincreasingroleincommunitydevelopment(particularlywheregovernmentcapacityhasbeenlacking).
However,community involvement overall cannot be considered an area of achievement,andremainsoneofthebiggestchallengesformineralsandsustainabledevelopment.Companypolicydoesnotalwaysleadtobestpracticeontheground.AngloAmerican’sSocio-EconomicAssessmentToolkit(SEAT)isupheldasanexampleofbestpractice,yetthePebbleprojectinAlaskahasattractedcriticismbecauseofthedisconnectbetween‘rhetoricandreality’.10Ingeneral,thereareaccusationsofindustry’sleaders‘outsourcing’theirhumanrightsabuses.AndtheUKParliamentaryCommitteeonHumanRightsfoundevidencethat‘UKmultinationalsmaypresentacompliantfaceathomebutshowquiteadifferentapproachwhenoperatingelsewhere,andsomehaveawoefulrecordabroad.’11
Indeed,theCommissiononSustainableDevelopmentreportedin2011,thatSocial Impact Assessmentsandcompensationregimesremaininadequate.12Thisresearchpointedtothefactthatpermittingandregulationsdon’taddresssocialissuessufficiently.Manyminersstillpreferthetechnicalpracticalityofenvironmentalsolutions.
ICMMhasdevelopedguidance on grievance mechanismsforitsmembers–anMMSDrecommendation–andBHPBilliton,Anglo-American,Xstrata,Newmont,CerrejonandOceanaGoldhavebeendevelopinggrievancemechanismtoolsandapproachesfortheirprojectsites.TheworkofUNSpecialRapporteurJohnRuggieonbusinessandhumanrightshashighlightedtheimportanceofgrievancemechanisms,includingthosethatarecompany-led.Manyoftheseeffortsare,however,stillatthestageofpilotingapproachesandframeworks.13
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Local communities and mines – continued
Capacity buildingforbothcommunitiesandcompaniesisstillneededandalthoughachievementshavebeenmade,thisissueremainsachallenge.ICMMiscurrentlyupdatingitsCommunity Development Toolkit,bringinginastrategicapproachtocommunityinvestmentthattheIFChasbeentriallingwithNewmont(onvaluingdifferentcommunityinvestments),whichhasmoreofahumanrightsfocusandisatoolforgrievancemechanisms–allreflectingadvancesinthecommunitydevelopmentagenda.
Thereisnodoubtthatcommunitiesbetterunderstandtheirrightsandareplacingmoredemandsongovernmentsandcompaniestoensurefairbenefitsfrommineralactivities.Theideaofmaintaininga‘sociallicencetooperate’throughoutthelifecycleofthemine—inwhichthecommunityacceptsandtruststhatthemineisoperatinginitsinterest—maybegainingtraction.14
Animportantpointofqualification:thisresearchwasbynomeansextensiveenoughtomakeabroadandfairassessmentoftheinteractionsbetweencompaniesandcommunitiesatthelevelofthemine.Todothisproperly,baselinedatawouldbeneededandanassessmentwouldhavetotakeplaceoverthefull20—30-yearlifecycleofthemine.Again,thestandard-settingorganisationsshouldbepartofrespondingtothischallengeofdatacollectionandevaluation.
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Mining, minerals and the environment2002 2012
Breaking New Ground The challenges 10 years on – views from our research
Mineralsactivitieshaveasignificantenvironmentalimpact.Managingtheseimpactsmoreeffectivelyrequiresdealingwithunresolvedissuesofhandlingimmensequantitiesofwaste,developingwaysofinternalisingthecostsofaciddrainage,improvingbothimpactassessmentandenvironmentalmanagementsystems,andeffectiveplanningformineclosure.
Thereisaneedtointegratesocialandeconomicaspectsintomineclosureplanning,addressongoingimpactsoflegacyminesites,andengagewithbiodiversityundertheConventiononBiologicalDiversity.
Key areas of action:
l Globallevelguidanceonprotectedareasandmining(ledbyIUCN)
l Guidanceonlargevolumewaste
l Dialogueonminerallegaciesleadingtoanindustrywideminerallegaciesinitiative
l Bestpracticeonbiodiversityandtoolsforintegratedlanduse
GuidanceandprincipleshaveappearedinresponsetoMMSD’scall.
Therehavebeentechnicaladvancesonwaterandwaste metals toxicity,withaccompanyingregulations.AndtherehavebeenfewerenvironmentaldisastersthanbeforeMMSD.Forindustry,wateristhe‘issueoftheday’–listedbyallindustryintervieweesamongstthetopthreesustainabledevelopmentissuesforthenext10years–andnumerousinnovationsarebeingdevelopedinresponsetothisconcern.
IUCNandICMMhaveproducedguidance,andgoodpracticecasestudieson protected areas and biodiversityandICMMmembercompanieshaveagreednottoexploreormineinWorldHeritageproperties(butseeearlierdiscussiononthelimitationsofthisguidance).
Therehasbeensomeprogressonminingandbiodiversityoffsetsundertheinternational,multistakeholderBusiness and Biodiversity Offsets Programme,whichproducedastandardonbiodiversityoffsetsin2012.
ICMMhasproducedatoolkittohelpplanformine closure,andexamplesofgoodpracticeexist.PTBHPKendiloCoalIndonesiareceivedenvironmentalawardsfromthegovernmentforrehabilitationpost-mineinpartnershipwithlocalNGOs,andAngloAmericanhasturnedminesitesintowindfarmsandjatrophaproductionforgreenenergyproduction.However,mineclosuresareregardedasanongoingchallengeleadingtosignificantadverseenvironmentalandhealthandsafetyimpacts.Therehasbeenlittleadvancementontheenvironmentalissuessurroundinglegacy siteswherelegalresponsibilityisunclear.ICMMchosenottoleadonthisalthoughitjoinedIUCNandthePostMiningAllianceinhostingamultistakeholder‘RoundtableontheRestorationofLegacySites’in2008,whichreiteratedtheneedforaglobaldialogue.ThePostMiningAllianceandtheNorthAmericanAbandonedMinesInitiativeareregardedashavingcarriedoutpromisingwork.Thisremainsapriorityissue,withgoodpracticeemerging.Butsolutionsproposednowcanonlybeevaluatedin20-30years’time.
AlthoughMMSDproposedataskforcetoconsidertheimplicationsofclimate changepoliciesonmining,itdidnotconsidertheissueitself.Somecompanieshaverecentlydecidedtoengagewiththeclimatechangedebate.Thereisrecognitionthatpoliticalpressure,orthelikelihoodofcarbonpricing,mayincrease.So,too,willpressureoncompaniestoaddressissuesofwater,energyandwastewithinalifecycleanalysisofmineralproductionandconsumption.ICMMintroducedaclimatechangeprogrammein2011followingagreementbyitsmembercompaniestostrategicallyengagewiththeissueofclimatechange.Since,theyhaveagreedasetofprinciples,commitmentsandfocusareaforworkatthelevelofnationalpolicydevelopment.15
Thiscouldbeconsideredanareawherethepursuanceofahostofsingleissueagendashasledtoadisparateanduncoordinatedresponsethatisreactiveratherthanproactiveandfailstoconsiderthetrade-offsinherenttosustainabledevelopmentwhenbalancedwithsocialandeconomicissues.
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An integrated approach to using minerals2002 2012
Breaking New Ground The challenges 10 years on – views from our research
Connectingtheproductionanduseofmineral-relatedmaterialsiscriticaltoensuringthatthemineralssectorcontributesoptimallytosustainabledevelopment.
Companiesatdifferentstagesinthemineralschaincanbenefitfromcollaboratingtoexplorefurther recycling, re-use, and re-manufactureofproductsanddevelopingintegratedprogrammesofproduct stewardshipand supply chain assurance.
Theprice of mineralsshouldreflecttheenvironmentalandsocialcostsoftheirproduction.
Key areas of action:
l Aproductstewardshipinitiative
l Effectiveregulationacrossthemineralvaluechain
l Furtherresearchtosupportthischallenge
AlthoughMMSDfocusedprimarilyonmineralsproduction,itproposedcollaborationacrossthesupplychainasanecessarysteptostrongproductstewardship.However,the‘disconnect’remainswithalackofverticalintegrationinthemineralssupplychainakeychallengetoovercome.
Overall,thechallengeofanintegrated approach hasseenonlyincremental,thoughnotinsignificant,advancements,inproductstewardshipandsupplychainassurance.Minersandmineralprocessors(thefocusofMMSD)havetraditionallynotmonitoredresponsiblepractices‘downstream’andthisagendahasstruggledtotakehold.Fewminingcompaniesundertakelifecycleassessmentsandtherearefewsuccessfulproductstewardshipinitiativesthatactacrosstheentirevaluechain.
EvenICMMhasencounteredchallengesinpaintinganholisticpictureofthemineralslifecycle.ICMM’sworkunder ‘materials stewardship’hassoughttoachievegreatercapacityforlifecyclethinking(linkingupstreamproducerswithdownstreamuserstogenerateandsharedata)butfocusedlargelyonspecificchallengesinthesupplychainsuchasmetalstoxicity.Thisisinpartrespondingtoexternalpolicydriversofnewchemicalsmanagementregulations(notablytheEUREACHregulation). Broaderprogresshasbeenrestrictedbythelackofcapacity(withinandoutsidemembercompanies)foraddressingtheseissuesandtheneedforgreaterintegrationthroughthevaluechain.
Thereistrendin,andmomentumbehind,addressingissuesofconflictminerals(althoughtheDoddFrankActhasmovedthegoalposts).InitiativesofnoteincludetheKimberleyProcessondiamonds,theworkoftheResponsibleJewelleryCouncil,16theemergingstandardonconflictfreegoldbytheWorldGoldCouncil,andtheInternationalTinResearchInstitute’sstandardsfortraceability.17Recentlyemergedrequirementsonchainofcustodyfromminetoconsumerwillbetestedincomingyears.TheFairtradedandFairminedstandardforartisanalgoldhassuccessfullybroughtethicalproductfromtheminetotheconsumer.Andthereisasenseofagrowinginterestinmaterialsprovenanceandlinkingthistothe‘sustainabilityfootprint’ofproducts.
Themetalcommodityassociationshaveapotentiallyleadingroletoplayinthe stewardshipagendainthenext10years.Mosthavemovedbeyondtheirtraditionalmarketdevelopmentremitandhavebeguntoadoptpoliciesonsustainabilitythatapplytomembersacrosstheirsupplychain(seefurthertheworkoftheInternationalAluminiumInstitute,18InternationalCopperAssociation19andInternationalLeadAssociation20).Theyareuniquelyplacedforengagingdownstreamconsumerswiththisagenda.
Insummary,thesystemsneededtodrivesustainabledevelopmentinitiativesupstreamanddownstreaminthesupplychainarenotyetinplace.However,newIFCPerformanceStandards(incorporatingsupplychainresponsibilities),theOECDduediligenceguidanceonmineralsupplychainsandtheUSDoddFranktraceabilityrequirementsmayspurtheindustrytomeetthischallenge(anditmaybeworthwhilerevisitingMMSD’srecommendationsinlightofthesedevelopments).
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Access to information2002 2012
Breaking New Ground The challenges 10 years on – views from our research
Accesstoinformationiskeytobuildinggreatertrustandcooperation.Thequalityofinformationanditsuse,production,flow,accessibility,andcredibilityaffecttheinteractionofallactorsinthesector.Effectivepublicparticipationindecision-makingrequiresinformationtobepubliclyavailableinanaccessibleform.
Authoritative and independent sources of informationacrossthemineraldevelopmenttoserveasalevellingtool.Systemsofaccountabilityandverificationareneededformonitoringperformanceofcompanies,governmentsandcivilsociety.
Alargenumberofreporting initiativeshaveemergedinthelastdecade.ICMMandothersengagedwiththeGlobalReportingInitiativetodevelopaminingandmetalssupplementtoallowfortailoredreportingonsustainabledevelopmentintheminingindustry.ICMMmembersarerequiredtoreportagainstboththeGRIrequirementsandtheICMMSustainableDevelopmentPrincipleswithanindependentassuranceprocess.ThisreportingisnowpubliclydisclosedinICMM’sannualreports.
TheEITIhascreatedapublic register of mining payments and government receiptsandachievedhighpoliticalbuyinandamodelformultistakeholdergovernance.EITIhasputtransparencyontheagendainamuchbiggerwaythanitwasin2002.Manycivilsocietygroupsarenowcallingfortransparencyincontracts,paymentsandfiscalregimes,andgeologicalsurveys.Thesewouldallowformoreopenandcompetitivebiddingandnegotiationofminingcontracts(includingthetermsforcontributionstosustainabledevelopment).Thisdiscussionisparticularlyrelevantinthedebateonresourcenationalismandrisingsocialpressurestoensuremining’scontributiontodevelopment.
Althoughguidanceandprinciplesforgoodpracticeexist,few have adequate accountability and verification systemsforassessingtheindustry’sperformanceandprogress.Moreover,somecivilsocietyorganisationsarequestioningtherelevanceofthesemetricstocommunities,localmineemployeesandlocalgovernment,particularlygiventhateveninternationalexpertsarestrugglingtomaptheproliferationofreportingstandards.
ProgressonFPIC,discussedabove,mayhelpensureinformedengagementofcommunitiesindecisiononmineralinvestments.
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Artisanal and small-scale mining2002 2012
Breaking New Ground The challenges 10 years on – views from our research
Anestimated10 million peopleareinvolved(directlyorindirectly)inartisanalandsmall-scalemining(ASM).Characterisedbylowincomes,unsafeworkingconditions,seriousenvironmentalimpacts,exposuretohazardousmaterialssuchasmercuryvapours,andconflictwithlargercompaniesandgovernments.
Thereisalackofawarenessandinformationongoodpracticeandimprovedmethodsandlackofincentivestoadoptgoodpractice.MMSDdiscussedbanningmanyformsofASM.
Key actions:
l Governmentstodevelopanappropriateandconsistentpolicyframework
l DonorsandinternationalagenciestoworktogetherthroughCASM,forexample,todisseminateexamplesofbestpractice,facilitatecommunicationandimplementpilotprojects
l Programmestoeliminatetheneedforchildlabour
l CooperationbetweenASMandLSM
Sustainabilityinartisanalandsmall-scalemining(ASM)hashardlyadvancedoverthepast10years,whereasthenumbersofsuchminershasgrowndramatically.In2002,therewereanestimated10millionartisanalminersworldwide(and100millionrelatedlivelihoods).In2012,conservativeestimatesare20 millionartisanalminersworldwide,althougharealisticfiguremaybecloserto30million.
SomerespondentstothisresearchfeltthatMMSD’sprimaryfocusonlarge-scalemininggaveinadequateconsiderationtoASMissues.MMSDdidchallengeviewsonASM–oftenconsideredasillegalactivitiestobeeradicated–butitdidnotgosofarastodefineASMasalegitimateplayerwithinthemineralssector.
MMSDtaskedgovernmentswithtakingresponsibilityforASMissues.SomegovernmentshaveadoptedmoreinclusivepoliciesonASM(suchasUganda,SierraLeone,MongoliaandGhana)andshowanincreasingrecognitionofASMasalegitimaterouteoutofpoverty.
NumerousnetworksandinitiativesemergedinLatinAmericaintheMMSDperiodwithmoreholisticresponsestoASMissues.TheworkofOroVerdeandtheAllianceforResponsibleMining(ARM)onethical supply chains overthelast10yearsledtothecreationoftheFairtradeandFairminedGoldStandardandhighlightedtheabilityofthissectortoleadinnovationandchange–bringingethically-minedproductstotheconsumerforthefirsttime.21AlthoughapplicationiscurrentlylimitedthereareplanstoextenditsscopetoAfricaandMongoliainthenearfuture.
Overthepast10years,however,muchworkintheinternationalNGOcommunityhasfocusedonissuessuchasmercury use, formalisation, child labourandconflict minerals–addressingtheproblemsofASMratherdrivingdevelopmentslikeimprovedmarketaccess,creditandtechnicalassistance.(Bycontrast,thesameperiodhasseenconsiderableprogressinthesmall-scaleagriculturesector.)
OverwhelminglyASMremainsamajorandincreasingchallengefortheminingindustryandforpovertyreduction,economicgrowthandsustainabledevelopment.Itisanunderfundeddevelopmentissuethatmaybefurtherisolatedasnewmarketandregulatorystandardsentertheindustry.ThisisnothelpedbycontinuingresistancetorecognisingASMasalegitimateeconomicactivitythatusesnaturalresourcesandcontributestolivelihoods.
MMSDtaskedCASM,theCommunitiesandSmall-ScaleMininginitiative,withtakingforwarditsrecommendationsforASM.CASMhelpedchangetherhetoricaboutASManditsworkhasbeencomplementedbythatoftheDiamondDevelopmentInitiativeInternationalandtheAllianceforResponsibleMining,amongstothers.ButCASM’sworkhasstagnatedinrecentyearsandastrategyreviewhasreconsidereditsrolefromanetworktowardsoneasanin-countryimplementer.However,fundingtomakethisinitiativeworkcontinuestobelimited.
MMSD+10 i reflecting on a DecaDe
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Sector governance – roles, responsibilities and instruments for change
2002 2012
Breaking New Ground The challenges 10 years on – views from our research
Sustainabledevelopmentrequiresnewintegratedsystemsofgovernance.Countrieswithsignificantmineraldevelopmentcouldconsideracomprehensive review of their legal frameworks andtheirimpactsonsustainabledevelopment.
Thereisaneedtostrengthenthecapacity of national and local government todesignandenforceregulationsandensurethemostvulnerableparticipateindefiningnewgovernanceframeworks.
Voluntary codes and guidelines,stakeholderprocesses,andothersystemsforpromotingbetterpracticewheregovernmentcannotbeaneffectiveregulatoraregainingfavourasanexpedient.Lendersandotherfinancialinstitutionscanplayapivotalroleindrivingbetterpractice.
Key areas of action:
l Complaintsanddisputeresolutionmechanism
l Sustainabledevelopmentsupportfacility
l Reportingguidelines
l ForumonMining,MineralsandSustainableDevelopment
Industryhasrisentogovernancechallengesandthereissignificantachievementhere,althoughwithscopeforincreasedsynergiesbetweeninitiatives.Itisthechallengesofimplementationandcapacitytoimplementthatremain.
Thegrowthinmultistakeholderinitiativesshowshowunderstandingofsustainabledevelopmentisgrowing,andhowthosewithsimilarinterestscancooperate–akeyaimoutlinedinMMSD.Aplethoraofvoluntarycodesandguidancehaveemergedoverthelast10years(seediscussiononAchieving cooperationaboveandboxlistinginitiatives)butnotallhavepublicreportingandindependentverificationofresults.
Moreover,ahostofsingleissueinitiativesriskunderminingaholisticapproachtosustainabledevelopment.Thepast10yearsmayhavebeenaboutstandardsetting.Thechallengeforthenext10yearswillbeimplementingthosestandardsinlinewithrisingexpectations.
NootherkeystakeholdergroupshaveequalledICMM’ssuccesswithgoodpracticeguidanceandcasestudies.ItisimportanttorecogniseICMM’sprogress,whilerecognisingthechallengetothemtoretaintheirrelevanceinanimplementation-focusedagendaandpointingtotheongoingchallengesidentifiedinMMSDforotherstakeholdergroups.
Forexample,theIntergovernmental ForumonMining,Minerals,MetalsandSustainableDevelopment’sMiningPolicyFrameworkhasonlyjustemerged.Andgovernmentcapacitytoimplementgoodpracticeisstilllacking.MMSDrecommendedaSustainableDevelopmentSupportFacilitytoassistgovernmentsandprovidecapacitybuilding–andalthoughthearchitectureexists,thishasnotbeenimplemented.
Civil society needstheresourcesandskillstobuildeffectiverelationshipswiththewealth-producingentitiesthatwillbethebedrockfordevelopment.Investorsneedtodefinetheirroleintyingsustainableperformancetocapitalprovision,particularlyforjuniorminingcompanieswherecapitalincentivescanbegreatest.Theartisanal mining sectorneedstoestablishitsroleasanindustryparticipanttoachievethemarketsupportitneeds.Andcommunitiesneedtobeabletodefinetheirexpectationsanddemandsformining’sroleintheirlivelihoodsandlocalenvironment.Allthesechallengescontinueandmustdefinegovernanceofthesectorinthecomingyears.
Beginning to Define a neW agenDa i iii
i 25
Beginning to define a new agendaMost people who were interviewed for this research agreed that there is still much relevance in the MMSD agenda; its wide-ranging scope means it covered issues that take time to move from conceptualisation into practical action.
However, all recognised that the context has changed and, as indicated in the section above, this has changed how the challenges are defined.
MMSD+10 i reflecting on a DecaDe
26 i
0%
50%
100%
150%
200%
250%
Percentage increase in global production from 2000 to 2010
0%
100%
200%
300%
400%
500%
600%
700%
800%
Percentage increase in London Metal Exchange price per unit
from 2001 to 2011
Alumini
um
Primary
alum
inium
Refine
d cop
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Refine
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d
Primary
nick
el
Refine
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(est)
Gold (m
ine fig
ures
)
Coppe
rLe
ad Tin Zinc GoldSilv
er
Platinu
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el
Commoditypriceshaveboomed;thepriceofgoldaloneincreasedfromUS$270perouncein2002tohighsof$1700in2012.Soaringconsumptionhasdrivenincreasedproduction(insomemetalsandminerals),resourceefficiency,newinvestmentsfromChinaandRussia,andsomeofthelargestmergersandacquisitionsindecades.22In2012aloneminingcompaniesareexpectedtoinvest$134billionindevelopingtheirassets.23Miningcompaniesareoperatinginmoreandmoreremoteareas.Thesurgeinlowcosttechnologyandsocialmediameansthatpeopletherearemoreawareandhaveclearerexpectationsofwhattheywantfrommining.Somearguethatsocialresistancetomininghashelpeddriveaccountabilityofbothgovernmentsandcompanies–leadingtonewinitiativessuchastheExtractiveIndustriesTransparencyInitiative(EITI)andNoalaMina(createdbyresidentsofEsquelinArgentina).Certainly,theGrasbergmineinIndonesiahasattractedworldwidemediacoverageandonlinevideoclipshavehadthousandsofviews.
Asforthesustainabledevelopmentagenda,society’sunderstandingandarticulationofwhatbusinessisexpectedtocontributehasadvancedmassively.TheMillenniumDevelopmentGoalsbegantoframebusiness’sroleinpartneringforsustainabledevelopment.Thisisnolongeraboutcorporatephilanthropyorevennarrowiterationsofcorporatesocialresponsibility;companiesareexpectedtocreateandsharevalueandresponsibilityacrossacomplexsetofeconomic,socialandenvironmentalissues.
The‘miningandsustainabledevelopment’agendahasbecomemoresophisticatedsinceMMSD.Althoughsustainabledevelopmentconcernshaveremainedbroadlythesame–‘reducingenvironmentalimpacts’and‘improvingcommunityrelations’haveconsistentlybeenthetoptwoissuesforminingindustrystakeholdersoverthepast10yearswithintheICMMthree-yearlysurvey–themodelresponsethathasemergedoverthelast10yearsmaybeunderreview.Questionsontheappropriatemodelofdevelopingmininginvestments,andtherolethatnationalgovernmentsandcommunitiesshouldplayinensuringtheyreceiveafairshareofthebenefitsfromtheirnaturalresources,arebringingnewissuestothetableandreframingthechallengesasarticulatedinMMSD.
In the past 10 years, both the mining industry and the sustainable development agenda have advanced
Source:BarclaysCapital,MetalMagnifier2012
i 27
Beginning to Define a neW agenDa i iii
Voices we heard: what do you think?
“It’s now ‘how do we mine’ not ‘why are we mining?’”
“We need to be talking about shared value and mutual
interests”
“It should be about overall contribution, not just impact
— let’s talk about net positives”
“We must stop talking about tax and start
discussing obligations and risks”
“Industry needs to become the
development partner countries are looking
for”
“ASM is an opportunity, not a problem. Let’s look at the structural
reasons why it’s not working”“No-gos need to
go beyond World Heritage Sites”
“FPIC should be the no go for social issues”
MMSD+10 i reflecting on a DecaDe
28 i
Resource nationalisation isnotanewconceptbutishotontheagendanow,coveringaspectrumofgovernmentactionfromrenegotiationsoftaxes,tomandatoryjointventurestonationalisationofresources.Since2011,manygovernmentssoughttoincreasethebenefitstheyreceivefrommining–theindustrybouncedbackrelativelyquicklyfromthe2008economiccrisis.Measureshaveincluded:acquiringanincreasedequitystakeinprojects(inMozambique,ZambiaandZimbabwe,forexample);increasingtaxesandroyalties(Chile,Tanzania,GuineaandAustralia);undertakingpolicyreviews(NamibiaandSouthAfrica);andintroducinggreateroversightandattentiontolinkagesprogrammes.24Althoughsomeintheindustryseethisasathreat,othersseeitasanopportunitytoreviseexistingmodelsofdevelopment.Newminingcodesbeingconsideredorintroducedrecently,forexampleinMali,GuineaandBurundi,canbeviewedaspositivedevelopmentsprovidingforastrongfoundationforcontinuedresourcedevelopment.Thismayresultinanew‘socialcontract’forminingbywhichgovernmentsrecognisethattheremayhavebeenanoverrelianceonminingcompaniestodeliveratthelocallevelinthepastandthereisaneedforanewdiscussionon‘whodelivers’benefitsfromminingandhow.Suchaconversationcantakeplacewithinamoresophisticatedsustainabledevelopmentagendathatcreatestruevalueforallstakeholdersthroughsocialandenvironmentalinvestments.
What is the debate? Can it be framed in a way that facilitates a multistakeholder discussion on positive engagement and
mining for the future?
The growth of emerging markets,inparticularChinaandIndia,ismakingthemineralssectormorecompetitiveforbothproducersandconsumers,potentiallysqueezingtheviabilityofsustainabilityinitiatives.Companiesfromemergingmarketcountriesareoftenaccusedofhaving‘lowtono’environmentalandsocialcredentials.However,therearesignsofgoodpractice.WWFChinareports‘rareexamples’ofhowSinopechasengagedwithEIAresponsibilitiesintheGabon,aswellashowChinesefirmswelcomedtheideaofEITI(despitenotknowingmuchabouttheInitiative).25Others,however,seemorepotentialengagementwithChinesecompanies.RioTinto,whoselargestshareholderisChinalco,hasapartnershipinGuineacoveringbothminingandcomprehensiveinfrastructurearrangementswithChinalco,theGovernmentofGuineaandtheIFC.RioTintoseesthisengagementwithChinaasanopportunitytopartnerwith
itsbiggestsupplierandconsumer.Suchpartnershipsareincreasinglynecessaryinensuringmineralscontributetosociety.
How do we engage these ‘new’ players and what is the basis for engagement?
The human rights agendahasgainedmomentumthankstoUNSecretary-General’sSpecialRapporteurJohnRuggie’sprocessarticulatingtheRespect,ProtectandRemedyframework.ICMMcompanieshavebeenverymuchengagedwiththisprocess–incontrasttothetimeofMMSD,whenminingcompaniesweregenerallyunwillingtoengagewithhumanrights,whichtheysawaspoliticallycumbersomeandoverlyideological,withoutapragmaticentrypoint.Miningcompaniesappearmorewillingtoembracethisagendatoday,withsomesuggestingtheVoluntaryPrinciplesonHumanRightsandSecurityshouldbecomemandatory.ButtheRuggieframeworkarticulateskeyresponsibilitiesforgovernmentsandcompaniesbutdoesnotconsidertheroleofcivilsocietyorganisations.Theseactorswillbeimportantcollaboratorsinhelpingtheindustryunderstandhowtointegratehumanrightsissuesintoexistingactivities.
How do we facilitate new learning on human rights and do so in a way that harmonises with existing frameworks and principles for
sustainable development?
Free, prior and informed consent(FPIC)astheprimarytoolforsecuringandprotectingindigenouspeople’srightshasmarkedlyincreasedinimportanceoverthepast10years.FPICopensaconversationon‘no-go’formininginvestmentsbasedonsocialissues,inthesamewaythatenvironmentalissueshavelongbeenconsidered.ThepervasivenessoftherevisedIFCPerformanceStandards,whichincludechangestoimplementingFPIC,mayencouragecompaniestoadoptanewstanceontheseissues.However,thereislittleguidanceforcompaniesonhowbesttoimplementFPICinthecontextofnationalsovereignty,inadequatecommunity-levelsupportandthemineralproductionlifecycle.Emergingguidanceandcasestudiesshouldbringclarityoverthenext10years.
RespondingtodemandsforFPICshouldbeframedwithinabroaderdiscussiononrespondingto increased community expectations,awarenessoftheirrightsandfairdistributionofbenefitsfrommininginvestments.
New issues shaping the agenda in 2012
Beginning to Define a neW agenDa i iii
i 29
What does best practice implementation of FPIC look like?
How should mining industry stakeholders respond to increased community
expectations? How does this, together with changing government roles in managing
mining investments, suggest a new social contract and model for partnerships in
mining?
Climate changeisapoliticallyuncertainissuebutincreasinglyamarketdriver.AtthetimeofMMSD,therewasnothingcompellingtheindustrytoengagewithclimatechange.Evennowthecross-sectoralandubiquitousnatureoftheclimatechangedebateinhibitstheconversationwithcompanies.Theminingindustrypreferstodealwithmorespecificchallenges.Butcarbonpricingisanemergingmarketincentiveforthatengagement.Indeed,aBSRreportidentifiedseveralreasonswhyminingcompaniesshouldsupportclimatechangeadaptation,includingrisingriskstocriticalinputssuchaswaterandenergy,increasingcompetitionforotherresourcesduetoclimatechange,andriskstoemployeehealthandsafety(particularlyinundergroundmineswheretemperatureincreasesareparticularlydangerous).26Technicalresponsesfromcompaniestoenvironmentalissues(innovationsinwaterandenergyuse,forexample)mayprovidethebuildingblocksforamorecompleteresponse.AKPMGsurveyin2011foundminingcompaniesarestilladoptinga‘waitandsee’approachtoclimatechange,27buttherearesignsofprogress:ICMMnowhasaclimatechangeprogrammeproducinggoodpracticeandpositionstatementsonclimatechange,andBHPBillitonandRioTinto,forexample,haveclimatechangegroups.
Respondingtoclimatechangeissuesshouldtoobeframedwithinabroaderdiscussionaroundresource access–withdifficultiesinaccessingenergy(drivingupoperatingcosts)andwater(linkedtoclimatechangeandhavingaknockoneffectofdrivingupenergyuseindeliveringwatertooperations)affectingthedynamicsofdailyoperationsintoday’sindustry.
How do we make climate change a genuine consideration in organisational policies in the
mining sector?
The green economyisthebuzzwordin2012andthedefiningconceptfortheRio+20EarthSummitinJune2012.Agreeneconomypolicyframeworkcouldhelpgovernmentsto
makebetterdecisionsonresourcerents,reinvestment,greenincentivesandtransparency.Yetdiscussionsonthegreeneconomyhavesofarneglectedmining.Miningcompanies,andmanystakeholders,areuncertainabouttheconcept’srelevance,andthebasisforengagement.Thatmaybebecauseminingcompaniestendtofocusonproductionissues,notthedownstream‘consumption’chain.Yetpressuresofrisingenergycosts,carbondioxideemissionsandwaterscarcity,alongwitharenewedfocusonsupplychains(seediscussiononanintegratedapproachtominerals)andthelifecycleofproductsandwaste,maydrivechange.Metalssuchascopperandplatinumhaveamarketincentivetoengagewiththisdebate,giventheirrolesinthephysicalgreeneconomy(inelectricityandcatalyticconvertorsforexample);theircommodityassociationsareuniquelyplacedtodriveforwardaconsumptionagendaastheydrawmembersfromthelengthofthesupplychain.
What does ‘green economy’ mean for mining? What are the material implications
of a low carbon economy? What of the recycling and reuse agenda that MMSD
outlined in 2002?
Theseissuesmustbeaddedtotheongoingand,incases,reframedchallengesarticulatedbyMMSDtohelpshapetheagendaformineralsandsustainabledevelopmentforthenext10years:
l Themineralsectorneedstoconsideritsviability inthecontextofapost-recessionpushtowards‘resourcenationalism’,sustainabledevelopmentdebatesre-invigoratingissuesofrecyclingandminerallifecycles,andincreasingcompetitionfrom‘newplayers’inChina,IndiaandBrazil.
l Thereismomentumaroundintegrated land-useplanningwiththeWorldBank’sagendaon‘resourcecorridors’andemergenceoftheseinMozambiqueandLiberiaasexamples.
l Theagendaonminerals and economic developmentisbeingshapedbythechanginggeopoliticsofmining.Miningistakingplaceinmorefragileecosystemsandmorecomplexsocialsituations,suchasconflictregions.Thesechangesrequirenewmodelsofpartnershipthatbringdifferentskillstothetableandensureminingmakesatruecontributiontosociety.
l Thediscussionforcommunity-level developmentismovingtowardsadiscussionof‘whodelivers’andtheappropriatedivisionofrolesandresponsibilitiesinpartnershipsbetweencommunities,companiesand
MMSD+10 i reflecting on a DecaDe
30 i
governments.Themoresophisticateddebateunderwaywillbeshapedbytheemerginghumanrightsdiscourseandgreatercommunityexpectations.The‘socialcontract’isnolongerjustaboutjobsandtaxesandneedstobeconsideredwithinthewiderdebateson‘resourcenationalism’.
l Environmentalconcernsaroundwater,energyand,possibly,climatechangehaveheightenedandinnovativesolutionsarebeingdeveloped.However,monitoringofworkonmineclosuresisneededtoensureprogressandactiononlegacysitesisnecessary.
l Theconflictmineralsagendaandpressuresonresourcesmaydrivetheintegrated approach to mineralsagendaforward.Thismomentumshouldbeharnessedforgreatersupplychaincollaborationupstream(includingtoartisanalminers)anddownstream(particularlyinhighmetalandmineralconsumptionindustriessuchasconstruction,automotiveandelectricalcomponents).
l Authoritative and independent informationontheprogressagainstkeysustainabledevelopmentgoalsisstillneeded.Thosesettingtheguidance–fromICMM,CASMandtheIntergovernmentalForumtotheIFCandUNbodies–needtoensuretheyprovideindependentandauthoritativemonitoringofprogressandthatthistranslatesintomeaningfulinformationatthelevelofthemineandcommunity.
l Theemergingdiscourseonresourcerightsandsupplychainsisforcingtheindustrytoconsiderartisanal and small-scale miningseriouslyasalegitimateindustryplayer.Progressonsustainabledevelopmentacrossthemineralsectorwillhavetoincludeprogressforartisanalandsmall-scaleminers,andstakeholdersacrossthemineralsandsustainabilitycommunitiesmustdomoretoensurethisisgivendueattention.
l Guidelinesandprinciplesgoverning the sector needtobeharmonised.Governmentcapacityneedstoimprove.The‘restoftheindustry’(namelymid-tier,juniorminingcompaniesandartisanalminers)needstobeequippedwiththeresourcesandknowledgetorespondtosustainabledevelopmentconcerns.Financialmarketsarekeytodrivingaccountabilityinthesectorandneedtobeengagedinthisagenda.
How do you think these issues are framing the agenda for minerals and sustainable
development for the next 10 years? What other issues need to be considered?
Beginning to Define a neW agenDa i iii
i 31
…beyond the rhetoricManyintervieweespointedtoimplementationofgoodpracticeandcapacitybuildingastheprioritiesforthenext10years.MMSDsuccessfullyestablishedasustainabledevelopmentagendayetmuchprogressstillneedstobemadenotonlyagainstthatagendabutalsoagainstthemoresophisticatedunderstandingnowemerging.WhiletheminingCEOsatthetimeofMMSDcouldaffordtobevisionaries,theCEOsoftodayhavetofocusonactionthatreachesbeyondindustryleaders.Metricsformonitoringperformanceandmeasuringprogressagainstbaselinedatashouldbecollectednowforevaluationacrossthe20—30yearlifecycleofamine.
Allstakeholderswillhavetogivethoughttotheemergingagendaoflocallydefinedsustainabledevelopmentandhowtouseminingactivitiestoreallytransformsocieties.CristinaEchavarria,boardmemberoftheAllianceforResponsibleMiningandregionalcoordinatorforMMSDSouthAmerica,askedthequestion‘miningtowhatend?’thatresonatedwithmanyparticipantsintheVancouverGEMMConferenceinApril2012.ThisraisesthequestionofwhetheritistimetoturntheMMSDdiscussiononitsheadandchallengetheagendafromthegroundup–itisnolongeraboutminingcompaniesseeingwhattheycandoforcommunities,butaboutcommunitiesandwidersocietydecidingwhattheywanttoseefrommining.
When MMSD was written there was the sense that this was the moment. MMSD responded with an agenda built around a vision and compelling principles. But
the challenge remains as great today as it was then, partly because the players and
voices in the field of mining and sustainable development have shifted the debate. We now need an agenda focused on
operationalising good practice guidance that is built around society’s demands and the
realistic aspirations of a much more capable industry sector.
Contribute your thoughts to where the industry is going and what the agenda
should be for the next 10 years at www.iied.org/mmsd
MMSD+10 i reflecting on a DecaDe
32 i
Thanksgothefollowingindividualswhomadetimetobeinterviewedforthisresearch:
TonyAndrews(Principal,ResponsibleMineralDevelopment(RMD)ConsultantsInc.);JohnAtherton(Director,InternationalCouncilonMining&Metals-ICMM);HilaireAvril(SeniorConsultant,ResourceConsultingServices,);LauraBarreto,(Director,MaterialsEfficiencyResearchGroupandChairofAllianceforResponsibleMining);EdwardBickham(EITIBoardandSeniorAdviser,WorldGoldCouncilandCriticalResourceLtd);JimCooney(SeniorAssociate,ResponsibleMineralsSectorInitiative,SegalGraduateSchoolofBusiness,SimonFraserUniversity);NicholasCotts(GroupExecutive,EnvironmentandSocialResponsibility,NewmontMiningCorporation);RobertCourt(GlobalHeadofExternalAffairs,RioTinto);LukeDanielson(President,SustainableDevelopmentStrategiesGroup);BenDavis(Manager,ICMM);AidanDavy(Director,ICMM);SteveD’Esposito(Head,RESOLVE);CarolineDigby(SustainabilityDirector,EdenProject);JohnDrexhage(Director,ICMM);CristinaEchavarria(BoardMember,AllianceforResponsibleMining);JohnGroom(Safety&SustainableDevelopmentAdviser,AngloAmericanplc);JonHobbs(SeniorPolicyAdvisor,NaturalResourcesGovernance);R.AnthonyHodge(President,ICMM);MarkHolmes(SeniorProgramOfficer,ICMM);PaulKapelus(Director,SynergyConsulting);EstelleLevin(Director,EstelleLevinLtd.);DanielLimpitlaw(independentconsultant,LimpitlawConsulting);IsabelMarshall(Consultant,SeniorPartnerofMymcoConsultoresLtda.,BoardMemberofCESCO(CentrodeEstudiosdelCobreylaMinería),DirectoroftheSustainabilityCommitteeofCESCO);RichardMorgan(InternationalGovernmentRelationsAdvisor,AngloAmericanplc);BenPeachey(DirectorofCommunications,ICMM);IngridPutkonen(ManagingDirector,AgileSustainabilityManagement);LisaSachs(Director,ValeColumbiaCenteronSustainableInternationalInvestment,ColumbiaUniversity);ChristopherSheldon(LeadMiningSpecialist,TheWorldBank);RorySullivan(SeniorResearchFellow,UniversityofLeedsandStrategicAdvisor,EthixSRIAdvisors);JohanViljoen(SeniorVicePresidentSustainability-Policy&Assurance,AngloGoldAshanti);ClaireWhite(SeniorProgramOfficer,ICMM);andPattiWickens(EnvironmentalPrincipal,DeBeersGroup).
ThanksalsotoallthespeakersandparticipantsattheResponsibleMineralSectorInitiative’sGEMM20/20DialogueinVancouverwhoprovidedinvaluableinsightintowherethemineralandsustainabledevelopmentagendaisgoing.
ThankstoICMMwhoopenedtheirdoorsandsharedinternaldocumentsandcandidassessmentsoftheirprogressagainstMMSD’sgoals.
FinallytoLukeDanielson,CarolineDigby,andIIEDcolleagueswhoallmadetimetoreviewandprovidecommentsonearlierversionsofthispaper.
ThispaperwasfundedbyUKaidfromtheDepartmentforInternationalDevelopment.
Acknowledgments
acKnoWleDgeMentS anD enD noteS i iv
i 33
1 TheGEMM 20/20: Global Exploration, Mining, and Minerals in 2020: Responsibility and Sustainability Challenges and OpportunitiesdialoguewasorganisedbytheResponsibleMineralsSectorInitiativeattheBeedieSchoolofBusinessinVancouveronthe17thand18thApril2012.Moreinformationcanbefoundathttp://beedie.sfu.ca/rmsi/.
2 ThesefiguresareincludedinICMM’sAnnualReview2011–Our Journey–andisavailableatwww.icmm.com.
3 SeefurtherKarlP.Sauvant., ‘The times they are a-changin’ – again – in the relationships between governments and multinational enterprises: From control, to liberalization to rebalancing,’ Columbia FDI Perspectives, No. 69, May 21, 2012.
4 Seefurtherhttp://environment.yale.edu/tfd/.
5 Seefurtherhttp://pubs.iied.org/X136IIED.html.
6 CommissiononSustainableDevelopmentReportoftheSecretary-General, Review of implementation of Agenda 21 and the Johannesburg Plan of Implementation: Mining 16February2010.Availableathttp://daccess-dds-ny.un.org/doc/UNDOC/GEN/N10/242/38/PDF/N1024238.pdf?OpenElement.
7 TheAfricaMiningVisionisa‘pathway’developedbyAfricangovernmentsthemselvestoimprovemining’scontributiontodevelopment.Seefurtherwww.africaminingvision.org/.
8 SeeTheMiningPolicyFrameworkatwww.globaldialogue.info/framework.htm.
9 SeefurthertheSustainableDevelopmentStrategiesGroup’sCDALibraryatwww.sdsg.org/archives/cda-library/.
10 SeefurthertheBristolBayreportathttp://ourbristolbay.com/anglo-american-environmental-and-social-track-record.htmlandAngloAmerica’sresponseatwww.investis.com/aa/media/publications/2008pub/aa_real_08/AngloAmericanTheReality.pdf
11 Seefurtherhttp://londonminingnetwork.org/2010/01/uk-parliamentary-human-rights-committee-issues-report-on-uk-businesses/
12 CSDReport,Review of implementation of Agenda 21 and the Johannesburg Plan of Implementation(noteabove).
13 SeefurtherHarvardKennedySchool’sreportonPiloting Principles for Effective Company-Stakeholder Grievance Mechanisms: A Report of Lessons Learnedavailableatwww.hks.harvard.edu/m-rcbg/CSRI/publications/report_46_GM_pilots.pdf
14 SeefurthertheworkofSusanJoyceandIanThompson,forexample,www.oncommonground.ca/publications/PDAC_2008_Social_Licence.pdf
15 SeefurtherICMM,Principles for climate change policy designavailableatwww.icmm.com/document/1843
16 Seefurtherwww.responsiblejewellery.com/chain-of-custody-certification/
17 Seefurtherwww.itri.co.uk/index.php?option=com_zoo&view=frontpage&Itemed=60
18 Seefurtherwww.world-aluminium.org/Sustainability
19 Seefurthercopperalliance.org/core-initiatives/sustainable-energy/
20 Seefurtherwww.ila-lead.org/responsibilty
21 SeefurtherARM’spaperRock Solid Chances for ASMwrittenbyFelixHruschkaandCristinaEchavarríaandavailableathttp://communitymining.org/attachments/059_RSC_FINAL_web_low.pdf.MoredetailsontheFairtradeandFairminedstandardcanbefoundatwww.communitymining.org/index.php/en/fairtrade-and-fairmined-standard.
22 Mostnotably,the2012mergerofGlencoreandXstrata,RioTinto’s2007acquisitionofAlcan,Freeport-McMoRan’spurchaseofPhelpsDodgein2006.
23 BarclaysCapital’sMetal Magnifier,17January2012.
24 SeefurtherTannekeHeersche‘Making Mines Work Harder – Resource Nationalism Trends In Africa’availableatwww.whoswholegal.com/news/features/article/29397/making-mines-work-harder-8211-resource-nationalism-trends-africa
25 SeefurtherWWF’sreportonChina’s Role in Global Tradeavailableathttp://awsassets.wwfcn.panda.org/downloads/wwf_china_trade_report_en.pdf
26 SeefurtherBSR’sreportAdapting to Climate Change: A Guide for the Mining Industryavailableatwww.bsr.org/reports/BSR_Climate_Adaptation_Issue_Brief_Mining.pdf
27 SeefurtherKPMG’sreportResponses to the Climate Change Debate: KPMG Mining Industry Surveyavailableatwww.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/Climate-Change-Mining-Survey-2010-final.pdf
End notes
it is 10 years since the Mining, Minerals and Sustainable Development (MMSD) initiative was completed. its findings were game-changing for the sector, and mining ceos of the day committed to act on its agenda as a robust and credible way to maximise the sector’s contribution to sustainable development. So where are we, 10 years on? How far have we travelled towards a sustainable and responsible mineral industry? this paper is intended as a ‘conversation starter’ – providing an initial assessment of the mining and minerals sector’s achievements against the MMSD agenda and opening up further discussion. contribute your thoughts to where the industry is going and what the agenda should be for the next 10 years at www.iied.org/mmsd
the international institute for environment and Development is one of the world’s top policy research organisations working in the field of sustainable development. With its broad based network of partners, iieD is helping to tackle the biggest issues of our times — from climate change and cities to the pressures on natural resources and the forces shaping global markets.
this discussion paper was produced by iieD’s Sustainable Markets group. the Sustainable Markets group drives iieD’s efforts to ensure that markets contribute to positive social, environmental and economic outcomes. the group brings together iieD’s work on market governance, business models, market failure, consumption, investment and the economics of climate change.
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