The International Council on Mining & Metals (“ICMM”) has released new guidance on land acquisition and resettlement for the mining sector, capturing practical insights and lessons learned.
The guidance builds on international standards such as International Finance Corporation (IFC) Performance Standard on Environmental and Social Sustainability (“IFC Performance Standards”) Five, “Land Acquisition and Involuntary Resettlement”. Notably for the Canadian mining sector, IFC Performance Standard Five has been endorsed as a best practice by the Government of Canada, under the Federal Corporate Social Responsibility (CSR) Strategy for the Extractive Sector (“CSR Strategy”). The renewed 2015 CSR Strategy contemplates possible withdrawal of Canadian Government support for companies that are found to deviate unacceptably from such endorsed standards.
By consequence, the ICMM’s guidance should be quite relevant for any Canadian mining companies engaged in international operations facing resettlement issues.
IFC Performance Standard Five applies a mitigation hierarchy to the impacts of potential resettlement. The hierarchy requires consideration of ways to avoid resettlement. Where avoidance is not possible, it requires minimization of displacement and exploration of alternatives in project designs. Where not possible, displacement impacts should be addressed through compensation where appropriate, information and consultation (with the potential for free prior and informed consent to apply where indigenous rights are affected). Resettlement may also include improving living conditions among physically displaced persons through the provision of adequate housing with security of tenure at resettlement sites. The standard also sets out a process and best practice for identifying who will be displaced and development of a resettlement action plan, which may exceed legal requirements to meet international best practice. This could involve land-based compensation, or monetary compensation for loss of assets, or programs to improve or restore standard of living.
A key initial step is to assemble a team composed of social, environmental and project planning experts. Legal considerations are also relevant, as a first step will be to conduct gap analysis with legal requirements and international standards. Gaps in which host country laws provide less protections than contemplated by international standards, will encourage adoption of the international best practice to manage risk. Cooperation with local governments to develop legislative frameworks may be part of the process.
In identifying impacts and planning, baseline data collection is identified by the ICMM as critical. The effect of sociocultural factors and communal resources should also be studied in the impact assessment phase.
Stakeholder engagement should be part of the impacts assessment and planning process, as well as part of the development of resettlement plans, physical resettlement and livelihood restoration.
Early and continued engagement and management of expectations are identified as key lessons for the stakeholder engagement process. The establishment of grievance mechanisms to allow for concerns to be raised in a manner consistent with cultural characteristics will also be critical.
The ICMM recommends, consistent with the mitigation hierarchy approach of the IFC Performance Standards, that in preparing resettlement packages should focus on land-based rather than monetary compensation. Key considerations include eligibility requirements, choice of resettlement site and provision of housing and facilities. While cash compensation should be avoided, as it is the least adequate type of mitigation, where it is provided, valuations should be open and transparent. Sustainable livelihood restoration can be complex and require ongoing engagement and planning. Employment opportunities associated with the mining project can be part of this. Throughout the process the needs and interests of vulnerable groups should be closely considered.
Benefit sharing strategies can also be integrated with resettlement planning. This would include negotiated impact benefit agreements, or strategies of shared value. Monitoring, evaluating and ongoing reporting of resettlement plans is recommended as part of the management process.
The ICMM’s report is a useful source of insights on the practical implementation of international standards, and those endorsed by the Government of Canada, on the complex topic of resettlement and worth a look.
Michael Torrance is a lawyer in Northern Rose Fulbright’s Toronto office.