sharing in governance of extractive industries
By Sarah Daitch & Tony Andrews
In some regions in the Global South, mining is seen as an important vehicle for generating wealth and improving local development. Yet, if managed poorly, mining can also lead to environmental degradation, displaced populations, increased inequality and social conflict. Experts and governments expect natural resources to become key drivers in a growing number of disputes, with potentially significant consequences for international and national peace and security. Research on the frequency of reported conflicts between mining companies and communities shows a progressive increase since 2002. Over the past 20 years, while the mining industry has sought improved performance in the areas of ethical practice, social responsibility and environmental stewardship, evidence shows that conflict has still risen dramatically in frequency and intensity (see Figure 1). It is clear that depending on improvements in industry practices alone is only a partial solution.
What is driving this alarming trend and what is it about conflict that we don’t yet understand? During the past four years, the Center for Responsible Mineral Development (RMD), Canadian International Resources and Development Institute (CIRDI) and the United Nations Development Program (UNDP), have been working to provide answers to these questions through two phases of research. Phase 1 of the global study examined conflict as a process involving the interplay of key actors, including government agencies, mining companies and local communities, all of whom contribute to conflict situations in different ways; this work examined four field case studies, investigating specific conflicts at mine sites Tanzania, Madagascar, Peru, and Bolivia.
The second phase of research, which has recently been launched and published in policy focused abridged and full-length versions, consisted of three components. First, a literature review of over 300 publications relevant to the role of government in conflict linked to mining; second, a quantitative analysis of 334 recorded conflict incidents between 2002 and 2013; and third, building on the Phase 1 field studies, the report discussed five case studies conducted in Latin America and Africa. For this work, we defined conflict as The interaction of two or more parties with perceived incompatible goals, who engage each other through a range of practices including dialogue, persuasion, negotiation, arbitration, legal action, protest, intimidation and physical violence.
The purpose of the Phase 2 reports is to better understand the role of host governments in conflict creation or prevention, and on this basis to provide possible actions for governments to consider conflict transformation, mitigation and prevention. Using a conflict pathway analytical framework, this publication offers policy implications of interest to host governments in mineral producing countries. The following six lessons summarize what we have learned about how future conflict can be better navigated in the extractive sector:
(1) The nature of conflicts is multi-dimensional and dynamic. Most projects face social challenges that can lead to conflict escalation with negative consequences, and potentially violence. For example, social and environmental drivers of conflict are interrelated, often situated at the interface of environmental issues and human rights concerns. Conflict can be understood as a process with a history and a pathway prior to conflict outbreak, and the result of the interplay of identifiable actors.
(2)There is a need for better planning, earlier on through a strategic approach to mineral development: Projects typically face more conflicts in the early phases. When governments and other actors engage in long-term, transparent planning, it can help local communities develop sustainably, reduce conflict risk and help rural communities prepare. Meaningful engagement helps to put conditions in place for the local community to benefit when projects proceed, as part of a broader development plan. This requires governance capacity building at the local level, as well as planning for co-existence of Artisanal Small Scale Mining (ASM) and Large Scale Mining (LSM) sectors.
Photo - Cakchiquel family, Peru: UN photo/F. Charton
(3) There is a lack of government capacity to contain conflicts:
Many remote resource-rich regions have very little government presence at the local level. This fosters mistrust and contributes to rural people’s concerns about contamination of land and water. Enhancing institutional capacity to govern natural resources, and thus social conflict, should be a top priority for all levels of government. In particular, resolving land ownership, acquisition and livelihood issues can contribute to reducing the risk of conflict escalating.
(4) The need for fair distribution of benefits: Benefits are often not shared equitably in projects affected areas. Ensuring that the benefit distribution system allocates benefits fairly, and that capacity is developed to implement this system helps to avoid conflict.
(5) Build Capacity for Implementing Environmental regulations among all actors - Environmental degradation, and pollution on the lands and livelihoods of communities consistently drive social conflicts to escalate. Companies and governments adhering to a higher quality of Environmental Impact Assessment than required, combined with monitoring that engages communities, can help to mitigate extractive conflicts.
The Phase 2 study demonstrated an important role played by host governments in establishing the appropriate governance and management regimes to achieve sustainable mineral development and prevent negative outcomes of destructive conflict. This lies at the heart of the challenge and also the solution. When host governments take a strategic approach to mineral development, including incremental steps to attract the LSM sector to match current governance capacity, alongside strengthening local governance institutions, the risk of destructive conflict decreases. Other useful measures include preparing rural communities for the arrival of the large-scale mining industry, reconciling the ASM and LSM sectors, and maintaining strong regulatory compliance and social development presence in producing districts. These approaches open up a path towards sustainable mineral development. Good management of natural resources can contribute to raising emerging producer countries out of poverty.
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