Mining and Sustainable Development II - DTIE

Mining
does not easily incorporate social vision. Moreover,
there is no reason to believe that unfettered
market decisions will steer society in a sustainable
direction. Without clear rules of responsibility
and reciprocity, maintenance and production of
environmental quality and social capital can be
jeopardized because it is within self interest to
“free ride.” The implications of this reality for the
ultimate success of SD are numerous. We will
consider only one.
As was noted earlier, there is general agreement
that current resource consumption levels are
unsustainable. There have been various proposals
for lowering resource use, such as increasing
resource productivity and decreasing material
inputs per service. It has also been suggested that
developed nations dematerialize, i.e., decrease
their material use by a factor of between 4 and 10
over the next 50 years, so that developing nations
can increase their consumption somewhat. The
open question is how to convince people to consume
less. Market mechanisms alone are unlikely
to be totally effective. Policies that create disincentives
will help, but the most straightforward of
those, taxation, is unpopular, so many politicians
will be reluctant to use that tool. The reality is that
the marginal effect of one consumer’s use of
resources is negligible, which is an incentive to free
ride, to depend upon others to reduce their consumption
rather than changing one’s own behaviour.
There are other market issues as well. Development,
including mineral development, is a fundamental
tenet of SD. Unless it is to be financed and
perhaps subsidized by governments, mineral
development and production must respond to the
dictates of global financial, equity and commodity
markets. International Financial Organizations
and many private banking institutions insist that
mining operations follow codes of best practice
and other standards to receive loans, loan guarantees,
or liability insurance. Equity markets have no
such overarching policies or ethical imperatives.
While there has been an increase in “green” investing,
mining firms must compete for investment
dollars with businesses in other sectors of the
economy. The value of their share price is in part
dependent upon earnings. The more costs a firm
incurs as a result of environmental and other
forms of legal compliance, voluntary adherence to
codes of practice, and efforts at continuous performance
improvement (as with ISO 14000 standards)
the lower the firm’s earnings, especially
short term. Markets are seldom kind to firms with
low earnings.
Mining firms have criteria against which they
judge alternative investment opportunities. The
list typically includes security of tenure, fixed environmental
requirements and tax terms, and management
control. The latter of these can be at odds
with the concept of public participation in governance
and management. There is wide agreement
that interested stakeholders should participate in
discussions about the nature and extent of mining
operations. There is less agreement over who is a
legitimate stakeholder, who is actually affected,
and who should be engaged. Moreover, it is one
thing to give stakeholders a voice in the debate, a
seat at the negotiating table, and to seriously consider
their opinions and point of view. It is something
else entirely to give stakeholders an actual
say in the decision, which ultimately means giving
up some degree of control and power to
another party. There is great ambivalence in both
industry and governments about how far public
participation should go.
There is also the potential for a disconnect of
expectations between the mining company and
the community or developing country. The reality
is that – various forms of rent transfer and corporate
socially responsible behaviour notwithstanding
– no single mining, firm, or industry can
solve all the social and economic problems of a
developing country, region, or community. One
challenge in extending SD to the minerals sector
will be to identify those social, economic, and
environmental issues that are both within the
capacity of the firm (financially and logistically)
to affect, and which it is within reason to expect
them tackle.
The achievement of a sustainable future is predicated
upon both people’s right to express their
opinion and their willingness to accept the
responsibility for consequences of their position
and their personal choices. Stakeholders have
objectives for resource management and opinions
about the goals of SD. They should have the right
to ask mining firms how they intend to work with
local communities and ameliorate the negative
impacts of mineral development. Unfortunately,
there is not currently an effective mechanism for
communicating to stakeholders the relationship
between their expressed objectives and the consequences
of fulfilling those objectives. The actual
outcome may be as they desire, but cause other
undesirable and/or unintended environmental or
social impacts. Alternatively, the outcome may be
the one desired, but may have associated high
costs that would be passed on to others. Or, the
expected outcome might actually conflict with the
stakeholder’s broader fundamental or strategic
objectives.
Consider for example the often significant
opposition to the development of large new mineral
operations in remote, pristine areas. That
opposition is frequently predicated upon the
assumption that in the absence of exploration and
development permits, the area would remain in
an undeveloped, natural state. However, this
assumption is inaccurate for those areas already
under pressure from illegal poachers and loggers,
slash and burn agriculture, or extraction by artisanal
miners. The reality is that in such cases
development of the mine might actually increase
the likelihood that the area could be preserved in
a natural state. First, legal mining can be more easily
and effectively monitored and controlled than
can illegal mining. Second, the firm could help
pay for guards and other protections that would
act to minimize unwanted activities. And third,
the jobs, income, and tax revenues generated by
the mine would help to alleviate the poverty that
is a source of much illegal and environmentally
damaging activity. Thus, banning mineral development
may have its own set of economic, social,
and environmental opportunity costs for which
those opposed to all mining on principle should
accept some degree of responsibility.
Conclusions
The problems described above are not insurmountable,
but they do present challenges to
those attempting to implement sustainable development
policies with respect to mining. These
challenges, and others not discussed here, have
many sources: a lack of understanding of the need
for balance across the social, economic, and environmental
dimensions; lack of capacity to implement
SD; unwillingness on the part of some
segments of the industry to embrace SD;
entrenched opposition to mining; unrealistic
requirements that lead to deadlocks over development
or reclamation; endemic poverty; excessive
consumption; political and civil unrest; and others
too numerous to mention. Each of these is a
human issue with an environmental consequence,
which is another way of stating the truism that
environmental problems are social problems.
They are the aggregate effects of humans making
choices and living their everyday lives. Playing
economic development goals against environmental
goals is inappropriate and ineffective
because the two are interconnected and mutually
dependent.
If SD is to be successful, humans will need to
act cooperatively to develop solutions that can
control environmental degradation associated
with mining while maximizing the benefits to be
derived from mineral resource use. The social
dimensions of SD, i.e. openness, effective communication,
and broad participation, hold great
potential for facilitating such consensus based
development and preservation. As we noted at the
beginning of this article, there are many ways to
define SD. This could be viewed as a serious
obstacle to the implementation of sustainable
practices. We suggest the opposite, that the many
different perspectives on how to combine and
weight the principles of SD provide numerous
opportunities for crafting balanced solutions to
the complex problems associated with mineral
resources. Sustainable solutions must fall within
the limits of environmental systems while simultaneously
being appropriate to specific mineral
activities and to the social, economic and cultural
characteristics of individual countries. This will
be the ultimate challenge in applying SD principles
to minerals resources.
Note: Complete references for this article are
available from the authors at the e-mail addresses
shown at the beginning of the article.
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UNEP Industry and Environment – Special issue 2000 ◆ 19