We all use things that are mined. If it is not farmed, then it is more than likely that at least part of it has been extracted from the ground. Despite the important role the products of mining play in helping us live our everyday lives, the industry’s impact on the environment and local communities is often far from positive. So what is the industry doing to make it better?
Guardian Sustainable Business convened a panel of experts to talk about responsible mining: the legislation and regulation, the effects on communities, the boundaries of responsibility, and whether all the talk is making a difference on the ground.
Digging into the issues were: Greg Valerio, founder of Cred Jewellery and co-founder of Fair Jewellery Action; Claire White, senior program officer for the International Council on Mining and Metals (ICMM); Professor Frances Wall, head of the Camborne school of mines at the University of Exeter; Dorothee Gizenga, executive director of the Diamond Development Initiative; Terry Heymann, director of responsible gold at the World Gold Council; Gus Macfarlane, director at risk management company Maplecroft; and Julian Kirby, campaigner at Friends of the Earth.
Who’s responsible: companies or governments?
Is there a larger role for governments and multilateral institutions in the equation?
“Governance weaknesses are a challenge,” admitted White. “Efforts where government, industry, development partners and civil society stakeholders come together to work towards improving public sector capacity will be the most effective.”
Multistakeholder initiatives such as the voluntary principles on security and human rights, the extractive industries transparency initiative and the OECD due diligence guidance on responsible supply chains on minerals from conflict-afflicted countries have all benefited from the important contribution that states make, said Heymann; but Kirby said the everyone-must-play-their-part argument tends to play out in reality as “there’s nothing I can do ’til they sort it out.”
Meanwhile Wall pointed out that “we can teach good practice but we can’t change national or global politics”. She cited Namibia, where mining contributes more than half of foreign earnings as well as 8.8% of GDP, as an example of a developing country with good governance of mining activities; Macfarlane also cited Botswana, saying its Debswana joint venture with De Beers was a good example of how “natural resources really can be harnessed to promote long-term national development if handled right.”
A complicating factor, said Wall, was the differing expectations between countries of what falls to a government to provide. Gizenga added that CSR initiatives by mining companies should “never be a replacement for social and economic programs that governments are supposed to put in place for their citizens.”
Communities v mining
Not surprisingly, the impact on local communities became one of the hot topics of our live discussion, with some members of mining-affected communities – Kamloops, Canada; Greenland; Alaska — joining the discussion.
The question of a “fair share of mining wealth” is one of the key issues, said Macfarlane: “Community development spend is often quite small compared to the revenues paid to government, but the company has no control regarding how these revenues are spent …This is often a key source of frustration that can result in anger towards the mining companies themselves.”
Valerio, who works extensively with artisanal and small-scale mines, said he had witnessed “very little positive social impact” from large-scale mining: “The model is flawed as it puts profits before people and the politics of securing the bottom line before community participation.”
Kirby spoke about his recent trip investigating the impact of tin mining on Bangka Island in Indonesia; the mining there is increasingly happening at sea as there are no local communities, but it’s destroyed around 70% of the coral reefs around the island. “We need to think about the environment as well as the people that depend upon it,” he said.
Of course, many of the really big ore deposits are already taken, so companies looking to grow are needing to look into “higher-risk” locations to maintain output. “This is where companies need to tread particularly carefully,” said Macfarlane. “And where we see many newsworthy incidents that in extreme cases can have serious impacts both on local communities and on their own project planning.”
Supply chain and Dodd-Frank
Traceability from mine to retail is an important aspect of the supply chain. Said Valerio: “It means the majority of the money earned by communities stays in the country and generates genuine wealth and livelihood opportunities for the people of the country.”
This, of course, is one of the reasons conflict minerals have become such a big story. Heymann spoke of the World Gold Council’s new conflict-free gold standard, pointing out that, unlike Dodd-Frank, it does not focus on the African Great Lakes region, but applies to conflict situations globally. Macfarlane had a few other guidance materials: from the OECD guidelines to sector-specific initiatives like the ITRI tin supply chain initiatives and the conflict-free smelter programme, all of which have traceability as a common element.
Kirby took exception to conflict mineral legislation: “Dodd-Frank and the international attention to the horrors in the DRC is welcome, but it’s also both too blunt and too specific. Blunt, in that many companies are just ignoring Africa altogether so as to avoid having to demonstrate African minerals aren’t conflict minerals, and specific because there are many other damaging impacts beyond those defined as conflict that aren’t addressed. What we need is a transparent, mandatory reporting regime that means it’s much easier for companies that want to ensure they’ve got clean, safe supply chains to do so, and much harder for companies with no such interest to ignore the problems they’re driving with their demand for these materials.”
Gizenga spoke of a pilot system DDI International is conducting in Sierra Leone to bring “development diamonds” to market. These are diamonds produced “responsibly, safely, with respect of human and communities’ rights, in conflict-free zones, with benefits to communities and payment of fair prices to miners.” Fairtrade is difficult to apply in the artisanal diamond mining setting, she said, and it is hoped this system will help with assurances for diamonds – especially considering the issues with the Kimberley process.
Mandatory v voluntary
The tension between mandatory and voluntary standards was recognised, with Heymann talking about a discussion at the recent OECD conference – voluntary approaches can have a role in setting high standards “because people have made a commitment to conform and see it in their interest to do so.”
Valerio believes mandatory targets would “go a long way to improving life on the ground for local communities”, while Kirby believes targets “should be applied much more broadly”. “Voluntary standards can lead the way,” Kirby said, “but ultimately they only apply to those that sign up to them, and often are poorly enforced or not strong enough.”
White added: “As noted in the UN Guiding Principles, a ‘smart mix’ of mandatory and voluntary measures is necessary to foster respect for human rights. For some, mandatory rules, like Dodd-Frank, do not go far enough as they are strongly focused on public revenues from extractive activities. Many critics argue that it is not enough to make public how much has actually been paid, but to discuss how much should have been paid and which other arrangements have been agreed. This would be an important step from transparency to accountability.”
The issues covered in the discussion were complex and the solutions nuanced. Guardian Sustainable Business will continue covering this area. If there are specific questions or areas you’d like us to explore, please tell us about them in the comment thread below.
http://www.guardian.co.uk/sustainable-business/responsible-mining-can-it-work