Global Drivers for Sustainable Business September 2012
Supporting Responsible Exploration Globally
1. 1
INTRODUCTION
The Prospectors & Developers Association of
Canada (PDAC) is committed to supporting our
members to responsibly find and produce the
minerals and metals that are essential for
modern life.
PDAC has five main priority areas:
Access to capital
Access to land
Aboriginal Affairs
Responsible exploration
Global competitiveness
To better understand how we can support our
members to explore and develop mineral
resources responsibly, PDAC undertook a series
of interviews with junior and mid-tier
companies operating around the world (see
Figures 1, 2 and 3). The purpose of these
interviews was to understand the issues being
raised by stakeholders about exploration and
mining around each company’s project sites.
Going forward, PDAC hopes to use this
information to better support its members to
improve their performance, develop positive
relationships with communities and contribute
to sustainable development.
INTERVIEWS
Interviews began in May 2015 and concluded in
August 2015. In total, 34 companies were
interviewed. The 34 companies represented a
wide variety of market capitalizations (Figure 1),
commodities (Figure 2) and countries of
operation (Figure 3).
Supporting Responsible Exploration Globally: Feedback from Companies
Figure 1: Distribution of market cap. of the 34 companies interviewed.
Figure 2: The classification by commodity type being explored
for/produced (of the 34 companies interviewed).
2. 2
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INTERVIEW FINDINGS
Community Concerns – Top Issues
Top concerns about their projects, as noted by
companies during the interviews:
1. Environment – water quality/quantity
2. Environment – wildlife/biodiversity
3. Socio-economic impacts
4. Loss of agriculture
1. Environment – water (10 of 34)
Concerns were raised about water quality in
jurisdictions with abundant water and high
social expectations for good environmental
practice (e.g. Sweden, Finland). Concerns about
the quantity of water used were raised to
companies operating in dryer climates (e.g.
Mexico).
2. Environment – wildlife/biodiversity (6 of 34)
In addition to water, other environmental
concerns were mentioned by communities,
including impacts on land and animals. In some
instances, companies felt that these concerns
were derived from the legacy of mining in the
region, and its impact on public perceptions of
the industry. Communities also commonly
associated exploration work with mining,
believing that drilling would use large amounts
of water, or have a large land disturbance
footprint for site clearing and pad creation.
3. Socio-economic impacts (5 of 34)
Companies noted that communities had raised
concerns about the impact of higher incomes
and their potential to cause an influx of drugs
and alcohol. However, other communities were
excited about opportunities for higher incomes
(see “economic opportunities” below).
Communities in small, tight-knit regions were
anxious about the arrival of “foreign” workers.
These communities would often associate
anyone who did not live in their immediate
community as a foreigner.
4. Loss of agriculture (5 of 34)
When local communities were socially and
economically based on agriculture, the land
owners were concerned a mine would be on
their property and decrease the amount of land
they were able to cultivate.
Community Concerns - Company Responses
Most companies undertook some combination
of the following responses:
1. Community engagement
Most companies discussed their
engagement practices, which included
holding community meetings to discuss
Figure 3: The 34 companies interviewed operated projects in 23 countries
(orange-shaded jurisdictions).
Figure 4: Multiple companies noted that communities were
concerned about levels of water used while drilling. They
often had to explain that mineral exploration and mining
are different, and that drilling uses significantly less water
than mining.
3. 3
the project and its potential impacts, as
well as company mitigation strategies.
Companies ensured regular, consistent
contact with the community. This
helped reduce anxiety levels within the
community
Companies that reported healthy
relationships with their local
communities also noted their efforts to
involve the community in decision
making. One company received input
from the community on the design of
their open pit and the surrounding
waterways. This effectively influenced
and changed the design of the open pit
in order to avoid sensitive water
regions.
2. Partnering with universities
Some companies partnered with local
academic institutions to produce
environmental studies. This provided
independent third-party assurance and
credibility for the reports.
These partnerships allowed for the
empowerment of the university and its
students, and gave the company a
trusted source to rely on if communities
had doubts about the environmental
integrity of projects.
3. Partnering with NGOs
Some companies partnered with NGOs
prior to entering, or when they were
already working within the community.
Some NGOs had a strong knowledge
base of who needed the most help
within the community, as well as where
and how assistance could be
administered.
4. Managing expectations
Managing expectations was a key
strategy deployed by companies at the
exploration stage. It was important to
avoid promising too many jobs, or too
much money for the community.
Many companies also invested in basic
educational activities to help
communities understand the
difference between exploration and
mining (and the different impacts of
each in terms of water and land).
Community Hopes – Top Issues
Economic opportunity (20 of 34)
Notwithstanding concerns raised about
potential negative impacts, most companies
reported that communities were interested in
receiving new jobs and gaining an economic
stimulus. These communities were generally
supportive of projects moving forward. In fact,
three companies said that communities raised
concerns about the slow pace of project
progression (due to the downturn).
Community Hopes – Company Responses
In order to maximize community employment,
companies took the following actions:
Using human-powered drills instead of
mechanical drills (employing more people).
Establishing the head office in the country
of operation, to provide locals with senior
employment opportunities.
Assisting in other forms of employment for
the community (e.g. host workshops to
teach people to properly plant a local crop;
bring in crop specialists).
4. 4
Company Challenges
Throughout the interview process we also heard
about the challenges companies were facing
with their projects abroad, aside from financing.
The top challenges were:
1. Government relations
2. Artisanal miners
3. Managing community expectations
4. Media, community rumours and third party
influences
5. Corruption and bribery
6. An uneven playing field
1. Government relations (17 of 34)
These challenges generally referred to slow
permit approvals or misaligned permit
renewals. Many companies reported challenges
with mid-level bureaucrats, or regional
authorities. Most companies felt they were not
able to influence government processes.
2. Managing community expectations (8 of 34)
Communities often believe that Canadian
companies have an abundance of money and
resources with which they could provide
payments to the community people. Companies
had to remind the local people to maintain their
original livelihoods, as a mine or exploration
project would not be able to employ everyone.
3. Artisanal miners (9 of 34)
Of the companies that discussed the practice of
artisanal mining on their properties, about half
found that their exploration activity could
coexist with the artisanal miners. The other half
were in the midst of discussions about
relocation, which is extremely challenging.
4. Media, community rumours and third party
influences (6 of 34)
The media, community rumours and third party
influencers (churches, NGO’s and consultants)
became areas of concern for companies. Media
and third parties have the power to portray an
unbiased opinion to the public which can be
beneficial for the mineral exploration and
mining industry, however companies often felt
they were not listened to by third parties. These
companies often felt biased actions or opinions
were portrayed to the public.
5. Corruption/bribery (6 of 34)
Corruption was encountered both in terms of
government officials as well as employees. One
company had a mines minister resign due to
corruption. Another company had to terminate
employees because they discovered the
workers were stealing ore from the property
and selling it elsewhere.
6. An uneven playing field (3 of 34)
A small number of those interviewed raised
concerns about the influence of non-Canadian
companies, based out of other jurisdictions,
that are not held to the same standards of
corporate practice. Canadian companies felt at
a disadvantage when these international
companies were more liberal with payments,
both to government officials and neighbouring
communities. As a result, Canadian companies,
were questioned why they didn’t provide the
same level of benefit to the communities where
they operated. Often they were asked for more
funding, which they were not always able to
provide.
5. 5
COMPANY LEARNING CULTURE
One of the primary goals of this project is to
better understand how companies respond to
these challenges, and how PDAC can provide
tools and resources that fit the industry’s
learning culture.
Accordingly, we asked companies how they
develop their approaches to responsible
exploration. The majority of companies relied
upon the expertise of staff and their industry
peers. Internal company discussions were often
used as the foundation for action, combined
with attending local conferences to assist in
discussions with companies that worked in a
similar geographical area.
Learning with, and from, the community was
also common practice. Some companies used
external course work as a way of educating
employees, including the PDAC Convention
short courses, and other courses conducted
geographically close to their exploration site.
HOW THE PDAC PLANS TO HELP
To support industry leadership in the area of
sustainability performance, PDAC currently
offers toolkits and resources, such as e3 Plus,
our Framework for Responsible Exploration.
e3 Plus outlines: “What Am I Responsible For”
as a mineral exploration company;
“Recommended Practices” for when a company
encounters bribery or corruption; and “Water
Use and Conservation” techniques, to name a
few topics. PDAC recently launched a new
chapter to e3 Plus: “First Engagement – A Field
Guide for Explorers”, developed in partnership
with world renowned community engagement
expert Luc Zandvliet (see Figure 5).
Going forward, companies most often
recommended that PDAC produce a series of
webinars to provide guidance on specific issues,
such as minimizing impacts on water quality
and water use.
In addition, the vast majority of companies (30
of 34) indicated their interest in participating in
some sort of peer-learning network to facilitate
information sharing between companies.
For more information on this project please
contact Anne Belanger, Coordinator,
Sustainability and Geoscience Programs
(abelanger@pdac.ca).
For more information on other activities being
undertaken by the PDAC to support responsible
exploration and mining, please contact Nadim
Kara, Senior Program Director (nkara@pdac.ca).
Figure 5: The PDAC’s newest e3 Plus chapter, First Engagement, was
launched at the IFC Sustainability Exchange in 2015 and aims to
support field workers to develop positive relationships with nearby
communities.
the best practices for community engagement.