CHAPTER 6: GOVERNANCE OF EXTRACTIVE INDUSTRIES
Effective governance of the extractive industries is based on professionalism, transparent processes and an integrated human rights perspective. In this lecture we discuss different social impacts in mining and also how mining relates to sustainable development.
A mining project affects many people whilst also impacting the environment, changing the landscape and releasing pollutants to air and water. Governance of the mining industry requires knowledge about a broad spectrum of subjects, from geology and geochemistry to social impacts and human rights. The role of the associated governmental agencies may differ worldwide, but in addition to inspection and monitoring it generally also includes the responsibility to inform- and communicate with the public.
Communication with the public
As governmental officials, it is important to communicate in a way that is transparent, easy to understand and unbiased. It is also encouraged to include the public in all the stages of mining, from exploration to mine closure. This can be done by so called stakeholder meetings, where different stakeholders can present their concerns or questions. A stakeholder is anyone who feels they have a stake in the mine, whether it is a landowner, a company, the municipality or someone from the public and so on. A stakeholder meeting can typically be held by the company, a governmental agency or in collaboration. Stakeholder meetings contribute to good relationship and dialogue between the company, the governmental agencies and the local community.
Knowing the public understanding about mining and the environment in an area is important to communicate effectively. The understanding may be higher in areas with experience of mining, compared to areas where mining is new. The information should always be clear, concise and easy to understand. The language should be understandable for everyone and avoid usage of technical terms. By raising the public understanding and working with transparent processes, certain negative social impacts may be reduced. Communication and dialogue are main tools in conflict prevention.
Mining projects and conflict
The social impacts from a mining project can be both negative and positive. The mining industry can be an important employer, investor and taxpayer that contributes to local, regional and national economies but can at the same time lead to social changes which start or worsen conflicts and social unrest. Common conflicts include acquisition and use of land along with the availability of water. Practical matters, such as availability of water, may sometimes be arranged between the government and the company, where the company might provide water for communities by building a drinking water treatment facility. The arrangement may even be a prerequisite for the mining permit.
Concerns about the environment may arise within the local communities or come from other stakeholders such as non-governmental organizations. Concerns should always be met with information and dialogue, allowing the public to ask questions and even see monitoring results. Transparency is encouraged, from all parties: the company, the governmental officials and the local communities.
Another source of social unrest or conflict may be the influx of people to a mining project. Mines can be large employers, and towns and villages can quickly expand due to a nearby mine starting. While the work force of a mine can be between a hundred and several thousand people, the increase in population may be several times more than the total number of workers. Large and quick demographic changes may cause tensions that lead to conflict, for example cultural conflict between people or economical conflict. While the mine may contribute to the tax income in the area, the administration may have difficulties investing the increased budget in a good way, or in time to account for the need of new infrastructure. The investments may also be unevenly shared, leading to increased social tension and further conflict.
It is highly encouraged that an assessment of the social impacts is included in the EIA. Larger impacts on people, such as displacement and resettlement, also demand greater attention from both the authorities and the mining company. The social impacts at large should be identified, predicted and analyzed in order to effectively prevent and/or mitigate the negative effects for people. Special attention on identifying and addressing the needs of the most vulnerable groups (low-income and marginalized) is important. It is always necessary to have a human rights perspective in order to prevent the mining activities from causing or contributing to human rights violations.
Resettlement and compensation
When a mine is planned to open on a site close to existing communities, additional measures must be taken to relocate and compensate these. The International Finance Corporation (IFC) of the World Bank Group make the following statements on involuntary resettlements:
“When companies seek to acquire land for their business activities, it can lead to relocation and loss of shelter or livelihoods for communities or individual households. Involuntary resettlement occurs when affected people do not have the right to refuse land acquisition and are displaced, which may result in long-term hardship and impoverishment as well as social stress. […] advises companies to avoid involuntary resettlement wherever possible and to minimize its impact on those displaced through mitigation measures such as fair compensation and improvements to […] living conditions. Active community engagement throughout the process is essential.” (The IFC)
Resettlements are done differently around the world. In case the mining company is responsible for the resettlement, it should present a detailed description of the affected communities and how they will carry out the relocation and compensation, sometimes referred to as a Resettlement Action Plan (RAP). This must be approved by the authorities before the mine can get a permit. Authorities should continuously monitor the process to ensure that the activities follow the agreed upon procedures and are in line with national laws.
Current best-practices advice that already in the very first stages of mine establishment, sufficient resources are allocated to properly facilitate the resettlement and compensation. Although no case is the same, there are some general guidelines to adhere in responsible resettlements. The resettlement procedures must be enrooted in the national laws and should also adhere to recognized best practices and international conventions on human rights. General guidelines can be summarized as follows:
- Careful planning and investigations with reference to proper baselines
- Human rights perspective
- Stakeholder involvement and consultations with proper authorities
- Fair compensation for losses associated to the resettlement
- Restored livelihoods
- Continuous monitoring of impacts
- Proper evaluation mechanisms
Human rights in mining
The Universal Declaration of Human Rights (UDHR) was adopted by the UN in 1948 and consist of 30 articles that describe fundamental rights and freedoms for all people. UDHR has become the foundation for the conceptual idea of Human Rights, and several new universal treaties and conventions expanding on these rights have been established over the years. Human rights have also been incorporated in national constitutions and legislative frameworks around the world.
Mining companies, as all organizations and corporations, must respect human rights. Companies are increasingly expected to operate with policies and procedures that incorporates human rights frameworks into their activities. The best practice UN-document ‘Guiding Principles on Business and Human Rights’, dictates that businesses should (at minimum) respect the human rights declared in the International Bill of Human Rights as well as the eight core International Labour Organisation’s (ILO) conventions. The UN Guidelines outlines the different roles for states and businesses with a clear framework to ‘protect, respect and remedy’. In short, states have the duty to protect human rights and businesses are required to respect human rights.
It is the responsibility of the state to create a business environment that foster and enable respect for human rights. Governmental departments should be aware of their state’s human rights obligations and have access to sufficient resources needed to ensure that these obligations are fulfilled through their different mandates. This task may be harder in different contexts. For example, if a company is operating in an area of active armed conflict, the likelihood increases dramatically that the company could contribute to gross human rights violations. It is also unlikely that the regular state mechanisms aimed at the protection for human rights are functioning in these situations. In such situations of armed conflict, both company and the state must ensure to adhere to international humanitarian law, and if need be, rearrange policies and practices to ensure that human rights are still protected and respected.
The performance of the company in terms of human rights should be continuously monitored from both the company and the government officers. Companies should incorporate human rights due diligence in their business (i.e. a process that enables the company to 1. asses actual and potential human rights impacts and 2. adequately respond to prevent or remedy such impacts). Trustworthy and easily accessible grievance mechanisms, i.e. complaint systems, should be established. Any reports on potential human rights abuses must be investigated in transparent manners from both the company and the officials. If human rights abuses or infringements are found, these must be remedied according to best practice, international principles as well as national law.
Note that not all universal human rights treaties and conventions are incorporated into the Bill of Human Rights and the ILO conventions.
Mines often involve large-scale land acquisitions. If permitted, these can result in evictions and displacements of people. Although there is no general human right to land, access to land is linked to the enjoyment of many civil, cultural, economic, political and social human rights. Additionally, displacements of people may also violate many of their human rights, e.g. if it leads to degraded livelihoods or undignified treatments. It is important that governmental officials are present during evictions to ensure legitimate procedures and protection of human rights. Neutral observers should be allowed access during evictions to allow for transparency and compliance with human rights.
It is important to have a broad scope when scrutinizing human rights in mining operations, but certain rights in particular may be more vulnerable to infringements and should be minded carefully depending on the local context. For example:
- Right to clean water and sanitation
- E.g. impacted negatively by monopoly of water for mine purposes or pollution of local water bodies.
- Right to an adequate standard of living
- E.g. impacted negatively during a poor resettlement, or through degradation of livelihoods by environmental pollution.
- Rights of indigenous people
- E.g. impacted negatively if traditional customs and livelihoods of indigenous groups are threatened by the mining activities or if their autonomy is compromised by unethical decisions from the national government.
- Workers’ rights
- E.g. impacted negatively in case of unsafe, unhealthy or discriminatory working conditions within the mine.
- Children’s rights
- E.g. if the mine contributes to child labour or increased risk for health issues in children.
- Women’s rights
- E.g. if the mine contributes to discriminatory systems by not supporting women’s participation in decision-making processes such as stakeholder meetings concerning mine impacts.
Corruption can be defined as the abuse of trusted power for personal gain. Corruption can, for example, involve accepting bribes in a license or permitting process, or favoring certain groups or companies. It is very important to abolish corrupt practices in all sectors and systems of society, as corruption severely undermines democracy and creates obstacles for rule of law, development and poverty alleviation. Moreover, corruption is connected to human rights abuses, organized crime, the erosion of public services and aggravated inequalities.
To prevent corruption, certain measures may need to be implemented. An anti-corruption programme is encouraged within both governmental offices and companies. The aim with the programme can be to inform employees about corruption and how to detect it, site reviews by third party auditor or establishing a whistleblower programme. There are several examples of anti-corruption programmes and many work with engaging employees in the issue to foster integrity and allowing them to work with questions related to corruption. High levels of transparency and accountability in different procedures also prevent corruption.
In many contexts of mining, especially in regions with low gender equality, impacts are unevenly felt by women and men. Scientific evidence shows us that men tend to experience more of the positive impacts such as employment and economic advantages, while women bear a disproportionate amount of negative impacts. Negative impacts for women may be imbedded in cultural norms that exclude women from participation as stakeholders or in receiving compensation from impacts. An example could be if monetary compensation is paid to a family for loss of land, this compensation could by norm be handled by the man and not the woman. Another example is that some countries does not allow women to work in certain parts of the mine, leading to unequal job opportunities.
Environmental impacts from mining are also often affecting women in a more direct manner than men. For example, women are generally more susceptible to diseases related to high metal concentrations in water and food, especially if pregnant. Another example is due to female household roles that depend on natural resources such as water, firewood and food, which can be impacted if the environment changes.
Women may also be suffering higher levels of gender-based violence, harassments and sexual assaults related to mining activities. This can be connected to, for example, the fact that the mining activities change the overall economic structures in the community. This brings structural shifts in employment, for example if men get jobs in the mine and not women, in turn creating more asymmetrical power relations in the home. If one party becomes more economically dependent on the other, the dependent party may have less power in household decision making. In addition, in case of domestic violence, the dependent party may also be more vulnerable due to having less economic independency. As economic benefits are more often given to men, women experience abusive more often in relation to this.
As women’s rights is one of the world's most pervasive human rights violations, it is important for companies and governmental officials to ensure that women’s rights are respected and protected in mining contexts, both in the affected communities and within the mine. Human rights due diligence processes and stakeholder engagements should put extra emphasis on women’s situation, especially the very marginalized. It is also important to be mindful about social backlashes that may occur as a result of women empowerment clashing with traditional norms.
Read the guide for governments, companies and financial institutions to uphold women’s rights in the supply chains of minerals for renewable energy technologies by the Dutch Ministry of Foreign Affairs.
Sustainable Development in mining
The mining industry can potentially impact positively or negatively across all 17 Sustainable Development Goals. While providing minerals necessary for infrastructure, technologies and energy production, the mining industry can also bring economic development to a region or nation. Well managed, it can also provide economic opportunities for marginalized groups as well as drive development forward in regional or national growth. On the other hand, in the worst cases, mining can contribute to severe environmental degradation, violent conflict and worsening economic and social inequality. The mining industry’s social and environmental impacts must therefore be critically assessed and tailored to be as positive as possible.
Read Guidance for Governments: Improving legal frameworks for environmental and social impact assessment and management by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF).
This chapter concludes the introductory course. Do the quiz to see what you have learned, or continue to the advanced course!