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February 22, 2002
Mining and Minerals Sector Trying to Clean Up Its Act
by Susan Wennemyr
Large international mining companies, in an effort to improve their image with investors, are
working on a project to define how the industry can best contribute to global sustainable
development.
SocialFunds.com --
Sometime in the next few weeks, the Mining, Minerals, and Sustainable Development
Project (MMSD) will release a report that has been two years in the making. The report will
suggest practical means by which the mineral and mining industries can make their practices
conducive to sustainable human and ecological development.
 MMSD was established by the London-based
International Institute for Environment and Development, under contract to the World Business
Council for Sustainable Development (WBCSD). The report's completion was consciously planned to
coincide with the UN's upcoming World Summit on Sustainable Development (Rio+10), which will be
held in Johannesburg, South Africa from August 26 to September 4, 2001.
Mining companies
are proactively seeking global operating standards in an effort to put a better public face on the
industry. They are getting increasingly worried that large financial institutions will abandon the
sector, which would increase mining companies' cost of capital and insurance.
There are
28 mining companies participating in MMSD, and each has given at least $150,000 to sponsor the
project. Participants include Freeport-McMorRan (ticker: FCX), Placer Dome (PDG), and Rio Tinto (RTP),
companies whose operations have been linked to human rights abuses and major environmental
degradation in the past.
Sir Robert Wilson, chairman of Rio Tinto, said, "A pressing need
for the mining and metals industry is the need to overcome poor public perceptions of our
industry's performance in relation to the environment, and our consequent growing vulnerability to
increased regulation based not on scientific analysis but popular prejudice."
Environmental and human rights activists are hoping that the final MMSD report will spell out
monitoring and certification mechanisms. MMSD literature indicates that the organization is open
to establishing inspection panels, though only as a measure of last recourse. MMSD itself will not
become a monitoring agent, as its charter requires its dissolution in August of 2002.
But
is it greenwash? Undoubtedly to allay such fears, MMSD stresses that corporate sponsors have a
partnership with other stakeholders and that all meeting proceedings are fully transparent.
Stakeholders are represented in the project by 24 people who have varied backgrounds in such areas
as the environment, international law, and economic development.
MiningWatch Canada, a
mining industry watchdog, is one of a number of organizations that fear MMSD may not improve
performance. MiningWatch's Catherine Coumans says that some high standards are being discussed,
but it remains to be seen if those standards make it into the final list of recommendations.
MiningWatch chose not to participate in MMSD.
Dr. Coumans also voiced concern about the
implementation of standards, noting the disjunction between present goals of mining companies and
their actual practices in the field. "It's what happens after Rio +10 that counts," Dr. Coumans
said.
Industry accounts are more optimistic about outcomes. De Beers Group chairman Nicky
Oppenheimer defends existing self-regulated practices in the diamond industry, contending that the
vast majority of diamond operations are an agent for growth and development in local areas.
Nevertheless, Dr. Coumans reports that communities affected by mining oppose the work of MMSD.
She said that communities view the MMSD project as a propaganda mechanism. They believe the mining
industry is panicking over the public's increased awareness of its actual conduct.
Can
such an array of interests come to agreement in the final report of MMSD? Even if it does
establish high standards, MMSD can recommend, but not require, particular practices. The MMSD
participants do, however, hope to influence policy making in a number of countries.
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SRI World Group, Inc. All Rights Reserved.
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