Sharing Mining Benefits in Developing Countries - World Bank

More documents

Recommendations

Info

vehicle of some sort to be activated. The inconsistency of definitions,however, illustrates the point that the specific type of instrument is lessimportant than its practical attributes.Practical CriteriaGiven the difficulty of comparing FTFs on the basis of definitionsalone, a set of experience-based criteria has been developed to allowfruitful comparisons. These criteria assess key attributes of FTFs andallow them to be compared on a sliding scale. The six criteria in no wayimply a normative evaluation of any institution, since FTFs can be evaluatedonly against the goals they were set to meet, and these vary in eachcase and for each of their stakeholders.The six scales that have been developed cover:• The programmatic approach taken by the entity: Does the entity makegrants, or does it operate field programs?• Its financing structure: How is the entity financed? Annual operatingbudgets present options for investment that differ from those ofendowed funds.• Its geographic focus: Where does the entity operate? On this scale, miningFTFs may target specific communities, such as indigenous or vulnerablepeople within the mine’s area of influence, or they may operateacross a broader area.• The degree of community participation in governance: How involved arecommunities/beneficiaries in the governance structure of the entity?• The influence of the mining company: How much influence does thecompany exert over the activities of the FTF?• The influence of the government: How much influence does the government(at all levels) exert over the activities of the FTF. How muchinfluence did it exert over the establishment of the FTF?Figure 3.1 provides an intuitive and visual way of comparing the attributes.Each case study presented in Chapter 4 includes a sliding-scalegraph that shows the position of the FTF on each of the six scales.Analysis of the Attributes of FTFsProgramming ApproachThere are two main programming options when developing an FTF:• Grant-making• Operational and implementation approaches.22 Sharing Mining Benefits in Developing Countries
Figure 3.1: Sliding Scales of Attributes Useful in Comparing FTFsProgramming ApproachGrant makingOperationalFinancing StructureAnnual BudgetEndowedGeographic FocusTargeted communityMine Area of InfluenceBroader communityCommunity Participation inGovernanceInfluence of Mining CompanyInfluence of GovernmentNo participationNo InfluenceNo InfluenceBoard MembershipMining Company OwnershipLegal RequirementGrant-making FTFs provide grants to other organizations, whereasoperational FTFs use their funds to deliver development projects directly.Many FTFs use a hybrid approach with some grant-making activities andsome projects delivered by an in-house team. Table 3.2 highlights someof the key strengths and weaknesses of each approach.Often linked to the programming approach, the program choices takenby an FTF should be grounded in a deep understanding of beneficiaries’needs, owner priorities, and gaps in existing development activities.FTFs can choose, or be directed, to support any number of programmingdirections, from literacy programs for targeted groups in a vulnerablecommunity to support of national culture through sponsorship ofthe fine arts. Common programming areas for FTFs in the mining sectorinclude local economic and business development; health and wellness;education and vocational training; basic infrastructure; employmentandincome-generating projects; environment; and capacity buildingprograms for local authorities and community-based organizations.A common programming trend progresses from supporting basicinfrastructure, health, and education at the FTF’s inception to supportingalternative livelihood projects and a focus on capacity building as theFTF matures. Monitoring and evaluation of the development impacts ofprojects supported by FTFs is one of the best means of recognizing thechanging needs of communities and allowing modifications to strategiesto be developed. For that reason, monitoring and evaluation are essential.FTFs can be established at any time during the mining cycle (box 3.1),but most are established after operations have commenced, a decisionlinked primarily to the cost of capital in the early stages of a project. Anincreasing trend of early-development FTFs is emerging, however, oftenin response to government requirements, community expectations, orboth. FTFs can also be used as a vehicle for managing social programsafter a mine closes.Extractive Industries for Development Series23
Page 2: World Bank Group’s Oil, Gas, and
Page 6 and 7: Box 3.3: Government Funding Mechani
Page 8 and 9: AcronymsAACFAHRCALACAMPAASRPCMCACOD
Page 11 and 12: Executive SummaryMining projects in
Page 13 and 14: Chapter 1IntroductionMessageFoundat
Page 15 and 16: that process. Chapter 3 reveals bot
Page 17 and 18: Figure 2.1: Benefit-Sharing Channel
Page 19 and 20: Table 2.1: Examples of Royalty/Tax
Page 21 and 22: to be shared among project benefici
Page 23 and 24: FTFs and other dedicated instrument
Page 25 and 26: money payable to communities over a
Page 27 and 28: The agreements often use FTF struct
Page 29 and 30: Chapter 3Key Attributes ofFoundatio
Page 31: • Provisions for supervision and
Page 35 and 36: Box 3.1: The Starting Points of FTF
Page 37 and 38: Communities or local nongovernmenta
Page 39 and 40: support charitable organizations in
Page 41 and 42: externally, or by a combined approa
Page 43 and 44: Chapter 4Drawing Lessons fromExperi
Page 45 and 46: development projects. It was subseq
Page 47 and 48: objectives, and intended beneficiar
Page 49 and 50: Buying in expertise: The Anglo Amer
Page 51 and 52: Figure 4.6: Rio Tinto Palabora Mini
Page 53 and 54: Figure 4.7: Fondo Solidaridad Cajam
Page 55 and 56: and the level of financing they wil
Page 57 and 58: Figure 4.9: Ok Tedi Mining, Ltd.Pro
Page 59 and 60: ConclusionFoundations, trusts, and
Page 61 and 62: Appendix 1: MiningFoundations, Trus
Page 63 and 64: Name Associated Company Country46.
Page 65 and 66: March 2002, accessed April 2, 2010,
Page 67 and 68: Ok Tedi Fly River Development Progr
Page 69: Extractive Industries for Developme
Page 72: The World Bank1818 H Street, N.W.Wa

Sharing Mining Benefits in Developing Countries - World Bank

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?