Sharing Mining Benefits in Developing Countries - World Bank

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Box 2.3: Benefit-Sharing FTFs between Indigenous Peoples andMining Companies (continued)Trust is jointly managed by a Traditional Owner Liaison Committee and minerepresentatives.Elsewhere in Australia, the Indigenous Land Use Agreement (ILUA) andArgyle Management Plan Agreement (AMPA) together were considered themost comprehensive agreements ever negotiated between a resource companyand traditional owners in Australia in 2006. The Rio Tinto owned ArgyleDiamond Mine is located in the East Kimberley region of Western Australiaand occupies the traditional country of a number of indigenous groups. TheILUA is a voluntary agreement entered in good faith by all parties and it wasthe result of three years of negotiation, replacing an earlier “Good NeighbourAgreement” dating from the 1980s. The ILUA established two trusts:the Gelganyem Trust and the Kilkayi Trust. The Gelganyem Trust compriseseleven trustees, nine representing the seven traditional owner estate groupsthat are party to the ILUA and two independent trustees. This Trust administersthe Sustainability Fund, the Law and Culture Fund, the Education andTraining Fund, and the Miriuwung and Gija Partnership Fund. The SustainabilityFund provides future generations of Miriuwung and Gija people with asignifi cant capital base including money for future generations.The Gelganyem Trust has developed a number of projects including anindigenous business development facility, scholarships funds, renal healthcare, and holiday programs for youth at risk. The Trust is funded throughroyalty payments and has successfully used these payments to leveragefunding from the federal and state governments and private funding partners.The Kilkayi Trust has only two trustees and has been established toadminister payments from Argyle to individual families party to the ILUA.Laos. The Sepon Trust Fund was established to implement the Community/Indigenous Peoples Development Plan developed for the Sepon gold andcopper project in Laos. The Trust Fund was specifi cally chosen to reducethe risk of the mine becoming the provider of government services at thelocal level. All projects supported by the Trust Fund have to be aligned withthe broad government plan for the area to improve sustainability. An eightmember board comprised of representatives from the company, government,and the two main ethnic groups govern the Fund, and a 17 membercommittee manages its day-to-day operations.Sources: ICMM 2010, NRC 2007, Newmont 2010, Jones et al. 2004, AHRC 2006.18 Sharing Mining Benefits in Developing Countries
Chapter 3Key Attributes ofFoundations, Trusts,and FundsIn order to consider the conditions for success of foundations, trusts, andfunds (FTFs), it is necessary to first understand the diversity of modelsused. FTFs can be distinguished not only by their legal structure but alsoby their position on six important scales: programming approach; financingstructure; geographic focus; community participation in governance;the influence of the mining company; and the influence of government.The variety of approaches is summarized in this section and re-examinedin Chapter 4, drawing on brief examples from global experience. 5 Thechoice of attributes for an FTF will depend on the local context in whichthe FTF is being established. Summary guidance on the applicability ofdifferent options is provided below.Brief HistoryThe use of FTFs to deliver benefits from mining has grown considerablysince the 1980s. Between 1950 and 1980, just a handful of FTFs were inoperation; by 2008, this figure had risen to 61 in developing countriesalone. Furthermore, it appears that FTFs have grown faster in the miningindustry than in other industries (BSR 2010).As mining FTFs have grown in quantity, the quality of their structuresand program execution tactics has evolved. The Alcoa Foundationand Phelps Dodge Foundation, both established in the 1950s and nowclosed, used a corporate foundation model to support philanthropicdonations to local initiatives across their global operating locations. Thefoundations formed in the 1970s in southern Africa, by contrast, becamemajor actors in national development initiatives, in some cases displacingthe government as the dominant social institution in some areas. In the1980s, locally managed funds with targeted objectives were created, such5Appendix 1 provides a nonexhaustive list of mining foundations, trusts, and funds.Extractive Industries for Development Series19
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