Canadian Mining Abroad: CBSR Gives Insight into Challenges and Opportunities (Part 1 of 2)
By: Meirav Even-Har, Toronto
The names Barrick, IAMGOLD, Kinross Gold and Goldcorp will be familiar to many: they are among the world's mining heavyweights, Canadian companies that operate globally. They are major players in one of Canada's principal industry sectors. The industry's historical practices have attracted critical scrutiny in many areas, from environmental issues to community relations. As the comments have grown, so has the companies' response to the various challenges.
In recent years, there has been much progress in the industry's CSR and sustainability practices. I was curious to learn more about responsible mining. Maria Jose Ramos, a CSR Advisor with Canadian Business for Social Responsibility (CBSR), spoke with me about the mining industry, with specific attention to stakeholder relations. In this two-part series, Ramos lends her expertise to providing clarity about the challenges and opportunities in gaining a social license to operate.
The overall picture
Since many Canadian companies are big players in the mining industry, they are in the spotlight. In general, mining companies have and continue to receive a lot of pressure from various groups. The pressure has in turn driven them to improve the industry's environmental and social performance. To gain social license to operate means improving the ways in which a company's corporate CSR strategy is realized on the ground. "This is still a challenge," says Ramos. "Ensuring corporate policies are implemented at the operational level is tough. There are good intentions at first, but at times there is limited capacity on the ground." She says departmental collaboration and adequate training in CSR policies and procedures among all operational divisions is a must.
The other complication in the natural resources sector relates to country of operation. For mining companies, that means adapting corporate policies and ways of doing business to the unique set of circumstances in each jurisdiction. Ramos explains there are several aspects that must be considered; these fall under governance, social and environmental categories. Some examples are highlighted below:
Environmental: Is the proposed mine located in or near ecologically sensitive region?
Social: What is the level of poverty in the region? Are there vulnerable groups? Such as indigenous people, women and children?
Governance: Are there strong governmental institutions? Is there corruption among government bodies (regional and national)? Do people trust the government?
Some examples of key challenges are highlighted below:
Legacy issues: Dissociating current mining projects with past ones where previous license holders created problems, and created distrust among the community.
Managing expectations: While mines can mean local jobs, there is often an expectation that everyone can be hired. "There are various phases in a mine project. Each phase requires a different set of skills." Ramos explains.
Social issues: "Social deterioration due to increase sexually transmitted diseases and alcohol abuse may occur," notes Ramos. She explains that this typically happens through migration into nearby towns due to wealth expectations in poor rural areas.
Getting everyone around the table: Making sure everyone in the community is represented can be difficult. At times there are competing interests among stakeholders. Getting all relevant parties to the table means engaging with everyone, not just appointed leaders.
Lack of trust in government: Where people don't trust the government, the legitimacy of a project may be hard to come by. Ramos explains, "a lack of trust in government relates to its ability to regulate resource extraction, including manage royalty funds appropriately."
Community vs. company timelines: A lot of money is spent in the exploration phase and from a financial standpoint, companies need to move into the exploitation phase quickly to so as not lose return on their investment. "Communities have very different timelines, and gaining their trust requires time," remarks Ramos. "The timeline of business is very different than the timeline of communities. Shareholders need to be made aware of this."
Misconception about mining: Knowledge of mining varies by region. Ramos gives the example of Colombia, where it is relatively new, in comparison to Chile. "Many times stakeholders may have several misconceptions about mining and a particular project. This is a factor that challenges gaining social license to operate," says Ramos.
In Part 2 of this series, Maria Jose Ramos speaks to the opportunities companies have as they strive to gain social license to operate - tackling the challenges presented in this part 1. Read Part 2 HERE
Want to learn more? Read Maria Jose Ramos' blog Toward a Framework for Resource Extraction Industries
Image: Lights in the Mine by nercoregirl (Creative Commons via Flickr)