mining conference presentation bs nagaraj

7/29/2019 Mining Conference Presentation BS Nagaraj

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2006 Hill & Associates Mitigating the Risks of Globalisation

Sustainable Mining and Local Communities:

Maximizing Stakeholder Benefits through Effective Social Impact

Management

Assocham conference on Indian Mining and Metal Sector: Turning Risks

into Opportunities

B.S.Nagaraj

Hill & Associates


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India: A Global Mining Destination in the Making

Large Resources base

Estimated 82 billion tons of reserves ofvarious metals yet to be tapped

Fourth in iron ore production and sixthin reserves; fifth in bauxite production;

third in coal production

Policy changes, coinciding with risingglobal demand, beginning to showresults

FDI flowing; Posco & Mittal sign MoUsmany others in the pipeline; Projectedinvestments at over USD 50 billion over10 years

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Outlook rosy but concerns remain

Mining sectors contribution to GDP at a low of around 2.5%;sectors contribution to Australian GDP in 2004-05 8%

Indian mining pulled back growth of Indian economy

Policy frameworks need alignment with those in developed mining

economies

Lack of communitys confidence in resources-based industrialization

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Community is key to success

Investment Climate: Influencers

Security

COMMUNITY

Politics

Policy

Investment Climate

Infrastructure

Law

Supply Chain

Community becoming the biggest hurdle for growth

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Absorption of Investments

Rising Community Opposition aNightmareOrissaJharkhandAndhra Pradesh

Projects have faced

protests/disruptions

NGOs, interest groups, political partiescatalysts

Looming Threat of Cost & Time Overruns

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Community Opposition: Why? 1

Most mineral-rich clusters inhabited by population which relies

on land for livelihood

Land being central to their sustenance, displacement is a bigissue

Rising awareness of rights as a result of mobilization by NGOs,interest groups

R&R policy landscape inadequate in addressing concerns

Constraints on making land-for-land mandatory

Community ill-equipped to take advantage of cashcompensation

Clamor for jobs but opportunities limited; skillsets paucity

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Community Opposition: Why? 2

Industrys commitment towards community & sustainablemining largely missing

Reliance on quick-fix/firefighting solutions

Inability/Unwillingness to recognize community as the centralstakeholder

Over-dependence on government to show the way

Unwillingness to go beyond compliance

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Community: Core R&R Demands

Land for land

Employment

Consultation

R&R customization

Skill upgradation Environment Protection

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Community Management: Why the Failure? 1

Kneejerk responses & patchwork

strategies by government, industry

R&R policies do not anticipate long-term adversarial trends

R&R policies not backed up by otherenablers

Lack of transparency about projectinformation

No effort to set realistic communityexpectations

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10/17 2006 Hill & Associates Mitigating the Risks of Globalisation

Community Management: Why the Failure? 2

PROJECT

Concerns

ResponseSocio-economic

context

Social impactmitigation

Projects suffer risk of failure if they fail tounderstand the community

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Better Management of Conflict: How?

Hill & Associates Sustainable Mining Framework

Comprehensive Social Impact Assessment (SIA) Community Development Plan Stakeholder Consultative Forum

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Why Social Impact Assessment?

Definition

Process of assessing/estimating in advance social consequences, bothpositive and negative, of project developments/actions

Make SIA mandatory on lines of EIA; tie it to project approvals

Components Assessment Mitigation

Consolidation of Key Learnings Monitoring Audit

Benefits Estimates social cost

Increases stakeholder benefits Minimizes community resistance Reduces project disruption & increase project success Reduces project cost in the long run

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Assessment of Mitigation Measures

Communication Strategy

Measurement Tools

Prediction Techniques

Baseline Data Collection

Implementation Strategy

Socio-economic context

Project Nature/Size

Law & Policy

SIA The Stages

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Stakeholder Consultative Forum

Stakeholder Consultative Forums (project-specific for industry &mineral area-wise for government)

Benefits

Better understanding of stakeholder concernsMore transparency and information sharing

Lower mistrust between industry-government & community

Information sharing & dialogue critical but platform missing

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Community Development Plan

Envisages

Assessment of socio-economic needs of community Designing of need-based development plans for

expanding livelihood options

Benefits Increases goodwill for project proponent Enhances visibility of corporate social performance Contributes to goal of sustainable mining

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To Conclude

Social Risk posing biggest challenge to industrialization

Social Risk more difficult to mitigate, and combined with

other factors the risk landscape becomes more complex

Incorporating best practices in community management key

to minimizing conflict and achieving success

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17/17Mitigating the Risks of Globalisation

Thank You

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mining conference presentation bs nagaraj

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