by Catherine Coumans
[This is a synopsis of a paper by Catherine Coumans published in: Governance Ecosystems CSR in the Latin American Mining Sector, edited by Julia Sagebien and Nicole Marie Lindsay, in the International Political Economy Series published by Palgrave Macmillan, November 2011. The last section here is not part of the original paper.]
If the 1990s were characterized by growing concern about the environmental impacts of mining, the 2000s saw a broadening of issues to encompass numerous social risks: human rights violations, forced evictions, abuses by security guards, failure to respect indigenous rights, and particularly harmful effects on women, minorities and workers. It is not surprising that there has also been a marked increase in social conflict and greater local opposition to proposed and existing projects.
Mining companies and industry associations have recognized the need to obtain a ‘social licence to operate’ if they are to avoid further reputational risk, costly delays, the potential loss of a project, and increased pressure for more effective regulation of the sector.[i] Companies highlight policies on corporate social responsibility, and emphasize the sector’s provision of jobs, taxes and royalties in an effort to link ‘mining’ and ‘development’ in public discourse, a strategy reminiscent of earlier efforts to counter reports of high profile environmental disasters by asserting positive associations between mining and sustainability.
However, this messaging is only one aspect of a more substantive effort to dissuade critics.
In 2004, the International Council on Minerals and Metals (ICMM) established the Resource Endowment Initiative aimed in part at questioning the “resource curse” literature (ICMM, 2010f) by academic researchers who have found a link between natural resource extraction and increased national poverty, particularly in resource-dependent poor countries.[ii]
ICMM’s own findings firmly shifted responsibility for negative national level economic outcomes and local conflicts away from mining or mining companies toward host country governance, and argued that weak governments do not manage revenues from mining well enough to ensure national development; nor do they ensure sufficient social investment or benefit sharing, particularly at the local level (McPhail, 2008, p.8). This analysis allows ICMM to propose solutions that would draw in a range of actors, particularly host governments, and make them co-responsible for outcomes. Moreover, ICCM suggests that the mining sector should be integrated into poverty reduction strategies, pointing out that:
This, in turn, will require government departments (for example, treasury and mining) to collaborate more closely, and will require chambers of mines and companies to participate in national development dialogues… In addition, social funds and donor agencies should connect funds better to the special needs of communities affected by mining. (McPhail, 2008, p. 9)
In other words, the home country’s aid program should target development projects at the mines sites of its companies.
However, it can be argued that multinationals have for decades taken advantage of governance weaknesses and lack of regulatory capacity in host countries to avoid costs associated with best environmental practices and meaningful community engagement. Furthermore, ICMM’s analysis falls short in addressing the fact that even when faced with possible jobs or other benefits from a potential mining project, some communities (or groups within communities) are choosing to reject mining in favour of existing or alternative economic activities. This puts these communities into direct conflict with the interests of the company, elements of the state, and possibly other community members.
Government initiative draws push back from industry – and NGOs are brought on board
In Canada, concern about the lack of government accountability mechanisms for ensuring that public financing not support bad mining practices abroad led to a parliamentary report, Mining in Developing Countries (SCFAIT, 2005), and subsequently in 2006, to the federal government spearheading a multi-stakeholder process called the National Roundtables on Corporate Social Responsibility and the Canadian Extractive Industry in Developing Countries (the Roundtables).[iii]An Advisory Group led the Roundtables process and included members from civil society, academia, labour and the resource development sector.
The subsequent Advisory Group report on the Roundtables reflected, to a certain extent, the many highly critical presentations made by over 150 members of public stakeholder groups from within and outside Canada, and was not well received by a number of companies. As the report was being presented to the government in March 2007, a series of closed-door meetings began at the Munk Centre for International Relations at the University of Toronto[iv] that brought together major Canadian mining companies, mining associations such as PDAC, and a number of the country’s larger organizations such as World Vision, Care Canada and Plan Canada, organizations that had not participated in the Roundtable process. The aim of the meetings – which came to be known as the Devonshire Initiative (DI), named after the street address of the Munk Centre[v] – was to establish the potential for long-term institutionalized collaboration around development projects at Canadian mining projects overseas.
Inmet Mining provided insight into industry’s assessment of the accountability-focused Roundtable process, versus the potential of the ‘solutions-oriented’ Devonshire Initiative:
The Roundtables highlighted the polarized and unproductive nature of the relationship between the extractive sector and a small segment of non-governmental organizations (NGO). To overcome this polarization and move towards productive, on-the-ground solutions to issues of mutual concern, development NGOs and some industry members have come together in a new dialogue that could see both sides working together in developing countries to achieve mutual objectives. This is an exciting opportunity and we are fully committed to the DI process.[vi]
The Devonshire Initiative can be seen as a coming to fruition of some key elements of the vision set out in ICMM’s Resource Endowment Initiative: a focus on partnerships between industry, NGOs and government, and community development projects at mine sites wherein responsibility for outcomes would be shared and significant costs for CSR projects shifted to governments and foundations.
The Devonshire Initiative web site offers little insight into its mandate other than the rather anaemic comment that development NGOs might welcome the ‘opportunity to steer private sector development in a more socially sensitive and equitable way’ (Devonshire Initiative, 2010). In that light, it is noteworthy that the NGOs involved in the Devonshire Initiative have been largely absent in the remarkable series of efforts to secure greater accountability in Canada for the activities of Canadian mining companies operating overseas, starting with the parliamentary hearings and report of 2005, through the CSR Roundtables of 2006 and the 2009-10 hearings and discussions around Bill C-300[vii], each of which did engage large segments of Canadian civil society, including development NGOs that are not engaged in the Devonshire Initiative.
“There are many effective ways to achieve your corporate philanthropic goals through a partnership with World Vision.”
- World Vision's web site (World Vision is a Devonshire Initiative participant.)
New government initiatives further nurture industry interests and raise growing concerns
Near the end of this past September, International Cooperation Minister Bev Oda announced CIDA’s new fund for partnerships between NGOs and mining companies. It ties in neatly with the Devonshire Initiative’s approach and will ramp up opportunities for CSR projects at mine sites.
It gives rise to many questions. Aside from reviewing the particulars of a given development project, how will CIDA evaluate which mine projects to engage in? What role will community consent for a mine, or lack thereof, play in this decision-making? How well placed is CIDA to assess community support for a mine project, or even for a particular CSR project? Will they respect community decisions not to host a mine? How will they respond when mining projects are associated with violence, human rights abuses, or severe environmental degradation?
Industry got support on another front roughly one month later when Prime Minister Harper announced the creation of a Canadian International Institute for Extractive Industries and Development that “will undertake policy research to identify best practices in extractive sector management for individual countries, and arrange technical assistance for governments and communities in developing countries through a partnership between the Federal government, Canada’s private sector and Canadian civil-society organizations.” Funding of $25 million has been set aside for this initiative. The language in this announcement echoes ICMM’s call for a focus on host country capacity rather than company operations, and signals once again the desire to draw in NGOs as part of the approach.
The very title of the federal government’s Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the Canadian International Extractive Sector suggests that it is corporations that are intended as the real beneficiaries of CSR initiatives, with collaborating NGOs following in second place.
We are increasingly concerned that such benefits will be gained at a financial cost to Canadian taxpayers, while mining-affected communities will pay through loss of livelihoods, devastated environments, contaminated and depleted water sources, and removal of the right to determine what “development” truly means for their regions.
For more on this, hear Catherine Coumans’ October 2011 radio interview on CKUT Montreal at http://www.archive.org/details/CatherineCoumansMiningWatchCanada
Coumans, Catherine. 2010a. Alternative Accountability Mechanisms and Mining: The Problems of Effective Impunity, Human Rights, and Agency. Canadian Journal of Development Studies 30, nos. 1–2: 27–48.
Coumans, Catherine. 2010b. Bill C-300: A High Water Mark for Mining and Government Accountability. MiningWatch Canada Newsletter. 29: Autumn.
Devonshire Initiative. 2010. About the DI. http://devonshireinitiative.org/About.html, viewed November 22, 2011.
ICMM 2010. Good Practice Vol. 9 Issue 2. International Council on Mining and Metals.
Kuyek, Joan and Catherine Coumans. 2003. No Rock Unturned: Revitalizing the Economies of Mining Dependent Communities. MiningWatch Canada.
McKay, John. MP, Bill C-300, An Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries http://openparliament.ca/bills/1987/
McPhail, Kathryn. 2008. Sustainable Development in the Mining and Minerals Sector: The Case for Partnership at Local, National and Global Levels. International Finance Corporation. http://www.ifc.org/ifcext/essaycompetition.nsf/AttachmentsByTitle/Bronze_Mining/$FILE/Bronze_Mining.pdf.
SCFAIT (Standing Committee on Foreign Affairs and International Trade). 2005. Mining in developing countries: Corporate social responsibility, 38th Parliament, 1st Session, 14th Report: June. House of Commons. http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=1961949&Mode=1&Parl=38&Ses=1&Language=E
[i] See for example the recently defeated Private Member’s bill tabled by John McKay MP in 2009, Bill C-300 (McKay, 2009). For more on Bill C-300 see Coumans (2010a, 2010b).
[ii] In brief, reasons for national economic decline associated with high levels of resource extraction include exchange rate overvaluation leading to loss of competitiveness and development of other economic sectors (so-called ‘Dutch Disease’); volatility in mineral values; overconsumption based on a non-renewable resource; and corruption and unequal distribution of benefits associated with mineral wealth. For a literature review regarding the resource curse see Kuyek and Coumans (2003, pp. 1-5).
[iii] For a more in-depth discussion of the National Roundtables on Corporate Social Responsibility (CSR) and the Canadian Extractive Industry in Developing Countries see Coumans (2010a).
[iv] The Munk Centre is named after its benefactor, Peter Munk, founder and chairman of the world’s largest gold mining company, Barrick Gold Corporation.
[v] The Devonshire Initiative meetings were headed up by Marketa Evans, then-director of the Munk Centre. Evans is now the government appointed CSR Counsellor for the Extractive Industries.
[vi] Inmet Mining Corporation; this text has since been modified on Inmet’s web site.
[vii] This private member’s bill was introduced in the House of Commons in February 2009 and was aimed at making Canadian government financial and political support for extractive companies contingent on those companies meeting international human rights and environmental standards.