I was pleased to read the announcement made at the Prospectors and Developers Association of Canada (PDAC) Convention in Toronto in early March, that the terms of reference for an environmental assessment on the third and final road leading to the Ring of Fire mining development in northern Ontario had been approved.
The terms of reference for the Northern Link Road were co-developed and submitted by the Marten Falls and Webequie First Nations, and the assessment process was carefully designed to blend Indigenous knowledge with western science.
Although the development is still a way off and has multiple hurdles to overcome, it represents a new standard for community involvement and, indeed, leadership in critical mining projects.
Proper engagement with local communities and Indigenous landowners is not something the mining industry has been well known for. However, there are an increasing number of examples where meaningful and equitable partnerships are being established, and the potential benefits – social, environmental and economic – are significant and long lasting.
I asked Dean Slocum, founder and president of social and environmental risk management consultancy, Acorn International, and Dr. Chris Anderson, a strategic partner of the firm, to talk me through community involvement in mining projects today and how it could help to shape responsible mineral extraction going forward.
Slocum is a social scientist with 40 years of experience helping mining and energy companies and host communities to develop sustainable relationships. Anderson is an anthropologist who has worked globally with and for Indigenous and other local communities on a variety of issues including land claims, royal commissions and customary law.
Making engagement meaningful
“What does community involvement in mining projects typically look like today?” I asked.
“Either they’re not involved, in which case the operation is at risk, or good practices are applied,” replied Anderson. “Good practices might include consultative mechanisms being put in place for overarching discussions and any potential issues.
“There could be community liaison offices situated in neighbouring villages or towns, or feedback entry available on the company website. Partnerships might be set up with NGOs or governments. There might also be local supply and employment commitments, active and or/strategic social investments, mechanisms for joint decision making… etc.”
“Meaningful engagement is becoming a critically important concept,” said Slocum. “It’s a term that’s enshrined in the International Finance Corporation’s performance standard, and it’s increasingly considered good international practice, even for projects that don’t have IFC financing.
“The trademark of meaningful engagement is not just dialogue i.e., telling people what you’re doing, but actually listening. It involves making sure that engagement is culturally appropriate, and that includes not only providing information, but giving people the opportunity to learn, make informed decisions, and in some cases, benefit through mutual agreements for these developments.”
In mining, the most successful engagement programmes today include elements of meaningful engagement. Slocum pointed out that it’s not just the big companies who are doing this, some smaller organisations are using their strength in this area to differentiate themselves and gain access to opportunities where they might not have the financial strength or the reputation that their competitors do.
“It’s rare that we find a mining company that doesn’t understand what meaningful engagement means,” he added. “But it’s common that we run into mining companies who struggle with making that happen.
“That’s mainly down to the need for continued efforts and investment to connect with the community. It costs money to do this, and it takes a lot of foresight, courage and exceptional communication skills.
“Also, there is no ‘one case fits all’ approach; meaningful engagement will look different for every mine, and while there are important lessons and practices that we can integrate from previous projects, every programme will be unique.”
Growing awareness of the need for change
Meaningful engagement practices for each project are usually determined before mine development begins. A combined environmental and social impact assessment (ESIA) would identify any risks and opportunities upfront, and a management plan put in place to set practices in motion.
That said, there are industry experts who would argue that meaningful community engagement can and should begin long before the ESIA stage – as soon as a company expresses an interest in a development.
Slocum said: “Too often, ESIAs and the management plans that result from them become checkbox requirements. This short-term thinking can prevent true meaningful engagement from being built into these programmes.
“So, while ESIAs can be useful in identifying community needs and in creating an avenue for this kind of engagement. But there are other factors that we see as driving progress in meaningful engagement.”
Oftentimes, it’s lender involvement – investment banks as well as private equity investors that have ascribed to the Equator Principles – which has the greatest influence on good engagement.
Shareholders are another group. For example, some mining operations have large global mining companies as shareholders and, where they do not have complete control, these companies tend to have high demands for good environmental and social performance.
Interestingly, the rise of social media which provides the opportunity for instant scrutiny from the general public and thus, a significant source of reputational risk, is another increasing driver.
“The more host communities and governments (both local and tribal) become aware of global expectations for good social and environmental performance, the more their demands go up,” said Slocum.
“We’re seeing a real uptick tick in awareness around what constitutes good, meaningful engagement and free prior and informed consent (FPIC), as well as human rights management and expectations for that. And understandably, host communities want those best practices to be applied.”
Anderson noted that a growing area of good practice that often both communities and companies desire is formal agreement making.
“These can cover all aspects of the interaction, impacts, opportunities and benefits that a mining project might bring,” he explained.
“Agreements generally set out the expected roles and responsibilities of both parties, ongoing communication and engagement vehicles, capacity building and employment commitments, local supply prioritisation, grievance mechanisms, as well as revenue sharing and social investments.
“Protection of cultural heritage and the physical environment is also often covered; sometimes over and above what is required by local laws and regulations.”
Such non-transactional and non-traditional agreements are not usually the stuff of mining and, particularly not that of the lawyers.
Anderson added: “The development of agreements can take years and is more about building a relationship than the outcome. Money is often an important but side issue. It takes good faith, patience and perseverance on both sides.
“A good agreement can be an excellent foundation and guidance mechanism for preventing conflict and ensuring good neighbourly behaviour on both sides – good for communities and shareholders.”
Establishing and committing to an equitable, culturally-appropriate process for agreement making is becoming critical, even in cases where achieving full consent from all affected parties is elusive.
The most recent version of the Equator Principles (EP4, 2020) recognises that in some cases, where formal agreement through FPIC may not be achievable, lenders may meet good international practice expectations by demonstrating ‘Good Faith Negotiations’ towards agreement making.
Measurable shared benefits
“Are you seeing interest in greater community involvement from both companies and communities?” I asked. “There must be significant benefits for both parties?”
“For sure,” replied Slocum. “The benefits for communities start with increased awareness. When we talk to groups around the world, the main thing we hear is that they don’t want to be left in the dark. Community members want to understand the potential impacts and opportunities of mining so they can make informed decisions about whether to support or oppose developments.
“Communities and landowners want information to be shared in a way that’s transparent and culturally appropriate, and a mechanism put in place so that they can engage with the company and ask questions. That type of action builds trust.
“Communities also want to know how they could benefit economically – will there be jobs, community investment or a Good Neighbour agreement? – so that they can share in the value generated by a project.
“On the company side, it really boils down to obtaining a social license to operate. Organisations want the flexibility to develop and operate a project without having to worry about undue criticism in the press, lawsuits… things that can slow down development and complicate operations.”
While important, sustainable and meaningful engagement with communities and landowners should really be the baseline for community involvement in every mining project. The next step, as seen in the Northern Link Road example, is for communities to become equity partners in projects.
This is an emerging trend, particularly in Canada and the US, where First Nations and Native American Communities, very advisedly, would like to see a generational benefit from developments on their land.
And these benefits can extend both ways. More and more mining companies are expressing a wish to become better custodians of the land and the natural resources that their operations impact.
Community partnerships present a huge opportunity to glean valuable knowledge and practices from groups who have successfully cared for their land for thousands of years; knowledge that will stand operators in good stead for the life of mine and beyond.
Anderson added: “In the 25+ years that I’ve been working with Indigenous peoples and extractive projects, I’ve never met an Indigenous person who’s dead set against mining or other forms of economic development at their local level. They just want it to be done right.
“People want a say in decisions within the project that affect them, and they want their ancestral rights to be respected. Communities want their future generations to be beneficiaries. And they’ll be very diligent about making sure those things happen if they’re involved.”
Co-creating a responsible future
“What role can projects with community involvement play in moving mining towards a more responsible, environmentally diligent future?” I asked.
“I think in the future, there won’t be as much of a division between mining companies and communities as we see now,” replied Slocum. “I’d like to see a merged approach to project development, not only intellectually and economically merged, but true partnerships.
“That’s a function of the increased expectations of communities as they learn from each other, but also the mining industry’s aperture for understanding that the game is changing. Companies need to find new ways to be responsible and truly engage.”
The organisations that are able to adapt and embrace this approach will likely generate new opportunities faster than those who don’t, lower their development and operating costs and experience fewer disruptions.
Also, through helping to develop the capacity of their host communities, when issues do arise, miners will be able to have constructive and informed discussions with members and, ultimately, find equitable resolutions faster.
These kinds of proactive engagement efforts will help companies to develop the kind of relationships that will put them ahead.
Looking to the future, Anderson is optimistic but skeptical.
“Miners are not used to dealing ‘outside the mine fence’ and sometimes assume that government permits are all that is needed for a development,” he said. “The same old mistakes with communities keep being repeated.
“Changes in global sentiment about mining and the need for community involvement are increasing pressure on investors and therefore companies. A ‘social science mindset’, skills, experience and tools are sorely needed in mining projects, but that mindset is not always welcomed or seen as needed.
“Tertiary training on the social side is a requirement for successful, responsible mining and it’s still rare within mining educational institutions and programmes. Without this, there will continue to be restrictions of access to minerals, critical or otherwise.
“The mining industry has to get better at this!”