Getting ASM to work for Community Development

1. Getting ASM to work for Community Development Halina Ward Director, Business and Sustainable Development Programme, International Institute for Environment and Development (IIED)

2. Outline • IIED: brief introduction • Two major overarching challenges for mining and community development • Particular challenges in economies in transition • Insights from Kosova • Reflections on distinctive approach to ASM

3. What is IIED? • A sustainable development policy research institute, with headquarters in London and an office in Edinburgh • Working to shape a future that ends global poverty and sustains fair and sound management of the world’s resources • 36 years old • Values-based, research-driven advocacy • Strong culture of partnership working

4. What has IIED done that’s relevant? • Coordination of Mining, Minerals and Sustainable Development Project (2000-2002); two-year process of international consultation and research which aimed to understand how to maximise the contribution of the mining and minerals sector to sustainable development at local, national and international levels • MMSD country studies in 18 ASM countries; workshop on ASM in 2001; synthesis report (“Artisanal and small-scale mining: challenges and opportunities” – authors from Projekt-Consult GmbH) • Business and Sustainable Development Programme Making business work for sustainable development; getting the public policy framework right; extending the agenda to SMEs • Economies in transition: Russia (oil and gas), Azerbaijan (oil and gas), Kazakhstan (oil and gas), Kosova (mining)

5. Roles and responsibilities • Need for rebalance in two main areas? • Role of public sector: last decade, major emphasis on developing tools, business case, capacity and understanding so that mining companies (especially larger companies) can maximise their positive contribution to community development. Public sector role has lagged behind • Forging integration between CSR/enterprise development • ASM and community development: model entry point for achieving these rebalances?

6. Rebalance 1): public sector • Mix of roles: legislative (e.g. legalisation in case of ASM, revenue management frameworks, minimum standards for community consultation ) but also facilitating, catalysing, spreading the word, outreach, brokering partnerships… • Alignment between sectoral and wider public policy frameworks and positive community development outcomes key • Public sector accountability in relation to mining and community development needs to become part of the agenda • Wider mix of roles needs to become part of the fabric of discussion on ASM public sector roles (without getting distinct role of the public sector lost in ‘partnership’) • Need to bring sub-national government roles and responsibilities closely into initiatives and analysis

7. Rebalance 2): Is small beautiful? • SMEs are the lifeblood of most economies. On average, 90% of enterprises and account for 50-60% of employment at a national level are SMEs (Luetkenhorst (2004)). • Beyond hard economics, whether SMEs are inherently more socially beneficial than larger companies is a matter of opinion. • “For real progress towards sustainable development, there is a need to view SMEs as CSR actors themselves, with their own social and environmental impacts. The argument that CSR is unaffordable or irrelevant for SMEs should not be used as a veil behind which to hide or ignore poor social and environmental practices”. • ASM arena offers evidence of the tough choices par excellence – insights for other sectors. Integrating environmental and social considerations within business support and ASM community development programmes

8. Challenges for extractive industries and community development in economies in transition • Centralised decision-making (often) – essential to work with blessing of public sector actors • Rapidly developing or incomplete legal and policy frameworks (revenue management, management of investment, environment, property..); • perceptions of lack of public transparency and accountability to citizens in relation to natural resource investment • Huge changes in distribution of property rights

9. Economies in transition, cont • Corruption • Weak civil society; unequal distribution of capacities across government, business, civil society • High levels of literacy and education: huge potential to build on existing human capital • Weak mechanisms for direct community engagement in public sector or business decision-making with community impacts: need for creative thinking • Significant (unmet) expectations of role of the state (sometimes!)

10. EITs, cont • Existing infrastructure under increasing pressure or deteriorating • Restructuring/privatisation/collapse of state-owned enterprises • Nation-building process impacts on what environmental/social externalities are considered tolerable • A distinctive environment in which to pursue maximisation of community development benefits from extractive sector activities

11. What is ‘the community’ and community development? • ‘The Community’: varies from site to site. Generally: inhabitants of the areas immediately next to and surrounding a mine site, any who have been relocated away from the mine site and those who are affected by mining activities. • A process which helps to improve the quality of life of community members, and enables them to achieve greater control over their lives. The process of community development should help communities to improve their social and physical environments in ways that increase equity and social justice, overcome social exclusion and build capacities. • Effective community consultation essential if the full local development benefits of mining are to be realised.

12. Draft approach in Kosova • World Bank project, led by Riinvest Institute, Pristina, with IIED input, very close involvement of MEM, community consultations – especially through focus groups within mining communities • Mix of legal, policy and organisational change. Need to relate to public mining company as well as new investors. ASM seen as a temporary challenge. • Role of government: legislating, facilitating, awareness-raising; policy coordination • High-level: revenue management; retrenchment policy; integration into economic development plans and education frameworks; resettlement and compensation policy; integration of community development and community consultation into the licence/concession process; basic legal framework for community consultation

13. Kosova, continued • MEM Community Liaison Officers • Community Development Framework and Community Consultation Guidelines • Community Development Plans • Community Development Forums (supported by community consultation groups) • Community Benefit Agreements • Catalysing links and partnerships • Outreach and ‘community development clinics’ • Evaluation after two years

14. Kosova: roles: central Government • Overall ‘enabling environment’ to ensure that mining brings community development benefits – mining plus (among others) labour, environmental and social policy; spatial planning; and economic development frameworks. • Community Liaison Officers work at local level to assist Community Development Forums; broker links between potential partners; raise awareness in communities of the Framework and Guidelines and advise companies and Municipalities on the steps they need to take to implement the Community Development Framework and Community Consultation Guidelines.

15. Kosova roles: municipal government • Primary responsibility for ensuring that mining revenues remitted to Municipalities are effectively distributed, and for consulting with communities on budget spending plans. • Liaison with Community Development Forums • Integrating goals of Community Development Plans within their own policy and governance processes, including local economic development strategies. • Information to mining companies on local economic development opportunities and local infrastructure and service needs • Assistance in brokering partnerships that can help to deliver community development benefits. Input into licensing process; • liaison with companies to provide access to locally available data to devise optimal community development and consultation approaches. • Agreeing on maintenance and handover arrangements for infrastructure and services provided by mining companies. • Planning for resettlement.

16. Kosova roles: • Mining companies Respecting the laws and regulations of Kosova as they relate to mining. Developing their own policies and approaches for contributing to community development, respecting communities where mining activities are based, and working constructively to identify financial resources necessary to support community development and, as appropriate, to transfer technical and management skills to community members. • Non-governmental organisations • Potentially key partners in the delivery of initiatives within project-level community development plans. Partnering with other actors; helping to build community capacity to ensure that the objectives of Community Development Plans are achieved; provide knowledge, skills and ideas on potential initiatives and effective delivery mechanisms, represent important interests within the community.

17. Community development framework: key themes • Maximising local employment • Maximising indirect economic benefits of mining; local enterprise development and diversification • Provision of services and infrastructure • Revenue sharing and distribution • Funds and foundations (role of community foundations) • Redundancy and re-employment • Planning for mine closure • Relocation and compensation

18. Community consultation: key reforms • Strategic environmental assessment, environmental impact assessment, social impact assessment • Spatial planning process: designation of ‘zones of public interest’ • Reform to mining licensing process to trigger prior discussions at community level (at very least with Municipalities) • Mine closure procedures • Consideration of putting ‘Community Benefit Agreements’ on a legally binding footing

19. Kosova: key principles for community consultation guidelines • Community ownership • A two-way process • Engage all interest groups • Ensure change results • Predictability and openness • Efficiency • No ‘one size fits all’ • No differentiation: between state and privately-owned mining companies, or local and foreign companies

20. ASM: differentiating factors • Large-scale mining: • Goal is for the mining company to operate as part of the community. You stress the links. You make the business case. You look to maximise the positive links. But at some level, the underlying starting point still sees the company as an ‘outsider’ that’s come in. ‘Separation’ factor of a legal entity with commercial purpose. • ASM: • May be like this as well.. Or may be viewed as a constituent expression of ‘the community’. Much depends on the nature of the ASM

21. ASM: Differentiating factors • Balance between roles and responsibilities will be different, with less (but evolving) emphasis e.g. on ASM in delivering service and infrastructure benefits • Is large-scale mining present as well? Thinking through implications of links • What are existing links between ASM and the local community? (And other communities!) • Formal or informal? What level of collective representation? • What levels of community organisation exist? • Symptom of poverty or of enterprise – in what measure? • Greater emphasis on the role of donors/large-scale mining

22. Two approaches • ‘Dependent’ ASM contributions to community development (‘dependent’ on links to large-scale mining or to donor initiatives; ASM as an object of community development initiatives) • ‘Independent’ ASM contributions to community development (ASM businesses as community development actors in their own right – using and building ASM capacities to deliver community development) • Goal: to maximise positive formation of human, social and environmental capital at local level through ASM, and minimise destruction of capital… getting to ‘independent’ ASM contributions to community development