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Co-creating value through better company & community engagement

How good engagement between mining companies, Indigenous Peoples and First Nations can deliver lasting value for all

If a company sets up a manufacturing plant, it usually locates it close to market. If it sets up an office, it can decide where to put it. But the location of mines is intimately tied to the landscape. There’s little point in building a mine without an orebody, and those are immobile.

Every location is different but, often, orebodies are situated in remote or less developed regions of the world. There might be poverty, weak governance, or endemic social conflict. So, before extraction begins, companies are already faced with a challenging physical and social environment.

Historical poor management of these risks has led to multiple instances of conflict between mining companies, Indigenous Peoples and First Nations across the globe.

Social license to operate and a lack of trust are considered some of the biggest threats to mining operations today, and rightfully so; examples of culturally significant sites and shared natural resources being damaged by mining companies are still rife, despite unanimous agreement that it’s unacceptable.

Proper engagement between companies and communities in a timely and culturally appropriate manner is hard to achieve, but the social, economic and environmental pay back for those who are willing to try can be enormous.

And there is a growing understanding that, in order to secure their operating future, mining companies need to evolve both their processes and cultures to facilitate this.

Change in action

Although change is slow, it is underway.

This is evident in a growing number of projects where Indigenous-led groups are partnering with miners and governments to deliver key projects. For example, in Ontario, Canada, Marten Falls and Webequie First Nations are co-leading the planning of a Northern Road Link project to access potential mine sites in The Ring of Fire.

It’s also heartening to see more Indigenous and First Nations’ voices at key mining conferences this year, including the annual CIM Convention which will be staged May 1-4, in Vancouver, Canada, under the theme ‘Mining for Future Generations’ .

Calvin Helin is a panellist at this year’s event. Helin is a member of the Ts’msyen nation from the community of Lax Kw’alaams. He is Principal Advisor at INDsight Advisers, an Indigenous-led consultancy dedicated to building connections between communities, industry and governments and, as Chairperson and President of Eagle Spirit Energy Holdings Ltd., Helin led the First Nations company in building an energy corridor through northern B.C. and Alberta.

He joined me, along with Conference Chair and Senior Advisor at Hatch, Doris Hiam-Galvez, to share his thoughts on Indigenous involvement in mining today.

“Mining companies tend to see projects as engineering issues first, and social/cultural matters last,” Helin explained. “The problem with this approach is they often offend Indigenous stakeholders when they present project plans to be rubber stamped. Companies need to invert their focus to avoid creating bad relations at the outset and potentially wasting resources on projects.”

Creating shared value of all sorts

He pointed out that Indigenous legal rights are growing and can be used to delay or stop mining projects.

Working openly and cooperatively with communities to ensure that projects address social, cultural and environmental concerns, while sharing the wealth taken from traditional territories will result in better outcomes for all parties at every stage of mine development, and long after extraction finishes.

“In addition, mining companies should employ Indigenous people to head up Indigenous relations departments, appoint Indigenous Peoples to their boards, and offer more meaningful participation than just jobs and business opportunities, such as project equity, company shares, etc.,” he continued.

“Approached properly, it can be a win-win situation, socially, culturally, economically and environmentally.”

Hiam-Galvez is a passionate advocate for creating sustainable prosperity through good project design and believes that, when done properly, mining can offer many long-lasting benefits.

“Mining companies, in many cases, are the only provider of income in the regions in which they operate, and local communities can become dependent on mining as the engine of their economies,” she said. “But mining has a finite life and, when it ends, then the economy suffers.”

Traditionally, investors have been interested in extraction, leaving projects once they reach the closure phase. But there is increasing recognition of the need for operations to continue generating social and economic value post-extraction.

“Most investors are supporting efforts to develop local economies on a small scale, and some are doing better than others,” Hiam Galvez told me. “The support is mostly limited though to the wants of local entrepreneurs. It’s still highly dependent on the mining investor and this approach may not create lasting prosperity.

“The mining industry has an opportunity to transition from being the main provider of income into a catalyst for regional prosperity by using its position to bring everyone to the table, to work collaboratively, and to diversify the economy so that a healthy level of economic activity continues after mining has ended.

“The target becomes the creation of lasting prosperity in partnership where all work together for the benefit of all. In this situation there should be no conflict.”

Harnessing Indigenous insights can also bring huge environmental value to mining throughout the project lifecycle.

Community members deserve the same care and respect that miners afford all their other stakeholders. Image: World Bank

“Some Indigenous Peoples have been on their traditional lands for over 10,000 years,” Helin told me. “Locals know the environment more intimately than anyone else. It just makes good sense to meaningfully consult with them to avoid sensitive cultural and harvesting areas.

“Such consultation may also help to incorporate an Indigenous perspective into planning to minimise the project footprint and impacts of execution. Companies might also finance an independent community office to monitor the various stages of the project to ensure the mutual environmental understanding is being adhered to.

“Taking such steps may also help to shield projects from environmental non-governmental organisations who often fly celebrities in (and other such media stunts) to create public opposition.”

Equipping companies for good engagement

The benefits of good engagement with Indigenous Peoples and First Nations, as well as their greater involvement in mining are clear, but the creation of meaningful relationships and partnerships cannot be rushed.

It’s important that mining companies invest in the appropriate expertise and skills (whether internal or external), and consider whether their own systems, processes and cultures are set up to facilitate this or require attention.

Rob Karpati, Managing Director at, O Trade, shared his thoughts with me. O Trade is a socio-economic development firm which provides solutions to assist the private sector in working collaboratively with communities. It’s clients include a number of mining companies.

“Companies need to get their head around engaging with Indigenous communities and First Nations based on the local economic reality, their specific culture and the environment, and that will look very different whether the project is situated in Northern Canada, Chile or the DRC,” he said.

“Businesses need to be savvy enough to be both local and global. Building capabilities and expertise to target fit-for-purpose engagement with communities is a challenge. But it is, or should be, a pillar of good corporate strategy.”

Moving from ‘us and them’ to ‘we’

Monica Ospina, O Trade’s Founder and CEO, also joined the discussion. Ospina specialises in designing and implementing corporate social responsibility strategies that support productivity while building trusting relationships with communities impacted by mining.

“Mining companies sometimes engage with communities in a paternalistic way, with a ‘we own the truth, we know what you need, we know how you should behave,’ attitude,” she explained. “Because of that, they often miss the chance to work together through inclusion and partnership.

“And they occasionally see inclusion and participation through that ‘I know what you need’ lens too. Miners assume lots of things but very rarely ask communities: what can you do, and how can I help?

“On the other hand, the industry is worried about community dependency, but it creates that itself through this paternalistic approach. We are making communities insecure about their capacity to own and steer their own future, and that is something that needs to change.”

Community engagement is usually treated as separate from the productivity component of mining or as ‘charity’, neither of which is conducive to long-term socio-economic growth.

“When companies paint churches or build libraries to satisfy their own perception of addressing social challenges or poverty, really they are creating a problem,” said Ospina. “This approach doesn’t alleviate anything, because it acts against the capacity of community.

“Mining companies sometimes assume that communities don’t have the capacity to understand risk. That concerns me, because nobody understands risk better than a community in a rural area that’s dependent upon agriculture for subsistence. Treating communities in less developed countries as though they are not capable can be very insulting.”

Ospina makes a valuable point. Community members are real people, with valuable knowledge and opinions. They deserve the same care and respect that miners afford all their other stakeholders.

Change starts at home

Often social return is overlooked when building a business case for a mining project but, really, it isn’t difficult.

It’s entirely possible to quantify corporate risks and the potential impacts of conflict, land rights disputes, shutdowns and slowdowns, as well as the benefits of collaborating on productivity and procurement.

Locals know the environment more intimately than anyone else. It makes good sense to meaningfully consult with them. Image: Unsplash

But social return usually requires a long-term view, and mining companies tend to be focused on short term gain… Short termism, plus in-built bias, equals inaction.

“It’s a tough but critical combination that the industry must push past,” said Karpati. “And to do that, change has got to start inside of mining companies.

“Finance departments must adapt to be able to pay in cash in communities that are remote; human resources need to hire people with different skills and backgrounds; procurement and logistics must adapt to accommodate suppliers with small warehouses in the middle of nowhere.

“Local content makes sense because, along with being the right thing to do, it builds collaboration and lowers conflict risk against potential value, but companies must address internal barriers in order to optimise social value over the long term.

“They’ve got to be able to lay out that business case, build understanding around it and communicate that case internally as well as externally, so that it goes from strategic to tactical. Otherwise, the machine of any large company is going to say ‘it might make sense on paper, but it’s not going to work’.”

This means that, for mining companies, internal engagement is equally important as external engagement, in generating social return because, without it, projects will get stuck in every single internal management process.

Engagement: as without, so within

“I sometimes find it more challenging to engage with the internal community, than with external ones,” Ospina said truthfully. “Because Indigenous community members often just want hope and potential. Internally, there are egos and politics which block roads for opportunities.”

Karpati added: “It’s true. Even inside the four walls of a company, there are functional siloes sitting side by side. The teams may or may not talk to and understand each other. Building a common language is so important for effective engagement.

“And it’s no different when those employees go into the field and engage with communities. If they take the time and put in the effort to build a common language and understanding, then it’s possible to articulate the importance and nature of the work and find opportunities for mutual growth.”

Ultimately, this harks back to a lack of education around social science. Many mining organisations delegate social management to their public relations teams, who usually have good intentions but aren’t experts in that field.

The lack of appropriate training and knowledge around best practice in engagement is adding to the high level of reputational risk the industry currently faces.

“It’s a big risk for the industry, one that is seriously underestimated,” Ospina said. “When social license becomes transactional, that is when problems arise.

“Social management is a discipline in itself. It’s not easy to work in a conflict zone, or with artisanal miners around a concession, or in countries with an inadequate judiciary system. Companies should think carefully about who they appoint to handle that and whether they are properly qualified.”

And the need for greater education around social management also extends to executives and managers, investors, geologists and engineers, lawyers… everyone, really. This is a prime example of where an ecosystem approach is required in order to realise a step change.

Getting out in the field, and speaking to and listening to locals is critical in building trust. Here, a team of executives from Anglo American Peru visit the Algarrobal olive plantation social project in Peru. Image: Anglo American

Mining for the future we want

Knowledge transfer is a powerful tool in creating social value, both on the ground and in the office.

By educating people throughout the mining community and, as Helin suggested earlier, employing Indigenous community members in key roles and investing in them, it’s absolutely possible to create a two-way flow of value.

Perhaps the industry needs to be more maternalistic in the way it engages? I suggested.

“It does!” Ospina said: “We underestimate the value of mining for society and likewise, society for mining. People can’t live without the products of mining, yet the industry is relatively unaware of the importance of its role in being the first part of many, many supply chains. It sets the standard for everything that follows.”

And that, folks, is why during May, The Intelligent Miner will be examining the mining industry’s potential to influence positive change.

N.b. For those who would like to learn more, Doris Hiam-Galvez will be delivering the keynote presentation at the CIM conference on May 4, outlining the ‘roadmap for future generations’ to achieve sustainable societies in mining regions

1 comment on “Co-creating value through better company & community engagement

  1. Link Murray

    Thank you for this excellent article. Shows the challenges of getting each and all to think anew and productively as opposed to simply reacting.

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