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EAST ASIA SCIENCE AND SECURITY EXPERTS WORKING GROUP MEETING September 22, 2010 Beijing, PRC PowerPoint PPT Presentation


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EAST ASIA SCIENCE AND SECURITY EXPERTS WORKING GROUP MEETING September 22, 2010 Beijing, PRC Minerals, Development and Local Communities: Approaches and Case Studies from Asia By Allen L. Clark East-West Center. ENERGY AND MINERALS EXPERTS WORKING GROUP MEETING.

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EAST ASIA SCIENCE AND SECURITY EXPERTS WORKING GROUP MEETING September 22, 2010 Beijing, PRC

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East asia science and security experts working group meeting september 22 2010 beijing prc

EAST ASIA SCIENCE AND SECURITY

EXPERTS WORKING GROUP MEETING

September 22, 2010

Beijing, PRC

Minerals, Development and Local Communities: Approaches and Case Studies from Asia

By

Allen L. Clark

East-West Center


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Asia mineral development

Focused on the “New Frontier Nations”

High impact on remote areas/communities

Evolving/incomplete mineral policy and legislation

Twelve nations with new legislation in last 8 years

Most use some form of a negotiated mineral agreement

No linkages across sectors

Lack of environment and social/cultural policy,

legislation and administrative guidelines.

Community based mineral development is largely ad hoc, guided by industry and impacted by multiple external stakeholders (NGO’s/IDB’s/UN/NGO’s/AID)

Increasingly important role of the private sector

Role and “modus operandi” of mineral industry is poorly

understood

High levels of mistrust, confusion, uncertainity.


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Asia Mineral Development (Cont)

Inadequate institutional capacity to effectively

administrate and/or manage mineral development

Virtually no social scientists on staff

Competition between national to local

levels of

government and associated government

agencies

Lack of inter-ministerial cooperation

“Alternative” permissions

Abdication or responsibility


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

  • Legal Components and Community Agreements

    • International Treaties and Accords

      • Universal Declaration of Human Rights; International Dispute

      • Resolution Conventions; Other relevant Treaties/Conventions

    • National law:

      • Constitution; National mining regime (Laws; Implementing

      • Rules and Regulations; Decrees; Orders; Guidelines)

    • Other National Laws/Regulations

      • Revenue sharing; Foreign Investment; Dispute

      • Resolution; Cultural Protection; Environment: (land, water, forest)

      • Contingent liability.

    • Corporate Headquarters Country Legal Requirements

      • Vicarious Liability/Respondeat Superior (Employer/employee

      • responsibility);Alien Tort Claims Act;Unfair Practices Acts;

      • Anti-corruption/ Foreign Corrupt Practices laws.


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

  • Legal Components and Community Agreements (Cont)

  • Governing legal instruments

    • Community Impact and Benefit Agreements; Industrial

    • and Employment Agreements; Joint venture, financing, contract and

    • leasing agreements; Investment guarantee policies; Internal corporate

    • policies of all other companies and contractors.

  • Non-binding Advisory Panel Bylaws

    • Community development association or other advisory association or

    • board; Environmental advisory committees; any other relevant advisory

    • committee rules especially those created by contract.

  • Extra-jurisdictional requirement

    • Equator Principles (now subscribed to by over 60 major companies);

    • Voluntary Principles on Security and Human Rights; United Nations Global

    • Compact; and corporations individual internal standards and guidelines.

  • A comprehensive legal structure and an agreed upon set of practices and standards for socially responsible mineral development,meeting national, investor and community needs, is the primary challenge facing mineral development in Asia today.


Mining and communities asia s challenge

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Mining and Communities – Asia’s Challenge


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Case Histories

  • Bougainville, Papua New Guinea – An old mine

    in a newly independent developing nation.

  • Kumtor, Kyrgyrz Republic – A large deposit

    being mined in a newly emerging CAR nation.

  • Sepong, Lao PDR – A new mine in a small

    transitional nation of ASEAN

  • Voisey Bay, Canada – From exploration to

    mining in a developed mining country

  • Tampakan, Philippines A prospective mine in a

    developed ASEAN nation.


Bougainville papua new guinea before

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Bougainville – Papua New Guinea

(Before)


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Bougainville – Papua New Guinea

Time frame

1963 CRA granted prospecting Authority

1969 Bougainville Copper granted Special Mining Lease

1972 Mine starts production

1974 Renegotiation of Bougainville Copper Agreement

1979 -1981Landowners riot/villager unrest

1988 - New compensation demands – Autonomy

1989 Mine closes

1990-1996 Civil War between PNG and BgnVl Res Army

1997 Executive Outcomes

2000 Peace Accord – formation of BAR

2005 First elections held for Gov. of BAR

2010 – New elected Government – reopen Bougainville

Mine (?)


Kumtor kyrgyz republic

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Kumtor Mine

Kumtor – Kyrgyz Republic


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Kumtor – Kyrgyz Republic

Time frame

1978 – Deposit discovered by Russian Geophysical expedition

1988 - Soviet specialists view mine as non-commercial

1992 Negotiations begin with Cameco

1993-1994 Feasibility study

1994 Agreement signed (4% of profits to the local Government)

1998 Cyanide spill – local unrest

2002 Kyrgyz worker killed in mine wall collapse – local unrest

2004 IFC sells holdings in Kumtor

2007 Government considers nationalization of Kumtor –

protests by Kumtor mining community

2007 Villagers blockade road over environment/work issues

2008 Kyrgyz Financial police raid Kumtor offices

2009 New Terms Agreement signed for future mining

2009 Cameco transfers all rights to Kyrgyzaltyn JSC


Sepong lao pdr

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Sepong - Lao PDR


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Sepong - Lao PDR

Time frame

September 2001 Gold Feasibility Study

October 2001Gold Environmental and Social

Impact Assessment (ESIA)

October 2002 Copper Feasibility Study

November 2002 Copper ESIA Addendum

December 2002 First gold poured

December 2003Gold expansion Feasibility Study

and ESIA Addendum

December 2004 Gold production expansion

- March 2005 Copper Project to be in production

April 2010 –Mine sold to MinMetals of China


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Sepong - The role of the IFC

Original ESIA (2001) prepared by Oxiana, with IFC guidelines and reviewed independently by State Technology and Environment Agency (STEA) resulting in following changes:

Early preparation of a Resettlement Action Plan

Formalization of the Public Consultation and

Disclosure Plan (PCDP)

Establishment of a Trust Fund for Community

Development

Development of a Community/Indigenous Peoples

Development Plan (C/IPDP).

Establishment of a trust fund – A means to keep social services within the purview of local government, rather than the mine, while implementing the programs within the C/IPDP.


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Case History Lessons Learned

Existing national policy and legislation is inadequate to guide social and community development.

In the absence of national policy and legislation commit to the development of environmental and social codes consistent with the best and most appropriate standards

Its never to early to start the process to acquire a “social license to Mine”

Government agencies, at all levels, are inadequately staffed to administrate social and community projects

There is no “one size fits all” for social and community development programs.

Social and community programs must be directed to sustainability and not dependency.

Community perception of a mine and its role in community development changes over time and generations.

Environmental degradation is the most common “trigger” of social and community dissatisfaction.

Successful social and community development programs are dependent on:

maintaining an absolute commitment to public consultation and involvement of the local community in the development and implementation of social and community programs.

an ability to listen, to be flexible, to have an absolute commitment at the highest levels in the organization and hard work.


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Generic History of Community Development

Years 1-3: Pre-development phase: ESIA preformed to assess the impact of the mine on the environment and local communities and propose means of mitigation and/or remediation. – little or no concept of the “reality of the mine”.

Years 4-8: Development to production – Community programs initiated creating “haves and have not’s” and new demands arise. A partial concept of the “reality of the mine” emerges”

Years -9-13: Operational Mine – Community programs modified and expanded with greater participation of the community and external stakeholders; environmental impacts increase and resource rent distribution issues become critical. The “reality of the mine” becomes clear.

Years 13-15 Mine Expansion – Community expectations change, increase and divisions within the community, with government and with industry emerge. Adequacy of community programs become and issue. The “reality of the mine” becomes a negative.


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Generic History of Community Development (Cont.)

Years 15-25 : Pre-closing phase: The “inter-generational” phase of community programs characterized discontent past and present programs, increased demand for increased funding and concerns re mine closure and sustainability. Invariably the “reality of the mine” is negative.

Years 26-30: Mine closure – With mine closure adverse social impacts arise (unemployment, social unrest); environmental issue become critical (and many unmet) and issues of sustainability become paramount. Contingent liabilities are left unmet. The “reality of the impact” becomes a legacy.


East asia science and security experts working group meeting september 22 2010 beijing prc

ENERGY AND MINERALS EXPERTS

WORKING GROUP MEETING

Sepon – Basic Principles

Communicate, spend time listening not talking.

Use appropriate communication media, including

the best translators available.

Use local knowledge and resources if possible

Break complex issues into simple steps.

Be prepared to explain time after time.

Be prepared to say no – with a reason.

Understand community structures and cultural

expectations.

Understand social contexts (Gender, ethnicity)

Understand and respect all stakeholders.

Address every issue.

Deliver on promises.

Be absolutely committed.


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