May 08, 2002

Mining Industry Reports on Its Problems, but Remains Vague on Solutions
    by William Baue

A new report identifies the global mining industry's social and environmental pitfalls, though its recommendations may prove hollow, according to an industry watchdog.

SocialFunds.com -- Last week, the Mining, Minerals and Sustainable Development Project (MMSD) released its study of the global mining industry entitled, Breaking New Ground: Mining, Minerals, and Sustainable Development. The report acknowledges the mining industry's hesitancy to identify its social and environmental liabilities, but asserts the necessity for the sector to confront these shortcomings if it is to shed its negative image. However, the voluntary and overly general nature of the report's recommendations may reveal the industry's lack of true commitment toward sustainable development, according to MiningWatch Canada, a nonprofit organization that monitors the industry.

"From the industry perspective, taking part in this project was a risky business," said Sir Robert Wilson, Chairman of Rio Tinto plc (ticker: RTP). "It was nevertheless an essential step, not least for business reasons. The industry realised it is difficult to do well as a business when you belong to an industry that has a bad reputation. If we allowed the widespread negative attitudes to our activities to go on, we would eventually have difficulty accessing resources in the ground and markets for our products."

In 1999, nine of the world's largest mining companies established the Global Mining Initiative (GMI) in order to assess the industry's social and environmental impacts. In April 2000, the GMI, in conjunction with the World Business Council for Sustainable Development (WBCSD), commissioned the International Institute for Environment and Development (IIED) to initiate the MMSD project. The intention of the MMSD project has been to present the resulting report at the World Summit for Sustainable Development this September in Johannesburg, South Africa.

The MMSD project, which had the financial support of 28 mining companies, established four regions of concentration (North and South America, Southern Africa, and Australia) with additional coverage of 16 nations outside these regions. The report's conclusions grew out of 175 commissioned studies and 23 global workshops, as well as feedback from a seven-week public review period of the preliminary findings. The report identified both challenges and solutions.

Among the nine challenges were issues such as indigenous rights, corruption, waste management, transparency of information, oversight of artisanal and small-scale mining (ASM), and integration of regulations. The MMSD report explains that the heterogeneous nature of the mining industry precludes the recommendation of specific solutions, hence the generalization of its conclusions. However, critics of the mining industry suggest an alternative explanation.

"We consider the MMSD to be a well-resourced attempt to distract public attention from the many environmental and social costs of mining--at all its stages," said Joan Kuyek, the national coordinator of MiningWatch Canada. "It is just rhetoric until the industry pays the full costs of its operations, including reclamation and monitoring in perpetuity; until it takes responsibility for abandoned mines; until it respects the rights of indigenous people to say no, and the livelihoods of small scale miners; and until it stops its corrosive lobbying for tax breaks, trade deals, the repression of unions and human rights."

For example, the report encourages companies to act as if permission is needed to access indigenous lands, even if no law requires such authorization. Although this suggestion makes ethical sense, it expects a degree of self-regulation that may not be realistic, considering the industry's historical precedent.

The MMSD report acknowledges the mining industry's checkered past in rectifying environmental damage from mining activity. The report recommends the establishment of a Mineral Legacies Initiative to clean up abandoned mines and other remnants of mining's environmental and social destruction.

However, the report does not recommend any accountability or legal regulation requiring such cleanup. Similarly, the report recommends the establishment of global "Complaints and Dispute Resolution Mechanism," but it does not provide any binding framework for enforcement or punishment.

"Promoting a voluntary international body to arbitrate disputes is an insult to all those communities and governments that have been battling for responsible mining practices for years," said Ms. Kuyek.