The Role of Host Governments in Enabling or Preventing Conflict

Associated with Mining

Tony Andrews Principal & Co-Founder

Centre for Responsible Mineral Development

February 7, 2019

Ryerson University Institute for the Study of Corporate Social Responsibility

Toronto, Canada

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RMDCentre for Responsible

Mineral Development

PRINCIPLE INVESTIGATORSTony Andrews, RMD Inc. Philippe Le Billon, University of British ColumbiaChang Hoon Oh, Simon Fraser UniversityDavid Reyes, Triple R AllianceSarah Daitch, UNDP

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Ian ThomsonOCG Philippe Le Billon

UBCDavid ReyesTriple R Alliance

Ian ThomsonOCG Philippe Le Billon

UBCDavid ReyesTriple R Alliance

EXTERNAL REVIEW COMMITTEEMargeret Watchenfeld, Themis Research; Institute for Human Rights and BusinessUyanga Gankhuyag, UNDP Bangkok Regional HubZamira Djabarova, American Bar AssociationBeatriz Mejia-Asserias, APC, ColumbiaEndre Stiansen, Oslo Goverance Centre

ASSISTANTSJonathan Gamu, University of British Columbia Jioung Shin, Simon Fraser University

PHASE 2 RESEARCH TEAM

Presentation Outline

PHASE 1: The Rise in Conflict Associated with Mining Operations: What Lies Beneath (CIRDI)

PHASE 2: The Role of Host Governments in Enabling or Preventing Conflict Associated with Mining (UNDP)

(1) Broad structural relationships

(2) Study background & approach

(3) High level observations (Phase 1)

(4) Role of host governments (Phase 2)

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Rise in Conflict Coincides With Global Commodity Boom (2002-2013)

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$ B

illio

ns

Conflict Incidents by Year Annual Exploration Expenditures

Source: SNL MetalsEconomics Group, 2014Source: International Council for

Mining and Metals (ICMM), 2015

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INCREASING WORLD PROTESTINTENSITY 2003 – 2013

Rising Social InstabilityINEQUALITY, INCOME DISPARITY, UNEMPLOYMENT,AUSTERITY MEASURES, CUT-BACKS ON SOCIALSERVICES, POLITICAL UPHEAVAL (ARAB SPRING – 2011) RISE OF TERRORISM

Cold War & Anti-Apartheid Tensions1980s

Relative Calm

Return of Political Protest Activity

Source: The Global Risks Report 2016, World Economic Forum

Occupy Together Protest, Montreal, 2011

20031980 1990

SHARE OF COUNTRIES (UN MEMBERS) PARTICIPATING IN CONFLICT, 1946-2012

Source: The Peace Research Institute, Oslo (PRIO)

NUMBER OF REPORTED TERROTIST EVENTS BY YEAR, 1970-2013

Source: PRIO

Source: PRIO, The Peace Research Institute, Oslo, 2015

Colonialism (1492-1810)Spain, Portugal

Colonialism (1881-1965)Britain, France

1. Rise in conflict coincides with globalcommodity boom.

BROAD, GLOBAL RELATIONSHIPS = STRUCTURAL FACTORS

2. Rise in conflict coincides with globalincrease in social instability

3. Marked difference in expression of conflict between Latin America and Africa

Phase 1 Study Purpose

To delve beneath the surface manifestations of conflict in order to develop a deeper understanding of:

Root causes, systems and pathways

What is driving the dramatic increase

The players involved; roles &responsibilities

Better policies and practices for conflict prevention, management and transformation

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ICMM, 2015

DEFINING CONFLICT FOR THIS STUDY

FocusCommunity-level social conflict associated with the mining sector

Conflict Definition – 2 Types1. Positive Conflict

a) Properly managed = positive outcome

b) Possible under conditions ofhigh quality governance

2. Negative Conflicta) Unmanaged = negative

outcomesb) Typical of conditions of

poor governance

Definition of ConflictThe interaction of two or more parties with perceived incompatible goals, who engage each other through a range of practices including dialogue, persuasion, negotiation, arbitration, legal action, protest, intimidation and physical violence.

Definition of Conflict The interaction of two or more parties with

perceived incompatible goals Engage each other through a range of

practices including dialogue, persuasion, negotiation, arbitration, legal action, protest, intimidation and physical violence.

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STUDY APPROACH

Literature Review

(300/ 170)

Quantitative Analysis

(163/44; 350/98)

Field Case Studies (5)

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Tanzania

PeruHaquira, Cu ProjectLas Bambas, Cu Mine

TanzaniaBulyanhulu, Au Mine

MadagascarAmbatovy, Ni Mine

GhanaCountry Study

BoliviaSan CristobalAg, Pb, ZnMine

STUDY OUTCOMESHigh Level

Conflict:

1. A process with a historyand a pathway

2. Involves multiple players;companies, communitiesand government

3. Seems chaotic, but is systematic and predictable

Sustainable Development orSustained Conflict

SUSTAINABLEMINERAL

DEVELOPMENT

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STUDY OUTCOMESHigh Level

Conflict:

1. A process with a historyand a pathway

2. Involves multiple players;companies, communitiesand government

3. Seems chaotic, but is systematic and predictable

Conflict TerminologyConflictDeterminant

Description Space(geographic scope)

Time(duration of effect)

Example

StructuralFactors

Generic,foundational,not specific to mining

GlobalInternationalNational

Long-termHistoricalCurrent

Colonialism;Commodity cycles

ContextualFactors

Impact the broadenvironment in which mining operations occur

National and sub-national

Medium to long-term

Government policy & regulatory regime

Conflict Drivers(Inhibitors)

Impact specific mining regions

Areas containing one or more mining operations

Short to medium-term

ASM and LSMcompeting for the same land base

ConflictOutbreak Triggers

An action or event that is a tipping point

Local, at the site of specificoperation

Short term, a moment in time

Tailings spill; breach of agreement

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CONFLICT DETERMINANTSKEY PLAYERS

CONFLICT PATHWAY ANALYTICAL FRAMEWORK

Structural Factors

Extent: Global, internationalDuration: Long-term

Contextual Factors

Extent: National, sub-nationalDuration: Medium-long term

Conflict Drivers (Inhibitors)

Extent: Local to regionalDuration: Short-medium term

Conflict Trigger Events

Extent: Local, case specificDuration: Short-term

Colonial PowersGovernments International Institutions

Host Governments

CompaniesCommunitiesNGOsHost Governments

CompaniesCommunitiesNGOsHost Governments

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THE ROLE OF HOST GOVERNMENT

Achieve Responsible, Sustainable Mineral Development Through the CreationAnd Implementation of Appropriate Governance Regimes

SUSTAINED CONFLICT

SUSTAINABLE DEVELOPMENT

ENABLING ENVIRONMENT

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Conflict Determinant Hierarchy

Role of Host Governments

COLONIALISM

AUTHORITARIAN GOVERNMENTS

NASCENT DEMOCRACYNEOLIBERALISM

LACK OF TRUST IN GOVERNMENT

Centralist approach to governance

Weak local government institutions

Disarticulated development approach

(urban vs rural)

PRIMARY TRIBUTARIESAND STREAMS

STRUCTURAL FACTORS

CONTEXTUAL FACTORS

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LACK OF STRATEGIC APPROACH TO MINERAL DEVELOPMENT

GOVERNANCECENTRALIST APPROACH

WEAK LOCAL INSTITUTIONS

LACK OF ACCOMODATION BETWEEN THE ASM AND

LSM SECTORS

LACK OF PREPARATION OF RURAL COMMUNITIES

CO

NTE

XTU

AL

FAC

TOR

S

Land acquisition for LSM concessions = compensation

and livelihood issues

Community concerns over contamination of land and

water

Rising dependency of communities on LSM

companies

Competition for land and resources

Rise in informal, unregulated ASM activities

Increasing environmental impact on land and

waterways

Unresolved concerns over land degradation and water

issues

Incursion of illegal miners onto LSM concessions and forceful removal by govt

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NFL

ICT

DR

IVER

SPRIMARY TRIBUTARIES

AND STREAMS

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NFL

ICT

TRIG

GER

S

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Lack of presence of central government in rural areas

Lack of social development programs

Lack of regulatory monitoring and enforcement

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Centralist approach to governance

Lack of capacityesp. in rural areas

Weak local government institutions

CONFLICT RISK CREATED BY HOST GOVERNMENTS

CREATION OF THE ENABLING ENVIRONMENT FOR MINERAL DEVELOPMENT

HIGH CONFLICT RISK

Lack of a strategic approach to mineral development

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Lack of strategic approach to mineral

development

Centralist Approach to Governance

Weak local government institutions

Capacity Building

Decentralization

Adopt strategic approach to mineral

development

1. A mineral tenure system designed to serve both ASM & LSM.

1. Eliminate Illegal ASM activities through formalization & legal means.

2. Geological mapping & gold assaying services provided to assist in the identification and designation of prospective lands for the ASM sector.

3. An incremental approach

SELECTED POLICY IMPLICATIONS

Fiscal decentralization; distribution of benefits Devolution of authority Capacity building in planning and administration Mechanisms for transparency and accountability

A collaborative approach Political autonomy to local government??

Reconcile the LSM and ASM sectors

STRATEGIC APPROACH TO MINERAL DEVELOPMENT Building capacity of the central and local governments to govern Adequate preparation of rural communities, and Reconcile the LSM and ASM sectors

INSTITUTIONAL ENGAGEMENT: Government initiatives: information, dialogue, appropriate application of FPIC, shared decision-making and social support and development programs.

Decentralization

Key Messages

1. To understand conflict look beyond the company-community interface;

2. Conflict is a process with a history and a pathway that is systematic, predictable and therefore preventable;

3. Developing effective, targeted interventions for conflict transformation and prevention will depend on analysis of the process and pathways;

1. All key players have a role to play in achieving sustainable development or sustained conflict – it takes collaboration in both cases;

1. The role of host government is foundational given that they establish the enabling environment in which mineral development will occur;

2. Good governance can act to mitigate conflict outbreak at the community-company interface

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CIRDIwww.cirdi.caResearch

UNDPwww.undp.orgLibrary pageSustainable Development Goals

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COEXISTENCERESISTANCE

Interests are ProtectedLow High

High

Low

High InfluenceHigh Protection

Low influenceHigh Protection

Low influenceLow Protection

NORMATIVE MODEL FOR MINING RELATED CONFLICTAt the Community – Company Interface

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COEXISTENCERESISTANCE

Interests are ProtectedLow High

High

Low

Dialogue Collaboration

PassiveAcceptance

PassiveAggression

NORMATIVE MODEL FOR MINING RELATED CONFLICTAt the Community – Company Interface

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COEXISTENCERESISTANCE

Interests are ProtectedLow High

High

Low

Dialogue Collaboration

PassiveAcceptance

PassiveAggression

AmbatovyBulyanhulu

Haquira

Las Bambas

San Cristobal

XstrataMMG

Ghana

NORMATIVE MODEL FOR MINING RELATED CONFLICTAt the Community – Company Interface

Results of Quantitative Analysis

Conflict Drivers Implicating Mining Companies

1. Environmental degradation and threats to water quality and supply

1. Competition for land between LSM and ASM

2. Asymmetrical distribution of benefits

1. Companies not living up to agreements with communities

2. Change in management during mine construction

3. Incoherent approach to community relations due to frequent turnover of mine management or transfer of project ownership

4. Transactional approach to community relations = policy of containment

Nobody is listening – negotiation by confrontation

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Source: Patel et al, (2015)