An International Overview of Mining Politics - Euromines · An International Overview of Mining Politics ... account for performance on industry-level ... The programme identifies

An International Overview

of Mining Politics

Living with Minerals 5

Mark Rachovides, President Euromines

London, 17 November 2014

European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org

Euromines – who we are

• Recognized representative of the European mining industry;

• Service provider to its members with regard to EU policy;

• Network for cooperation and for the exchange of information throughout the sector within Europe;

• Link to contacts with the mining community throughout the world.

Euromines

represents large

and small

companies and

their subsidiaries

in Europe and in

other parts of

the world which

provide jobs to

more than

350,000 people.

Their activities

and operations

produce more

than 42 different

metals and

minerals.

http://www.euromines.org/


Our Key Messages

RESOURCES • We strongly believe that Europe has a viable resource base

DEMAND • The demand for raw materials is continuously increasing

STANDARDS

• The EU should maintain an enabling environment that provides for achievement of the highest standards in the extractive industries



Overview of Global Policy

Initiatives (by subject areas)

1. Corporate governance and transparency

2. Communications, stakeholder engagement, and reporting

3. Social and economic development

4. Health & Safety

5. Environment and climate change

6. Materials stewardship

EU Priorities: • Climate Change

• Biodiversity

• Environment issues: Water, Waste, Mercury etc.

• Social Acceptance

• Health & Safety

• Material Stewardship

» 4



1. Corporate governance and

transparency

Policy Initiative Issuing Institution IGO/NGO

The Value of Responsible Investment UN Principles for Responsible Investment IGO

Assessing Human Rights Impacts: Where the Rubber Hits the Road UN Global Compact IGO

The Equator Principles (reviewed) The Equator Principles NGO

Business Principles for Countering Bribery Transparency International (TI) NGO

Unmask the Corrupt – G20 Transparency International (TI) NGO

G4 Global Reporting Initiative (GRI) NGO

Mining Company of the Future – Development Partner Framework Kellogg Innovation Network NGO

Integrated Reporting International Integrated Reporting Committee (IIRC) NGO

Non-Renewable Resource Standards Sustainability Accounting Standards Board (SASB) NGO

Financial Valuation Tool IFC IGO

EU Accounting and Transparency Directives European Commission, EU IGO

Natural Resource Charter 2nd Edition NRC/ RWI / Natural Resource Governance Institute NGO

Mining Contracts: How to Read and Understand Them Open Contracting Initiative NGO

» 5

IGO

31%

NGO

69%

IGO/NGO



Transparency

• The Value of Responsible Investment: UN Principles for Responsible Investment

• The initiative presents the main drivers and debates in responsible investment, and makes a case

for the moral, financial and economic imperatives for more sustainable form of investment.

• The Equator Principles: The Equator Principles

• Risk management framework adopted by financial institutions for addressing social and

environmental risk in projects. They apply to all new projects with total capital costs of more than

US$10 million.

• G4: Global Reporting Initiative (GRI)

• Promotes the use of a sustainability reporting framework for sustainable business and

development.

• Natural Resource Charter 2nd Edition:

• A set of 12 best practice principles for governments and societies on how to best manage

natural resources for development.

• Business Principles for Countering Bribery: Transparency International (TI)

• Principles provide a framework for companies to develop comprehensive anti-bribery programs

that are effectively implemented.

• Unmask the Corrupt – G20: Transparency International (TI)

• Campaign advocating for beneficial ownership disclosure, targeting G-20 meeting



Reporting and Accounting

• Integrated Reporting: International Integrated Reporting Committee (IIRC) • Advocates and created a standard for improved reporting in the

communication of an organisation’s strategy, governance, performance and prospects.

• (EITI: Extractive Industries Transparency Initiative)

• Non-Renewable Resource Standards: Sustainability Accounting Standards Board (SASB) • The standard provides companies with standardized accounting metrics to

account for performance on industry-level sustainability topics.

• Financial Valuation Tool: IFC • A tool that estimates the financial return of site-specific community

investment portfolios.

• EU Accounting and Transparency Directives: European Commission, EU

• The EU directives require EU extractive companies to disclose all payments to foreign governments of $100,000 or above, on a project-by-project basis.



2. Communications, stakeholder

engagement, and reporting

» 8


Building Sustainable Futures:

Communication Strategies for CSR Change Management

International Association for Business Communications NGO

IBA Model Mining Development Agreement Project - Spanish International Bar Association NGO


Integrated Reporting International Integrated Reporting Committee (IIRC) NGO

Sustainable Development Goals (SDGs) UN IGO

ISO 14001 Revision International Organisation for Standarisation (ISO) NGO

Non-Renewable Resource Standards Sustainability Accounting Standards Board (SASB) NGO

WB EHS Guidelines review WB IGO

IFC Performance Standards IFC IGO

IGO

33%

NGO

67%

IGO/NGO



3. Social and

economic development / 1

9


Global Agenda Council on Responsible Mineral Management 2012-2014 WEF NGO

Mining and Metals in a Sustainable World WEF NGO

Extractives for Development (E4D) World Bank IGO

Natural Resource Charter 2nd Edition NRC/ RWI / Natural Resource Governance Institute NGO

Women in Natural Resource Management UN Women/ UNEP/ UNDP/ PBSO IGO

Strategic Plan 2014-2017 UNDP IGO

Geology and Mineral Information Systems UNECA IGO

Responsible Mineral Development Initiative (RMDI) WEF NGO

EITI Standard EITI NGO

Shared Value Creation and Local Development OECD IGO

Guidance on state national action plans

UN Working Group on Business and Human Rights IGO

Ongoing priorities and themes and post- 2015 development agenda

UN Permanent Forum on Indigenous Peoples IGO



3. Social and

economic development / 2

10


Expert Mechanism on the Rights of Indigenous Peoples, 7th Session UNHRC IGO

World Social Protection Report 2014-2015

International Labour Organization (ILO) IGO

Equal Pay: An Introductory Guide International Labour Organisation (ILO) IGO

Action Plan on Base Erosion and Profit Shifting (BEPS) OECD IGO

EU Emissions Trading System EU Commission IGO

G-8 International Tax Agreement G-8 IGO

IMF Carbon Tax (and other systems) IMF IGO

IFC Performance Standards IFC IGO

IGO

80%

NGO

20%

IGO/NGO

Extractives for Development (E4D): WB-led multi-stakeholder initiative to share knowledge on extractives particularly focused on

tackling rent-seeking and corruption in resource-rich countries. EITI Standard: An initiative which brings together governments, extractive companies, and CSOs in order to address revenue transparency, by disclosing the taxes and other payments made by extractive companies to governments. Shared Value Creation and Local Development: A review of the objectives and approaches to local content, possibly geared towards a local content toolkit for governments and companies.

World Social Protection Report 2014-2015: The report analyses trends and recent policies in the field of social protection, such as the negative impacts of fiscal consolidation and adjustment measures. EU Emissions Trading System: EU’s GHG emissions’ cap-and-trade system.



4. Health & Safety

11


MSHA steps up mine fatality prevention efforts

Mine Safety and Health

Administration (MSHA), US Government IGO

Equal Pay: An Introductory Guide International Labour Organisation (ILO) IGO

UNGA Improving Global Road Safety UN General Assembly IGO

IGO

100%

IGO/NGO

Equal Pay: An Introductory Guide

The guide is aimed at government authorities, workers’ and employers’ organizations, as well as policy makers,

and provides insights and examples to how ‘fair pay’ can be implemented in different settings.



5. Environment and

climate change / 1

12


First UN Environment Assembly UNEP – World Conservation Monitoring Centre (WCMC) IGO

WB EHS Guidelines review WB IGO

ISO 14001 Revision International Organisation for Standarisation (ISO) NGO

Decisions of the Warsaw Framework for REDD-plus UNFCCC IGO

2014 IUCN World Parks Congress International Union for Conservation of Nature (IUCN) IGO

Sustainable Management of Marginal Drylands – new policy brief UNESCO, Man and Biosphere Program IGO

Testing focus groups as a tool for

connecting indigenous and local

knowledge on abundance of natural

resources with science-based land management systems

UNEP – World Conservation Monitoring Center (WCMC) IGO

Huangshan Declaration on UNESCO

sites, Sustainable Development and the Role of Space Technologies

UNESCO – Man and Biosphere Program IGO

Building Flexibility and Ambition into a 2015 Climate Agreement

Center for Climate and Energy Solutions NGO



5. Environment and

climate change / 2

13


Mobilizing and transferring knowledge

on post-2015 climate policy implications Centre for European Policy Studies NGO

Building Readiness for Carbon Pricing WB Partnership for Market Readiness (PMR) IGO

De-risking Renewable Energy Investments UNDP IGO

Strategy for Success – Delivery as One on Water Related Issues UN Water IGO


Guidelines for reporting emission data

under the Convention on Long-range Transboundary Air Pollution UN Economic Commission for Europe IGO

IGO

73%

NGO

27%

IGO/NGO



5. Preparation of Climate Change

agreement 2015/2016

• Building Flexibility and Ambition into a 2015 Climate Agreement: Centre for Climate and Energy Solutions

• Explores options for a hybrid approach in the 2015 agreement, focusing on mitigation efforts.

• Mobilizing and transferring knowledge on post-2015 climate policy implications: Centre for European Policy Studies

• The initiative will analyze different policies looking for knowledge gaps about implications of

international climate policies, to then cover these gaps with knowledge packages derived

from stakeholder consultation, research, and policy analysis.

• Building Readiness for Carbon Pricing: WB Partnership for Market Readiness (PMR)

• An event which provided a platform for the representatives of business and governments to

share their experiences and views on preparations for carbon pricing policies.

• De-risking Renewable Energy Investments: UNDP

• A framework to support policymakers in selecting public instruments to promote renewable

energy investment in developing countries; accompanied by a financial tool.

• IMF encouraging Carbon Tax (and other systems): IMF

• Mandatory reporting of GHG emissions for quoted companies: UK Dept. for Environment, Food & Rural Affairs



Emission trading systems

(ETS) in the world

China ETS

Pilots

New Zealand ETS

Australia ETS

California ETS

EU27 ETS

Conn., Delaware,

Maine, Maryland,

Mass., New

Hampshire, NY,

Rhode Is, Vermont:

Cap e

Alberta GHG

Reduction

Program

British

Columbia

Carbon Tax

Quebec cap and trade

system – Western Climate

Initiative (WCI) Carbon

Market

South Africa

carbon tax



Summary of ETS pilots in China

• Pilots:

• Beijing, Tianjin, Shanghai,

Chongqing(4 Cities),

Guangzhou, Hubei (2

Provinces) + Shenzhen

• Tasks:

• ETS pilot implementation

plan

• Policy and regulation,

scheme design, cap,

allocation, trading rules,

monitoring, registry and

trading system

• Timeline:

• 2013 local/regional

• 2015 national



Materials stewardship / 1


7th Environment Action Programme Environment Directorate, EU Commission IGO

Horizon 2020 EU Commission IGO

Global Forum on Environment:

Promoting Sustainable Materials

Management through Extended Producer Responsibility (EPR)

OECD – Environment Directorate

(Sustainable Materials Management) IGO

Responsible Mineral Development Initiative (RMDI) World Economic Forum (WEF) NGO

REACH European Commission IGO

Current landscape of alternatives assessment practice: a meta-review OECD, Environment Directorate IGO

» 17

7th Environment Action Programme: The programme identifies three objectives to be achieved before 2020: protect the EU’s

natural capital, make the EU a resource-efficient economy, and safeguard EU citizens from environment-related pressures to health. Horizon 2020: EU research and innovation programme aimed at securing the EU’s competitiveness. Within its Raw Materials Initiative there is research directed at creating more efficient processes of raw materials. REACH: EU Regulation concerning the registration, evaluation, authorization, and restriction of chemicals, and establishing the European Chemicals Agency.



Materials stewardship / 2


IOMC Toolbox for Decision Making in Chemicals Management

OECD, Chemical Safety and Biosafety IGO

Mercury Exposure and Health Impacts

among Individuals in the Artisanal and Small-Scale Gold Mining Community WHO/ UNEP Mercury Partnership IGO


Guidelines for reporting emission data

under the Convention on Long-range Transboundary Air Pollution UN Economic Commission for Europe IGO

Raw Materials Committee Business and Industry Advisory Council (BIAC), OECD IGO

» 18

IGO

82%

NGO

18%

IGO/NGO

Mercury Exposure and Health Impacts among Individuals in the Artisanal and Small-Scale Gold Mining Community:

Report commissioned by the WHO exploring the effects of mercury on the health of communities ASGM communities.

Guidelines for reporting emission data under the Convention on Long-range Transboundary Air Pollution:

guidelines aiming to assist parties in meeting their obligations under the Convention of Long-range Transboundary

Air Pollution and its protocols (e.g. heavy metals).



Mining’s importance

to national economies

19

Source: ICMM 2013



Trends in the nominal value

of world mineral production

» 20

• In 2010, the nominal value of world mineral production was nearly four times higher than it had been in 2002. During this period, growth in value has been significantly greater than growth in world gross domestic product (GDP).



Fraser Institute

Policy Potential Index

The Fraser Institute published the 2012/2013 annual survey of mining and exploration companies to assess how mineral endowments and public policy factors such as taxation and regulation affect exploration investment.

The Policy

Potential Index (PPI) is a composite index, measuring the overall policy attractiveness of the 96 jurisdictions

in the survey.



Key Factors in

Mining Investment Decisions

22

• Geological potential for target mineral

• Profitability of potential operations

• Security of tenure & permitting

• Ability to repatriate profits

• Consistency of mineral policies

• Realistic foreign exchange controls

• Stability of exploration terms/conditions

• Ability to pre-determine environmental obligations

• Ability to pre-determine tax liability

• Stability of fiscal regime

꞊ Source: ICMM 2014, Otto/United Nations Survey of 45 companies



Export restrictions

23

• Important raw materials sources are increasingly located in parts of the world which lack political and economic stability. Over 50% of major reserves are located in countries with a per capita gross national income $10 per day or less.

• There are over 450 export restrictions on more than 400 different raw materials.

• The OECD Inventory confirms a transparency deficit in the design and implementation of export restrictions.

Location of mining by region, 1850 - present

Source: Raw Materials Group, Sweden



Recent trends in

the use of export restrictions

24

• Use of export restrictions is often highly unpredictable. Substantive international disciplines in this area are weaker than for import restrictions.

• Export restrictions on raw materials have become more frequent over the last decade. • The OECD Inventory records more than thirteen different types of export-restraining

measures or policies, the most common of which are export permits, export taxes and quantitative restrictions.

• Export restrictions are broadly applied across all raw materials sectors, from minerals and metals, and metal scrap, to wood and agricultural commodities. • They are used mostly, but not exclusively, by emerging and developing countries

and for a variety of reasons.

• Global markets for raw materials often feature a high concentration of supply of, and hence dependency on, production and exports by a small number of countries.

• Experience shows that export controls can trigger similar actions in other supplier countries, driving up prices further, making price volatility worse, and creating a crisis of confidence that spreads from one resource to the next.

Source: Export Restrictions in Raw Materials Trade: Facts, Fallacies and Better Practices, OECD, 2014


Public Acceptance

» 25


Current NGO agenda on mining

26

Source: SIGWATCH data ©2014



Raw Materials:

Increased importance

27

• Minerals and metals represent the basis for any industrial

production process. They provide both everyday products and

new solutions for modern infrastructure and technologies.

• Increase in population and living standards will continue to drive

growing demand for raw materials. Due to these developments

resource efficiency measures such as optimizing reuse and

recycling as well as extension of lifespan of products are not

expected to close the material deficit by 2050.

• European mining companies and technology companies are

playing an increased global role in securing access to raw

materials.



What we need to help lift

people in the EU out of poverty

• 20% industrial contribution to GDP by 2020 and more later.

• Successful conclusion of the EU-US trade agreement (TTIP).

• Resource efficiency strategies that drive contributions from whole value chains – including mining & quarrying in the EU.

• Development of “environmental footprints” into full “net benefit assessments” of products and processes in economic, environmental and social terms.



What we need to contribute

to employment rates

• Explicit political support for mining as a particular growth strategy.

• Continued increase of minerals exploration in the EU Member States.

• Free movement of labour (e.g., EU job descriptions, standards, accreditations).

• Financial support for investments that target performance exceeding established standards.



What we need

to invest in Europe

30

• Predictable and stable policy from the EU and Member States.

• An EU energy policy focussed on creating a viable undistorted internal market that offers long-term supply contracts to industry.

• Deployment of all conventional and unconventional energy sources.

• Reduced permitting times in line with recommendations of the EU Semester.

• Recognition of mine site rehabilitation.



What we need to contribute to

reduced greenhouse gas emissions

• An EU Climate policy focused on obtaining a global agreement, allowing efficient mining to grow and avoiding carbon leakage.

• Maintenance of the EU ETS as the main policy instrument – One single GHG reduction target to drive all other measures including renewables and efficiency.

• Separation of the power sector and the manufacturing sectors into two different emission reduction systems.

• Allocation of emission allowances under ETS based on realistic benchmarks, technical standards and actual production.

• Recycling of ETS revenues into innovation of emissions reduction and/or sequestration technologies.

• Compensation for indirect carbon costs.

» 31



What we need to deliver

maximum value over time

• Predictable and stable policy from the EU and Member States • No new legally binding targets for at least a

decade.

• Protection from unfair global competition • Less unilaterally self-imposed costs (e.g.,

energy, auditing etc.).

• Deployment of all conventional and unconventional energy sources enabling affordable long-term energy contracts.

• Market rewards for stand-out productivity performance • Market reward for CSR etc


Thank you for your kind attention

In case of any questions please contact: Euromines 12, Avenue de Broqueville

B-1150 Brussels Belgium Tel.: +32 2 775 63 31 Fax: +32 2 770 63 03 E-mail: [email protected], [email protected]

www.euromines.org

Society needs Responsible Mining

Documents

An International Overview of Mining Politics - Euromines · An International Overview of Mining Politics ... account for performance on industry-level ... The programme identifies