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Dealing with growing social demands in the mining industry

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Slides from a presentation to a World Bank panel discussion on the growing social demands on the mining industry in Latin America and the Caribbean. The presentation dealt with how those demands were manifesting and the general themes that government responses are taking. While the focus of the panel was Latin America the growing demands and the manifestation of responses is similar in all countries and regions

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Dealing with growing social demands in the mining industry

  1. 1. Dealing with Growing Social Demands Wayne Dunn CSR Training Institute info@csrtraininginstitute.com www.csrtraininginstitute.com World Bank Group Forum PDAC 2015 Sunday March 1, 2015 Toronto, Canada
  2. 2. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Presentation Outline • What are the growing social demands? • Consultation (formal/informal, history, structure, FPIC, closure) • Access to land (who/how approved) • Benefit sharing (what’s in it for everyone) • Project approval (who approves? when? how?) • What is being done? • What more might we do? • Discussion
  3. 3. PDAC 2015, Toronto, CanadaPDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure 2015 not an easy time for the mining industry • Bottom of the cycle (and a long bottom?) • High costs • Low prices • Increasing social demands • Increasing environmental requirements • Artisanal mining • Expanding regulatory requirements • Expanding compliance requirements & expectations • How to meet social, environmental & shareholder expectations Need to innovate Need to collaborate
  4. 4. PDAC 2015, Toronto, CanadaPDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Has the World Changed? 1990s • NGOs • Communications • National Governments • Business Today • NGOs • Communications • National Governments • Business Society expects more AND has more power to force change
  5. 5. PDAC 2015, Toronto, CanadaPDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Capital Flow into LAC Economies 1990 to 2015 Official Development Assistance 90% - 10%* Business Investment 10% - 90%* Huge changes over the past ~20 years * SWAG/PFS
  6. 6. PDAC 2015, Toronto, CanadaPDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure CSR in the OLDEN DAYS (cont) Suddenly communities could influence how, or if, a project could proceed. Business had a new challenge to figure out Answers weren’t easy or obvious Community Relations Management Framework Plan ?Results? System
  7. 7. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Local Demands/Involvement Growing Social Demands • Consultation (formal/informal, history, structure, FPIC, closure) • Access to land (who/how approved) • Benefit sharing (what’s in it for everyone) • Project approval (who approves? when? how?) • Environmental monitoring
  8. 8. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Consultation • From exploration to closure • Formal/Informal (relationship history across ownership changes) • Structured Processes (who leads, who participates, roles & responsibilities, end points) • Starting point (exploration, permitting, construction) • ICMM Position Paper http://bit.ly/ICMMFPIC • defines FPIC as process based on Good Faith Negotiation through which Indigenous Peoples can give or withhold consent • commits members to work to obtain the consent of Indigenous Peoples • includes supporting commitments that apply to most interactions with indigenous communities • defines how to engage where government has primary responsibility • addresses how to move forward where differences of opinion arise.
  9. 9. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Aboriginal Title in Canada Increasingly progressive rulings • Calder v. British Columbia (Attorney General) [1973] confirmed Aboriginal title had existed • R v Guerin [1984] Aboriginal title is a right and government has fiduciary duty to protect it • Delgamuukw v British Columbia [1997] Aboriginal title is different from merely land use and occupation, as it had previously been defined, but also incorporates Aboriginal jurisdictional authority over how the land is used. • Supreme Court Ruling Declares Tsilhqot’in Hold Aboriginal Title – 2014 “ownership rights similar to those associated with fee simple: the right to decide how the land will be used; the right of enjoyment and occupancy of the land; the right to possess the land; the right to the economic benefits of the land; and the right to pro- actively use and manage the land.” • Duty to Consult: similar progression in court rulings • And then there’s FPIC
  10. 10. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Land Access • Role of the State (strength of land cadastre systems) • Role of Community (who leads, who participates, roles & responsibilities, end points,) • Role of Landowner • Process (purchase, lease, negotiation, relocation, pricing, etc.) • Dispute Resolution
  11. 11. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Benefit Sharing* • Compressive Community Development Agreements (structured frameworks, bi-lateral, tri- lateral/multi-dept, multi-lateral, ODA involvement) • Local Content (employment, procurement, training) • Local Industry/Diversification • Infrastructure(direct funded, co- funded, tax credits [Works for Investment]) • Resource Access (water, small scale mining, agriculture) * World Bank approach to promote shared prosperity generated by the mining industry Mining Community Development Agreements http://bit.ly/1C3VfKW Source Book March 2012
  12. 12. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Project Approval • Informal (local, national, international pressures: Tambo Grande) • Structured Local Processes (Binding Referendum/Honduras) • Informed Processes (State decision informed and influenced by local input)
  13. 13. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Relationships & Trust • Crosscutting themes (relationship history across ownership changes) • History of relationships (reputational capital of project and owners – new owners don’t reset reputational liabilities) • Transparency and legitimacy of processes (environment, permitting & approvals)
  14. 14. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure What is being done • National policies and regulations • Company and industry wide initiatives • IFI support and multi-lateral technical assistance and support • ODA support, co-funding • Development collaboration (NGO, industry, government)
  15. 15. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure National Policies & Legislation • Regulatory structures to facilitate meeting growing social demands • Consultation • Access to land • Benefit sharing • Project approval • Project permitting • Mine closure
  16. 16. PDAC 2015, Toronto, CanadaPDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Increasing mandatory and voluntary compliance • ICMI - International Cyanide Management Institute (ICMI) • Conflict Free Gold Standard • Voluntary Principles on Security and Human Rights • EITI • Global Reporting Initiative • Voluntary Principles • ICMM • IFC • Equator Principles • ILO • Accountability • Many, many more
  17. 17. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Social value imperative applies across industry, sector & geography
  18. 18. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Mining Schools Hi Tech! • Long way to go, Yes • But mining has come a very long way in last 15 years! • Other industries see mining as a leader/exemplar
  19. 19. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Industry social investments • Education • Health • Poverty alleviation • Gender equality • Environment • Partnerships • Equity & justice
  20. 20. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Global Development Framework Collective Social Responsibility The Millennium Development Goals (MDGs) are eight international development goals that were officially established following the Millennium Summit of the United Nations in 2000 All 193 United Nations member states and at least 23 international organizations agreed to achieve these goals by the year 2015 General framework for governments, international and multi-lateral agencies, NGOs, etc
  21. 21. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Global Development Framework II The United Nations summit for the adoption of the post-2015 development agenda will be held from 25 to 27 September 2015, in New York and convened as a high-level plenary meeting of the General Assembly.
  22. 22. PDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Global development framework elements • Education • Health • Poverty alleviation • Gender equality • Environment • Partnerships • Equity & justice
  23. 23. PDAC 2015, Toronto, CanadaPDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Notice any similarities? Global development framework • Education • Health • Poverty alleviation • Gender equality • Environment • Partnerships • Equity & justice Social value investments of business • Education • Health • Poverty alleviation • Gender equality • Environment • Partnerships • Equity & justice Natural Partnerships Unnatural Partners
  24. 24. PDAC 2015, Toronto, CanadaPDAC 2015, Toronto, Canada dealing with Growing Social Demands from Exploration to Closure Why Unnatural Partnerships? Perspectives driven by Development Community • Development assistance as dominant capital flow • Business’ historical record on human development, rights, etc. • Other impressions and perspectives (profit only, exploitative, etc.) Business • Development as anti- business • Historical pressures from the development community • Other impressions and perspectives (inefficient, do-gooders, etc.)

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