Building Beneficial Relationships for All Sides

A most important group of stakeholders is the local community. The way mining companies manage their relationship with society is a critical factor in the success of their activities. Companies have come to realize that close relations with the local community is important to enhance the community’s capacity to deliver social services, to promote growth of the local economy and to allow the traditional cultures and lifestyles of local people to flourish, particularly after mine closure.

Some mining companies formulate their relations with their communities through negotiated agreements, such as the Cominco-NANA agreement (Red Dog), the Raglan agreement between Falconbridge (now Xstrata) and Makivik Corporation, and the Musselwhite agreement between Placer Dome (now Goldcorp), First Nations groups and government shareholders. These agreements cover several elements such as preferential employment opportunities for local people, education and training commitments, financial compensation, preferential business opportunities and environmental commitments.

Many companies have developed social investment programs in the communities affected by or near their projects, such as participating in alliances with other businesses that have community involvement activities, giving money or contributing employee volunteers, contributing to government programs that promote community development in the locality or region, or establishing and facilitating community development initiatives through corporate foundations.

The question is: how can mining companies create positive impacts for all sides, including the companies themselves? Certainly a successful strategy that would benefit all sides involved would be constructive input from each of the three main groups of participants–government, private enterprise and society.

Co-operation between government, industry and NGOs for sustainable development can be grouped into several categories:

* co-operation between the government and industry via negotiated agreement when the government delivers initiatives;

* co-operation between the government and industry whereby the government assigns the responsibility for delivering initiatives to an NGO;

* companies establish nonprofit organizations through which they direct initiatives;

* co-operation between the industry and already established NGOs, whereby the NGOs deliver initiatives.

Tri-sector partnerships help build trust and confidence among the industry, government and societal organizations by allocating roles and responsibilities among the partners and defining expectations from each other. The success of such partnerships depends on the strengths, competencies and resources that businesses, governments and civil society can bring together. Mining companies can contribute their expertise in supply chain and project management, engineering, infrastructure and logistics. Governments can provide strategic co-ordination and expertise in public services. Social organizations can contribute their capacity to mobilize community participation.

The partnership approach to social investment offers a number of valuable benefits. Bilateral “corporate-community” partnership helps to moderate community expectations that could otherwise escalate into conflicts and potential disruption to operations. Partnerships between the company and civil society that include government agencies have helped to improve the long-term physical and political sustainability of social investments. Partnerships have helped define local priorities for social investment, assign responsibilities, apportion costs, establish accountabilities and resolve conflicts. Partnerships improve understanding and trust. As well, partnership may guarantee the success of social investment and may help to protect both local and global corporate reputation. In addition, the benefits of tri-sector partnership to companies include potential cost-saving via leveraging resources, skills-sharing, reducing dependence, networking and collaboration.

In other words: All sides benefit.