Sharing Mining Benefits in Developing Countries - World Bank

of voluntary contributions companies pay an additional 3.75 percent oftheir sales over a five-year period to support social development projectsin their host provinces.The Fondo Solidaridad Cajamarca (FSC) is the fund developed byMinera Yanacocha to meet its commitments under the scheme. All of theprojects supported by the FSC are aligned to the priorities and investmentplans of the local, regional, and national government. Critically,investments in complementary projects, basic infrastructure, and institutionalstrengthening are supporting the implementation of projects usingcanon minero financing. As such, the activities of the FSC both generatedevelopment benefits directly and also enhance the impact of fundsderived from the canon minero.Leading Practice: Partnership, Governance,and SustainabilityThe definition of leading practice for an FTF model can vary significantlydepending on the perspective of the stakeholder. For example, a highlyparticipative governance structure may meet community requirements andbe seen as a successful model by those stakeholders. At the same time itmay be deemed a failure for the company because of its inability to controlthe activities of the FTF. Recognizing these different views, three areas ofleading practice were evident in the case studies undertaken: participation;strong governance; and sustainability. Application of just one aspect of leadingpractice does not imply that an FTF is a success within its local context.ParticipationHigh levels of participation are seen to be leading practice in mining FTFs.As described in Chapter 3, there are a number of methods for increasingparticipation, from soliciting community proposals for projects to includingstakeholder representatives on the FTF’s governance structure. Typically,the greater the participation of beneficiaries in the design of the FTF, thegreater the sense of ownership in the beneficiary community. By engagingstakeholders in design discussions, the FTF is likely to better representthe needs and desires of the community. It must be noted, however, thathigh levels of participation in the design of an FTF can greatly extend thetime required to develop the FTF, likely delaying the commencement ofactivities. As such, FTF owners need to be certain that they have sufficientsocial capital within a community, and sufficient flexibility in their managementapproach, to accommodate a significant design phase.42 Sharing Mining Benefits in Developing Countries