Dealing with growing social demands in the mining industry

Dealing with

Growing Social Demands

Wayne Dunn CSR Training Instituteinfo@csrtraininginstitute.comwww.csrtraininginstitute.com

World Bank Group Forum

PDAC 2015Sunday March 1, 2015

Toronto, Canada

mailto:[email protected]

http://www.csrtraininginstitute.com/

PDAC 2015, Toronto, Canada

dealing with Growing Social Demandsfrom Exploration to Closure

Presentation Outline

• What are the growing social demands?• Consultation (formal/informal, history, structure, FPIC,

closure)• Access to land (who/how approved)• Benefit sharing (what’s in it for everyone)• Project approval (who approves? when? how?)

• What is being done?

• What more might we do?

• Discussion

PDAC 2015, Toronto, CanadaPDAC 2015, Toronto, Canada


2015 not an easy time for the mining industry

• Bottom of the cycle (and a long bottom?)

• High costs

• Low prices

• Increasing social demands

• Increasing environmental requirements

• Artisanal mining

• Expanding regulatory requirements

• Expanding compliance requirements & expectations

• How to meet social, environmental & shareholder expectations

Need to innovate

Need to collaborate



Has the World Changed?

1990s• NGOs

• Communications

• National Governments

• Business

Today• NGOs

• Communications

• National Governments

• Business

Society expects more ANDhas more power to force change



Capital Flow into LAC Economies1990 to 2015

Official DevelopmentAssistance90% - 10%*

Business Investment10% - 90%*

Huge changes over the past ~20 years

* SWAG/PFS



CSR in the OLDEN DAYS (cont)

Suddenly communities could influence how, or if, a project could proceed.

Business had a new challenge to figure out

Answers weren’t easy or obvious

Community Relations Management

Framework

Plan

?Results?

System



Local Demands/Involvement Growing Social Demands• Consultation (formal/informal,

history, structure, FPIC, closure)

• Access to land (who/how approved)

• Benefit sharing (what’s in it for everyone)

• Project approval (who

approves? when? how?)

• Environmental monitoring



Consultation• From exploration to closure• Formal/Informal (relationship history across

ownership changes)

• Structured Processes (who leads, who participates, roles & responsibilities, end points)

• Starting point (exploration, permitting, construction)

• ICMM Position Paper http://bit.ly/ICMMFPIC

• defines FPIC as process based on Good Faith Negotiation through which Indigenous Peoples can give or withhold consent

• commits members to work to obtain the consent of Indigenous Peoples

• includes supporting commitments that apply to most interactions with indigenous communities

• defines how to engage where government has primary responsibility

• addresses how to move forward where differences of opinion arise.

http://bit.ly/ICMMFPIC



Aboriginal Title in CanadaIncreasingly progressive rulings

• Calder v. British Columbia (Attorney General) [1973] confirmed Aboriginal title had existed

• R v Guerin [1984] Aboriginal title is a right and government has fiduciary duty to protect it

• Delgamuukw v British Columbia [1997] Aboriginal title is different from merely land use and occupation, as it had previously been defined, but also incorporates Aboriginal jurisdictional authority over how the land is used.

• Supreme Court Ruling Declares Tsilhqot’in Hold Aboriginal Title – 2014

“ownership rights similar to those associated with fee simple: the right to decide how the land will be used; the right of enjoyment and occupancy of the land; the right to possess the land; the right to the economic benefits of the land; and the right to pro-actively use and manage the land.”

• Duty to Consult: similar progression in court rulings

• And then there’s FPIC



Land Access

• Role of the State (strength of land cadastre systems)

• Role of Community (who leads, who participates, roles & responsibilities, end points,)

• Role of Landowner

• Process (purchase, lease, negotiation, relocation, pricing, etc.)

• Dispute Resolution



Benefit Sharing*

• Compressive Community Development Agreements (structured frameworks, bi-lateral, tri-lateral/multi-dept, multi-lateral, ODA involvement)

• Local Content (employment, procurement, training)

• Local Industry/Diversification

• Infrastructure (direct funded, co-funded, tax credits [Works for Investment])

• Resource Access (water, small scale mining, agriculture)

* World Bank approach to promote shared prosperity generated by the mining industry

Mining CommunityDevelopment Agreements

http://bit.ly/1C3VfKW Source BookMarch 2012

http://documents.worldbank.org/curated/en/2012/03/16523320/mining-community-development-agreements-source-book

http://bit.ly/1C3VfKW



Project Approval

• Informal (local, national, international pressures: Tambo Grande)

• Structured Local Processes (Binding Referendum/Honduras)

• Informed Processes (State decision informed and influenced by local input)



Relationships & Trust

• Crosscutting themes (relationship history across ownership changes)

• History of relationships (reputational capital of project and owners –new owners don’t reset reputational liabilities)

• Transparency and legitimacy of processes (environment, permitting & approvals)



What is being done

• National policies and regulations

• Company and industry wide initiatives

• IFI support and multi-lateral technical assistance and support

• ODA support, co-funding

• Development collaboration (NGO, industry, government)



National Policies & Legislation

• Regulatory structures to facilitate meeting growing social demands• Consultation

• Access to land

• Benefit sharing

• Project approval

• Project permitting

• Mine closure



Increasing mandatory and voluntary compliance

• ICMI - International Cyanide Management Institute (ICMI)

• Conflict Free Gold Standard

• Voluntary Principles on Security and Human Rights

• EITI

• Global Reporting Initiative

• Voluntary Principles

• ICMM

• IFC

• Equator Principles

• ILO

• Accountability

• Many, many more



Social value imperativeapplies across industry, sector & geography



Mining Schools Hi Tech!

• Long way to go, Yes

• But mining has come a very long way in last 15 years!

• Other industries see mining as a leader/exemplar



Industry social investments

• Education

• Health

• Poverty alleviation

• Gender equality

• Environment

• Partnerships

• Equity & justice



Global Development FrameworkCollective Social Responsibility

The Millennium Development Goals (MDGs) are eight international development goals that were officially established following the Millennium Summit of the United Nations in 2000

All 193 United Nations member states and at least 23 international organizations agreed to achieve these goals by the year 2015

General framework for governments, international and multi-lateral agencies, NGOs, etc



Global Development Framework II

The United Nations summit for the adoption of the post-2015 development agenda will be held from 25 to 27 September 2015, in New York and convened as a high-level plenary meeting of the General Assembly.



Global development framework elements

• Education

• Health


• Gender equality

• Environment

• Partnerships




Notice any similarities?

Global development framework• Education

• Health


• Gender equality

• Environment

• Partnerships


Social value investments of business • Education

• Health


• Gender equality

• Environment

• Partnerships


Natural Partnerships Unnatural Partners



Why Unnatural Partnerships?Perspectives driven by

Development Community• Development assistance as

dominant capital flow

• Business’ historical record on human development, rights, etc.

• Other impressions and perspectives (profit only, exploitative, etc.)

Business• Development as anti-

business

• Historical pressures from the development community

• Other impressions and perspectives (inefficient, do-gooders, etc.)