MMSD+10 - pubs.iied.org.

MMSD+10:Reflecting on a decade of mining and sustainable development

Sustainable Markets DiScuSSion PaPer : June 2012

www.iied.org

abbi Buxton, international institute for environment and Development

MMSD+10 i reflecting on a DecaDe

i

Published by iieD, 2012

Buxton, a. 2012. MMSD+10: Reflecting on a decade. iieD Discussion Paper. international institute for environment and Development, london.

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eXecutive SuMMary

i 1

Executive summary It is 10 years since the Mining, Minerals and Sustainable Development (MMSD) initiative was completed. MMSD offered an independent review of how the mining and minerals industry performed in relation to broad-ranging sustainable development issues. Its findings were game-changing for the sector. MMSD provided a foundation for shared understanding by stakeholders from mining CEOs to community groups. Mining CEOs of the day committed to act on its agenda as a robust and credible way to maximise the sector’s contribution to sustainable development.

So where are we, 10 years on? How far have we travelled towards a sustainable and responsible mineral industry?


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in short, the past 10 years have seen

a valuable increase in the number of

standards and best practice guidance,

helping stakeholders to understand what

sustainable development means. But

despite good intentions at the strategy

level and examples of good practice, the

complexity of situations at the mine site

means implementation across the sector

is highly variable. Questions remain as to

whether current verification and reporting

regimes are sufficient to meet the needs

of key stakeholders – from investors to

communities. in a large number of cases,

there is little idea of how exactly these

should be translated into progress on the

ground. Meanwhile, new pressures on the

sector, such as competition from emerging

economies, climate change and a re-

emergence of the ‘resource nationalism’

debate, are putting the challenges and

solutions for sustainable development in

mining in a new light.

Key findings

Achievements against the sustainable development agenda set out by MMSD

l Understandingofsustainabledevelopmentintheminingandmineralssectorhasmarkedlyimprovedandthereisincreasedsophisticationintalkingabouthowminingshouldmaximiseitscontributiontosustainabledevelopment.

l TheInternationalCouncilonMiningandMetalshassucceededinimplementingmanyofMMSD’srecommendationsforindustryandprovidestheprimarybasisforcollectiveactioninthesector.Complementarymeasuresforgovernment,thesmall-scaleminingsectorandcommunitieshavenotequalledthissuccess.

l Asetofglobalrulesforbestpracticeonsustainabledevelopmentandmineralshasemerged,althoughdifficultiesintranslatingtheseatthegroundlevel(bothintermsofreportingandimplementation)andensuringconsequencesfornon-compliance(orcompliance)remain.

eXecutive SuMMary

i 3

Ongoing challenges to maximising mining’s contribution to sustainable development

l Governmentcapacitybuilding–akeyMMSDrecommendation–remainslimited,restrictingtheabilitytoharnessminingforpositivedevelopment.

l Artisanalandsmall-scaleminingisaneglectedandunderfundedsectorinthemineralsindustry.

l Communitydevelopmentremainsacomplicatedfieldinbothrhetoricandimplementation,althoughthereisevidenceofprogressandmoresophisticatedapproachestotacklingtheseissues.

l Anintegratedapproachtomining,asarticulatedbyMMSD,isanagendaonlyjustbeginningtotakeshape,butresourceefficiencyand‘closedloopthinking’couldbecomebusinessimperativesinthefaceofincreasingpressuresonresources.

New issues that, combined with the ‘ongoing challenges’ from the last 10 years, may help shape the agenda for the next 10 years

l ThecompetitivelandscapehaschangedandinvestorsandoperatorsfromChina,Brazil,Indiaandelsewhere–notnecessarilyinvolvedindefiningtherules10yearsago–haverisentoprominence.

l Theminingindustryhasbroadlytakena‘waitandsee’attitudetoclimatechangeissues,butharsheroperatingconditionsarespurringactionanddebate.

l UNSecretary-General’sSpecialRapporteurJohnRuggie’sworkiscompellingbusinessestoengagewithhumanrightsissues.

l Thedramaticincreaseincommunityexpectations,includingforFree,PriorandInformedConsent(FPIC),mustbetackledheadonbygovernments,civilsocietyandcompanies.

l Increasingpressuresof‘ResourceNationalisation’,viewedbysomeasathreat,couldprovideanopportunitytorethinkexistingmodelsofdevelopment.

l Difficultiesofoperatinginconflictregionsandfragilestatesarehighontheinternationalagendarightnow.

l The‘greeneconomy’discourseframingthe2012EarthSummitinRiomayhelpshapearenewedagendaaroundanintegratedapproachtominerals.


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IntroductionThis review is intended as a ‘conversation starter’ – providing an initial assessment of the mining and minerals sector’s achievements against the MMSD agenda and open to further discussion. Thisreviewis

basedon36semi-structuredinterviewstogatherperceptionsofstakeholders

inminingcompanies,civilsocietygroups,industryandcommodityassociations,

andindependentconsultants(afulllistofintervieweescanbefoundinthe

Acknowledgmentssection).Thepapersynthesisesideasexpressedbymany

individualsandshouldnotbetakenasrepresentativeofanysingleperson’sopinion.

NordoesitextensivelyrevieworquantitativelyevaluateMMSD.Rather,itlooksfor

keyachievements,discussesnewandongoingchallenges,andbeginstoarticulate

issuesthatmayshapetheagendaforthenext10years.Itishopedthatthiswill

stimulatefurtherdiscussionsanddebateonthesekeyquestions,andcallsonyou,

thereader,toaddyourvoiceviablogsandonlinecommentsatwww.iied.org/mmsd

overthecomingmonthsandatIIED’sFairIdeaseventatRio+20(www.fairideas.org).

introDuction

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MMSDwaspartof,butindependentfrom,theGlobalMiningInitiative(GMI)–drivenbyminingcompanies’recognitionthattheindustryneededagreementonhowtostartmeetingthechallengesofsustainabledevelopment.Theindustrywantedanalternativetotheadversarial,advocacy-basedapproachthatcharacterisedinteractionsatthetime,andwasreadyforamovetowardsasharedagendainvolvingallthemainstakeholders.MMSDwasconvenedbytheWorldBusinessCouncilforSustainableDevelopment(WBCSD)andhousedbytheInternationalInstituteforEnvironmentandDevelopment(IIED)–aresearchhomethatcouldconvenearangeofstakeholdersandprovidetheindependencecrucialtobuildingtrust.Althoughfundedlargelybyminingcompanies,anAssuranceGroup,madeupofindependentacademicsandseniormembersofsomeofthebigNGOsatthetime,wastaskedwithensuringtheprocessandfindingsremainedindependent.

MMSDaimedtocreateasharedideaoftheappropriateandnecessaryrolesforeachofthemajoractorsinminingandsustainabledevelopment–government,civilsociety,andtheprivatesector–asking‘whatisacompany’sroleandwhatisnotacompany’srole?’.Duringthetwo-yearproject,morethan700peopleparticipatedin20countriesandover130reportswerepublished.RegionalresearchandengagementprocessesinLatinAmerica,Australia,AfricaandNorthAmerica,withtheirowngovernancestructures,leadership,budgetandpriorities,wereacentralpartofthewholeeffort.

Whatemergedwasawell-developedrationaleforwhysustainabledevelopmentisavitalpartofaminingcompany’sbusiness,ratherthananactofphilanthropy.Thishelpedtoframethesector’scontributiontothe2002JohannesburgSustainableDevelopmentSummitandtheGMITorontoconference.TheTorontoConferencemarkedtheclosingofboththeGMIandMMSD,andsawagreementonamandatefortheInternationalCouncilonMiningandMetals(ICMM)–setupbytheGMItoreplacetheexistingInternationalCouncilonMetalsandtheEnvironmentasaflagshipCEO-ledorganisationthatwouldtakeforwardtheindustry’sresponsibilitiesonsustainabledevelopment.ICMM’srolewastobecomplementedbyCASM(theCommunitiesandSmall-scaleMiningbodyattheWorldBank),theIntergovernmentalForumonMining,Minerals,MetalsandSustainableDevelopment(unformedatthetime)andIUCN(theInternationalUnionforConservationofNature).

Time to reflect and refocus… Aswemoveintothenext10yearsthereisasenseoftheneedforanewagendawithinachangedcontextformineralsandsustainabledevelopment.Beforethatnewagendaisdefineditisimportanttotakestockofwhathasbeenachievedoverthelast10yearsandwhathavebeentheobstaclestoprogress.Breaking New Ground,MMSD’sfinalreport(2002),articulatedaseriesofsustainabledevelopmentchallenges,withassociatedrecommendations,andfourstepsforsupportingsustainabledevelopmentinthemineralsindustrythattogetherprovideagoodframingforthisdiscussion.

Chapter 1 – pages 6-13Progress in sustainable developmentSynthesisestheperspectivesofstakeholdersinterviewedforthisresearchinchartingprogressagainstthefourstepsofsupportingsustainabledevelopmentinthemineralssectorandasksreaderstocontributetheirthoughts

Chapter 2 – pages 14-24Tackling the challengesConsidersprogressagainsttheninechallengesidentifiedbyMMSD–bothachievementsandongoingchallenges

Chapter 3 – pages 25-31Defining a new agendaHighlightskeyissuesthatareunderdiscussionin2012andopensadiscussiononhowthismayframetheagendaforthenext10years

What was MMSD? MMSD was both an outcome and a process

– a two-year initiative to gather evidence and knowledge, and engage stakeholders around

the question of ‘how can mining and minerals best contribute to the global transition to

sustainable development?’


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Progress in sustainable development MMSD’s final report, Breaking New Ground, articulated four steps to supporting sustainable development in the mining sector. IIED spoke to a range of stakeholders about the achievements and challenges of mining and sustainable development to get an idea of where we might be in this progression. The following is a synthesis of those perspectives.

Suppo

rting s

ustai

nable

deve

lopmen

t

in the

mine

ral se

ctor

Understanding sustainable development

Creating organisational policies and management systems

Achieving cooperation among those with similar interests

Building capacity for effective actions at all levelsStep 4

Step 3

Step 2

Step 1

ProgreSS in SuStainaBle DeveloPMent i i

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MMSDhelpedcompaniesunderstandthatsustainabledevelopmentisaboutbalancingtheneedsofsociety,theenvironmentandeconomics,inthecontextofgoodgovernance.Allthecompaniesspokentoforthisresearchdemonstratedanunderstandingofsustainabledevelopment.JohanViljoen,SeniorVicePresidentSustainability(Policy&Assurance)atAngloGoldAshanti,commented:

“Health and safety, environment,

communities and security – 10 years ago

these were single silo disciplines, now

they cross boundaries.”

Goodsocialandenvironmentalpracticeisnowseentobepartofthecompany’scompetitiveadvantage,accordingtoRichardMorgan,GovernmentRelationsAdvisoratAngloAmerican,andunderstandingofsustainabledevelopmenthasincreasedinsophistication.DrJohnGroom,SafetyandSustainableDevelopmentAdviseratAngloAmericanandAngloAmerican‘Sherpa’fortheGMI,andstakeholderintheMMSDprocess,commented:

“The drivers for GMI were clear

recognition that mining companies had

problems of access to land, and access

to markets, and cost of capital. The

fundamental underlying reason was the

reputation of the industry. To tackle this

we would have to work with others and

also improve the way we worked. This

is what drove MMSD and started the

process of stakeholder engagement.

None of the problems have gone away,

but the dialogue is much better informed

and infinitely more constructive.”

But, what do you think? What does progress along these four steps look like to you?

Step 1: Understanding sustainable developmentunderstanding of sustainable development in the mining and minerals sector has markedly

improved – arguably the single biggest achievement in the last decade – but the debate has

now increased in sophistication.


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ManyseetheabilitytoengageinamoresophisticateddebateasasuccessattributabletoMMSD,whichprovidedasharedlexiconthatarangeofstakeholderscoulduseasthebasisforengagement.RobertCourt,GlobalHeadofExternalAffairsatRioTintoandpartoftheSecretariatfortheGMI,statedthatbusinessplanningatRioTintoisnow‘intrinsicallyinformedbyawillingnesstoengagewithothers’(discussedfurtherunderStep3).

However,mostofthoseinterviewedheldseniorpositionsandtheircompaniescouldbeconsideredindustryleadersonsustainabledevelopmentissues.

So what is understanding like across the industry and at the level of the mine site?

TonyAndrews,previouslyExecutiveDirectoroftheProspectorsandDevelopersAssociationofCanada(PDAC),segmentsjuniorminingcompaniesinto(1)thoseatthetopthatarewellestablishedandcrediblefirmswithgoodmanagement;(2)thesmallsegmentwhowanttoavoidsustainabledevelopmentissues;and(3)the80percentwho‘developpracticesbasedoncommonsenseinresponsetoparticularcontext’,whichinsomecasesresultsingoodworkbutisgenerallynotbenchmarkedtointernationalstandardsandcanbehighlyvariableinthequalityofbothdeliveryandoutcome.

If ‘understanding’ isn’t industry wide and looks more like ‘awareness’ in huge parts of the sector, can we say that we have taken

this first step to supporting sustainable development in the sector?

Casestudiesandpracticalguidancehavecontributedtowardsanemergingglobalstandardandpictureofwhatresponsibleminingshouldlooklike.Ahostofpracticaltoolsisavailablethrough,forexample,ICMM’swebsiteandtheWorldBank’sExtractiveIndustriesSourcebook.However,puttingtheseintopractice,particularlyinlarge-scaleprojects,canbedifficult.Thecomplexityofthechallenge,asarticulatedbyMMSD,

hasmeantthat,inpractice,certainissuesareprioritisedandothersneglected.StephenD’Esposito,nowHeadofRESOLVEandrepresentativeoftheNGOsectorintheGMITorontoconference,notedthataddressingissuesinisolation(suchasbiodiversityoffsetsandFPIC)hasledtoa‘missedopportunity’inconsideringthetrade-offsinherenttosustainabledevelopment.

TherearenowawealthofinitiativesarticulatingwhatsustainabledevelopmentmeansforcompaniesincludingtheInternationalFinanceCorporation’s(IFC)PerformanceStandards,theUnitedNationalGlobalCompactandOECDGuidelinesforMultinationalEnterprises;manyofwhichdidnotexistin2002(seeMajorinternationalinitiativesimpactingmineralsandsustainabledevelopmentonpage13).However,theredoesn’tseemtobeaclearideaofhowmanyoftheseinitiativesaremadetoworkattheminesite–whetherbycivilsocietyorganisations,communities,artisanalminersormineemployees–andhowtheinformationcollectedthroughassessmentandreportingistranslatedintovaluableknowledgeontheground.Moreover,aconclusionfromtheGEMMDialogueinVancouverinApril20121wasthatalthoughtherearemanytoolsforcompanies,thereareinsufficienttoolsandguidanceforcommunitiestohelpthemunderstandandupholdtheirrightsandresponsibilities.Thesameissaidforartisanalminers.

What has been achieved in ensuring communities and artisanal miners have the tools and knowledge to understand what it means to maximise mining’s contribution to

sustainable development? What can we learn from these successes?

Whatwasmostclearfromtheinterviewrespondentswasthatthecontexthaschanged.Theshiftingsandsofthesustainabledevelopmentdiscoursecontinuetochallengewhatsustainabledevelopmentmeansintermsofitsimplementationandthusshapingunderstandingforthenext10years(discussedfurtherinChapter 3: Beginning to define a new agenda).


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ICMMisnowconsideredthe‘portofcall’onindustrystandardsforbestpractice.Itspositionstatementscoverarangeofissuesfromclimatechangeandmininginprotectedareastoindigenouspeoplesandminingpartnershipsfordevelopment.Thesearebindingonallitsmembers,whichrepresentsasignificantproportionofglobalmineralsproduction(including52%ofcopper,48%ofplatinumgroupmetals,42%ofironore,41%ofnickel,38%ofgoldand25%ofzinc),2andsetabenchmarkforperformanceacrossthesector.

ManycompanieshaveadoptedsustainabledevelopmentpolicesthroughmembershipassociationssuchasICMM,theMiningAssociationofCanada(MAC)ortheProspectorsandDevelopersAssociationofCanada(PDAC).Aswith‘understanding’inthesector,itisnotalwaysclearhowwellthesepolicieshavetranslatedtoon-the-groundimprovements.JimCooney,formerVicePresidentandSustainabilityLeaderatPlacerDomeratthetimeofMMSD,questionswhethertherehasbeenaculturalshiftwithincompaniesbigenoughtodrivesustainabledevelopmentchangeintheminingindustry.Theproliferationofgoodpracticeandstandardshasnotnecessarilyextendedtomonitoringandevaluationofthatguidancenecessarytoensuregoodimplementationattheminesite.CarolineDigby,ResearchManageronMMSDandnowSustainabilityDirectorattheEdenProject,comments:

“Reporting and metrics that can be

independently and publicly verified

are the only way that the industry can

demonstrate that it is really succeeding

in the longer run. Is the current reporting

regime sufficient? I would say no.”

AidanDavy,DirectoratICMM,submittedthatwhileICMMhasbeenverysuccessfulinfillingout‘goodpracticeguidancegaps’tohelpcompaniesaddresstheICMM’sprinciples,

thefocus‘willincreasinglyshifttocompaniesbeingabletodemonstrateimplementationprogressonmaterialissues’.

How have organisational policies translated into improvements at the mine site? Which

management systems have worked? Is the current reporting regime for monitoring implementation of good practice sufficient? What would an effective regime look like?

OnlyinthelastyearhastheIntergovernmentalForumagreedaframeworkagainstwhichtoassessnationalpoliciesrelatedtomining–asrecommendedbyMMSD.Recentandongoingchangestonationalminingpoliciessuchasincreasedequitystakes,raisedtaxesandgreaterpolicyoversightarebeingviewed,insomecases,as‘resourcenationalism’andthreatstocompanyoperatingmodels.Butitmaybenecessarytodistinguish‘politicalopportunism’insomecaseswithgovernmentstakingamoreconsideredapproachtoforeigndirectinvestmentinothers.3

Are there examples of governments that have improved their ability to manage mineral developments for positive development?

What do their policies and systems look like?

Itmaynowbetimetoconsidernewavenuesforincentivisingchangeincompanypractice,suchasthroughinstitutionalandsocialimpactinvestors(likelytohaveaparticularimpactonjuniorsthataredrivenmorebycapitalinvestmentdemands).Consumer-driveninitiativestoo,whichhavesofarbeentoolimitedtohavesufficientscopetodrivechangethroughsupplychainmanagementsystems.ThesearediscussedfurtherinChapter 3: Beginning to define a new agenda.

Step 2: Creating organisational policies and management systems

good practice guidance and strategic level buy-in exists for improved organisational policies

and management systems – but more needs to be done to ensure good (and measurable)

practice at the operational level and across the sector. this includes for small-scale miners,

juniors and mid-tier companies.


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MMSDestablishedaprecedentforstakeholderengagementandconstructivedialogue,whichwasground-breakingfortheindustryatthetime.NicholasCotts,GroupExecutiveofEnvironmentandSocialResponsibilityatNewmontMiningCorporation,commentedthatminingcompaniesarenowbeginningtobeviewedas‘legitimatedevelopmentpartners’.AccordingtoStephenD’Esposito‘theincentivestructureforcivilsocietyhasshiftedandpartnershipswithcompaniesareseenasawaytomakegainsinwaysthatweren’tasclearbefore’.D’EspositowentontosaytherehavebeenmissedopportunitiesonissuessuchasFPIC,tailingsdisposaland‘nogo’areas,whichare‘oftenframedinblack-and-whitetermswithNGOdemandsfollowedbyindustryreactionorresponses.’This‘callandresponse’dynamictypicallypreventsconstructiveengagement.RobertCourt,too,commentedthat‘iftheworldisrunasaseriesofsingleissueagendas,itwillbeamess.’LukeDanielson,MMSDProjectDirectorandnowPresidentofSustainableDevelopmentStrategiesGroup,commented:

“My own biggest disappointment has

been the failure to create any kind of

ongoing system for dialogue among

companies, government, labour and

civil society… one of our strongest

recommendations was to create

something – an annual forum, a set of

issue-focused, meetings, or almost any

kind of way these actors could keep the

discussions going in a structured way.

This simply did not happen, and there

has been a tremendous value lost as

a result. It will be harder to recapture

this value now, because so many of the

participants have moved on.”

AnexampleofsuchaforumisTheForestsDialogue,whichwascreatedaftertheTowards a Sustainable Paper Cycleinitiativetocontinuetoaddressimportantglobalforestryissuesinmultistakeholderdialogues.4Towards a Sustainable Paper CyclewasMMSD’spredecessorexaminingtheissuesfacingthepaperandpulpsectorinsustainabledevelopment.5GivencommentssuchasthosefromD’EspositoandCourtabove:

What appetite is there for such a forum amongst mining stakeholders? Is creating a

forum still a top priority? What other avenues exist for multistakeholder dialogue?

ICMMprovidesafirmfoundationfordrivingchangethroughcollectiveeffortsattheindustrylevel.DrAnthonyHodge,PresidentofICMMandFacilitatorforMMSDNorthAmerica,describestheorganisation’sroleaspartlyaboutdesigningsolutionsbutprimarilyaboutbringingpeopletogethertoachievechangethroughcollaboration,sharedlearningandpeerpressure.

SomeintervieweesthoughtpushingtheboundariestoofarandtoofastwouldhaveriskedturningICMMintoanexclusivemembersclub.JohnGroomusedthemetaphorofanicebreakerleadingthewayintopackedice:ifitmovestoofastorgetstoofaraheadtheicemayclosebehinditandotherswon’tfollow.However,aswemovefurtherawayfromtheMMSDprocessintime,ICMMmaybecomemoresusceptibletothewhimsandpoliticsofitsindustrymembers–particularlyasnoneoftheCEOswhoengagedwithMMSDareinthatpositiontoday.Agreementandcooperationisthefoundation,andICMMwillneedtoensureitcanbothretaincollaborationandchallengetheagenda.

Thecommodityassociationsarealsofurtheringtheirrolesinfosteringcooperationforsustainabledevelopment.WhereasICMMadoptsabroadapproachtosustainabledevelopmentacrosstheminingandmetalsindustry,commodityassociationscanadoptmetal-ormineral-specificsustainabilityinitiatives—andarebeginningtodoso.TheLeadAssociation,forexample,

Step 3: Achieving cooperation among those with similar interests

this step was articulated largely in terms of principles and codes of conduct. there is no

doubt the last 10 years have seen a proliferation of initiatives and principles, many of which

are multistakeholder and articulate shared goals and interests. MMSD provided a model

for engagement, and there have indeed been more collaborative agreements between civil

society and companies during this time.


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hasrecentlyadoptedaSustainabilityCharterandisseeingbigadvantagesintellingthesustainabilitystoryoflead–suchashow95percentoftheleadforcarbatteriesisrecycledwithnoriskyexposureforhumans.

However,non-industrycounterpartsappeartohavebeenmarkedlylesssuccessful.CASMhasstagnatedandthesectorhasseenlittleadvancementinthepast10years.IUCN,workingwithICMM,agreed‘nogos’forWorldHeritageSitesbutdidnotgetfurtherthanthat.AndtheIntergovernmentalForumhasonlythisyearagreedaframeworkfornationalpoliciesonmining.Ithasalsosofarfailedtodrivegovernmentcapacitybuilding(seenextsection).Thereisnointernationalbodyforindigenouspeoplesandminingandthereislimitedjoined-upcooperationforcommunities(althoughtheworkofIFConCommDevwashighlightedbyanumberofinterviewees).

What is the evidence of successful cooperation in artisanal and small-scale mining, communities and governments?

And again, how successful has post-MMSD cooperation been in implementing change on

the ground?

Atthecommunitylevel,socialmovementsareemergingtochallengemineralinvestmentsandarebeingsuccessfulinsomecases.Amoreconnectedandawarepopulaceappearstobechangingthefaceofcooperationbetweengovernment,communityandcompany.ThisisdiscussedfurtherinChapter 3: Beginning to define a new agenda.


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Morethanhalfoftheinterviewrespondentslistedlackofgovernmentcapacitywithinthetopthreechallengestomoresustainablemining.MMSDrecommendationstoincreasegovernmentcapacitytomanagemineralinvestments,andatechnicalsupportfacilitytosupportthat,havenotmaterialised.DanielsonarguesthatinanindustrythatcanspendUS$300,000onasetoftyresforatruck,theinvestmentsneededinareasonableprogrammeofcapacitybuildingforhostcountriesshouldbeseenasminor,withmassivereturns.JonathanHobs,SeniorPolicyAdvisor,NaturalResourcesGovernanceatWWF,asked:

“Where does corporate social

responsibility stop and government

responsibility start? The threshold

will be context specific. In addition to

paying taxes, developing infrastructure,

assisting with social services, companies

often have to do more than their fair

share in situations of poor governance.

It is in their interests as much as anyone

else’s that governments are effective in

managing their natural resources.”

Butitisnotjustgovernmentsthatneedtodefinetheirrolesandbuildcapacity.Miningcompaniesneedcapacityquitedistinctfrombusinessorminingengineeringskillstoaddresssustainabilityissues.Thosewhohavethiscapacitytendtobetheindustryleaders.Feedbackinthisresearchsuggestedthatcapacityamongstthejuniorandmid-tierminingcompaniesisstilllacking–largelyduetolackofresourcesandskills.Yetnearlyalltheinterviewrespondentshighlightedchallengesofimplementationforthenextdecade.ThesechallengesaredisusedfurtherinChapter 2: Tackling the challenges

butitisworthhighlightingherethedifficulties,particularlyincommunityengagement.Socialissuesarebetterunderstoodbyminingcompaniesthantheywere10yearsagobutenvironmentalissues,withtheirtechnicalsolutions,remaineasiertoaddress.Thecomplexityofoperations–whetherbecauseofthesizeofthemineorthesocialandenvironmentalcontext–meansthatdespiteimprovementsinorganisationalpoliciesandsystems,substantialimprovementsincapacityarestillneeded.

What are your thoughts on how the sector has developed its capacity for effective action? What have been the areas of

improvement (and what are the areas where capacity is still lacking)?

Again,thisprogressneedstobeconsideredinlightofthecurrentcontextandthenewagendaforminingthatidentifiesthemostappropriaterolesforgovernment,companiesandcivilsocietyindeliveringonsustainabledevelopmentinthesectordiscussedfurtherinChapter 3: Beginning to define the new agenda.

How far do you think the mineral industry has come in its progress towards sustainable

development? What has been important in the last decade to achieving progress? And

how should those achievements and the lessons learned shape the agenda for the

next decade?

Step 4: Building capacity for effective actions at all levels

good practice guidance exists, but capacity to implement remains the single greatest

challenge to maximising sustainable development across the minerals sector.


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Major international initiatives impacting minerals and sustainable developmentGlobal Reporting Initiative: TheGlobalReportingInitiative(GRI)isanetwork-basedorganisationthatproducesacomprehensivesustainabilityreportingframeworkofprinciplesandperformanceindicatorsthatorganisationscanusetomeasureandreporttheireconomic,environmental,andsocialperformance.It(anditsMiningandMetalsSectorSupplement)isthebaselineforreportingonenvironmental,socialandeconomicperformanceinthemineralsindustries.Seefurtherhttp://www.globalreporting.org.

Extractive Industries Transparency Initiative: TheExtractiveIndustriesTransparencyInitiative(EITI)isasetofprinciplesandproceduresaimedatstrengtheningaccountableandtransparentgovernanceinresource-richcountriesthroughtheverificationandfullpublicationofcompanypaymentsandgovernmentrevenuesfromoil,gasandmining.Itisacoalitionofgovernments,companies,civilsocietygroups,investorsandinternationalorganisations.Seefurtherhttp://eiti.org.

Voluntary Principles for Security and Human Rights: TheVoluntaryPrinciplesforSecurityandHumanRightsprovideabroadframeworkthatcanhelpcompaniesoperateinwaysthatprovidesecuritytotheirfacilitieswhilerespectinghumanrightsandfundamentalfreedoms.ItwasunveiledinDecember2000bytheUSStateDepartmentandtheForeignandCommonwealthOfficeoftheUnitedKingdom,afterayear-longprocessinvolvinggovernmentofficials,oilandminingcompanies,andNGOs.ThePrinciplesprovideguidancetocompaniesoperatinginzonesofconflictorfragilestates.Seefurtherwww.voluntaryprinciples.org/files/voluntary_principles_english.pdf.

IFC Performance Standards:ThePerformanceStandardsoftheInternationalFinanceCorporationareapplicabletoallprojectssupportedbyIFCandMIGAarmsoftheWorldBankGroup.TheyarealsoapplicablebroadlytoprojectssupportedbymostprivatefinancialinstitutionsthroughtheiradherencetotheEquatorPrinciples(seefurtherwww.equator-principles.com/).ThePerformanceStandardswerebeingupdatedandrevisedin2011.Seefurtherwww1.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/IFC+Sustainability/Sustainability+Framework/Sustainability+Framework+-+2012/Performance+Standards+and+Guidance+Notes+2012/

ICMM’s Sustainable Development Framework:TheICMM10principlesofsustainabledevelopmentformthebasisforitsSustainableDevelopmentFramework,whichisbindingonitsmembercompanies.ReportingisinlinewiththeGRI,isindependentlymonitoredandverifiedandtheresultspubliclydisclosed.Seefurtherwww.icmm.com/our-work/sustainable-development-framework.

UN’s Guiding Principles on Business and Human Rights:ThesenowrepresenttheUN’sofficialpositiononcorporatedutiestowardshumanrights.TheGuidingPrinciplesareavailableathttp://www.business-humanrights.org/media/documents/ruggie/ruggie-guiding-principles-21-mar-2011.pdfandtheSpecialRepresentative’swebsite/portalisathttp://business-humanrights.org/SpecialRepPortal/Home.

OECD Guidelines for Multinational Enterprises:TheOECDGuidelinesforMultinationalEnterprisesincluderequirementsondisclosure,employmentandindustrialrelations,environment,combatingbribery,consumerinterests,scienceandtechnology,competitionandtaxation.TheGuidelineswererecentlyupdatedtoincorporatehumanrightsintocorporateduties.Seefurtherwww.oecd.org/dataoecd/43/29/48004323.pdf.

Akwe-Kon Guidelines:TheAkwe-KonGuidelinespreparedbytheSecretariatoftheConventiononBiologicalDiversityaredesignedtosetoutacceptedprocessesforconsultationwithindigenouscommunitieswheredevelopmentmayimpactindigenouslandsandresources.Seefurtherwww.cbd.int/doc/publications/akwe-brochure-en.pdf.

Framework for Responsible Mining:TheFrameworkforResponsibleMiningisajointeffortbyNGOs,retailers,investors,insurers,andtechnicalexpertsworkinginthemineralssector.Itoutlinesenvironmental,humanrightsandsocialissuesassociatedwithminingandminedproducts.Seefurtherwww.frameworkforresponsiblemining.org/.

The Natural Resource Charter:TheCharterisasetofprinciplesforgovernmentsandsocietiesonhowbesttoharnesstheopportunitiescreatedbyextractiveresourcesfordevelopment.Seefurtherwww.naturalresourcecharter.org/.

Sources:Sustainable Development Strategies Group(Danielson)andShaping Sustainable Markets(http://shapingsustainablemarkets.iied.org)


14 i

Tackling the challengesMMSD articulated nine challenges facing the minerals industry. The tables below outline some of the progress to date – identifying both achievements and ongoing challenges based on the research undertaken for this review. It is by no means comprehensive but may help shape understanding of the last 10 years to inform the agenda for the next 10 years. Please have your say in this discussion via www.iied.org/mmsd.

tacKling tHe cHallengeS i ii

i 15

The viability of the minerals industry2002 2012

Breaking New Ground The challenges 10 years on – views from our research

Tobe viablethemineralsmarketshouldevolveto internalise the costsandincentivisesustainabledevelopmentgoodpractice.Bothregulatoryandmarket-basedinstrumentsshouldbedeveloped.

Companiesstruggletolinksustainabledevelopmentinvestmentswithfinancialsuccessandaclear business case,particularlygivenlowmargins.

Mineralscompaniesasagrouphaveapoorrecordonsafe and healthy working conditionsandmoreneedstobedone.

Sustainabledevelopmentfundamentalsmustbeembedded in company culturetohaveapositiveeffectonhealthandsafety,accesstocapital,asociallicencetooperate,theabilitytoattractandmaintaingoodmanagerialtalent,andtheopportunityforareturnoninvestment–necessitatingashiftfromacostculturetoavalue culture.

Viabilityinthemainstreamindustryisstillviewedverymuchinfinancialterms,andincreasingdemandfromemergingcountrieshascontinuedtopushupconsumptionandproductionfigures.Recyclingremainslowand,accordingtotheCommissiononSustainableDevelopment,commoditypricesstillfailtoreflecttheenvironmentalandsocialcostsinthe‘mineralslifecycle’.6

Health and safetycontinuestobeapriorityissue.Movementstowardscommunityhealthandwellbeingarebeingconsideredwithintheremitofcommunitydevelopmentandsocialprogrammes.ICMM’sworkshopsandconferenceshaveprovedafruitfulwayofsharingexperiencesandresponses.Collaborationwiththeoilandgasindustryontopicsthatarerelevanttobothisnowprovidingacross-sectorplatformforsharing.Databasesofbestpracticeexistbutitremainschallengingtofindexacthealthandsafetyfigures.Itisnotpossibletosaywithcertaintywhethertherehasbeenarealandtrueimprovementinhealthandsafetyintheminingindustry.Theobjectiveofeliminatingfatalitiesremains.

Thereisnoclearcross-industryrecognitionofthebusiness caseforinvestinginsustainabledevelopment,eventhoughsomeindustryleadersseesustainabledevelopmentasacompetitiveadvantageandarebeginningtoadheretothenotionofsharedvalue.However,sustainabledevelopmentismorefirmlyapartofoperationalriskmanagement,asfactorslikeincreasedwaterandenergyscarcity,andthegeopoliticsofmininginremoteareasforceminingcompaniestoconsidertheseissues.

Thediscussionsaboutculture and organisational policies,introducedintheprecedingsection,arealsorelevanttoissuesofviability.


16 i

The control, use and management of land2002 2012


Governmentsshouldestablishintegrated land use planning frameworks thatbalancecompetinginterestswhetherlocalandnational,socialandenvironmental.

Governmentshouldrecogniseandupholdtherights of indigenous peopleandcompaniesshouldact‘asistogainconsent’.Indigenouspeopleneedaninternational bodytoestablishandupholdgoodpractice,andevidence of good practiceengagementbetweenminingcompaniesandindigenouspeople.

Consensusisneededon ‘no-go’ zonesforminingandprotectedareaswithexamplesofgoodandbadpracticeandrecommendationstohelpregulatorssettermsfornewminingprojects.

Key action:

l Globallevelguidanceonprotectedareasandmining(ledbyIUCN)

Access to land and resourcescontinuestobeoneofthecentraldrivingforcesforindustry’sengagementwithsustainabledevelopment,and‘resourcenationalisation’,whichcanbringrenegotiationsoftaxes,mandatoryjointventuresandotherconstraints.

National development plans,mineralinvestmentsandlocalcommunityexpectationsremainatoddsandimprovedinformationsharingandcooperationbetweensectorsanddifferentlevelsofgovernmentisstillneeded.Yetthereareemergingmodelsofsuccessfulcooperation.TheWorldBank’scurrentagendaisfocusedon‘corridors’inrespectofintegratedlanduseplanning.MozambiqueandLiberiahavebothused‘growthcorridors’centredoninfrastructuredevelopmentsthatmeanmininginvestmentscanbeintegratedwithdevelopmentoflocallyappropriateactivitiessuchasagriculture,forestryandsmall-scaleminingtohelpfacilitateindirectbenefitsandemploymentfrommineraldevelopments.This‘linkages’agendaisalsoakeypartofthenewAfricaMiningVision.7

ICMMhasproducedguidanceonindigenous peoples’ rights,includingevidenceofgoodandbadpractice.YetIndigenouspeoples’groupscontinuetoidentifysocialandenvironmentalimpactsthatshowthatcompanies’commitmentslackcredibleandindependentperformancemonitoring.Therearenumerousexamplesofbadpractice,fromtheTasekoMineinCanadatotheGrasbergMineinIndonesia.Companiesareoftenshowntobeviolatingindigenouspeoples’rightsandthesituationisfrequentlymademoredifficultbygovernmentfailuretorecognisetheserights.Thereisno international body for indigenous peoples and mining.

TherighttoFree, Prior and Informed Consent(FPIC)hasbeenarticulatedininternationalconventionsandsoftlaw,butcompanieshavestruggledtoimplementitintheabsenceofagreementonwhatthatlookslike.ICMMdevelopedapositionstatementbindingitsmemberstorespectnationallawsandengagewithFPICprocesses,butitdidnotrequireconsentunlessthiswasalreadyenshrinedinnationallaws.ChangestotheInternationalFinanceCorporation’sPerformanceStandardsonFPICin2011mayforcetheindustrytoreengagewithFPICandencouragepracticalstepsforimplementation.

AnICMMpositionstatementhascommittedmembersnot to explore or mine in World Heritage properties(seeMining,mineralsandtheenvironment,below).Thisguidesbutdoesnotbindtherestoftheindustry(themajorityofcompanies)anddoesnotapplytootherconservationorprotectedareas.


i 17

Minerals and economic development2002 2012


Formineralstocontributetopovertyalleviationandeconomicdevelopment,appropriate frameworksforcreatingandmanagingmineralwealthmustbeinplacealongwithinstitutionalcapacityandpoliticalwilltoovercomepoormanagementanddistributionofresourcerents.

Governmentsmustbetransparent on revenue generation and expenditurewithaninternationalregisterofallpayments.

Companiesmustpromoteandnotjustrespect:human rights,adherencetotheVoluntary PrinciplesonHumanRightsandSecurityandotherinternationalhumanrightsstandards.Moreresearchisneededonhuman rights indicatorsandcompliancemeasuresforgovernments,companiesandcivilsociety.Companiesmustdomoretopreventmineral-relatedconflict.

Key action:

l Reviewanddevelopmentofnationallegalandpolicyframeworks

l Internationalregisterofpaymentstocombatcorruption

l Nationalcapacitybuilding

l Nationalmultistakeholderprocesses

ManyintervieweeshighlightedGovernment capacitytomanagemineralinvestmentsasthesinglegreatestchallengefacingmineralsandsustainabledevelopmentandonethathasseenlittleprogressoverthelast10years.

TheIntergovernmentalForumonMining,Minerals,MetalsandSustainableDevelopment,taskedwithtakingforwardthepolicysideofMMSD’srecommendations,finalisedtheMining Policy FrameworkinFebruary2012–10yearsafterthattaskwasset.8Itallowsgovernmentstomaptheirregulatoryandinstitutionalframeworkagainstbestpractice,andtoidentifygaps.Applyingitisvoluntary.AssuggestedbyMMSD,itincludesguidanceonaccesstoinformation,publicparticipation,andlandrights,althoughartisanalandsmall-scaleminingissuesclearlyremaincontentiousanditistooearlytoassesswhetheritwillhaveanyimpact.

TheframeworkfollowsinitiativessuchastheWorldBank’sExtractive Industries Reviewin2002-2004,ICMM’sResource Endowment Initiative(nowMining Partnerships for Development)startedin2004,andtheNaturalResourcesCharter,whichallprovidemultistakeholderguidanceonhowtomanagenaturalresourcesforeconomicdevelopment–andrepresentanongoingresearchbasefundamentaltounderstandingsustainabledevelopmentinthesector.

The Extractive Industries Transparency Initiative (EITI),startedin2005,hasmadeprogressonan international register of paymentstocombatcorruption.However,theEITI’sagendaisverynarrow.Manyarechallengingittomovebeyondtrackingpaymentstogovernmentsintotrackinggovernmentexpenditure,disaggregatedreporting,andtoachievetransparencyoncontractsandlicences.Otherchallengesaretoregisterinformalrevenuesfromartisanalminers,toachievegreaterownershipofthedataatthelocallevel,tomakegeologicaldatabasesopentothepublic,andtoconsidertheimpactoftheUSDodd-FrankAct(requiringUScompaniestodeclaretheirpaymentstogovernment)inmovingEITIfromsofttohardlaw.TheWorldEconomicForum’sResponsibleMineralsDevelopmentInitiativehasstartedworklookingatMineralDevelopmentAgreementstomaketheseamoretransparentandinclusiveprocess.

MMSDmadeonlyaminimalreviewofhuman rights issues,asitwasconsideredtooideologicallyweightyanissueatthetime.However,therehasbeenrecentprogressonthisissue.ICMMandothershavereleasedanimplementationguideontheVoluntaryPrinciples,andsomeminingcompanieshavesuggestedthePrinciplesbecomemandatoryforthesector.RecentprogressbytheUNandthe‘Ruggieprocess’(seeNewAgenda)mayforcegreaterengagementwiththehumanrightsagenda.Indeed,AngloGoldAshantiarealreadybeginningtotalkaboutthe‘rightsofcommunity’.ICMMhasrecentlyproduceddocumentsonHuman Rights in the Mining and Metals Sector thathastoobeguntheprocessofleaningwithspecificguidanceonmanagementsystems,grievancemechanismsandduediligence.

Multistakeholder processeshaveproliferatedandarediscussedinresponsetoeachofthechallengesinthissection.Howeverrulesandguidancearenotconsistentlybackedwithindependentverificationorrealconsequencesfornon-compliance–amajorongoingchallenge.


18 i

Local communities and mines2002 2012


Miningandlocalcommunitiesmustbeanareaofparticularfocus.

Tostart,allactorsneedtohaveacommitment to sustainable development,effectivecommunityparticipationindecisionmaking,proactiveandnotreactiveapproaches,andwillingnesstoshareresponsibility.

Companiesshouldwork with civil society wheregovernmentcapacityislacking.

Clearer guidanceisneededoncommunityengagementprocesses,integratedsocialandenvironmentalimpactassessmentsandeffectivemineclosureplans.

Multistakeholder forumsshouldberecognisedascapableofraisingcommunityawareness,buildingcapacityandaddressingthepowerdeferentialbetweencompanyandcommunity.

Key action:

l Integratedimpactassessments

l CommunitySustainableDevelopmentPlans

l Integratedplanningforclosure

l Labour-managementagreementforsustainabledevelopment

l Disputesandconflictresolutionmechanisms

Thepast10yearshavehelpeddefinewhatcommunitygoodpracticelookslike.Manyminingindustryassociationsnowprovidebindingpoliciesandguidanceoncommunitydevelopmentconcernsfortheirmembers.ForexampletheMiningAssociationofCanada’s‘TowardsSustainableMining’InitiativeandtheProspectorsandDevelopersAssociationofCanada,whichhavedevelopedtheE3standardtoincludemoresocialaspects–nowE3plus.ICMMisconsideredthe‘firstportofcall’forindustrystandardsongoodpractice—somethingwhichdidn’texistbefore.Industryleadersarelesspaternalisticandthereisevidenceofcommunitiesbeingaskedwhattheywant.TheideaofCommunitySustainableDevelopmentPlansistakingshapeintheformofImpactBenefitAgreementsorCommunityDevelopmentAgreementsandisspreadingfastinnationalregulations.9Theagendatoaddresssocialconcernsiscertainlymoreprevalentandsophisticatedthanitwas10yearsagoandminingcompanies–withtheskills,knowledgeandresources–haveplayedanincreasingroleincommunitydevelopment(particularlywheregovernmentcapacityhasbeenlacking).

However,community involvement overall cannot be considered an area of achievement,andremainsoneofthebiggestchallengesformineralsandsustainabledevelopment.Companypolicydoesnotalwaysleadtobestpracticeontheground.AngloAmerican’sSocio-EconomicAssessmentToolkit(SEAT)isupheldasanexampleofbestpractice,yetthePebbleprojectinAlaskahasattractedcriticismbecauseofthedisconnectbetween‘rhetoricandreality’.10Ingeneral,thereareaccusationsofindustry’sleaders‘outsourcing’theirhumanrightsabuses.AndtheUKParliamentaryCommitteeonHumanRightsfoundevidencethat‘UKmultinationalsmaypresentacompliantfaceathomebutshowquiteadifferentapproachwhenoperatingelsewhere,andsomehaveawoefulrecordabroad.’11

Indeed,theCommissiononSustainableDevelopmentreportedin2011,thatSocial Impact Assessmentsandcompensationregimesremaininadequate.12Thisresearchpointedtothefactthatpermittingandregulationsdon’taddresssocialissuessufficiently.Manyminersstillpreferthetechnicalpracticalityofenvironmentalsolutions.

ICMMhasdevelopedguidance on grievance mechanismsforitsmembers–anMMSDrecommendation–andBHPBilliton,Anglo-American,Xstrata,Newmont,CerrejonandOceanaGoldhavebeendevelopinggrievancemechanismtoolsandapproachesfortheirprojectsites.TheworkofUNSpecialRapporteurJohnRuggieonbusinessandhumanrightshashighlightedtheimportanceofgrievancemechanisms,includingthosethatarecompany-led.Manyoftheseeffortsare,however,stillatthestageofpilotingapproachesandframeworks.13


i 19

Local communities and mines – continued

Capacity buildingforbothcommunitiesandcompaniesisstillneededandalthoughachievementshavebeenmade,thisissueremainsachallenge.ICMMiscurrentlyupdatingitsCommunity Development Toolkit,bringinginastrategicapproachtocommunityinvestmentthattheIFChasbeentriallingwithNewmont(onvaluingdifferentcommunityinvestments),whichhasmoreofahumanrightsfocusandisatoolforgrievancemechanisms–allreflectingadvancesinthecommunitydevelopmentagenda.

Thereisnodoubtthatcommunitiesbetterunderstandtheirrightsandareplacingmoredemandsongovernmentsandcompaniestoensurefairbenefitsfrommineralactivities.Theideaofmaintaininga‘sociallicencetooperate’throughoutthelifecycleofthemine—inwhichthecommunityacceptsandtruststhatthemineisoperatinginitsinterest—maybegainingtraction.14

Animportantpointofqualification:thisresearchwasbynomeansextensiveenoughtomakeabroadandfairassessmentoftheinteractionsbetweencompaniesandcommunitiesatthelevelofthemine.Todothisproperly,baselinedatawouldbeneededandanassessmentwouldhavetotakeplaceoverthefull20—30-yearlifecycleofthemine.Again,thestandard-settingorganisationsshouldbepartofrespondingtothischallengeofdatacollectionandevaluation.


20 i

Mining, minerals and the environment2002 2012


Mineralsactivitieshaveasignificantenvironmentalimpact.Managingtheseimpactsmoreeffectivelyrequiresdealingwithunresolvedissuesofhandlingimmensequantitiesofwaste,developingwaysofinternalisingthecostsofaciddrainage,improvingbothimpactassessmentandenvironmentalmanagementsystems,andeffectiveplanningformineclosure.

Thereisaneedtointegratesocialandeconomicaspectsintomineclosureplanning,addressongoingimpactsoflegacyminesites,andengagewithbiodiversityundertheConventiononBiologicalDiversity.

Key areas of action:

l Globallevelguidanceonprotectedareasandmining(ledbyIUCN)

l Guidanceonlargevolumewaste

l Dialogueonminerallegaciesleadingtoanindustrywideminerallegaciesinitiative

l Bestpracticeonbiodiversityandtoolsforintegratedlanduse

GuidanceandprincipleshaveappearedinresponsetoMMSD’scall.

Therehavebeentechnicaladvancesonwaterandwaste metals toxicity,withaccompanyingregulations.AndtherehavebeenfewerenvironmentaldisastersthanbeforeMMSD.Forindustry,wateristhe‘issueoftheday’–listedbyallindustryintervieweesamongstthetopthreesustainabledevelopmentissuesforthenext10years–andnumerousinnovationsarebeingdevelopedinresponsetothisconcern.

IUCNandICMMhaveproducedguidance,andgoodpracticecasestudieson protected areas and biodiversityandICMMmembercompanieshaveagreednottoexploreormineinWorldHeritageproperties(butseeearlierdiscussiononthelimitationsofthisguidance).

Therehasbeensomeprogressonminingandbiodiversityoffsetsundertheinternational,multistakeholderBusiness and Biodiversity Offsets Programme,whichproducedastandardonbiodiversityoffsetsin2012.

ICMMhasproducedatoolkittohelpplanformine closure,andexamplesofgoodpracticeexist.PTBHPKendiloCoalIndonesiareceivedenvironmentalawardsfromthegovernmentforrehabilitationpost-mineinpartnershipwithlocalNGOs,andAngloAmericanhasturnedminesitesintowindfarmsandjatrophaproductionforgreenenergyproduction.However,mineclosuresareregardedasanongoingchallengeleadingtosignificantadverseenvironmentalandhealthandsafetyimpacts.Therehasbeenlittleadvancementontheenvironmentalissuessurroundinglegacy siteswherelegalresponsibilityisunclear.ICMMchosenottoleadonthisalthoughitjoinedIUCNandthePostMiningAllianceinhostingamultistakeholder‘RoundtableontheRestorationofLegacySites’in2008,whichreiteratedtheneedforaglobaldialogue.ThePostMiningAllianceandtheNorthAmericanAbandonedMinesInitiativeareregardedashavingcarriedoutpromisingwork.Thisremainsapriorityissue,withgoodpracticeemerging.Butsolutionsproposednowcanonlybeevaluatedin20-30years’time.

AlthoughMMSDproposedataskforcetoconsidertheimplicationsofclimate changepoliciesonmining,itdidnotconsidertheissueitself.Somecompanieshaverecentlydecidedtoengagewiththeclimatechangedebate.Thereisrecognitionthatpoliticalpressure,orthelikelihoodofcarbonpricing,mayincrease.So,too,willpressureoncompaniestoaddressissuesofwater,energyandwastewithinalifecycleanalysisofmineralproductionandconsumption.ICMMintroducedaclimatechangeprogrammein2011followingagreementbyitsmembercompaniestostrategicallyengagewiththeissueofclimatechange.Since,theyhaveagreedasetofprinciples,commitmentsandfocusareaforworkatthelevelofnationalpolicydevelopment.15

Thiscouldbeconsideredanareawherethepursuanceofahostofsingleissueagendashasledtoadisparateanduncoordinatedresponsethatisreactiveratherthanproactiveandfailstoconsiderthetrade-offsinherenttosustainabledevelopmentwhenbalancedwithsocialandeconomicissues.


i 21

An integrated approach to using minerals2002 2012


Connectingtheproductionanduseofmineral-relatedmaterialsiscriticaltoensuringthatthemineralssectorcontributesoptimallytosustainabledevelopment.

Companiesatdifferentstagesinthemineralschaincanbenefitfromcollaboratingtoexplorefurther recycling, re-use, and re-manufactureofproductsanddevelopingintegratedprogrammesofproduct stewardshipand supply chain assurance.

Theprice of mineralsshouldreflecttheenvironmentalandsocialcostsoftheirproduction.


l Aproductstewardshipinitiative

l Effectiveregulationacrossthemineralvaluechain

l Furtherresearchtosupportthischallenge

AlthoughMMSDfocusedprimarilyonmineralsproduction,itproposedcollaborationacrossthesupplychainasanecessarysteptostrongproductstewardship.However,the‘disconnect’remainswithalackofverticalintegrationinthemineralssupplychainakeychallengetoovercome.

Overall,thechallengeofanintegrated approach hasseenonlyincremental,thoughnotinsignificant,advancements,inproductstewardshipandsupplychainassurance.Minersandmineralprocessors(thefocusofMMSD)havetraditionallynotmonitoredresponsiblepractices‘downstream’andthisagendahasstruggledtotakehold.Fewminingcompaniesundertakelifecycleassessmentsandtherearefewsuccessfulproductstewardshipinitiativesthatactacrosstheentirevaluechain.

EvenICMMhasencounteredchallengesinpaintinganholisticpictureofthemineralslifecycle.ICMM’sworkunder ‘materials stewardship’hassoughttoachievegreatercapacityforlifecyclethinking(linkingupstreamproducerswithdownstreamuserstogenerateandsharedata)butfocusedlargelyonspecificchallengesinthesupplychainsuchasmetalstoxicity.Thisisinpartrespondingtoexternalpolicydriversofnewchemicalsmanagementregulations(notablytheEUREACHregulation). Broaderprogresshasbeenrestrictedbythelackofcapacity(withinandoutsidemembercompanies)foraddressingtheseissuesandtheneedforgreaterintegrationthroughthevaluechain.

Thereistrendin,andmomentumbehind,addressingissuesofconflictminerals(althoughtheDoddFrankActhasmovedthegoalposts).InitiativesofnoteincludetheKimberleyProcessondiamonds,theworkoftheResponsibleJewelleryCouncil,16theemergingstandardonconflictfreegoldbytheWorldGoldCouncil,andtheInternationalTinResearchInstitute’sstandardsfortraceability.17Recentlyemergedrequirementsonchainofcustodyfromminetoconsumerwillbetestedincomingyears.TheFairtradedandFairminedstandardforartisanalgoldhassuccessfullybroughtethicalproductfromtheminetotheconsumer.Andthereisasenseofagrowinginterestinmaterialsprovenanceandlinkingthistothe‘sustainabilityfootprint’ofproducts.

Themetalcommodityassociationshaveapotentiallyleadingroletoplayinthe stewardshipagendainthenext10years.Mosthavemovedbeyondtheirtraditionalmarketdevelopmentremitandhavebeguntoadoptpoliciesonsustainabilitythatapplytomembersacrosstheirsupplychain(seefurthertheworkoftheInternationalAluminiumInstitute,18InternationalCopperAssociation19andInternationalLeadAssociation20).Theyareuniquelyplacedforengagingdownstreamconsumerswiththisagenda.

Insummary,thesystemsneededtodrivesustainabledevelopmentinitiativesupstreamanddownstreaminthesupplychainarenotyetinplace.However,newIFCPerformanceStandards(incorporatingsupplychainresponsibilities),theOECDduediligenceguidanceonmineralsupplychainsandtheUSDoddFranktraceabilityrequirementsmayspurtheindustrytomeetthischallenge(anditmaybeworthwhilerevisitingMMSD’srecommendationsinlightofthesedevelopments).


22 i

Access to information2002 2012


Accesstoinformationiskeytobuildinggreatertrustandcooperation.Thequalityofinformationanditsuse,production,flow,accessibility,andcredibilityaffecttheinteractionofallactorsinthesector.Effectivepublicparticipationindecision-makingrequiresinformationtobepubliclyavailableinanaccessibleform.

Authoritative and independent sources of informationacrossthemineraldevelopmenttoserveasalevellingtool.Systemsofaccountabilityandverificationareneededformonitoringperformanceofcompanies,governmentsandcivilsociety.

Alargenumberofreporting initiativeshaveemergedinthelastdecade.ICMMandothersengagedwiththeGlobalReportingInitiativetodevelopaminingandmetalssupplementtoallowfortailoredreportingonsustainabledevelopmentintheminingindustry.ICMMmembersarerequiredtoreportagainstboththeGRIrequirementsandtheICMMSustainableDevelopmentPrincipleswithanindependentassuranceprocess.ThisreportingisnowpubliclydisclosedinICMM’sannualreports.

TheEITIhascreatedapublic register of mining payments and government receiptsandachievedhighpoliticalbuyinandamodelformultistakeholdergovernance.EITIhasputtransparencyontheagendainamuchbiggerwaythanitwasin2002.Manycivilsocietygroupsarenowcallingfortransparencyincontracts,paymentsandfiscalregimes,andgeologicalsurveys.Thesewouldallowformoreopenandcompetitivebiddingandnegotiationofminingcontracts(includingthetermsforcontributionstosustainabledevelopment).Thisdiscussionisparticularlyrelevantinthedebateonresourcenationalismandrisingsocialpressurestoensuremining’scontributiontodevelopment.

Althoughguidanceandprinciplesforgoodpracticeexist,few have adequate accountability and verification systemsforassessingtheindustry’sperformanceandprogress.Moreover,somecivilsocietyorganisationsarequestioningtherelevanceofthesemetricstocommunities,localmineemployeesandlocalgovernment,particularlygiventhateveninternationalexpertsarestrugglingtomaptheproliferationofreportingstandards.

ProgressonFPIC,discussedabove,mayhelpensureinformedengagementofcommunitiesindecisiononmineralinvestments.


i 23

Artisanal and small-scale mining2002 2012


Anestimated10 million peopleareinvolved(directlyorindirectly)inartisanalandsmall-scalemining(ASM).Characterisedbylowincomes,unsafeworkingconditions,seriousenvironmentalimpacts,exposuretohazardousmaterialssuchasmercuryvapours,andconflictwithlargercompaniesandgovernments.

Thereisalackofawarenessandinformationongoodpracticeandimprovedmethodsandlackofincentivestoadoptgoodpractice.MMSDdiscussedbanningmanyformsofASM.

Key actions:

l Governmentstodevelopanappropriateandconsistentpolicyframework

l DonorsandinternationalagenciestoworktogetherthroughCASM,forexample,todisseminateexamplesofbestpractice,facilitatecommunicationandimplementpilotprojects

l Programmestoeliminatetheneedforchildlabour

l CooperationbetweenASMandLSM

Sustainabilityinartisanalandsmall-scalemining(ASM)hashardlyadvancedoverthepast10years,whereasthenumbersofsuchminershasgrowndramatically.In2002,therewereanestimated10millionartisanalminersworldwide(and100millionrelatedlivelihoods).In2012,conservativeestimatesare20 millionartisanalminersworldwide,althougharealisticfiguremaybecloserto30million.

SomerespondentstothisresearchfeltthatMMSD’sprimaryfocusonlarge-scalemininggaveinadequateconsiderationtoASMissues.MMSDdidchallengeviewsonASM–oftenconsideredasillegalactivitiestobeeradicated–butitdidnotgosofarastodefineASMasalegitimateplayerwithinthemineralssector.

MMSDtaskedgovernmentswithtakingresponsibilityforASMissues.SomegovernmentshaveadoptedmoreinclusivepoliciesonASM(suchasUganda,SierraLeone,MongoliaandGhana)andshowanincreasingrecognitionofASMasalegitimaterouteoutofpoverty.

NumerousnetworksandinitiativesemergedinLatinAmericaintheMMSDperiodwithmoreholisticresponsestoASMissues.TheworkofOroVerdeandtheAllianceforResponsibleMining(ARM)onethical supply chains overthelast10yearsledtothecreationoftheFairtradeandFairminedGoldStandardandhighlightedtheabilityofthissectortoleadinnovationandchange–bringingethically-minedproductstotheconsumerforthefirsttime.21AlthoughapplicationiscurrentlylimitedthereareplanstoextenditsscopetoAfricaandMongoliainthenearfuture.

Overthepast10years,however,muchworkintheinternationalNGOcommunityhasfocusedonissuessuchasmercury use, formalisation, child labourandconflict minerals–addressingtheproblemsofASMratherdrivingdevelopmentslikeimprovedmarketaccess,creditandtechnicalassistance.(Bycontrast,thesameperiodhasseenconsiderableprogressinthesmall-scaleagriculturesector.)

OverwhelminglyASMremainsamajorandincreasingchallengefortheminingindustryandforpovertyreduction,economicgrowthandsustainabledevelopment.Itisanunderfundeddevelopmentissuethatmaybefurtherisolatedasnewmarketandregulatorystandardsentertheindustry.ThisisnothelpedbycontinuingresistancetorecognisingASMasalegitimateeconomicactivitythatusesnaturalresourcesandcontributestolivelihoods.

MMSDtaskedCASM,theCommunitiesandSmall-ScaleMininginitiative,withtakingforwarditsrecommendationsforASM.CASMhelpedchangetherhetoricaboutASManditsworkhasbeencomplementedbythatoftheDiamondDevelopmentInitiativeInternationalandtheAllianceforResponsibleMining,amongstothers.ButCASM’sworkhasstagnatedinrecentyearsandastrategyreviewhasreconsidereditsrolefromanetworktowardsoneasanin-countryimplementer.However,fundingtomakethisinitiativeworkcontinuestobelimited.


24 i

Sector governance – roles, responsibilities and instruments for change

2002 2012


Sustainabledevelopmentrequiresnewintegratedsystemsofgovernance.Countrieswithsignificantmineraldevelopmentcouldconsideracomprehensive review of their legal frameworks andtheirimpactsonsustainabledevelopment.

Thereisaneedtostrengthenthecapacity of national and local government todesignandenforceregulationsandensurethemostvulnerableparticipateindefiningnewgovernanceframeworks.

Voluntary codes and guidelines,stakeholderprocesses,andothersystemsforpromotingbetterpracticewheregovernmentcannotbeaneffectiveregulatoraregainingfavourasanexpedient.Lendersandotherfinancialinstitutionscanplayapivotalroleindrivingbetterpractice.


l Complaintsanddisputeresolutionmechanism

l Sustainabledevelopmentsupportfacility

l Reportingguidelines

l ForumonMining,MineralsandSustainableDevelopment

Industryhasrisentogovernancechallengesandthereissignificantachievementhere,althoughwithscopeforincreasedsynergiesbetweeninitiatives.Itisthechallengesofimplementationandcapacitytoimplementthatremain.

Thegrowthinmultistakeholderinitiativesshowshowunderstandingofsustainabledevelopmentisgrowing,andhowthosewithsimilarinterestscancooperate–akeyaimoutlinedinMMSD.Aplethoraofvoluntarycodesandguidancehaveemergedoverthelast10years(seediscussiononAchieving cooperationaboveandboxlistinginitiatives)butnotallhavepublicreportingandindependentverificationofresults.

Moreover,ahostofsingleissueinitiativesriskunderminingaholisticapproachtosustainabledevelopment.Thepast10yearsmayhavebeenaboutstandardsetting.Thechallengeforthenext10yearswillbeimplementingthosestandardsinlinewithrisingexpectations.

NootherkeystakeholdergroupshaveequalledICMM’ssuccesswithgoodpracticeguidanceandcasestudies.ItisimportanttorecogniseICMM’sprogress,whilerecognisingthechallengetothemtoretaintheirrelevanceinanimplementation-focusedagendaandpointingtotheongoingchallengesidentifiedinMMSDforotherstakeholdergroups.

Forexample,theIntergovernmental ForumonMining,Minerals,MetalsandSustainableDevelopment’sMiningPolicyFrameworkhasonlyjustemerged.Andgovernmentcapacitytoimplementgoodpracticeisstilllacking.MMSDrecommendedaSustainableDevelopmentSupportFacilitytoassistgovernmentsandprovidecapacitybuilding–andalthoughthearchitectureexists,thishasnotbeenimplemented.

Civil society needstheresourcesandskillstobuildeffectiverelationshipswiththewealth-producingentitiesthatwillbethebedrockfordevelopment.Investorsneedtodefinetheirroleintyingsustainableperformancetocapitalprovision,particularlyforjuniorminingcompanieswherecapitalincentivescanbegreatest.Theartisanal mining sectorneedstoestablishitsroleasanindustryparticipanttoachievethemarketsupportitneeds.Andcommunitiesneedtobeabletodefinetheirexpectationsanddemandsformining’sroleintheirlivelihoodsandlocalenvironment.Allthesechallengescontinueandmustdefinegovernanceofthesectorinthecomingyears.

Beginning to Define a neW agenDa i iii

i 25

Beginning to define a new agendaMost people who were interviewed for this research agreed that there is still much relevance in the MMSD agenda; its wide-ranging scope means it covered issues that take time to move from conceptualisation into practical action.

However, all recognised that the context has changed and, as indicated in the section above, this has changed how the challenges are defined.


26 i

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Commoditypriceshaveboomed;thepriceofgoldaloneincreasedfromUS$270perouncein2002tohighsof$1700in2012.Soaringconsumptionhasdrivenincreasedproduction(insomemetalsandminerals),resourceefficiency,newinvestmentsfromChinaandRussia,andsomeofthelargestmergersandacquisitionsindecades.22In2012aloneminingcompaniesareexpectedtoinvest$134billionindevelopingtheirassets.23Miningcompaniesareoperatinginmoreandmoreremoteareas.Thesurgeinlowcosttechnologyandsocialmediameansthatpeopletherearemoreawareandhaveclearerexpectationsofwhattheywantfrommining.Somearguethatsocialresistancetomininghashelpeddriveaccountabilityofbothgovernmentsandcompanies–leadingtonewinitiativessuchastheExtractiveIndustriesTransparencyInitiative(EITI)andNoalaMina(createdbyresidentsofEsquelinArgentina).Certainly,theGrasbergmineinIndonesiahasattractedworldwidemediacoverageandonlinevideoclipshavehadthousandsofviews.

Asforthesustainabledevelopmentagenda,society’sunderstandingandarticulationofwhatbusinessisexpectedtocontributehasadvancedmassively.TheMillenniumDevelopmentGoalsbegantoframebusiness’sroleinpartneringforsustainabledevelopment.Thisisnolongeraboutcorporatephilanthropyorevennarrowiterationsofcorporatesocialresponsibility;companiesareexpectedtocreateandsharevalueandresponsibilityacrossacomplexsetofeconomic,socialandenvironmentalissues.

The‘miningandsustainabledevelopment’agendahasbecomemoresophisticatedsinceMMSD.Althoughsustainabledevelopmentconcernshaveremainedbroadlythesame–‘reducingenvironmentalimpacts’and‘improvingcommunityrelations’haveconsistentlybeenthetoptwoissuesforminingindustrystakeholdersoverthepast10yearswithintheICMMthree-yearlysurvey–themodelresponsethathasemergedoverthelast10yearsmaybeunderreview.Questionsontheappropriatemodelofdevelopingmininginvestments,andtherolethatnationalgovernmentsandcommunitiesshouldplayinensuringtheyreceiveafairshareofthebenefitsfromtheirnaturalresources,arebringingnewissuestothetableandreframingthechallengesasarticulatedinMMSD.

In the past 10 years, both the mining industry and the sustainable development agenda have advanced

Source:BarclaysCapital,MetalMagnifier2012

i 27


Voices we heard: what do you think?

“It’s now ‘how do we mine’ not ‘why are we mining?’”

“We need to be talking about shared value and mutual

interests”

“It should be about overall contribution, not just impact

— let’s talk about net positives”

“We must stop talking about tax and start

discussing obligations and risks”

“Industry needs to become the

development partner countries are looking

for”

“ASM is an opportunity, not a problem. Let’s look at the structural

reasons why it’s not working”“No-gos need to

go beyond World Heritage Sites”

“FPIC should be the no go for social issues”


28 i

Resource nationalisation isnotanewconceptbutishotontheagendanow,coveringaspectrumofgovernmentactionfromrenegotiationsoftaxes,tomandatoryjointventurestonationalisationofresources.Since2011,manygovernmentssoughttoincreasethebenefitstheyreceivefrommining–theindustrybouncedbackrelativelyquicklyfromthe2008economiccrisis.Measureshaveincluded:acquiringanincreasedequitystakeinprojects(inMozambique,ZambiaandZimbabwe,forexample);increasingtaxesandroyalties(Chile,Tanzania,GuineaandAustralia);undertakingpolicyreviews(NamibiaandSouthAfrica);andintroducinggreateroversightandattentiontolinkagesprogrammes.24Althoughsomeintheindustryseethisasathreat,othersseeitasanopportunitytoreviseexistingmodelsofdevelopment.Newminingcodesbeingconsideredorintroducedrecently,forexampleinMali,GuineaandBurundi,canbeviewedaspositivedevelopmentsprovidingforastrongfoundationforcontinuedresourcedevelopment.Thismayresultinanew‘socialcontract’forminingbywhichgovernmentsrecognisethattheremayhavebeenanoverrelianceonminingcompaniestodeliveratthelocallevelinthepastandthereisaneedforanewdiscussionon‘whodelivers’benefitsfromminingandhow.Suchaconversationcantakeplacewithinamoresophisticatedsustainabledevelopmentagendathatcreatestruevalueforallstakeholdersthroughsocialandenvironmentalinvestments.

What is the debate? Can it be framed in a way that facilitates a multistakeholder discussion on positive engagement and

mining for the future?

The growth of emerging markets,inparticularChinaandIndia,ismakingthemineralssectormorecompetitiveforbothproducersandconsumers,potentiallysqueezingtheviabilityofsustainabilityinitiatives.Companiesfromemergingmarketcountriesareoftenaccusedofhaving‘lowtono’environmentalandsocialcredentials.However,therearesignsofgoodpractice.WWFChinareports‘rareexamples’ofhowSinopechasengagedwithEIAresponsibilitiesintheGabon,aswellashowChinesefirmswelcomedtheideaofEITI(despitenotknowingmuchabouttheInitiative).25Others,however,seemorepotentialengagementwithChinesecompanies.RioTinto,whoselargestshareholderisChinalco,hasapartnershipinGuineacoveringbothminingandcomprehensiveinfrastructurearrangementswithChinalco,theGovernmentofGuineaandtheIFC.RioTintoseesthisengagementwithChinaasanopportunitytopartnerwith

itsbiggestsupplierandconsumer.Suchpartnershipsareincreasinglynecessaryinensuringmineralscontributetosociety.

How do we engage these ‘new’ players and what is the basis for engagement?

The human rights agendahasgainedmomentumthankstoUNSecretary-General’sSpecialRapporteurJohnRuggie’sprocessarticulatingtheRespect,ProtectandRemedyframework.ICMMcompanieshavebeenverymuchengagedwiththisprocess–incontrasttothetimeofMMSD,whenminingcompaniesweregenerallyunwillingtoengagewithhumanrights,whichtheysawaspoliticallycumbersomeandoverlyideological,withoutapragmaticentrypoint.Miningcompaniesappearmorewillingtoembracethisagendatoday,withsomesuggestingtheVoluntaryPrinciplesonHumanRightsandSecurityshouldbecomemandatory.ButtheRuggieframeworkarticulateskeyresponsibilitiesforgovernmentsandcompaniesbutdoesnotconsidertheroleofcivilsocietyorganisations.Theseactorswillbeimportantcollaboratorsinhelpingtheindustryunderstandhowtointegratehumanrightsissuesintoexistingactivities.

How do we facilitate new learning on human rights and do so in a way that harmonises with existing frameworks and principles for

sustainable development?

Free, prior and informed consent(FPIC)astheprimarytoolforsecuringandprotectingindigenouspeople’srightshasmarkedlyincreasedinimportanceoverthepast10years.FPICopensaconversationon‘no-go’formininginvestmentsbasedonsocialissues,inthesamewaythatenvironmentalissueshavelongbeenconsidered.ThepervasivenessoftherevisedIFCPerformanceStandards,whichincludechangestoimplementingFPIC,mayencouragecompaniestoadoptanewstanceontheseissues.However,thereislittleguidanceforcompaniesonhowbesttoimplementFPICinthecontextofnationalsovereignty,inadequatecommunity-levelsupportandthemineralproductionlifecycle.Emergingguidanceandcasestudiesshouldbringclarityoverthenext10years.

RespondingtodemandsforFPICshouldbeframedwithinabroaderdiscussiononrespondingto increased community expectations,awarenessoftheirrightsandfairdistributionofbenefitsfrommininginvestments.

New issues shaping the agenda in 2012


i 29

What does best practice implementation of FPIC look like?

How should mining industry stakeholders respond to increased community

expectations? How does this, together with changing government roles in managing

mining investments, suggest a new social contract and model for partnerships in

mining?

Climate changeisapoliticallyuncertainissuebutincreasinglyamarketdriver.AtthetimeofMMSD,therewasnothingcompellingtheindustrytoengagewithclimatechange.Evennowthecross-sectoralandubiquitousnatureoftheclimatechangedebateinhibitstheconversationwithcompanies.Theminingindustrypreferstodealwithmorespecificchallenges.Butcarbonpricingisanemergingmarketincentiveforthatengagement.Indeed,aBSRreportidentifiedseveralreasonswhyminingcompaniesshouldsupportclimatechangeadaptation,includingrisingriskstocriticalinputssuchaswaterandenergy,increasingcompetitionforotherresourcesduetoclimatechange,andriskstoemployeehealthandsafety(particularlyinundergroundmineswheretemperatureincreasesareparticularlydangerous).26Technicalresponsesfromcompaniestoenvironmentalissues(innovationsinwaterandenergyuse,forexample)mayprovidethebuildingblocksforamorecompleteresponse.AKPMGsurveyin2011foundminingcompaniesarestilladoptinga‘waitandsee’approachtoclimatechange,27buttherearesignsofprogress:ICMMnowhasaclimatechangeprogrammeproducinggoodpracticeandpositionstatementsonclimatechange,andBHPBillitonandRioTinto,forexample,haveclimatechangegroups.

Respondingtoclimatechangeissuesshouldtoobeframedwithinabroaderdiscussionaroundresource access–withdifficultiesinaccessingenergy(drivingupoperatingcosts)andwater(linkedtoclimatechangeandhavingaknockoneffectofdrivingupenergyuseindeliveringwatertooperations)affectingthedynamicsofdailyoperationsintoday’sindustry.

How do we make climate change a genuine consideration in organisational policies in the

mining sector?

The green economyisthebuzzwordin2012andthedefiningconceptfortheRio+20EarthSummitinJune2012.Agreeneconomypolicyframeworkcouldhelpgovernmentsto

makebetterdecisionsonresourcerents,reinvestment,greenincentivesandtransparency.Yetdiscussionsonthegreeneconomyhavesofarneglectedmining.Miningcompanies,andmanystakeholders,areuncertainabouttheconcept’srelevance,andthebasisforengagement.Thatmaybebecauseminingcompaniestendtofocusonproductionissues,notthedownstream‘consumption’chain.Yetpressuresofrisingenergycosts,carbondioxideemissionsandwaterscarcity,alongwitharenewedfocusonsupplychains(seediscussiononanintegratedapproachtominerals)andthelifecycleofproductsandwaste,maydrivechange.Metalssuchascopperandplatinumhaveamarketincentivetoengagewiththisdebate,giventheirrolesinthephysicalgreeneconomy(inelectricityandcatalyticconvertorsforexample);theircommodityassociationsareuniquelyplacedtodriveforwardaconsumptionagendaastheydrawmembersfromthelengthofthesupplychain.

What does ‘green economy’ mean for mining? What are the material implications

of a low carbon economy? What of the recycling and reuse agenda that MMSD

outlined in 2002?

Theseissuesmustbeaddedtotheongoingand,incases,reframedchallengesarticulatedbyMMSDtohelpshapetheagendaformineralsandsustainabledevelopmentforthenext10years:

l Themineralsectorneedstoconsideritsviability inthecontextofapost-recessionpushtowards‘resourcenationalism’,sustainabledevelopmentdebatesre-invigoratingissuesofrecyclingandminerallifecycles,andincreasingcompetitionfrom‘newplayers’inChina,IndiaandBrazil.

l Thereismomentumaroundintegrated land-useplanningwiththeWorldBank’sagendaon‘resourcecorridors’andemergenceoftheseinMozambiqueandLiberiaasexamples.

l Theagendaonminerals and economic developmentisbeingshapedbythechanginggeopoliticsofmining.Miningistakingplaceinmorefragileecosystemsandmorecomplexsocialsituations,suchasconflictregions.Thesechangesrequirenewmodelsofpartnershipthatbringdifferentskillstothetableandensureminingmakesatruecontributiontosociety.

l Thediscussionforcommunity-level developmentismovingtowardsadiscussionof‘whodelivers’andtheappropriatedivisionofrolesandresponsibilitiesinpartnershipsbetweencommunities,companiesand


30 i

governments.Themoresophisticateddebateunderwaywillbeshapedbytheemerginghumanrightsdiscourseandgreatercommunityexpectations.The‘socialcontract’isnolongerjustaboutjobsandtaxesandneedstobeconsideredwithinthewiderdebateson‘resourcenationalism’.

l Environmentalconcernsaroundwater,energyand,possibly,climatechangehaveheightenedandinnovativesolutionsarebeingdeveloped.However,monitoringofworkonmineclosuresisneededtoensureprogressandactiononlegacysitesisnecessary.

l Theconflictmineralsagendaandpressuresonresourcesmaydrivetheintegrated approach to mineralsagendaforward.Thismomentumshouldbeharnessedforgreatersupplychaincollaborationupstream(includingtoartisanalminers)anddownstream(particularlyinhighmetalandmineralconsumptionindustriessuchasconstruction,automotiveandelectricalcomponents).

l Authoritative and independent informationontheprogressagainstkeysustainabledevelopmentgoalsisstillneeded.Thosesettingtheguidance–fromICMM,CASMandtheIntergovernmentalForumtotheIFCandUNbodies–needtoensuretheyprovideindependentandauthoritativemonitoringofprogressandthatthistranslatesintomeaningfulinformationatthelevelofthemineandcommunity.

l Theemergingdiscourseonresourcerightsandsupplychainsisforcingtheindustrytoconsiderartisanal and small-scale miningseriouslyasalegitimateindustryplayer.Progressonsustainabledevelopmentacrossthemineralsectorwillhavetoincludeprogressforartisanalandsmall-scaleminers,andstakeholdersacrossthemineralsandsustainabilitycommunitiesmustdomoretoensurethisisgivendueattention.

l Guidelinesandprinciplesgoverning the sector needtobeharmonised.Governmentcapacityneedstoimprove.The‘restoftheindustry’(namelymid-tier,juniorminingcompaniesandartisanalminers)needstobeequippedwiththeresourcesandknowledgetorespondtosustainabledevelopmentconcerns.Financialmarketsarekeytodrivingaccountabilityinthesectorandneedtobeengagedinthisagenda.

How do you think these issues are framing the agenda for minerals and sustainable

development for the next 10 years? What other issues need to be considered?


i 31

…beyond the rhetoricManyintervieweespointedtoimplementationofgoodpracticeandcapacitybuildingastheprioritiesforthenext10years.MMSDsuccessfullyestablishedasustainabledevelopmentagendayetmuchprogressstillneedstobemadenotonlyagainstthatagendabutalsoagainstthemoresophisticatedunderstandingnowemerging.WhiletheminingCEOsatthetimeofMMSDcouldaffordtobevisionaries,theCEOsoftodayhavetofocusonactionthatreachesbeyondindustryleaders.Metricsformonitoringperformanceandmeasuringprogressagainstbaselinedatashouldbecollectednowforevaluationacrossthe20—30yearlifecycleofamine.

Allstakeholderswillhavetogivethoughttotheemergingagendaoflocallydefinedsustainabledevelopmentandhowtouseminingactivitiestoreallytransformsocieties.CristinaEchavarria,boardmemberoftheAllianceforResponsibleMiningandregionalcoordinatorforMMSDSouthAmerica,askedthequestion‘miningtowhatend?’thatresonatedwithmanyparticipantsintheVancouverGEMMConferenceinApril2012.ThisraisesthequestionofwhetheritistimetoturntheMMSDdiscussiononitsheadandchallengetheagendafromthegroundup–itisnolongeraboutminingcompaniesseeingwhattheycandoforcommunities,butaboutcommunitiesandwidersocietydecidingwhattheywanttoseefrommining.

When MMSD was written there was the sense that this was the moment. MMSD responded with an agenda built around a vision and compelling principles. But

the challenge remains as great today as it was then, partly because the players and

voices in the field of mining and sustainable development have shifted the debate. We now need an agenda focused on

operationalising good practice guidance that is built around society’s demands and the

realistic aspirations of a much more capable industry sector.

Contribute your thoughts to where the industry is going and what the agenda

should be for the next 10 years at www.iied.org/mmsd


32 i

Thanksgothefollowingindividualswhomadetimetobeinterviewedforthisresearch:

TonyAndrews(Principal,ResponsibleMineralDevelopment(RMD)ConsultantsInc.);JohnAtherton(Director,InternationalCouncilonMining&Metals-ICMM);HilaireAvril(SeniorConsultant,ResourceConsultingServices,);LauraBarreto,(Director,MaterialsEfficiencyResearchGroupandChairofAllianceforResponsibleMining);EdwardBickham(EITIBoardandSeniorAdviser,WorldGoldCouncilandCriticalResourceLtd);JimCooney(SeniorAssociate,ResponsibleMineralsSectorInitiative,SegalGraduateSchoolofBusiness,SimonFraserUniversity);NicholasCotts(GroupExecutive,EnvironmentandSocialResponsibility,NewmontMiningCorporation);RobertCourt(GlobalHeadofExternalAffairs,RioTinto);LukeDanielson(President,SustainableDevelopmentStrategiesGroup);BenDavis(Manager,ICMM);AidanDavy(Director,ICMM);SteveD’Esposito(Head,RESOLVE);CarolineDigby(SustainabilityDirector,EdenProject);JohnDrexhage(Director,ICMM);CristinaEchavarria(BoardMember,AllianceforResponsibleMining);JohnGroom(Safety&SustainableDevelopmentAdviser,AngloAmericanplc);JonHobbs(SeniorPolicyAdvisor,NaturalResourcesGovernance);R.AnthonyHodge(President,ICMM);MarkHolmes(SeniorProgramOfficer,ICMM);PaulKapelus(Director,SynergyConsulting);EstelleLevin(Director,EstelleLevinLtd.);DanielLimpitlaw(independentconsultant,LimpitlawConsulting);IsabelMarshall(Consultant,SeniorPartnerofMymcoConsultoresLtda.,BoardMemberofCESCO(CentrodeEstudiosdelCobreylaMinería),DirectoroftheSustainabilityCommitteeofCESCO);RichardMorgan(InternationalGovernmentRelationsAdvisor,AngloAmericanplc);BenPeachey(DirectorofCommunications,ICMM);IngridPutkonen(ManagingDirector,AgileSustainabilityManagement);LisaSachs(Director,ValeColumbiaCenteronSustainableInternationalInvestment,ColumbiaUniversity);ChristopherSheldon(LeadMiningSpecialist,TheWorldBank);RorySullivan(SeniorResearchFellow,UniversityofLeedsandStrategicAdvisor,EthixSRIAdvisors);JohanViljoen(SeniorVicePresidentSustainability-Policy&Assurance,AngloGoldAshanti);ClaireWhite(SeniorProgramOfficer,ICMM);andPattiWickens(EnvironmentalPrincipal,DeBeersGroup).

ThanksalsotoallthespeakersandparticipantsattheResponsibleMineralSectorInitiative’sGEMM20/20DialogueinVancouverwhoprovidedinvaluableinsightintowherethemineralandsustainabledevelopmentagendaisgoing.

ThankstoICMMwhoopenedtheirdoorsandsharedinternaldocumentsandcandidassessmentsoftheirprogressagainstMMSD’sgoals.

FinallytoLukeDanielson,CarolineDigby,andIIEDcolleagueswhoallmadetimetoreviewandprovidecommentsonearlierversionsofthispaper.

ThispaperwasfundedbyUKaidfromtheDepartmentforInternationalDevelopment.

Acknowledgments

acKnoWleDgeMentS anD enD noteS i iv

i 33

1 TheGEMM 20/20: Global Exploration, Mining, and Minerals in 2020: Responsibility and Sustainability Challenges and OpportunitiesdialoguewasorganisedbytheResponsibleMineralsSectorInitiativeattheBeedieSchoolofBusinessinVancouveronthe17thand18thApril2012.Moreinformationcanbefoundathttp://beedie.sfu.ca/rmsi/.

2 ThesefiguresareincludedinICMM’sAnnualReview2011–Our Journey–andisavailableatwww.icmm.com.

3 SeefurtherKarlP.Sauvant., ‘The times they are a-changin’ – again – in the relationships between governments and multinational enterprises: From control, to liberalization to rebalancing,’ Columbia FDI Perspectives, No. 69, May 21, 2012.

4 Seefurtherhttp://environment.yale.edu/tfd/.

5 Seefurtherhttp://pubs.iied.org/X136IIED.html.

6 CommissiononSustainableDevelopmentReportoftheSecretary-General, Review of implementation of Agenda 21 and the Johannesburg Plan of Implementation: Mining 16February2010.Availableathttp://daccess-dds-ny.un.org/doc/UNDOC/GEN/N10/242/38/PDF/N1024238.pdf?OpenElement.

7 TheAfricaMiningVisionisa‘pathway’developedbyAfricangovernmentsthemselvestoimprovemining’scontributiontodevelopment.Seefurtherwww.africaminingvision.org/.

8 SeeTheMiningPolicyFrameworkatwww.globaldialogue.info/framework.htm.

9 SeefurthertheSustainableDevelopmentStrategiesGroup’sCDALibraryatwww.sdsg.org/archives/cda-library/.

10 SeefurthertheBristolBayreportathttp://ourbristolbay.com/anglo-american-environmental-and-social-track-record.htmlandAngloAmerica’sresponseatwww.investis.com/aa/media/publications/2008pub/aa_real_08/AngloAmericanTheReality.pdf

11 Seefurtherhttp://londonminingnetwork.org/2010/01/uk-parliamentary-human-rights-committee-issues-report-on-uk-businesses/

12 CSDReport,Review of implementation of Agenda 21 and the Johannesburg Plan of Implementation(noteabove).

13 SeefurtherHarvardKennedySchool’sreportonPiloting Principles for Effective Company-Stakeholder Grievance Mechanisms: A Report of Lessons Learnedavailableatwww.hks.harvard.edu/m-rcbg/CSRI/publications/report_46_GM_pilots.pdf

14 SeefurthertheworkofSusanJoyceandIanThompson,forexample,www.oncommonground.ca/publications/PDAC_2008_Social_Licence.pdf

15 SeefurtherICMM,Principles for climate change policy designavailableatwww.icmm.com/document/1843

16 Seefurtherwww.responsiblejewellery.com/chain-of-custody-certification/

17 Seefurtherwww.itri.co.uk/index.php?option=com_zoo&view=frontpage&Itemed=60

18 Seefurtherwww.world-aluminium.org/Sustainability

19 Seefurthercopperalliance.org/core-initiatives/sustainable-energy/

20 Seefurtherwww.ila-lead.org/responsibilty

21 SeefurtherARM’spaperRock Solid Chances for ASMwrittenbyFelixHruschkaandCristinaEchavarríaandavailableathttp://communitymining.org/attachments/059_RSC_FINAL_web_low.pdf.MoredetailsontheFairtradeandFairminedstandardcanbefoundatwww.communitymining.org/index.php/en/fairtrade-and-fairmined-standard.

22 Mostnotably,the2012mergerofGlencoreandXstrata,RioTinto’s2007acquisitionofAlcan,Freeport-McMoRan’spurchaseofPhelpsDodgein2006.

23 BarclaysCapital’sMetal Magnifier,17January2012.

24 SeefurtherTannekeHeersche‘Making Mines Work Harder – Resource Nationalism Trends In Africa’availableatwww.whoswholegal.com/news/features/article/29397/making-mines-work-harder-8211-resource-nationalism-trends-africa

25 SeefurtherWWF’sreportonChina’s Role in Global Tradeavailableathttp://awsassets.wwfcn.panda.org/downloads/wwf_china_trade_report_en.pdf

26 SeefurtherBSR’sreportAdapting to Climate Change: A Guide for the Mining Industryavailableatwww.bsr.org/reports/BSR_Climate_Adaptation_Issue_Brief_Mining.pdf

27 SeefurtherKPMG’sreportResponses to the Climate Change Debate: KPMG Mining Industry Surveyavailableatwww.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/Climate-Change-Mining-Survey-2010-final.pdf

End notes

it is 10 years since the Mining, Minerals and Sustainable Development (MMSD) initiative was completed. its findings were game-changing for the sector, and mining ceos of the day committed to act on its agenda as a robust and credible way to maximise the sector’s contribution to sustainable development. So where are we, 10 years on? How far have we travelled towards a sustainable and responsible mineral industry? this paper is intended as a ‘conversation starter’ – providing an initial assessment of the mining and minerals sector’s achievements against the MMSD agenda and opening up further discussion. contribute your thoughts to where the industry is going and what the agenda should be for the next 10 years at www.iied.org/mmsd

the international institute for environment and Development is one of the world’s top policy research organisations working in the field of sustainable development. With its broad based network of partners, iieD is helping to tackle the biggest issues of our times — from climate change and cities to the pressures on natural resources and the forces shaping global markets.

this discussion paper was produced by iieD’s Sustainable Markets group. the Sustainable Markets group drives iieD’s efforts to ensure that markets contribute to positive social, environmental and economic outcomes. the group brings together iieD’s work on market governance, business models, market failure, consumption, investment and the economics of climate change.

Published by iieD, 2012

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