CHAPTER 11 COMMUNITY RELATIONS IN MINERAL DEVELOPMENT PROJECTS
| Jurisdiction | Derecho Internacional |
(2001)
COMMUNITY RELATIONS IN MINERAL DEVELOPMENT PROJECTS
Estudio Grau Abogados
Lima, Peru
ABSTRACT
The global mineral industry is undergoing dramatic changes when undertaking mineral development activities. The current economic and engineering models, based on negotiations between industry and governments as the only stakeholders does not fully respond to the needs, concerns and views of other stakeholders, in particular those of indigenous minorities, local communities and concerned Non-Governmental Organizations (NGOs). A more complex model therefore needs to be developed that takes these issues into account.
This paper considers the background and new context for mineral development projects, and identifies local communities as one of the key new stakeholders whose needs, concerns and views must be taken into account or accommodated into a "socially acceptable" model for development of mineral projects.
This paper contends that, although there have been substantial improvements in the attempt to integrate local communities into the business equation, as an active stakeholder, there is still room for improvement. Action needs to be taken by the industry and governments, as the traditional stakeholders, towards a partnership alliance model that includes issues affecting all other stakeholders. Suggestions are offered on how mining can achieve acknowledgement as a socially acceptable activity.
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1. INTRODUCTION
Social issues in mineral development projects have become a major concern globally. Actions by local communities and pressure groups have crystallized into recognizable threats to development of mineral projects. In some instances, projects are being delayed or totally abandoned because of opposition by communities in which the projects are located.
Although the mineral industry has proved adept at quickly designing and integrating engineering and management models into its operations that promote sound environmental practices and satisfy, to the extent that is possible, increasing global environmental awareness, there are now new issues under debate. Three of these issues are, an increasing "social awareness," a greater number of stakeholders involved in all phases of the development process and their various demands, and the call for a "social dimension of business" as being inherent in the concept of sustainable development.1 These have posed new challenges, not only to the mineral industry, but also to governments. Emerging trends suggest the need to move from economic and engineering models, discussed between the industry and governments, to more complex ones that recognize and take into account the concerns, needs and views of other stakeholders, in particular those of local communities that host the mineral project.
This study attempts to see whether traditional methods of managing problems in the minerals industry, would be adequate to address social issues affecting mineral development projects. These are contractual and statutory approaches and self-regulation. This discussion is based on the analysis of current literature. The topic was identified as being of importance to policy decision-makers and companies attempting to provide them with certain key criteria to design and implement a new model that ensures an adequate balance between social concerns and the development of mineral projects.
The paper is divided into five sections. Section 1 contains introductory matters. Section 2 examines the new context for mineral development projects. It identifies how increased social awareness and the different interests and concerns of the various stakeholders involved have impacted, or are likely to impact on, mineral development projects. Section 3 deals with the effectiveness of certain traditional methods of managing problems in the minerals industry, and suggests possible tools and actions to be taken by the industry and governments to accommodate the newly emerging priorities and views of other stakeholders, in particular those of local communities. Section 4 discusses three case
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studies in the Peruvian minerals industry that illustrate some of the discussion points. These are Tambo Grande, Yanacocha and Antamina. Section 5 provides conclusions and recommendations on how to integrate the concerns of local communities in mineral development projects, and make these projects socially acceptable.
Certainly, there are some other relevant issues associated with community relations, such as the social aspect of sustainable development and whether mining is or not a sustainable activity, related human rights problems in development of mineral projects, and specific treatment of indigenous groups. Nevertheless, due to space constraints, those issues will not be addressed in this paper.
2. CERTAIN CONCERNS INVOLVED IN A MINERAL DEVELOPMENT PROJECT: THE SOCIAL ASPECT
The purpose of this section is to examine the new context for mineral development projects. It identifies how issues such as increased social awareness and the greater number of stakeholders involved in mineral development projects and their different interests and have impacted, or are likely to impact on mineral development projects.
For the purpose of this paper, "social awareness" is defined as the increasing understanding by local communities, and other interest groups, of their interests, needs, views, role and capacities with respect to mineral development projects, and their demand for an active role in the decision making process. This process involves: (a) understanding of impacts caused by mineral developments they may host; and (b) understanding of their bargaining power with respect to other stakeholders.
2.1 Social awareness: The new context for mineral development projects
Awareness about impacts caused by mineral development projects has evolved considerably over the past few decades.2 The modern history of mining, driven by advances in exploitation techniques only goes back to the nineteenth century. Together with the advent of modern techniques and mineral developments at a larger scale, came increased environmental problems that led to the intervention of the State at a later stage.3
During the twentieth century, at least three distinct phases can be identified in the minerals industry.
The first phase finishing by the 1950s, when development of mineral projects was carried with little or no interaction of local communities and traditional landowners, nor a confrontational relationship among companies, and communities.
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The second phase, starting in the 1950s until the 1970s. Although there are references on actions taken by affected groups to fight problems associated with mineral development in the 1950s, the scope and degree of these actions were still limited. There are four reasons to this: (a) the low level of literacy, particularly in developing countries, at that time; (b) the limited means of communication available; (c) the localized, week and uncoordinated efforts of interest groups; and (d) the lack of identification of impacts caused by mineral development by the international community.
However, during the 1950s, in the international arena specific multilateral instruments were concluded, which in turn contributed to raise concerns about impacts caused by mineral development projects. At this phase, world attention was mainly focussed on reconstruction and economic development after the world war, and decolonisation in Africa and Asia. The nationalistic approach in Africa, Asia, and later in Latin America, together with pursuance of economic reforms, allowed a notable expansion and intervention of the state in economic affairs. During this stage, the development of concepts such as the "New International Economic Order" and "Permanent Sovereignty over Natural Resources," together with the feeling of inequitable distribution of benefits and wealth, shaped the policy of forced-upon negotiations and nationalization that continued until the 1980s.4
The third phase started in the 1970s. Until the early 1970s, impacts caused by mineral development projects, particularly on the environment, and disruptions on local communities, were not yet major concerns either for the industry, government or the community. It can be argued that environmental degradation and collateral impacts on local communities were implied in the equation of exploitation of mineral resources for the production of essential minerals commodities that kept economic development, and improve standards of living.5 Further developments during the 1970s by environmental movements acting in open confrontation against the industry, significantly altered the public view of the manner mineral development projects should be assessed and how public policies should be designed and implemented.6
Between the 1980s and 1990s, within the framework of opening up the minerals industry to foreign investment, and implementing new mineral policies,7 affected and pressure groups started questioning the economic arguments given by the industry and governments to support development of mineral projects. These arguments were corporate
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profitability, foreign exchange earnings and tax revenues.8 As a result, during the last decade, the minerals industry had to design and integrate engineering and management models into its operations to promote sound environmental practices and satisfy, to the extent that is possible, increasing global environmental awareness.9
The following shows the most significant changes in the mineral industry compared to past practices:
(a) Governments and the global mineral industry recognize the need for sound environmental practices;
(b) International law is increasingly being recognized as a useful tool to control or manage broad and specific issues related to the...
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