going to be particularly comfortable with the juniors having to adhere to standard that maybe
some of the majors don’t’. Another view was that the extent to which the IFC has raised the bar
with this change ‘could actually serve to squeeze the junior sector out from some geographies,
because of investor perceptions of increases in project development risk’.
The Xstrata representative expressed the view that ‘the more that companies like us and Rio
Tinto and Anglo American start to say to companies, we are concerned about these issues and
if you want to be acquired by us you have got to get this right, there is sort of an incentive for the
juniors to address these issues more seriously.’
The Rio Tinto representative observed that ‘a lot of the juniors … think [community engagement]
is just a kind of luxury or add on [because] it costs money … and they just want to get on with
digging ore out of the ground. They regarded this as a distorted and outdated perception as ‘the
digging the hole bit’s easy, its what’s outside the mine fence and engaging successfully there
that’s the key to business going forward’. Faced with this situation they suggested that ‘the things
that we are talking about are not necessarily about … spending a lot of money, they are really
about fundamentally starting from the point of view that … if you don’t have [communities] on
board then you don’t have a project, so you better figure out a way to engage and discuss and
set up vehicles for this sort of thing and that doesn’t cost money’. Addressing how pressure can
be put on these companies to obtain community consent they answered that ‘it is a role for the
industry to lift the standards and to publicise what is good practice’
Paths towards operationalization
a) Capacity Building
The centrality of capacity building, at both the community and company level, and the importance
of addressing community expectations around benefits was a theme raised in several interviews.
The Rio Tinto representative noted that ‘there’s capacity building and new skills learning on both
sides of the relationship and trust building’. On the community side this was ‘critical, because
they are not used to dealing with … major global corporations and don’t necessarily have the
financial or legal skills to make sure they are covered’. They also noted that ‘part of the capacity
building is … an understanding of business and how it works’ as ‘a lot of communities get
disappointed’ in relation to the benefits that are realistically available to them. On the corporate
side capacity building involved ‘learning about communities ... building a knowledge base about
them and figuring out effective ways to communicate and consult and engage, and those are
skills which mining companies still [lack].’ It also involved a shift of mind-set, which necessitated
that company leaders recognize ‘the moral and business imperatives of [indigenous participation
in decision-making], and not swallowing the notion that aboriginal people are necessarily antidevelopment, [but realizing that] they just want to be involved in it and have a real decision about
how it’s to proceed, if it’s to proceed.’
The Xstrata representative pointed out a challenge existed because of project durations as the
exploration phase may last for several years so ‘there is a lot of confusion and misconception
about the different phases of the project’ with community members losing ‘track of where they
are’ which in turn ‘creates a lot of misconception and can lead to tension’.
The BHP Billiton representative expressed the view that capacity development ‘is really important
and the mining company will always be somewhat compromised in that space, so the role of an
independent body [selected by the community] is probably pretty fundamental’ to its realization.
This need for capacity building was also recognized as applying to investors. The Anglo American
representative noted that there was a risk ‘that as a result of the IFC / Equator bank approach it
becomes a case of finance people saying “show us your consent” and divorcing consent from the
engagement processes and on-going relationships’, thereby transforming it into a bureaucratic
tick-box legalistic exercise.
A positive example of capacity building was raised by the Anglo American representative in the
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Making Free, Prior and Informed Consent a Reality