Presentation by Emma Irwin, Consultant, World Bank, 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. Introduction to Community
Development Agreements
(CDAs)
27 January 2015
Emma Irwin
Consultant, World Bank

2. Introduction to CDAs:
Historical Context and Background
 CSR – growth over past 10-15 years especially
in extractive industries, internationally and in
Asia
 Moving from awkward ‘add –on’ to core,
integral business component
 Why?

3. Why?
“It takes 20 years to build a reputation,
and five minutes to ruin it”
Warren Buffett, Chairman, Berkshire Hathaway; Investor, Philanthropist and
World’s 2nd Wealthiest Man

4. Community / Company Expectations

5. Introduction to CDAs:
Historical Context and Background
 Many examples of incidents, tensions, and conflicts between
local communities and companies – globally and in Myanmar
 Companies not ‘getting it right’, failing to recognise importance
of good relations and trust with host community
 Ability to shut down a company’s operations and cause
millions £$£$£$ losses if left unaddressed

6. Social license to operate
 ‘Social license to operate’ is crucial for project development
(in addition to government/legal license to operate)
 CSR and company-community relations now widely
recognised as vehicle for socio-economic development as
well as business growth and profitability
 CDAs as tool for building trust, community relations and
socio-economic development

7. Social license to operate
 Can’t be paid for, can only be earned/built
 Trust
 Respect
 Dialogue
 Ongoing, regular transparent communication
 Demonstrable commitment
Role of CDAs

8. What is a CDA?
Voluntary
Agreement
Shared Responsibility
Agreement
Impact Benefit
Agreement (IBA)
Community Contract
Community Joint
Venture
Investment Agreement
Community Development
Initiative
Social Trust Fund
Benefit Sharing Agreement
Participation
Agreement
Partnership
Agreement

9. What is a CDA?
 Voluntary or mandatory agreement between extractive company and
community
 Increasingly recognised as means of improving relationships
(companies, communities, government, civil society etc.)
 Promotion of long-term, local socio-economic development
 Promotion of benefits / development back to community (in exchange
for extraction of non-renewable local natural resources)
 Content of each is unique to specific local context:
‘one size does NOT fit all’
 Certain general shared characteristics – process and general content -
focus of today

10. International Approaches to CDAs
 Afghanistan, Chile, Colombia, Ethiopia, Fiji, Ghana, Guinea, India,
Indonesia, Kenya, Kyrgyzstan, Mali, Mongolia, Mozambique, Sierra
Leone, South Africa, South Sudan, Peru… all have CDAs (or other
name) incorporated into national regulatory framework somehow
 Other countries, e.g. Canada/Australia - CDAs are expected as
best (and common) practice, although not formally required
 Most other countries, no CDA requirement at all
 Overall, there is little consistency in approach.

12. Typical CDA Content
 Scope, mandate and vision of CDA
 Description of parties, including representatives of qualified
community/ies – clearly defined roles and responsibilities
 Grievance/feedback mechanism
 CDA Clauses:
 strategic aims, scope and parameters of community investment
activities
 fund management
 management/governance body for investment activities and overall
CDA process - structure and terms of reference
 local content (procurement / employment)
 Regular review, evaluation and capacity development
 Signed by all parties

13. CDA Development Process
 4 Key Phases:
- 1 -Stakeholder Engagement
- 2 -Capacity Development
- 3 -Stakeholder Representation, Roles and Responsibilities
- 4 -Implementation, Monitoring and Feedback Mechanisms

14. CDA Development: Phase 1 – Stakeholder Engagement
 Identification of qualified communities - who qualifies, and why?
 Are marginalised/vulnerable groups adequately represented?
 Are local power struggles, tensions, other dynamics taken into
account?
 Mapping and analysis of qualified communities
 Democratic election process for community members to directly
select people to represent them in the CDA process?
 Stakeholder engagement plan

15. CDA Development: Phase 2 – Capacity Development
 How can the capacity of the different parties be assessed?
 Whose capacity? When? To do what? And why?
 Community capacity to:
 negotiate and make agreements
 participate in governance and monitoring of CDA
 deliver and manage specific local community investment projects and
programmes
 What strategies can be used to strengthen capacity, both in the
agreement making and implementation stages?
 Capacity needs assessment and development plan
 Key role for CSOs?

16. CDA Development: Phase 3 – Stakeholder Representation,
Roles and Responsibilities
 How far should company responsibilities extend in the CDA?
 Risk of companies taking on government responsibilities for
provision of social goods/services
 Should government (national/sub-national) be party to
agreements? Roles and capacity of local governments?
 Importance of linking to local development planning
 Roles/responsibilities of communities and their representatives?
 CDA multi-stakeholder governance committees as best potential
way forwards
 Clear governance structure, mandate and vision of multi-
stakeholder committees

17. CDA Development: Phase 4 – Implementation,
Monitoring and Feedback Mechanisms
 Importance of multi-stakeholder approach
 Community fund management – structure, governance and criteria
 Grievance/ feedback / dispute resolution mechanism e.g. grievance
procedure
 Community/social investment aims, criteria, themes and procedures :
 Non-specific as dependent on unique local context
 Typically include projects for socio-economic benefit and community well-
being (education, livelihoods improvement, health)
 Investment to groups, not individuals
 Investment should not support marginalisation
 Investment should benefit all stakeholders

18. Core principles for CDA development

19. Summary: Best Practice CDA Development
 Agreement is achieved through inclusive, equitable, fair negotiation
between parties
 Commitment among all parties to make CDA work
 Clearly defined and understood mutual obligations, needs and
commitments between the parties
 Outcome is formalised in some kind of formal written document
(sometimes, but not always, in legal form)
 Agreement includes provisions that address broader, sustainable
development objectives, rather than narrow focus on financial
compensation
 Effective governance arrangements to manage relationships, and adequate
funds/resources to support these
 Monitoring and review mechanism integrated into agreement, to ensure
progress is being made and allow for changes/flexibility where necessary

20. Case Study:
Ahafo Social Responsibility Agreement, Ghana
 Formal agreement signed in 2008 between Newmont Ghana Gold Company and
the Ahafo Mine Local Community (10 community towns in two districts)
 Voluntary and multi-stakeholder approach – good example for developing a CDA -
but important to remember that each context is different
 In 2005 Newmont committed USD 1 per ounce of gold sold and 1% of net annual
profits for a Community Development Foundation.
 In absence of regulatory framework, Newmont and the Nananom (local chiefs)
decided to create a Social Responsibility Forum to develop an agreement on how to
manage the Fund

21. Case Study:
Ahafo Social Responsibility Agreement, Ghana (cnt’d)
 Social Responsibility Forum created in 2006 to provide a mechanism
for collective discussion and decision-making.
 As a result of over 20 meetings in 2 years, the Forum developed the
Social Responsibility Agreement
 Social Responsibility Agreement delegates Forum with authority to:
 create committees and assign functions to them
 establish rules, by-laws and regulations to enforce implementation
 resolve disputes and complaints, assist with conflict-resolution
 Agreement review and amendment
 management of Community Development Foundation
 Engagement with wide range of stakeholders
 Forum consists of 55 members as well as an independent monitor and
co-monitor

22. Case Study:
Ahafo Social Responsibility Agreement, Ghana

23. Case Study:
Ahafo Social Responsibility Agreement, Ghana
SUMMARY
 The Ahafo Social Responsibility Agreement includes provisions for
the creation of a:
 Social Responsibility Forum, which serves as the multi-stakeholder
negotiating and governing body for the general agreement
 Development Foundation, which serves to fund sustainable
development projects in the community
 The Agreement also includes:
 local employment quotas
 training and human development opportunities
 provisions for social amenities and the safeguarding of cultural
heritage.

24. Thank you!

25. Case Study 2: Argyle Diamond Mine, Australia

26. Case Study 2: Argyle Diamond Mine, Australia
 Argyle Diamonds:
 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.

27. Case Study 2: Argyle Diamond Mine, Australia (Cnt’d)
 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.

28. Case Study 2: 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

29. Case Study 2: 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.