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Natural Resources

Mining Benefits Fail to ‘Trickle Down’

SYDNEY, Jun 22 2013 (IPS) - With South-South trade on the rise and growth in emerging economies set to outstrip production in industrialised countries, the international mining sector has been quick to follow global trends.

In recent years, significant mining activity has moved from the developed to the developing world, with the latter’s share of global trade in minerals increasing from less than one-third in 2000 to nearly half in 2010.

Doris Eaton, Co-Chairperson of Yamatji Marlpa Aboriginal Corporation, the Native Title representative body for the Traditional Owners of the resource rich Pilbara, Murchison and Gascoyne regions in Western Australia. Credit: Neena Bhandari/IPS

Doris Eaton, Co-Chairperson of Yamatji Marlpa Aboriginal Corporation, the Native Title representative body for the Traditional Owners of the resource rich Pilbara, Murchison and Gascoyne regions in Western Australia. Credit: Neena Bhandari/IPS

A landmark 2012 publication by the International Council on Mining and Metals states that there have been huge investments in recent years in Latin America, Africa and parts of Asia, which are likely to escalate in the next 10 years.

Forty countries, including Australia, China, Brazil, Russian Federation, India, the United States and Canada, are heavily dependent on mineral exports; and 30 of them, including Chile, Peru, South Africa, Zambia and the Democratic Republic of Congo, are low- or middle-income countries.

Mining ventures have brought mega profits, but also sharp scrutiny, with activists raising thorny questions about transparency, gender equality and community development in this sprawling and largely unregulated sector.

The World Bank estimates that today there are 15 to 20 million artisanal and small-scale miners, with about 80 to 100 million people depending on such mining for their livelihood.

Around 3.5 billion people live in developing countries that contain vast deposits of coal, iron ore, copper, gold, nickel, bauxite and zinc, but most are deprived of the benefits from their nation’s mining bonanzas, especially women, who also bear the brunt of the sector’s many negative externalities.

Oxfam Australia’s work with communities around the world has shown that the impact of mining is not gender neutral. “Women often experience the negative impacts of mining more than men, and rarely receive the benefits that men do,” the NGO’s mining advocacy advisor, Serena Lillywhite, told IPS.

“There is also a concern that they are not actively involved in project decision-making, benefit-sharing agreements or revenue payments as women are seldom at the table when mining projects are being negotiated,” she added.

Over the last few decades, several gender impact assessment frameworks have emerged, but there is no “one size fits all”. Oxfam’s gender impact assessment tool helps industry to assess the gender-specific impact of mining. It can assist companies to ensure that mining projects are responsive to women’s needs and interests, and also promote women’s participation in planning and implementation of projects.

Doris Puiahi, project manager in Solomon Islands of the inclusive natural resource management project of the Melbourne-based NGO Live & Learn Environmental Education, and her team have been working with heavily logged rural communities in the Solomon Islands. This archipelago in the south-west Pacific Ocean has observed similar trends.

“There is currently only one gold mine in Guadalcanal Province, central Solomon Islands,” Puiahi told IPS, “but as mining interests increase, most women fear they will be disempowered further.

“The 40-year-old logging industry hasn’t brought any development and people are unhappy with how royalties are distributed: only about 10 percent of profit goes to the community. But as profits are not usually disclosed, people don’t really know if they are actually getting even 10 percent of the profits made.”

With resource wealth comes the inevitable risk of conflict. As of Jun. 8, the World Bank Group’s Compliance Advisor Ombudsman (CAO) had a total of 114 cases (from the 2000-2013 period) across multiple sectors – predominantly extractive industries, infrastructure and agribusiness – in 40 countries; 38 of these conflicts are active in 19 countries. A total of 59 cases revolve around extractive sectors (oil, gas, mining and chemicals), of which only 21 are mining-related.

Whether it is minerals under the ground, land acquired for infrastructure or agriculture, or water used for irrigation or industrial purposes, competition between local communities who depend on those resources for their livelihoods, and developers who require those resources for their commercial activities, often leads to conflict.

“Population increase is creating more competition for these resources worldwide,” CAO’s vice-president Dame Meg Taylor told IPS. Two recent cases that have come to CAO relate to the International Finance Corporation and Multilateral Investment Guarantee Agency’s support for early mining exploration activities in the Philippines and Indonesia, where communities have expressed concern about the potential impacts of these projects on their ancestral land, water, fields and forests.

Women’s participation in decision-making, and ensuring that they receive their due share of mining wealth, will be crucial to sustainable socio-economic development in resource-rich countries. Thanks to rising demand for coal and iron ore from China, India and other developing countries, Australia has witnessed unprecedented growth in the mining sector.

The Yamatji Marlpa Aboriginal Corporation (YMAC) is the native title representative body for the traditional owners of the Pilbara, Murchison and Gascoyne regions in Western Australia, which are home to massive crude oil, salt, natural gas and iron-ore mining operations.

The Corporation’s co-chairperson, Doris Eaton, told IPS, “Over the last decade, we have seen one of the largest mining booms in our history. We are losing the beautiful valleys where our old people walked, important ceremony and story places and land that is home to rare species of animals and plants.”

The mining sector contributes around 11 percent to Australia’s GDP, with export revenues from the sale of mineral and energy commodities forecast to be 171 billion U.S. dollars in 2012-2013. There are currently 98 projects, worth 239 billion dollars , at an advanced stage of development.

Emphasising that it is vital for indigenous people to receive compensation for the loss of their land and heritage, Eaton said, “Native Title (which recognises the traditional rights and interests of Aboriginal and Torres Strait Islander people to land and water) groups do not have equal negotiating power with mining companies and when companies mine, they change a country forever.

“Our people want to be genuine partners and have a say in how compensation from mining is used for creating jobs, security and a positive future for our young people.”

A study released last month by University of Melbourne Researcher Sara Bice has found that big miners’ corporate social responsibility or sustainable development programmes run the gamut from philanthropic donations to public-private partnerships, but can create a disturbing dependency over the long term, with communities often given money for projects they don’t need.

“For example, one school principal spoke of how his school received a sunshade, and one community received donations for the local football team guernsey. In another instance, principals didn’t openly resist a mining company attempting to influence the local school curriculum as they feared rebuffing the company could lead to withdrawal of funds,” Bice told IPS.

Respondents in remote communities studied expressed concern over the short-term and ‘superficial’ nature of such responses to community needs. Bice said, “The case studies found that these programmes are misaligned both with company policies which have been progressively working to promote long-term ‘sustainable’ development and with community needs, concerned with the lasting viability of their communities.”

According to civil society campaigners, governments need to step up and be more open about the income they receive from their resources industries. More countries need to commit to implementing the Extractive Industries Transparency Initiative (EITI), the global standard for transparency of government revenues from natural resources, which requires full disclosure of taxes, royalties and other fees from the country’s oil, gas and mining sectors.

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