Mining faces new challenges in sustainable development move - Report

BY EDMUND SMITH-ASANTE

Pollution of River Asasre in Himan, Ghana, by Galamsey

Although the mining and minerals industry has made major advances towards sustainability in the past ten years, the sector now faces new challenges, says an independent 10-year review of the sector published today by the International Institute for Environment and Development (IIED).

According to Researcher Abbi Buxton who reviewed progress the mining sector has made over the past ten years, since its leading companies joined NGOs in calling for the Mining, Minerals and Sustainable Development (MMSD) initiative, despite the fact that governments in the global South have reasserted control over their natural resources, they lack the capacity to ensure mining can contribute to sustainable development.

One area in which there has been minimal progress over the past 10 years, says the new report, is in the capacity of governments in developing nations to ensure that mining contributes to sustainable development.

The report notes further that despite the improvements larger companies have made towards sustainability, the capacity needed to make this happen is still lacking, particularly in mid-tier and smaller companies and in governments and communities, while bad practice persists despite good intentions across the industry.

Speaking to this phenomenon, Researcher Buxton says “Some of the world’s biggest mining companies have undergone major shifts in terms of their understanding of and commitment to sustainable development, and what they can do to contribute to it,” and “They have made major improvements in their environmental policies at a strategy level and have gained a better idea of what good practice looks like. The challenge that remains is to implement these policies on the ground.”

Commenting on the MMSD initiative which was aimed at providing a landmark independent review of the sector’s role in sustainability and set standards for it to meet, Buxton said; “The 2002 MMSD report was a game-changer,” adding, “For the first time, mining executives committed to act to maximise their sector’s contribution to sustainable development, and they adopted the MMSD agenda as a robust and credible way to do this. Ten years on, however, the results are mixed and new challenges have emerged.”

Buxton’s report shows how the International Council on Mining and Metals – an umbrella organisation of leading companies such as Rio Tinto and Anglo American - has succeeded in implementing many of MMSD’s recommendations for industry, whereas complementary measures proposed for governments, the small scale mining sector and communities, have not matched this success.

The report also describes how global rules for best practice in the sector have emerged in the decade since the MMSD report. But it shows that more often than not, there is a lack of implementation, independent verification, public reporting, or consequences for non-compliance.

However, this poses fresh challenges in light of the new trend for such governments to reassert control over their mineral resources by, for instance, changing their tax laws and mining policies or acquiring equity stakes in companies that are active in the sector, in response to the boom in commodity prices on the global market over the same period.

The report adds nevertheless, that mining companies need not see this trend as a threat because it can be an opportunity for them to rethink. Lamenting that the social contract that has emerged in the past 10 years has seen companies increasing their responsibility while government and community capacity remains weak, the report suggests there is now an opportunity to redefine roles and responsibilities and the social contract for achieving sustainable development in the sector.

Contributing to the discourse on the mining review, Steve Bass, head of IIED’s Sustainable Markets Group said, “Mining companies have often played a role that governments should have played.” “As states move to reclaim their roles in community and economic development, there will be opportunities for improved partnerships between governments, mining companies and local communities. These new partnerships will be critical to ensure that mining contributes to local and national development in an environmentally sustainable way.”

Meanwhile, the report notes other big trends that have emerged since the MMSD report was published in 2002 and will affect the mining sector’s journey to sustainability, as the rise in prominence of investors and operators from China, Brazil, India and elsewhere – that did not play a major role in defining the sector’s direction 10 years ago.

Others cited are the dramatic increase in community expectations, including demands for Free, Prior and Informed Consent (FPIC), which governments and companies must respond to like never before, and the growing scientific evidence for climate change and its implications for the mining sector, which to-date has adopted a ‘wait and see’ approach.

On the way forward, Buxton says; “The past 10 years have been about setting standards, identifying best practices and demonstrating to stakeholders what sustainable development means,” adding, “The next 10 have to be about implementation. The ambition must also build from reducing environmental and social impacts to also sharing the benefits of mining to promote social and economic development. That means moving from ‘do no harm’ to a net positive impact.”

By and large, the report urges the mining and minerals sector to move from improving its standards in principle to implementing them in practice and highlights new opportunities for governments and the mining industry to work together and engage with communities and other stakeholders to improve the sector’s performance.

Meanwhile, researcher Abbi Buxton is expected to share the findings from the review at IIED’s Fair ideas conference in Rio de Janeiro on 16-17 June, 2012.