Although Canadian mining companies have made considerable progress improving their environmental record, few of them paid much attention to their social record — particularly in developing nations — until recently.
Even now, say insiders and critics, the industry has a long way to go.
Increasingly, the social practices of Canadian firms have come under public scrutiny in the 1990s, in much the same way that environmental practices were monitored in the previous decade. Gordon Peeling, president of the Mining Association of Canada (MAC), says negative public perceptions forced the industry to improve its environmental performance.
The MAC has since adopted an environmental policy according to which all its members must perform work, from exploration through to closure, in a manner that “embodies protection of human health, the natural environment, and a prosperous economy,” wherever they operate in the world. “You’re expected to live up to it,” says Peeling.
However, the MAC, which represents 15 Canadian companies with operations in developing nations, has no plans to draft a social policy for its members.
“At present, it’s a matter of companies setting their own course with respect to social issues,” says James Cooney, director of international affairs for
Cooney says it is only a matter of time before all companies devise and abide by a similar code. “The long-term justification and acceptance of this industry require that it make durable contributions to social, environmental and economic progress.”
Placer’s social policy, adopted in early 1998, originated in the 1980s, when the company was developing the Misima and Porgera mines in Papua New Guinea.
However, most Canadian firms began operating in developing regions only in the 1990s, when mineral-rich nations that formerly rejected or discouraged foreign investment began to liberalize their mining codes.
Under reformed mining laws, governments of developing nations freed up large tracts of land for Canadian firms, or sold them whole or majority interests in existing mines as part of privatization programs. Governments were eager for an infusion of better technology, new capital and tax-generating activity, while miners were keen on increasing reserves and generating additional revenue with new, often low-cost producers.
But with the new mining projects came new problems. Nearby communities found that the projects often attracted more people than they could employ, and artisanal miners or residents were often relocated to make way for foreign interests. Social problems arose when indigenous workers began succumbing to expensive addictions, such as alcoholism and gambling, and if a mine closed or was rendered uneconomic, jobs and benefits quickly disappeared.
Social responsibility has replaced environmental protection as the most important issue affecting the industry, says Jason Potts, a research associate with Toronto-based EthicScan, which keeps tabs on Canadian companies operating abroad.
“There is an international human rights focus in corporate responsibility,” he says. “There have been a few disasters that drew a lot of media attention.” That attention has pressured companies to take a gentler approach to working in developing countries.
One such incident involved a dispute in 1996 between local miners and
In April, following Vista’s purchase of the Capa Circa gold mine from its Bolivian owners, the miners waged an illegal strike over wages owed. Other issues of concern included new production methods, safety, and social benefits. An agreement was signed, but meetings designed to address further grievances went badly.
As the months dragged on, new grievances — from charges by the company of kidnapping and illegal production, to workers’ claims of unsafe labour conditions and undelivered social benefits — continued to surface, further disrupting discussions. Not even the intervention of the Bolivian labour ministry could resolve the dispute.
The situation deteriorated when workers and residents of the nearby village overran the nearby Amayapampa gold mine, which also had been acquired recently by Vista, in response to the company’s having detained a local man for theft. Vista employees and police, who had been called to the site by the company when earlier negotiations fell apart, fled the scene.
The Bolivian government responded with force, sending police and soldiers to restore order and return the mine to the company. Further negotiations between those occupying the site and the military were fruitless, and in December the army took the site by force. The confrontation left nine villagers dead and 32 injured. An army colonel was also killed.
An investigation into the incident by the Inter-American Commission on Human Rights of the Organization of American States, though primarily an evaluation of government military practices, attempted to chronicle and explain the roots of recent civil and labour strife in the area.
The May 1997 report concluded that although the police presence was justified, poor communication and misunderstandings between security forces and the villagers were to blame for the deaths. The examination of events leading up to the occupation of the mine by workers concluded that the initial dispute between Vista and the miners “was not handled appropriately” and, moreover, that general labour unrest was the result of “extreme poverty that has predominated in an area that has known a past of great wealth, which did not come to benefit the population as a whole.”
In April 1996, a month before the release of the report, Vista signed an agreement with communities near the Amayapampa and Capa Circa mines to provide funds for education and job-training.
Today, social programs implemented by Canadian miners at operations in developing nations are more and more in evidence. For example: * Almost the entire workforce at
*
*
* farmers working land leased from
Each of these projects has been recognized and applauded by either the Conference Board of Canada or the Social Investment Organization.
The list goes on:
*
*
Cooney agrees that the tide is turning, and says “our understanding of the world and the expectations that the public has for this business have evolved considerably.”
Placer’s sustainability policy is partly based on studies by anthropologists and sociologists conducted when the company proposed to build the Misima mine in Papua New Guinea. The company wanted to avoid a replay of the labour-related civil unrest and violence that forced the shutdown of the Bougainville mine, also in Papua New Guinea, in 1989.
Placer
reached an agreement with the government to help build schools and hospitals, and contribute to job-training programs, in lieu of certain taxes. Aside from employing people from the nearby community, the Misima operation created spinoff businesses, including construction contractors, a sawmill and a brickworks, which are designed to last even after the mine closes. A similar arrangement was instituted when the Porgera operation opened in 1990. Currently, Placer’s sustainability policy is being applied to the Las Cristinas gold deposit in Venezuela.
The era of what Cooney calls the “paternal mine” is over, as more and more companies adopt policies designed to help communities diversify in preparation for the day when the last of the ore is taken from the ground.
Otherwise, he says, “we leave a hole in the ground, a road to nowhere and a memory of boom times, and the people are left asking, ‘Why do we want this industry?’
“The capacity to maintain social improvements — whether it’s health or education or employment — must be internalized in the community after the mine closes.”
It’s important to communicate with stakeholders from the outset, he says.
“Just a few years ago, one never paid attention to these issues until the feasibility study stage.”
Potts points out that circumstances dictate when a company should get involved with stakeholders, and that some — particularly smaller exploration firms — should not be expected to. “Those who have less of a commitment to a particular project can’t be expected to over-invest in a particular aspect [including social programs],” he says. “It’s hard enough for companies that are well-established to do that.”
He adds that although the mining industry is moving toward social responsibility and sustainable development, “there is some indication that mining is behind.”
He points to policies adopted by the agricultural and forestry sectors, which include provisions for best practices in dealing with communities and indigenous peoples, in compliance with the law and workers’ rights.
“There isn’t a lack of interest or awareness of this issue, but I think there’s a lack of consensus as to how to define or identify what kind of commitment [mining companies] will make,” Potts explains.
There are no international or national guidelines promoting good citizenship by mining companies abroad, but Canadian and world development agencies are exploring ways that the private sector can become better corporate citizens.
In Canada, Potts is part of a
team researching an accountability framework for the government-run International Development Research Centre. He and his fellow researchers will evaluate, among other issues, the viability of implementing a regular social audit process at Canadian-owned operations abroad.
In October, the International Finance Corp., a division of the Work Bank, released a booklet advocating private sector “good practices” in developing nations, including community consultation, collaboration with governments and aid agencies, and provisions for monitoring and public disclosure.
Meanwhile, Cooney is working with the World Bank on a project called Business Partners and Development, which is looking at sustainable development strategies in the natural resources sector.
More and more mining companies are acting responsibly in developing nations, says Cooney. “I think we will find the pressures growing in Canada to have a clearer and more comprehensive set of principles that address social issues.”
Be the first to comment on "Social problems in developing countries pose challenge — Canadian companies learning that it pays to be a friendly neighbour"