Mining and indigenous people issues

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Objective Capital's Global Resources Investment Conference 2011
Stationers' Hall, City of London
27-28 September 2011
Day 1- Session1: The context in which we operate
Speaker: Aidan Davy, ICMM

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  • Investor interest in ESG risks: institutional investors, securities analysts, project finance and M&A
  • Indigenous Peoples are increasingly important in terms of resource access 45% of Peruvians are Indigenous 40% of Canada land mass is covered by twenty–two comprehensive land claim agreements (modern treaties) ratified and brought into effect since the Canada's comprehensive land claims policy in 1973. 
  • : Oil & Gas (47%), Mining (36%); Forestry (10%) and Agribusiness (7%)
  • Mining and indigenous people issues

    1. 1. Mining and indigenous people issues Aidan Davy –ICMM
    2. 2. Other sponsors & participating organisations: GLOBAL RESOURCES INVESTMENT CONFERENCE 2011 Lead sponsor: Media partners: @Objectivelive
    3. 3. Indigenous Peoples and Mining: Developing Projects for Mutual Benefit Aidan Davy, Director September 2011 www.icmm.com
    4. 4. Overview of presentation www.icmm.com <ul><li>Coincidence between mining and Indigenous Peoples </li></ul><ul><li>A snapshot of investor perspectives </li></ul><ul><li>ICMM Good Practice Guidance </li></ul><ul><li>Conclusion </li></ul>
    5. 5. Top 10 countries for mining exploration www.icmm.com Source: Interra Resources Intelligence (September 2010) Distribution of 22,400 projects (global total 40,000) Argentina 2%
    6. 6. Distribution of mining projects globally www.icmm.com Source: Interra Resources Intelligence (September 2010)
    7. 7. Investor Perspectives on Indigenous Peoples www.icmm.com <ul><li>Talisman Energy initiated a review of FPIC on basis of shareholder resolution (Bâtirente/RSSE) </li></ul><ul><li>Not just NGO’s advocating: Co-Op. Bank’s support for Beaver Lake Cree Nations vs. Tar Sands in Alberta </li></ul><ul><li>EIRIS, CAER and The Ethical Funds Company all promoting FPIC (ideally large ‘C’) </li></ul><ul><li>EIRIS analysed 250 companies from FTSE All World Developed Index </li></ul>
    8. 8. Indigenous Peoples – selected indicators www.icmm.com % % % % Indigenous Policy FPIC (consent/consultation) Resettlement Indigenous employment Source: EIRIS (2009). Indigenous rights: risks and opportunities for investors Agribusiness Forestry & Paper Oil & Gas Mining
    9. 9. Policies and reporting on Indigenous Issues www.icmm.com FPIC Global data Engage Respect Policy Case-study None None Indigenous Peoples Policy Indigenous Peoples Disclosures ICMM members Non-members
    10. 10. Do investors care about Indigenous Peoples? www.icmm.com Vedanta resources share price (2010)
    11. 11. Do regulators care about Indigenous Peoples? www.icmm.com Sources: http://tmx.quotemedia.com/ Photo: Lorna Elkins, 2008 Taseko Mines Ltd share price (2010) Oct Dec Nov
    12. 12. www.icmm.com
    13. 13. Free, Prior and Informed Consent (FPIC) www.icmm.com
    14. 14. Where does ICMM stand on FPIC? www.icmm.com <ul><li>Where legally mandated, ICMM’s Guide is a valuable resource to support FPIC implementation </li></ul><ul><li>Where governments don’t fully embrace FPIC, companies can’t unilaterally endorse </li></ul><ul><li>Guide supports members to implement progressive commitments in ICMM Position Statement </li></ul><ul><li>Currently engaging with IFC and others around practical implementation challenges </li></ul>
    15. 15. Indigenous Peoples & Mining Good Practice Guide www.icmm.com <ul><li>Council of CEOs approved Position Statement on Mining and Indigenous Peoples in May 2008 </li></ul><ul><li>Explicit commitment to develop Guide included in 2008 Position Statement </li></ul><ul><li>From outset, independent Indigenous Peoples Advisory Group established: critical aspect of guide development </li></ul><ul><li>Team from academia and consulting selected </li></ul><ul><li>Case studies verified with Indigenous community representative: good practice examples balanced by negatives </li></ul>
    16. 16. Engagement and Indigenous Participation www.icmm.com <ul><li>Outlines a series of principles for good engagement, and what it should achieve – and distinctive challenges </li></ul><ul><li>Focuses on steps to achieve broad community support through meaningful engagement </li></ul><ul><li>Discusses FPIC and related challenges </li></ul><ul><li>Explores practicalities of Indigenous engagement, as well as challenges </li></ul>
    17. 17. Laying the groundwork www.icmm.com <ul><li>Focus on establishing basis for sound relationships early </li></ul><ul><li>Determining rights and interests: legal, customary and sometimes competing </li></ul><ul><li>Conducting comprehensive baseline studies, which address vulnerability </li></ul><ul><li>Assessing positive and negative impacts: iterative rather than one-off </li></ul>
    18. 18. Agreements www.icmm.com <ul><li>Focus on negotiated agreements to define and regulate company-community relationships </li></ul><ul><li>Explores attributes of successful agreements </li></ul><ul><li>Discusses process aspects in detail </li></ul><ul><li>Outlines substantive aspects, e.g. financial, employment/contracting, impact management, governance </li></ul>
    19. 19. Managing Impacts and Sharing Benefits www.icmm.com <ul><li>Emphasis on: </li></ul><ul><ul><li>Practical dimensions of impact mitigation and benefits sharing </li></ul></ul><ul><ul><li>Information/knowledge sharing </li></ul></ul><ul><ul><li>Compensation to redress physical and economic losses </li></ul></ul><ul><ul><li>Concept of ‘strengthening community asset base’ is key to benefits </li></ul></ul><ul><ul><li>Addressing cultural and environmental preservation </li></ul></ul><ul><ul><li>Recognizing discrimination and historical disadvantage </li></ul></ul>
    20. 20. Dealing with Grievances www.icmm.com <ul><li>Focuses on implementing effective grievance mechanisms </li></ul><ul><li>Acknowledges inevitability of disagreements, and imperative of effectively addressing these </li></ul><ul><li>Explores potential sources of conflict </li></ul><ul><li>Provides detailed guidance on design aspects, e.g. culturally appropriate, accessibility, process predictability etc. </li></ul>
    21. 21. &quot;Move on!&quot; Has the Native American no rights that the naturalized American is bound to respect? (Harpers weekly, 1871)
    22. 22. For further information please contact: Aidan Davy, Director [email_address] www.icmm.com Available to download at www.icmm.com

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