Presentation by Professor Bruce Harvey at a “Multi-Stakeholder Workshop on Community Engagement in the Extractive Industries” in Yangon on 27/28 January 2015, convened by the Myanmar Centre for Responsible Business (MCRB) to discuss international best practice in strategic community investment and engagement, including how to handle grievances.

1. Extractive Sector Community Agreements
Professor Bruce Harvey
Formalising and dignifying relationships to change behaviours

2. The sky did not fall in!

3. Argyle Diamond Mine, Western Australia

4. 4
Diavik Diamond Mine, NWT, Canada

5. 5
Flambeau, Wisconsin, USA

6. Peeling Back the Onion - Impacts and Influence
Employees
Contractors
Local people
Provincial people
Na onal popula on
Interna onal commentators

7. Examples of thinking local

9. The Arrow of Time
• Cannot win an
emotional argument
with an economic one
• The arrow of time – the
future must be founded
in the present and past

10. 10
Argyle Diamond Mine, Western Australia

11. 11
600 400 200 0 200 400 600
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
Agegroup
Persons
Males Females
Indigenous
400 200 0 200 400
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
Agegroup
Persons
Males Females
Non-Indigenous
Distribution of the Indigenous and non-Indigenous populations1 of the East Kimberley by age and
sex, 2001
Where are the young people?

12. 12
Three critical elements in agreement making…

13. 13
Agreement making takes a long time…
Institution to
institution
Simple Agreement
Agreement
Making Protocol
1. Enhanced knowledge base
2. Agreement making protocol
3. In principle agreement
4. Comprehensive formal agreement
5. Registration & celebration
6. Implementation
General Principles
No Success
Success
Leave on
good terms

14. 14
Argyle Participation Agreement

15. 15
Indigenous employment - Rio Tinto Australia
Numberofemployees
0
5000
10000
15000
20000
25000
30000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q2, 2012
Indigenous employees x 10 Total Rio Tinto Australia employees
(Actual number)
(2294)
Indigenous employment

16. 16

17. 17

18. Disconnected Business
• Donations and other charitable
contributions
• Direct funding or delivery of
disconnected welfare programmes
• Unilateral construction of civic
infrastructure
• Disconnected Offsets
• Payments to agencies that offer
‘outsourced’ community development
services

19. The Business of the Business
• Human Resources
• Procurement
• Security
• Environment
• Finance & accounting
• Infrastructure & asset management
• Maintenance & operations
• Health & Safety
• (Project) Management

20. Community Development will not deliver social licence…….

21. 21
Key Drivers
• Enduring value to shareholders
• Sustained ability to operate & develop new projects
• Sustainable business advantage
• Developer of choice
• The right thing to do

22. 22
Argyle Diamond Mine, Australia
• Argyle Diamond Mines:
– owned and operated by Rio Tinto
– open-pit diamond mine in the East Kimberley region of NW Australia
– Mine Lease area located on the traditional country of 4 indigenous communities, composed
of 5 estate groups
• Participation Agreement agreed with local indigenous communities in 2004.
• Participation Agreement registered by the Native Title Tribunal of Australia in 2005 as
an Indigenous Land Use Agreement (ILUA)
• ILUAs in Australia perceived to often restrict companies and communities and can be
very difficult to amend
• Participation Agreement includes a Management Plan: a flexible subsidiary
agreement that provides guidelines on important community issues not directly
addressed in the ILUA
• Management Plan addresses: land rights, income generation, employment and
contracting opportunities, land management and indigenous site protection.
Courtesy Emma Irwin WBG

23. 23
Argyle Diamond Mine, Australia
• Company frames relationship with community in terms of “tenancy”, seeing the qualified
community as “landlords”
• Company recognises that indigenous community holds primary ownership of the land -
working towards handing land back to Traditional Owners is key to Agreement
• Participation Agreement key component is creation of Relationship Committee, consists
of:
– 4 company representatives
– 26 Traditional Owner (TO) representatives from 6 estate groups of the Mine Lease
Area.
• Establishment of Relationship Committee demonstrates commitment to honour and
empower Traditional Owners role in influencing the Management Plans that affect their
communities - a direct reflection of overarching principle of community as ‘landlords’
• Role of Relationship Committee (which meets quarterly) is:
– to monitor implementation of Management Plans
– make recommendations to parties on improving implementation
– conduct a review of each Management Plan
– provide reports annually
– identify employment opportunities
– set timeframes for negotiations between Argyle and the TOs.
Courtesy Emma Irwin WBG

24. 24
Argyle Diamond Mine, Australia (cnt’d)
Capacity Building:
• Participation Agreement includes:
– training for every representative on the Relationship Committee to ensure capacity to fulfill
responsibilities.
– Key capabilities include understanding the agreement (both company and Relationship
Committee) and ability to comprehend/ assess financial statements and reports.
• To enable better understanding of Agreement - summary boxes written in plain English - as well
as a video are included to make legal/technical language more accessible.
• Agreement establishes a Secretariat, provided for and staffed by company, to:
– assist the Relationship Committee in facilitating meetings
– assisting TO representatives to participate in the committee
– conducting informative meetings with the local indigenous communities
– ensuring the committee operates properly.
• Agreement provides training for the TO representatives on the committee but also for all Tos to
assist them in participating in the agreement - includes organisational and managerial support
to TOs in their engagement
Courtesy Emma Irwin WBG

25. 25
Argyle Diamond Mine, Australia (cnt’d)
Key Findings:
• Factoring flexibility into Agreement to adjust to trends and
circumstances and to ensure sustainability
• Argyle developed a Management Plan Agreement with local TOs
to accompany the ILUA to address how the company and the
community would work together
• Participation Agreement demonstrates concerted effort to ensure
mutual understanding and communication between the company
and the community – key principle of tenant/landlord relationship
• Argyle provides training to TO representatives as well as support
mechanisms for the wider community
• Argyle employees receive cross-cultural training to build capacity
on the company side to understand the perspective of the TOs.
Courtesy Emma Irwin WBG

26. 26
Where Agreements fit in a larger process
Understand key social,
environmental and economic
factors
Gather data on demography,
labour market, education
profile, family and individual
wellbeing, etc.
Understand the current state
and drivers of change,
regardless of presence or
absence of the business
Identify potential risks and
opportunities
1. Situational analysis
2. Build engagements &
partnerships
3. Develop Community
Programmes
Build partnerships with
government agencies,
community/ NGOs/
Academy and other
corporate entities
Agree needs and ensure
these are mutually
understood and accepted
Partnerships should be
based on respective
expertise and collaborative
inputs
Programmes should reflect
baseline assessments and
consultation
Programmes cover
educational, health or
livelihood initiatives and
provide local employment,
small business and contractor
opportunities
Programmes should build long
term local skills and
knowledge
Initiatives undertaken should
encourage self help and avoid
dependency

27. 27
Social License Business Case
for Long-life Mines
• Strategy fundamentally turns on short/long-life
• Short mine-life strategy directed to closure
• Long-life mines require long-run social legitimacy
and political acceptability
• Societal and political stability depends on full, gainful
and satisfying employment
• Stability needs to be based on sustainable local and
regional economic and social relationships

28. 28
Benefits of Robust Regional Economy
• A mobile pool of skilled employees
• A selection of locally-based enterprises
• Competitive forces
• Diverse local capacity
• The inherent stability of local government
• Employees living ‘at home’
• Normal societal institutions
• An attractive lifestyle for employees

29. 29
Robust Regional Communities
• Built on diversity
• Direct employment
• Enterprise and small business development
• Industrial services and procurement
• Tourism and cultural activity
• Historic and heritage preservation
• Sports and recreation
• Agribusiness, possibly based on unique local
traditional products
• Partnerships/Joint Ventures
• Provide social mandate, ……secured by agreement

30. Rents, Employment
and Enterprise