2013 The International Institute for Sustainable Development

Transcription

1 Sustaining Mining Investments in the Evolving Context of Sustainable Development: The Legal Perspective Tangla Hotel Beijing (19 Fuxingmen Street, Chang an Avenue West, Beijing, China) April 25, 2013 Background and Challenges Global investments in mining and other extractive sectors have risen exponentially in the past 20 years. Since 2006 or so, China has become an active player in international mining investments, now ranking as the country s second largest sector of outward capital flows according to MOFCOM. Indeed, Chinese outward investment in this sector includes six continents now, and scores of individual countries and minerals. And China s resources for making future investments continue to grow. China s objectives in these investments range from securing minerals and energy resources for its own growth, to supplying export industries with product inputs, to acquiring or expanding technology and its applications, and to participating directly in global commodity markets. Increasingly, however, the objectives of capital investors have to be made to match the objectives of capital importers. Nowhere has this become more evident than in the natural resources/extractives sectors. Like companies from elsewhere, Chinese investors have faced circumstances leading to the shutdown of mining operations, community demonstrations, contract renegotiations, significant labour strife, and complaints over the deterioration of Chinese investments in related infrastructures. Some salient examples are the repeated labour strikes in Shougang s Marcona mine in Peru, the antimining protests against Chinalco s Toromocho copper project in Peru, the riot in a Chinese-owned Collum coal mine in Zambia as well as the surging anger and criticism towards China Songangol s poor performance in its Resources for Infrastructure projects in Angola and Zimbabwe. Chinese companies and officials are increasingly aware of these facts and the need to address the demands and expectations in countries where investments are being made, and the risks that access to investment opportunities will depend increasingly on meeting those expectations of host states. In recent years we have seen more and more Chinese companies are reporting about and responding to these issues, including with various stakeholders both at home and abroad. Yet, the challenges continue and require even more serious examination and more constructive approaches at the company level as well as state policy level than ever before. The ongoing effort to develop the Guidelines of Sustainable Overseas Investment and Operation of Chinese Mining Enterprises shows

2 an appreciation of this need. However, the issues today go well beyond the now traditional environmental concerns to include a comprehensive set of other sustainable development related issues. Emerging Solutions: International Legal Instrument The leading explanation of the content of the growing demands of developing country capital importers is seen in the development and ongoing implementation of the African Mining Vision, which aims to fully integrate mining projects into development policies by enabling nations to negotiate contracts that generate fair resource rents, stipulate local goods and services inputs for operations, seek to ensure sustainable benefits for local communities, and promote environmental protection. In essence, what is at stake now is a demand to fully reflect the social, economic and environmental dimensions of sustainable development. Moreover, this reflection is being required for both the national level and community level where the mine is located. Traditional approaches to investment contracts and investment treaties are not able to address the range of issues now being seen. Even more risky, reliance on strict instruments such as stabilization clauses is not stopping governments from mandating contract renegotiations or preventing changes in revenue regimes. International investment treaties may allow damages to be recouped in some cases, but their use often means the end of a productive relationship, and production, in the host state. Indeed, organizations such as the International Council on Mining and Metals have acknowledged that in some circumstances reliance on these instruments can make it even more difficult to find solutions. In addition, the changes in the relationship between host state governments and their own local communities mean that recourse to the use of force by local police or external security forces has become an unacceptable approach today. Witness the immediate recourse to a full public enquiry in South Africa following the police shooting of 44 demonstrators at a platinum mine of Lonmin in Marikana South Africa last year. As a result, new and more broadly based legal instruments are now surfacing at the international level in their place. The goal of the proposed Workshop is to consider how these new international legal instruments can help Chinese companies address the challenges raised by these factors and develop advanced contracts that will work in practice in the future. What is needed in international legal instruments today to help ensure the success of Chinese investments in the sector? Neither the challenges today, nor the potential responses to them, are unique to China. But the ability or inability in some cases to find and implement responses in coherent and effective ways will impact competitiveness either positively or negatively in the near future.

3 The Goal of the Workshop The Workshop will examine these issues through the policy lens used in the African Mining Vision, the legal lens of the International Bar Association s Model Mine Development Agreement (MMDA), and other instruments that address the relationship between mine development and sustainable development in the host community and host state. The African Mining Vision can be understood as embodying the growing set of expectations of all developing countries in this sector, not simply African countries. The MMDA provides a coherent international legal instrument that sets out approaches to respond to these demands, as seen by leading international mining lawyers and sustainable development experts. Both of these leading documents are intended to enhance investment in the sector, but to also reorient that investment so that it meets the needs of all stakeholders. The Workshop will examine what this means in practice: What are the key elements social, legal, economic and environmental? What are the key tools and processes, and at what levels of society in the host state? Are traditional diplomatic and aid tools useful or sufficient to address these challenges? What other legal and soft law approaches are being developed today? The Workshop would then focus on how China and Chinese companies might use the emerging international legal instruments within its own capital exporting context: What legal tools and related standards might make the most sense? What issues need priority addressing? What existing Chinese standards, policies and regulations might be relevant to identifying new approaches to solutions that expand market access? What processes might be most useful in China in better understanding and utilizing the international legal instruments? If the Workshop identifies a demand to develop an ongoing process to further examine and develop responses for further study and review, IISD would be available to work with partners in China to bring our dynamic understanding and expertise from legal perspective to work with partners identified through the Workshop.

4 Sustaining Mining Investments in the Evolving Context of Sustainable Development: The Legal Perspective Tangla Hotel Beijing (19 Fuxingmen Street, Chang an Avenue West, Beijing, China) April 25, 2013 Agenda Time Issues for Discussion Speakers 9:30-10:00 Welcome, Introduction of participants and purpose of Workshop China s outward investment in mining, Ms. JIN Jiaman, Executive Director of GEI Mr. Scott Vaughan, President of IISD Mr. CHANG Xingguo, chief of international mining finance program, China Mining Association

5 10:00-10:45 The roles of sustainable development in Chinese mining companies outward investment Mr. CHEN Xiaohong, Former director and senior research of Research Centre of Enterprise, Development Research Center of the State Council MS. YAN E, Head, Department of Policies, Laws and Regulations, Ministry of Environmental Protection 10:45-11:00 Tea break 11:00-11:45 The growth of host country demands and expectations in relation to mining investments: The African Mining Vision and contract renegotiation in Africa as an example Scope of issues Sustainable Development as a guiding concept Key expectations of African states as host states Levels of engagement: national, regional government, community (incl. NGOs) Prof. Dr. ZHANG Jianping Director, Dept. of International Economic Cooperation Institute for International Economic Research, NDRC Mr. Antonio Pedro, Director, United Nations Economic Commission for Africa, Sub-regional Office for Eastern Africa

6 11:45-12:30 The International Bar Association s Model Mine Development Agreement Development Underlying principles Design and relationship to domestic law Scope Transparency Dr. Howard Mann, Senior International Law Advisor of IISD, Member of IBA Administrative and Drafting Committees for the MMDA 12:30-1:30 Lunch 1:30-3:00 Legal aspects examined in more detail Governance Economic and social development Environmental issues Human rights as a key feature: Prof. John Ruggie s work on Business and Human Rights and the emerging UN standards A legal perspective on other emerging international standards on security, relocation, environmental assessment, environmental management, etc. Dr. Marit Kitaw, Governance and Public Administration Officer, Sub-regional Office for Eastern Africa (SRO-EA) of the United Nations Economic Commission for Africa (UNECA): "The evolving governance architecture in the extractive industry in Africa" Mr. ZHANG Shiguo, director, department of Planning Research, China Industry Overseas Development and Planning Association Simon Zadek, senior fellow, IISD; visiting scholar in Tsinghua University

7 3:00-4:00 What role can these international legal instruments play for China and Chinese companies, and what existing Chinese standards, policies and regulations are relevant? The MMDA in different contexts Other international legal and related instruments : IFC, ICMM and other international standards 4:00-4:15 Follow-up and conclusions Is there a basis for developing a Chinese model outward investment contract for mining sector? Co-hosts summary and proposals for follow Free discussion and expert comments co-host Speakers and participants include experts from academia, the Chinese government, the Chinese enterprises, Africa, and the International Institute for Sustainable Development (IISD). The workshop is bilingual (English and Chinese). Simultaneous interpretation is provided.