Securing and maintaining a social licence to operate has never been more important – or challenging. By geological coincidence, many mineral resources are concentrated in the world’s poorest and most under-developed regions and extraction inevitably has massive environmental, economic and social impacts for host communities.
Investors and host governments alike are increasingly assertive. And so are host communities in their expectations and demands for consultation, compensation and a share of the benefits in terms of jobs and raised living standards. However, negotiating the cultural gulf between a boardroom in Canada or London and the daily reality of local people whose livelihoods and heritage may be intricately entwined with subsistence farming and the well-being of the local habitat is fraught with difficulties – and dangers.
The business case
Margins within mining have never been tighter and the losses resulting from mine closure as a result of local protests can be colossal. “If there is shut-down relating to a technical problem at one of our mines, it is simple to resolve. We just need to send in the right people and equipment to get the mine running again. But if there is a shut-down as a result of problems with a community, then it can be extremely hard to resolve,” says Brent Bergeron, Goldcorp’s executive vice president of corporate affairs and sustainability.
Dr Elaine Dorward-King is executive vice president for sustainability and external relations at Newmont Mining. She is keen to point out that effective community engagement is as important as any other area of the business and has operational benefits that extend far beyond building support for the mine and the social license to operate.
“For example, by providing local residents with the skills needed to work at the mine, we reduce our need to identify and recruit talent elsewhere. In addition, through investments in capacity building we can help local entrepreneurs achieve the scale and standards necessary to become suppliers of goods and services to the mine. They, in turn, can go on to hire more people from the local communities which can transform the local economy,” she says.
Bergeron is a realist and believes there will always be operational issues that need resolution at the community level. “Unlike some other Canadian miners, a large proportion of our projects are located within Canada itself and that makes a collaborative partnership approach to mine development and moving beyond simply balancing impacts against benefits a lot easier,” he explains.
“However, it is inevitable that issues will arise sometimes from different perspectives, and what matters most is our ability to develop a working relationship of trust and openness from the beginning, along with effective pathways for dialogue and communication.”
Five years ago, Goldcorp signed a major collaboration agreement co-authored with the Cree Nation of Wemindji, the Grand Council of the Crees (Eeyou Istchee) and the Cree Regional Authority that would ensure sustainable development opportunities for the Cree Nation. This also signified Goldcorp’s commitment to continuous collaboration and communication with Indigenous peoples.
Bergeron believes that the Éléonore mine in Northern Quebec, which became operational in April 2015, is a landmark project and a tribute to the level of trust that Goldcorp was able to achieve with the Cree community.
“It is proving that aboriginal communities and mining companies can successfully work together to make sustainable commitments to one another for the mutually beneficial successful development, operation and reclamation of a project,” he tells MM.
Local contractors secured major contracts during the mine’s construction, a plethora of educational, training and employment opportunities have been created for the Cree community and the mine’s design took into careful account environmental sensitivities.
As a result, Éléonore is one of the few gold mines in North America that has adopted dry tailings technology, where rock and sand left over after gold is recovered is dewatered using pressure ﬁlters so the tailings can be dry stacked rather than placed in ponds. This innovative process uses 95% less water than conventional methods, and water that is used is recycled, resulting in a signiﬁcantly greener operation.
In the Dominican Republic, Barrick believes that its approach to community engagement in the area of the Pueblo Viejo mine represents a unique departure from the standard approach to direct company engagement. The company has pursued a multi-stakeholder approach rooted within a national framework to strengthen municipal governance. Critically, the initiative is seen as empowering local communities, rather than the mine, to take a lead in determining impacts.
The mine has partnered with government, business, civil society and the Canadian Embassy to facilitate the development of municipal development plans (MDPs). These are created in a transparent and participatory process allowing communities to set priorities for the use of mining revenue, and to develop the capacity to manage and allocate it in a transparent and democratic way. Since each community approved its respective MDP in local referendums, more than 405 municipal projects have been delivered across 48 municipalities and communities.
As a result of the initiative, Barrick has positioned itself as a positive and significant contributor to the broader processes of democratisation and decentralisation taking place in the country.
For Naomi Johnson, Barrick’s senior director of community relations, the key challenges in her work include understanding the distinct characteristics of each community. “It requires clear and consistent mapping and analysis of stakeholders that looks at both impact and influence and takes into account the dynamics within a community and how those can impact our work and engagement practices,” she explains.
Johnson also highlights the need to balance informal and formal engagement. “We need to ensure that we are engaging with all stakeholders, not only the leaders and key people. It is important to provide a suite of engagement methods to meet different needs and expectations.
“We also need to tailor grievance mechanisms to realities on the ground - each site operates in different cultural milieus and faces unique circumstances and we have to make sure we are responsive to the diversity of views that comes with any community.”
Supporting the most excluded
A consistent challenge to meaningful engagement with communities for all miners is the need to circumnavigate ‘elite capture’, and ensure that mine benefits address the needs of the most vulnerable, who may not necessarily be represented.
During initial social impact assessments, one of the key findings of Newmont prior to commissioning the Ahafo project in Ghana was that women were under-represented in community decisions. “Based on this understanding, in 2006 Ahafo established a Gender Plan to implement strategies to secure greater female participation through establishment of the Women’s Consultative Committee (WCC). Today, the WCC provides a platform for women in the Ahafo area to freely express their interests and needs and actively participate in community decision-making” says Dorward-King.
By participating in capacity-building programmes, financial management training, entrepreneurship classes, advocacy skill building, and health awareness courses, the members of the WCC have been able to hold seminars and training for other women in the community. They have also initiated a Self-Help Fund with a 95% repayment rate, versus less than 50% for loans in general in Ghana.
Newmont is also notable in its efforts to collaborate with, rather than condemn, its local counterparts. Artisanal, small-scale mining (ASM) provides a livelihood for millions of people and makes a significant contribution to many local economies, which also host large-sale corporate operations in the vicinity. The company is actively working with governments to identify land in areas where it has licence agreements to set aside for responsible, legal ASM. Currently, ASM activities take place on or near three of the company’s operations – at Batu Hijau in Indonesia and Ahafo and Akyem in Ghana and at the Merian project in Suriname.
However, not all news from the industry is golden. Global mining is still besmirched by tales of recent cyanide spills, environmental contamination, dispossessed farmers and allegations of intimidation and assault by protestors. The financial imperative to return value to shareholders and the rigours of operational demands do not always sit easily with other agendas.
Bergeron of Goldcorp believes that the industry is sincere in its attempts to enhance the life chances of those whose way of life is touched by its operations. “The days when miners could ride rough-shod over local communities are long since gone. We are not alone in recognising the benefits that can accrue to everyone by finding a better way of working,” he states.
If miners want profitable and harmonious mines then the message is clear: local communities must have a strong voice in their development and a meaningful stake in their benefits. For Bergeron, this means that corporate social responsibility and sustainability can never exist in a vacuum, or as a discrete business unit. “Rather, it is an ethos and philosophy that must permeate the entire organisation,” he concludes.