KLD Community Engagement in Mining

8/7/2019 KLD Community Engagement in Mining

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The Global Context of Community Engagement in Mining

What India can learn and what India can do

Kuntala Lahiri-DuttFellow, Resource Management in Asia Pacific Program

Research School of Pacific and Asian StudiesThe Australian National University, ACT 0200

Australia

Email: [email protected]

Introduction

I thank DRET for the opportunity to speak at this Workshop. I was brought up near a coal

mining area in West Bengal and have many years of work experience on the social issues

surrounding Indian mining, but have been fortunate to be able to learn about good practice

in mining in Australia and other parts of the world from my base in one of the worlds best

universities the Australian National University. For this reason, I am pleased that I havebeen able to come back as an Australian representative to talk to my colleagues about the

nature of these leading practices and how they could be used in the Indian context, one

with which I continue to remain engaged.


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Some of my Indian colleagues, when exposed to international mining practices on

community, express the feeling that many of the measures taken by Australia cannot be

done in India. The reason appears simple enough: too many people! The community,

therefore is seen as the problem in mining development in India; my presentation will

show how communities can be turned from trouble into treasures.

Whilst India and Australia share many characteristics relevant to mining such as our

common Gondwana geology, our common colonial history of mining that also vests the

ownership of the minerals with the State, thriving democracies, and our knowledge and

skill-based economies almost every inch of Indias mineral tracts unlike Australia is

covered by dense human habitations with great heterogeneity in society and culture.

Moreover, new mining projects in India lead to a population influx and rapid change in the

demography wiping out the clear-cut distinction between who is local and who is not

again, somewhat like the gold rush times experienced by Australian countryside in late

1800s.

Therefore, whilst outlining the global efforts in community engagement as part of

sustainable development framework, I will focus on what India can do under the current

scenario. Mine closure is not specifically mentioned many a time in my presentation, but

community engagement begins at the exploration stage, goes on throughout the project

cycle, and continues well after the mine has stopped operation. It is thus as important in a

mining project as any other activity irrespective of the stage of mine life.

Mining in India and Australia

There are significant differences between the mining sectors of India and Australia: mining

and minerals are important for the Australian economy accounting for AU$45 billion (~7%

of GDP, 35% of Australian export value) and the existence of the Native Titles Act

which represents an official acceptance of the indigenous people as custodians of the

country and its resources. In stark contrast, mining is not the dominant economic sector in

India; contributing only ~ 2.6% of GDP, and thus would not seem even critical for the

Indian economy. However, for India and the continued economic growth of the country,

mining is hugely relevant, indeed essential. This is for several reasons: although the

minerals produced in India primarily serve the domestic market, the mining sector is one of

the largest employers of workers. According to the 2001 Census data, there were over 2.2


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million people1 (around 14% of all main workers) formally employed by large and small

mining enterprises, with another 2.3 million2 (around 33% of all marginal workers)

working in mines on a casual, part-time or informal basis3. The mining sector of India is

also influential for sustaining the overall economic performance of the country. The

continued availability of minerals and ores are crucial for the development of competitive

local industries, for providing an alternative livelihood base to landless labourers, for

providing electricity to the 550 million people without access to electricity, for building

roads and infrastructure to meet the Millennium Development Goal of reducing poverty by

half by 2015. Coal for example, is the biggest source of energy in India, 75% of all coal is

consumed is used for power generation and is responsible for ~ 55% of Indias current

commercial energy consumption. Mining and minerals are, therefore, inextricably linked

to the goal of ensuring Indias economic development, energy security and the well-being

of its population.

Social Performance of the Mining Industry in India

The fundamental differences between Australian and Indian mining industry lies in how

projects deal with the communities. Mining in India is undoubtedly the quintessential

footprint industry having a large impact on social, environmental and institutional

aspects. Poor management of these issues, even when only local or regional in nature, can

damage international reputation, cause long-term conflicts, and reflect negatively on the

economic parameters countrywide.

Social issues around mining are of crucial importance; it is imperative that mining, like any

other human endeavour, should follow the key sustainable development principles by

contributing to the social, economic and institutional development of the communities

within which it operates4. Social and community issues also follow the UN Declaration on

Human Rights, and forms foundation-stone of the democratic system that characterises

16% of these workers are women.

2 17% of these workers are women.

3 Together, this population is larger than the entire population of Sydney, Australias biggest city. Incomparison, mining in Australia employs around 1.3% of the labour force, and is currently suffering an acuteskills shortage.4 ICMM SD Framework, Principle 9: Contribute to the social, economic and institutional development of thecommunities in which we operate. This is achieved through: community development from projectdevelopment through closure in collaboration with host communities and their representatives, and enhancedsocial and economic development by seeking opportunities to address poverty.


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Indias political milieu. In a democracy, the mining industry can make this contribution

only through an open and transparent process of consultation with the community. The

mining industry does not operate only through a business license; it requires a social

license to operate because all mining projects exist within a social and cultural context. It

is thus, important to weigh the benefits of community engagement against the risks and

costs surrounding Indian mining industrys operations and to mitigate the negative impacts.

Unfortunately, the mining sector of India is not amongst the worlds best managed. In spite

of efforts, Indias mining sector has become well-known for the ailments of economic

inefficiencies, poor management and dismal health and safety records. The Government of

Indias High Level Committee noted in its 2006 report (p. 69):

Land is often used without the consent of the indigenous people. Mining companies should act

as if consent to gain access to land is required even when the law of the land does not require

this. In making decisions, the cultural circumstances of the local people and loss of access to

common resources should be kept in mind..Mineral development can bring benefits to the

local level. However, the relationship between mining companies and local communities has a

legacy of abuse and mistrust.

What is most significant for India is that the countrys poorest people the scheduled

tribes and lower castes tend to live on the lands that are richest in mineral reserves. Many

of these people make a living from land and land-based resources on a subsistence basis,are poorly educated or lack education, and are not yet a full part of the cash economy.

They are disproportionately represented amongst those negatively affected or directly or

indirectly affected by mining5.

Consequent to the neglect of social concerns, widespread community demands have arisen

for direct and sustained benefits from mineral wealth. The mineral tracts of India are now

approximately synonymous with political violence and strife. In poorly governed areas,

communities demand that some basic services and facilities be provided by miningcompanies. Unfortunately, there has not yet been any productive dialogue between the

mining companies and the civil society. The Non-Governmental Organisations (NGOs)

5 SCs comprise 16% and STs 8% of Indias population, but comprise 40% of those displaced. Of the 1.7million people displaced by large mining projects, almost 50% were tribals.


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working on these issues are generally seen by mining companies as trouble-makers inciting

the local communities.

A consequence of the neglect of social (and environmental) impacts has been the rampant

illegal mining sector which has multiple ramifications. One aspect of it is the flourish of a

small-scale mining sector: as much as US $65 million worth of coal was carried and

distributed in 2005 only by the cyclists on roads and highways. Whilst supporting the

livelihoods of a large number of people, this kind of mining encroaches upon, endangers

and also pollutes common resources (such as air and water), impedes the production in

legal operations, and causes a loss of revenues to the State.

Unplanned closure of mines without assessing the social impacts and without engaging the

community has in fact been a key feature of the poor social performance. In eastern Indian

collieries, for example, breakage into shut underground pits, or scavenging from old

abandoned mines are common features. Accidents leading to injuries and deaths are not

uncommon in these abandoned mines. Scavenging from abandoned mines may cause

breathing of oxygen into the coal seam and light up subsurface fires, affecting operating

mines nearby. Examples of unplanned mine closure leading to total collapse of local social

fabric are not uncommon elsewhere too, the case of Kolar Gold Fields being the best

known among them.

The International Context: What India can learn

The commitment expressed by the High-Level Committee on Indias National Mineral

Policy to social development is entirely in tune with the practices that are now prescribed

by the international mining industry. Let me briefly describe the context in which the

international mining industry has internalized the socially sustainable practices. Since

1999, nine major mining companies of the world began a three-year Global Mining

Initiative in response to increasing complaints, escalating protests and violent conflicts in

and around mining operations resulting at times in forcible closure6. This initiative

developed an independent process of analysis and consultation around key issues facing

the mining sector by the Mines, Minerals and Sustainable Development (MMSD)

process led by the London-based international NGO International Institute of Environment

6 Bougainville in Papua New Guinea.


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translations published in 2007. The Australian Governments handbook, freely

downloadable from the internet source, is titled Community Engagement and

Development, and was published in October 2006.

These guidelines put forth three major reasons for community participation, engagement

and development in the mining sector namely the development case, the human rights case

and the business case. Of this, the human rights case is not trivial: the ICMM notes that it

is the duty of the mining industry to uphold fundamental human rights and respect

cultures, customs, and values in dealings with all those who are affected by mining

activities. By pointing out the mutual benefits of engagement, they also make a business

case, and by invoking the overall sustainable development framework they make a

development case. Above all, they prove the need to move beyond the use of simple tools

and point out to the need to involve the community in the decision-making process, and

above all, differentiate between the top-down approach inherent in terms such as

community consultation and instead imply deeper, meaningful and longer-term

involvement and even at times a bottom-up approach in community engagement. Again,

this trend that projects work more efficiently, produce better outcomes and satisfy those

for whom they are intended - has been well-established in development of other natural

resource sectors.

The main message that these various guidelines, toolkits and toolboxes give is loud and

clear, and extremely relevant for this Workshop. These are saying in unison that it is not

only the right thing to do, but it also makes good business sense to effectively involve the

communities in decisions which affect them; that mining can contribute to making the

community livelihoods more sustainable if it works with the consent of and in consultation

with the community; that credible monitoring and evaluation of industry claims is

essential; that verification and reporting systems need to be mandatory; that indigenous and

human rights cannot be easily ignored; that it is good business sense to give training and

resources to the community in order to build competencies for delivering on social

responsibilities and that more R&D is needed on alternate options for realizing

sustainability objectives and for minimizing harm.

A major and strongly felt motivation behind development of these tool-kits was the lack of

expertise within the mining industry professionals (because social concerns are not part of


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their core business) to comprehend the depth and significance of the adverse impacts of

mining projects on the society and culture. In fact the MEM-ACE Guidebook begins with a

brief outline of the history of the aboriginal people, how they were taken over by the

colonialists, what their social fabric commonly is and how their cultures operate, and how

some of the resource laws that mining companies operate within came about during the

colonial occupation. This training of mining engineers in sociology, human geography and

history of the areas in which they work is intended to give the first lesson that communities

are complex and dynamic entities. It also means that the mining companies need to take a

long-term view when assessing the success of community initiatives.

Whilst making a space for social scientists in mining projects, almost all the guidelines

also address the universal intra-company need of internally training people to do it hands

on if necessary by providing frameworks, describing the basic steps in effective planning

community engagement and development, and set out the key principles that should guide

these activities. They also acknowledge that community engagement is not an easy task

and many of the methods are still evolving; and that there are no simple solutions for

success.

Community Engagement and Development: What India can do

Let me now focus closely on the point of applicability of these various guidelines and

toolkits to the Indian situation. After decades of license raj and excessive state control, the

Indian mining industry is on the threshold of major changes. Even the coal sector the

symbolic icon of nationalism is gradual opening up. How should we interpret

community engagement in the context of this gradual process of economic reforms? It is an

important question to answer, because under state control, mining companies such as Coal

India Limited had always interacted with a diversity of external groups such as regulators,

governments, customers and suppliers, indigenous peoples, local administrators, political

representatives, and employees. This was indeed a form of community engagement, and by

virtue of being synonymous with the state, all their actions were accepted as contributing

to the greater common good, the national interest.

Which way?

With economic liberalisation and divestment, two options have been thrown open to the

Indian mining sector the first is to engage with the international context and develop a set


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of country-specific guidelines under the rubric of some new rules and regulations; the

second is to allow companies to develop their own moral or ethical business practices

under the rubric of Corporate Social Responsibility (CSR). In a country famous for the

Bhopal incident, with 88% of its economy in informal sector, depending on the corporate

largesse and benevolence towards the society may not be an informed choice. Some

developing countries such as Indonesia have indeed allowed their mining sectors to

develop their own CSR principles, using a carrot and (at times) a stick method.

For a thriving democracy like India, with conflicts over mining raging throughout the

mineral belt, and with a watchful civil society keeping tabs on the actions of mining

companies, it is undoubtedly a better option to take up the Australian model of regulations

and ensure strict enforcement and compliance to these rules. This would require

commitment far beyond the audience of this workshop. It would require revisiting some of

the laws that oversee mining operations in India.

Indeed efforts are underway to ensure the loosening the mining sector from the grip of the

State, and although a Bill to amend the Coal Mines Nationalisation Act (to allow private

companies to explore, mine and own coal in India) has been lying with the Indian

Parliament since 2000, there may be a gradual opening up of the sector. Under these

circumstances, a way for Coal India Limited to obtain its social license would be to lobby

the government not only for guidelines but also to press for changes in the law. Laws such

as the Coal Bearing Areas Act which supersedes the inalienability of tribal land need to be

re-considered in view of SD framework and ICMM principles. It would also require setting

up separate departments, with adequate funding and powers, to undertake the specialised

tasks of community engagement from the exploration till closure.

SIA

Till last year, there was no provision for the use of tools such as Social Impact Assessment

in preparing the mine plan or for mine closure. The Draft National Policy for Resettlement

and Rehabilitation, following the observations by the High Level Committee of the

Planning Commission of India, has now recommended that Social Impact Assessments

(SIA) be made in addition to EIAs. However, it must be borne in mind that SIA is is

specialised tool to be used by the specialists, and that it is not just the one tool, so it would

be important to select the most participatory ones from the range of approaches to SIA.


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Above all, SIA is just a tool to make the first entry into community engagement that can

build sustainable livelihoods not just for the life of a mine but enduring after closure. It is

SD and sustainability of livelihood opportunities that form the overall background and

includes many other tools besides SIA.

Robustness of Indian Laws

The two statutes, Forest Conservation Act (FCA, 1980) and Environment Protection Act

(EPA, 1986) that are important for mining in India, do not fully and specifically reflect the

question of sustainable development in the mining sector by bringing into the fold

community engagement needs. There is a pre-occupation towards various forms of

compensation for the diversion of forest land-use, including compensating afforestation,

and the need for EIA studies prior to grant of environmental clearances in India. Clearly

stronger laws are needed to accommodate the emergent global thinking within the country.

On this lacuna, the High Level Committee observed (p. 71):

it is necessary to recognise that the global level dialogue currently underway has taken the

entire issue of sustainable development in mining to a much higher level. The basic approach is

that ..mining can and should contribute to the economic, social and cultural well-being of

indigenous and host populations and local communities, particularly by creating stakeholder

interest in mining operations for the project affected persons (PAPs).

In this context it would be appropriate to assert that what community engagement aims toachieve dovetail accurately into the Indian Constitutional mandate. The International

Association of Public Participation (IAP2) has created a spectrum to show how community

engagement works: from information to consultation to involvement to collaborate and

finally to empower.

INFORM - CONSULT - INVOLVE - COLLABORATE - EMPOWER

(Source: www.iap2.org.au)

From the point of view of what is required by the law, India is currently at the lower or the

information end of the spectrum in that only information-sharing and Public Hearings are

mandatory. These Public Hearings have yet to move on to becoming a two-way interactive

process, and under the current laws and the scenario of mutual distrust can never aim to


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achieve to move on to the involvement and collaborative steps. These should be

stakeholder-driven interactions that include workshops, focus group discussions, learning

circles, interviews, reference groups and community consultative committees.

At the other end of the spectrum empowerment represents a level of engagement that can

extend to participation in planning and decision-making, not only on issues related to

operational impacts but also on decisions regarding the communitys future once the mine

has closed.

Community engagement: Indian accomplishments

The Indian mining sector has traditionally used compensatory jobs either permanent in

the company or casual jobs with labour contractors as the main tool in rehabilitating

communities affected by mining. It had also engaged with stakeholders through the

compliance/legal framework with technical and scientific considerations being the focus of

engagement.

These, however, are first or second generation model of stakeholder engagement The

emergent approaches that are being adopted in some cases in Australia can be described as

third and fourth generation in which the mining industry engages seriously with the

sustainable development agenda, moving away from a defensive and crisis mentality and

taking active steps to build a dialogue with the local communities.

Ultimate objective: Community empowerment

Community development based on partnerships, and driven by collaborative relationships

is a key aspect of community engagement. In this emerging model, companies work with

governments and communities on initiatives that help to strengthen the social, human,

cultural, and economic capital of an area. This strength from within not power over -

is the essence of community empowerment. Empowerment is fundamentally about helping

the communities to help themselves, to empower themselves to such a level in which they

are better able to meet their livelihood needs and aspirations, both now and into the future.

For the mining industry, community development would mean working with or influencing

other institutions or agencies to contribute in, for example, the improvement of public

health and other services, enhancing the local environmental quality and building

community pride, strengthening local institutions including the NGOs, working with


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marginalised groups to help them participate more fully in the development of their

community. Community development and engagement are thus overlapping but distinct

processes leading ultimately to community empowerment to sustain their livelihoods.

Importance of gender: An example

A lot can be done and indeed much is being done at different levels. I will give a brief

example of a successful partnership between the Australian National University, the

Australian Government (its research branch, Australian Research Council7), and a large

coal mining company in Indonesia. This collaborative project is working out an answer to

the simple question: how can mining benefit both men and women in local communities?

This question arises because evidence has pointed out that in mining projects benefits

accrue to men whilst women bear the risks and the greater burden of negative impacts. I

have pointed out that there is no homogeneous and simple the community out there, and

the task of dealing with the heterogeneity is complex and specialized. Similarly, an

important distinction within any one community is that women and mens roles, needs and

interests are not the same.

With increasing attention on the relationship of gender to economic development in

international forums and the prominence of gender issues in the policy agendas of major

donors specifically the role and levels of participation of women the question of

womens empowerment has assumed greater significance for the mining industry.

Evidence has pointed out that womens empowerment leads to better developmental

outcomes within the family and the community.

Although largely beyond the scope of todays discussion, this question would not be

entirely irrelevant in the Indian context where women have worked as equal partners in the

production process since early colonial collieries. In many indigenous communities too,

women constitute the backbone of the household subsistence as major livelihood earners,

and any engagement with the community must remember and respect this role by putting

women at par with men rather than reinforcing the gender inequalities.

7More information on this partnership can be found in https://empoweringcommunities.anu.edu.au


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Conclusion

The contribution of a mining sector to a countrys economy does not take place in

isolation, but rather in the countrys overall socio-cultural and political context. It is thus

the quality and competency of social policies and institutions that will determine whether a

mining sector can promote economic growth whilst ensuring the sustained livelihood

opportunities for its peoples. There are many examples in the world where the revenues

generated by the mining sector have actually impeded development and affected the well-

being of communities. In India, in spite of some minor efforts in this regard, as I have

shown, the consequences of social neglect in the mining sector have been serious. A great

amount of initiative now needs to be undertaken. However, the good news is that there are

a wealth of information now freely available, and that help and expertise is at hand. All

that is required is will. Within the constraints of existing laws, much can be done to engage

and empower the communities.

In conclusion, I would note that for India to turn its natural endowment into mineral

wealth, it would not only mean that incomes are generated for the State or the mining

companies, but to create wealth and incomes for people around the mines by helping them

to improve their capabilities, build livelihoods and options that can be sustained even after

the mine has ended.

KLD Community Engagement in Mining

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