Mining Specifics

Why an Extractive Industry Source Book? 

Agostina Martinez

My name is Agostina Martinez Carelli, I am lawyer born in San Juan, Argentina. In that country I became a lawyer in 2014, right after completing my undergraduate degree I decided to join CEPMLP and started my LLM in Mineral Law and Policy in 2015. During my studies at the University of Dundee I came across an interesting academic and professional tool: the Extractive Industries (EI) Source Book project.

The purpose of this tool assists policy makers and their advisers in resource-rich developing countries by providing a wide body of knowledge and country examples.

Additionally, I think that it proves to be an essential academic source to access to credible and efficient sources of information, which can be apply in practical and current topics. 

I am pleased to provide an insight of why I believe EI Source Book it’s so useful focusing in one of the main challenges discussed in policy and literature debates which is the concept of Free, Prior and Inform Consent Principle (FPIC) in the EIs. Chapter 9 of the EI Source Book identifies key issues that a host Government should actively consider when trying to achieve a inclusive EI-driven economic development. There is the key issue of indigenous peoples’ rights with respect to EI operations, which rights should be considered fully at each state of the mining value chain; sometimes it is not clear that this actually happens, and ambiguity in this regard can undermine the claims of the mining company/ies concerned that they are properly undertaking stakeholder engagement, and respecting affected persons’ rights.

Furthermore, the fact that the majority of the mining projects are by nature located nearby or adjacent to traditional lands of indigenous people or communities, can lead to conflicts between the mining company and the local inhabitants. Actually, this is the situation in a number of conflict cases conflicts in Latin America. Hence, the mining sector in Latin America is currently posing serious challenges when trying to obtain Social License to Operate. As many local communities may both:  disproportionately experience the negative impacts of mining projects; and fail to share the fruits of their development, the visible result and unsurprising result of more and more protests against mining projects taking place in in countries such as Chile, Peru, Argentina, and elsewhere. The main catalyst for the above is, in my view, the lack of an adequate approach of mining companies and host Governments to the needs and expectations of local communities, communities that need to be recognised as legitimate stakeholders in such projects.

On one hand, a new mining project signifies progress and economic development for an entire region or country. On the other hand, indigenous people often consider that their rights may be adversely affected, therefore there is an issue and the need of the government to respect and protect all rights. Thus, the main question is: how to engage with both aspects in order to transform the potential wealth that resource extraction may bring to the communities and a whole region, into a sustainable social and economic future for those potentially most impacted by this same project?

Giving a conceptual framework, the principles of FPIC were formally laid out by International Labour Organization Convention 169. It established the right to consultation prior to the exploration or exploitation of resources, the need for free informed consent of indigenous peoples prior to any relocation, and the requirement to consult with indigenous peoples prior to any transfer of land rights outside of their community.

Increasingly, responsible companies are aware of the importance of FPIC and the need of implementing business policies. Given the progressively important role that business enterprises plays in the global economy and society, as well as the significant impacts that their operations can have on communities, clarifying the human rights responsibilities of business enterprises became imperative. Therefore, a consensus about the responsibilities of all businesses to respect human rights emerged with the endorsement of the UN Guiding Principles on Business and Human Rights ("UN Guiding Principles”) by the UN Human Rights Council in 2011. 

The development of this kind of guiding principles and another industry associations reports (such as the ones contained in Chapter 9, e.g. see the reports of project partner the International Council on Mining and Metals (ICMM)), confirms the fact that FPIC can be an effective tool for companies assessing them to achieve a social licence to operate, and eventually contribute to sustainable development. However, sometimes there is confusion about who is the responsible of conducting and implementing FPIC processes; it can be the Host Government or the companies. It is obvious, that companies as a single business enterprise cannot ensure an adequate consultation and consent process without the involvement and help of host governments. It is a responsibility of the state to provide the legal framework and policies to allow FPIC to be conducted correctly by the business enterprises. But it is becoming common that leading companies are increasingly seeking to help build government capacity to run effective consultation and consent processes. Therefore, EISB can help by assessing and providing developing countries with examples of “good practices”. 

According to the ICMM´s Indigenous Peoples and Mining Good Practice Guide (which is also contained in Chapter 9), the concept of the term ‘engagement’ refers to the interactions which takes place between the companies, communities and other stakeholders. It covers a broad set of activities, ranging from the simple provision of information through active dialogue and partnering.  It is a core activity that needs to take place in a sustained manner across the whole project life cycle and its value chain. 

A new trend is gaining traction in the mining sector, “The Initiative for Responsible Mining Assurance (IRMA)” established a multi-stakeholder and an assurance system which could improve social and environmental performance in mining. It is currently under development, whereas it provides a series of standards to follow in the context of FPIC requiring the engagement to be free from external manipulation, coercion and intimidation. Mining projects may apply for IRMA certification at different stages of the mine life cycle. However, it is recommended for mining companies to obtain the consent at the earliest possible stage of development, as well as be maintained at subsequent stages. IRMA is one example of many other mining good practice initiatives available for EI companies and host government to improve in good governance and apply international standards in their way of conducting EI activities.  

In conclusion, the relationships with stakeholders of a mining project should be a cooperative engagement process between mining companies and host government. The EI Source Book can prove to be a helpful tool for developing countries to access to credible and reliable knowledge. EISB provides an insight of good practices in the Extractive Industries and an extensive collection of legal and academic information. Thus, this tool should be seen as a rich opportunity for those resource-rich countries trying to implement good governance policies in order to ensure that investment lead to sustainable impacts on growth and development. 

Author: Agostina Martinez Carelli

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