International Standards for responsible mining

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1 International Standards for responsible mining

2 Why are International Mining standards usefull? Most of mining related problems/conflicts are NOT unique and there is a lot of information and lessons learned from experiences of others and mining standards are based on those lessons learned Help organisations understanding their impacts with a view to mitigating the negative and optimizing on the positive Safeguard specified social, environmental and management issues Provides stakeholders a platform for dialogue Enhances predictability to the project (communities and stakeholders know what to expect) Promote communication, transparency and reporting

3 Commonly used standards for responsible mining (1/2) The Equator Principles (EPs) - Voluntary set of guidelines for determining and managing social and environmental risk in project financing Extractive Industries Transparency Initiatives (EITI) Principles and Criteria - Standard for encouraging transparency and good governance (oil, gas and mining) Global Reporting Initiative (GRI) Mining and Minerals Sector Supplement - Reporting, focus on evaluations, empowerment and energy and materials efficiency International Council on Mining and Metals (ICMM) Sustainable Development Framework - Monitoring and verification of sustainable mining

4 Commonly used standards for responsible mining (2/2) International Cyanide Management Code (ICMC) - Emergency procedure and preparedness, Hazardous substances International Finance Corporation (IFC) Performance Standards - Operators management and monitoring systems, Environment, Social Organisation for Economic Co-Operation and Development (OECD) Guidelines for Multinational Enterprises - Principles for responsible business Responsible Jewellery Council (RJC) Code of Practices, including Mining Supplement - Occupational Heath and Safety, non-discrimination, social and community 4

5 Rankin on Standards Based on Solidad Benchmark 5 Source:

6 Most commonly used standards 6 Source:

7 Close up on IFC performance standards 7

8 International Finance Corporation (IFC) IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries Established in 1956 IFCs primary goals are to - end extreme poverty by boost shared prosperity in every developing country Currently holds a $49.6 billion investment portfolio Is one of the leading organisations promoting and mainstreaming sustainability initiatives 8

9 IFC in Kyrgyz Republic The Kyrgyz Republic became a member of IFC in Since 1996, IFC has invested more than $100 million to support over 20 private sector projects across a variety of sectors IFC promotes private sector growth in the Kyrgyz Republic by providing a wide range of advisory services IFC also seeks opportunities to increase its direct investments in microfinance, banking, energy, mining, and agribusiness IFC will provide a $40 million financing package to the Kyrgyz Republic's first private sector gold mining project (Kumtor Gold Company) 9

10 Objectives of IFC Performance Standards GUARD AGAINST UNFORESEEN RISKS AND IMPACTS Implementing the Performance Standards helps companies identify and guard against interruptions in project execution, legal claims, brand protection, and accessing international markets. IMPROVE FINANCIAL AND OPERATIONAL PERFORMANCE IFC believes that meeting the Performance Standards helps their clients to improve their bottom line. Implementation of the Standards can help optimize the management of inputs such as water and energy, and minimize emissions, effluents, and waste, leading to a more efficient and cost-effective operation SOCIAL LICENSE TO OPERATE The Standards help clients find ways to maximize local development benefits and encourage the practice of good corporate citizenship. This often results in greater acceptance of the project by local communities and governments, allowing companies to acquire a social license to operate. GAIN AN INTERNATIONAL STAMP OF APPROVAL The Equator Principles, which have been adopted by more than 70 of the world s leading investment banks in developed and developing countries, are based on IFC s Performance Standards. These principles are estimated to cover nearly 90% of project financing in emerging markets. 10

11 PS1: Assessment and Management of Environmental and Social Risks and Impact Identify project Environmnetal and Social Risks and Impacts Adopt mitigation Hierarchy Engagement with Affected Communities and other stakeholders PS2: Labor and Working Conditions Fair treatment, non discrimination, equal opportunity Good worker - management relationship Comply with national employment and labor laws Protect workers, in particular vulnerable categories Promote safety and health Avoid use of forced labor or child labor 11

12 PS3: Resource Efficiency and Pollution Prevetion Avoid, minimize and reduce project related pollution More sustainable use of resources, including energy and water Reduced project-related Greenhous Gas emissions PS4: Community Health, Safety and Security To anticipate and avoid adverse impacts on the health and safety of the Affected Community To safeguard personnel and property in accordance with relevant human rights principles 12

13 PS5: Land Acquisition and Involuntary Resettlement Avoid and minimize adverse social and economic impacts from land acquisition or restrictions on land use Avoid and minimize displacement Alternative project designs Avoid forced eviction Improve or restore livelihoods and standards of living Improve living conditions among displaced persons Adequate housing Security on Tenure PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources Protection and conservation of biodiversity Maintentance of benefits from ecosystem services Promotion of sustainable management of living natural resources 13

14 PS7: Indigenous People PS8: Cultural Heritage Ensure full respect for Indigenous People Human rights, dignity, aspirations Livelihoods Culture, knowledge, practices Avoid and minimize adverse impacts Sustainable and culturally appropriate development benefits and opportunities Protection and preservation of cultural heritage Promotion of equitable sharing of cultural heritage benefits 14

15 Streanghts of IFC standards (1/3) Continual Improvement: The aim is to allow for the Standards to adapt to changing contexts and enable the incorporation of lessons learned into new requirements. Improving Labour Requirements: The IFC has taken the initiative to improve the quality of labour standards and support through: hiring labour experts, creating a labour advisory group, training staff, and preparing guides and good practice notes to advise IFC staff and client companies on how to improve labour standard requirements 15

16 Streanghts of IFC standards (2/3) The Best on Environment: The IFC was the rigorous standard for addressing environmental issues including hazardous Substances, Tailings, Waste, Emissions, Habitats, Environmental Rehabilitation, Biodiversity, Transport, and Energy and Materials Efficiency. Enforcement Happens: The IFC has been made aware of possible violations of standards in investments, and in some cases has taken action to correct them. This shows a willingness to discipline operators who do not comply, and to rectify bad practice. 16

17 Streanghts of IFC standards (3/3) Uptake by Other Standards: The IFC PS have become the most widely-accepted framework for managing environmental and social risks of projects in the developing world. Multi-stakeholder Development: A process that is multi-stakeholder will be stronger through having more perspectives involved Civil Society has had a significant role in contributing to the IFC standards. 17

18 Weaknesses of IFC standards (1/4) Too Much Flexibility?: The IFC PS leave a lot of room for interpretation, which allows the Standard to be inconsistently applied. 18

19 Weaknesses of IFC standards (2/4) Managing Risk vs. Stimulating Development: IFC often appears to focus on do no harm instead of do some good. Its potential to safeguard the environment and society is good, but it is missing an opportunity to really stimulate meaningful progress beyond risk management. In particular, there is a need for a greater focus on community development, which is the priority of affected stakeholders, but something in which mining companies do not have the expertise. Poor Reporting: Clients of the IFC are reporting infrequently and with varying degrees of information. If the IFC were to mandate regular reporting and standardize data requirements from all client borrowers, then comparison between projects would also be more possible. 19

20 Weaknesses of IFC standards (3/4) Bias Towards Environmental Aspects: On the ground, environmental (impact assessments) is what everyone is geared up for, social assessments area newer phenomenon and it would have been helpful to have more guidance as such. Anglo-centrism: For being a global organization, the IFC is very much English language-based. Though there are documents available in other languages on the IFC website, a non-english reader would have to navigate through English web pages to get to the non-english documents and even still, most of the documents are in English. 20

21 Weaknesses of IFC standards (4/4) Poor Complaint Procedures: There are limited ways in which complaints can be made through the IFC. Complaints are only filed through trade unions or other parties (e.g. NGOs), or brought up through self-reporting. The IFC should establish a formal complaints or grievance process to mitigate project tensions. Human Rights: It is repeated over and over that IFC does not provide sufficient guidance on human rights risks. The IFC is reluctant to take on human rights but it could have positive human rights effects, and since they do not currently explicitly incorporate human rights, this gives companies the choice of also not incorporating human rights into their risk management strategies. 21