The European Bank for Reconstruction and Development (EBRD) has issued new guidance on resettlement best practices, including as applicable in the mining sector.
The guide sets out the process by which clients of the EBRD can fulfil their obligations under Performance Requirement 5 (PR5) of the EBRD’s Environmental and Social Policy when projects involve resettlement. PR5 is based on the Involuntary Resettlement Performance Standard of the IFC Performance Standards, which itself has been endorsed by the government of Canada as a best practice for Canadian extractives companies operating outside of Canada. These same standards are used by Equator Principles banks in financing decisions where the IFC Performance Standards apply. As such, the EBRD guidance is relevant for mining companies that may seek financing even where the EBRD will not be involved.
The EBRD guide provides an overview of resettlement processes, discussing planning techniques and identifying major challenges. The guide explains the roles played by each of the parties in the resettlement process – the project proponent, the affected people and the key stakeholders (such as government entities and essential services providers). The guide recommends:
- Retaining specialists, particularly for clients who have not previously carried out resettlement efforts;
- Forming a settlement team or resettlement committee to oversee and carry out the resettlement process; and
- Identifying vulnerable groups within the affected people early on, with particular attention to how gender may affect participation.
The guide highlights common challenges faced in the process and provides good practice advice to overcome those difficulties.
- Legislative Review: Local and national laws should be identified and adhered to, recognizing that they may provide insufficient protection for the most vulnerable groups, such as people lacking legal title to land. Companies must therefore also identify the areas in which local laws fail to meet the applicable standard (IFC Performance Standards, etc.) and attempt to “fill in the gaps.” To accomplish this, companies should retain experienced counsel including local practitioners where possible.
- The Census: To identify which individuals and households qualify for resettlement benefits, companies must undertake a census of affected persons. The process for giving notice to residents of an upcoming census requires careful timing. Conducting the census too early may necessitate additional or repeated steps as the residents and economic prospects of a region change over time. Conducting a census too late may result in opportunistic individuals moving onto the land in order to obtain resettlement benefits.
- The Socio-Economic Survey: Due to the uniqueness of each project and each group of affected people, no two socio-economic surveys will be exactly alike. The guide strongly recommends seeking the advice of experts, such as statisticians and accountants in preparing this document. Experts should be independent of stakeholders and, if possible, locals.
- Asset Inventory and Valuation: Valuing affected peoples’ assets is one of the most difficult, yet most important steps in the resettlement process. Assets such as informal housing will be difficult to value using traditional calculations. The guide recommends clients consider using alternative valuation methods, like the cost of replacing the building materials and allow affected people to select their own valuators where practical.
- Companies should rigorously document the land, including by way of aerial photography, to avoid attempts by opportunistic individuals to artificially increase their potential benefits.
- Livelihood Restoration: One of the final steps in complying with good practice is to establish that the livelihoods of affected people have been restored post-resettlement. This is a very difficult and nuanced concept, but the guide suggests that it can be achieved through a combination of providing options to affected people at each step of the process and careful documentation of the client’s efforts and results. It is important to note that the concept of livelihood restoration encompasses more than mere economic restoration and must account for cultural and familial considerations.
Underlying each section of the guide is the importance of consultation with and respect for affected people. A number case studies included in the guide provide examples of projects where a lack of openness and consultation with affected people resulted in consequences for all parties. Major impediments to project completion and damage to the livelihoods of affected people can be avoided simply by obtaining the opinion of affected people and allowing them to take an active role in shaping their own resettlement process. The guide asserts that companies focusing on consultation and inclusion will find it much easier to satisfy good practice expectations and improve the chances that their resettlement effort will be successful.
MICHAEL TORRANCE is a lawyer with Norton Rose Fulbright, Toronto.