© MEA 2006 V 1.0 08/2006

Socio-Environmental

Impacts of MiningSocial Impact – Key Issues

David Brereton

July 16, 2015 © MEA 2006

Social Impact – Key Issues

July 16, 2015 © MEA 2006

What are social impacts?

The term ‘social impacts’ refers to the

effects – positive as well as negative – that

mineral operations can have on individuals

and communities.

July 16, 2015 © MEA 2006

Social impacts that can result from large-scale

minerals developments

Loss of amenity due to traffic, noise, dust, visual impacts,

etc.

Public concern about health risks

Relocation

Demographic changes – population growth; change in

community composition

Cultural changes – introduction of new influences; erosion of

traditional values & identity

Changes in wealth distribution and forms of income

generation

Increased social strains in communities

Improved services.

July 16, 2015 © MEA 2006

Why do project planners need to take account of

social impacts?

Legal requirements - SIA now required as part of

the EIS for major projects; native title & cultural

heritage

The ‘social license to operate’ – failure to take

account of, and respond to community concerns,

can lead to conflict with community, damage to

corporate reputation, etc.

Obligations created by company and industry

policies and codes.

July 16, 2015 © MEA 2006

Identifying potential social impacts

Characteristics of the operation

Where will the operation be located?

What will it produce and what inputs will it

require?

How will materials be transported to and from the

operation?

How many people will it employ?

Where will employees come from and where will

they live?

July 16, 2015 © MEA 2006

Identifying potential social impacts, cont’d

Community characteristics

What is the size, economic base, demographic composition,

etc. of nearby communities?

How might the proposed development alter the make-up of

these communities?

What concerns, expectations, perceptions etc. do

community members have about the proposed operation?

How much community support is there for the development?

Who are the likely winners and losers?

Are there any Indigenous communities likely to be affected?

July 16, 2015 © MEA 2006

Managing Social Impacts: General Principles

Design projects to minimise potential adverse

social impacts

Implement mitigating strategies where impacts

cannot be avoided

Inform, consult and engage with affected

communities and groups.

Monitor impacts and adjust strategies as required.

Need to manage the impacts of closure, as well

as start-up impacts.

July 16, 2015 © MEA 2006

Discussion points

1. Why do mining companies need to be concerned

about their social impacts?

2. Are the issues different in Australia than in the

developing world?

3. To what extent should the management of social

impacts associated with large resource

developments be a government, rather than

company, responsibility?

July 16, 2015 © MEA 2006

Week 12 presentation

Social Impact – Tools

and frameworks

July 16, 2015 © MEA 2006

What is Social Impact Assessment?

A process of systematic social inquiry that focuses on

the consequences for people’s well-being of proposed,

current and/or past actions.

July 16, 2015 © MEA 2006

SIAs: Key Points

An SIA can be initiated at any time during the life-cycle of a mining project.

SIAs can be backward-looking (what happened & why) as well as forward-looking (what is expected to happen).

An SIA should be regarded as an iterative process, rather than a one-off activity.

SIAs should be focused on how to deliver positive outcomes for communities, rather than just on how to mitigate negative impacts.

July 16, 2015 © MEA 2006

Why do SIAs?

To comply with regulatory requirements & secure project approval

To plan for social & physical infrastructure

To identify and help manage social risks and opportunities

To inform internal and external stakeholders about project impacts and benefits.

July 16, 2015 © MEA 2006

Overview of the SIA Process

BaselineStudies

Risk & opportunity Analysis

InitialScoping

Implemen-tation

MonitoringEvaluation& Review

Reporting

July 16, 2015 © MEA 2006

The SIA Process

1.Scoping

Aim:

Determine the scale, timing and focus of the SIA

Tasks include:

Ascertain who is likely to be impacted on by, or have an interest in, the project (stakeholder analysis)

Consult with potentially affected groups and those who are knowledgeable about the ‘impact communities’

Review available information sources

Identify key knowledge gaps

July 16, 2015 © MEA 2006

The SIA Process

2. Establishing a social baseline

Aim:

Profile the ‘impact communities’ and assess how people are

likely to respond to anticipated changes

Tasks include:

Analysis of demographic patterns & trends

Socio-economic analysis

Community needs analysis

Social mapping

Engagement with community stakeholders

July 16, 2015 © MEA 2006

The SIA Process

3. Analysing risks and opportunities

Aim:

Ensure that key social risks and opportunities have been identified and appropriate management strategies developed.

Tasks include:

Identification and assessment of potential impacts, including indirect & cumulative impacts

Alternatives analysis

Prioritising of risks and opportunities

Selection & evaluation of possible ‘controls’

July 16, 2015 © MEA 2006

The SIA Process

4. Implementation

Aim:

Ensure that there is follow through on the outcomes of the risk & opportunity assessment

Tasks include:

Developing a risk and opportunity register with designated responsibilities and time lines

Formulating a community development plan linked to this

Ensuring that strategies are also linked to other planning and management processes (e.g. HR planning, purchasing policy).

July 16, 2015 © MEA 2006

The SIA Process

5. Monitoring

Aim:

Ensure that desired SD outcomes are being achieved.

Tasks include:

Identifying priority areas for monitoring

Defining ‘lead’ and ‘lag’ indicators

Setting up data collection processes

Reporting: internally and externally

July 16, 2015 © MEA 2006

Good practice in SIA

The earlier the better – but it is never too late to get started!

SIAs should be linked to other management and planning processes, rather than being approached as stand-alone exercises.

Community engagement should be seen as an integral part of the SIA process.

SIAs need to be reviewed and updated regularly, on the basis of monitoring data.

July 16, 2015 © MEA 2006

SIAs will be most useful when:

They are linked to an ongoing monitoring

program.

They are part of an engagement strategy.

They link back into mainstream management

processes, such as risk management frameworks.

July 16, 2015 © MEA 2006

Discussion points

1. Should there be a requirement placed on mining

operations to undertake some form of social

impact assessment as part of closure planning?

2. What information would you need to be able to

assess the likely social and economic impacts of

closing a mine?

3. What use should a mine make of this

information?

July 16, 2015 © MEA 2006

Week 12 presentation

Ok Tedi Case Study

July 16, 2015 © MEA 2006

Overview of the Ok Tedi Mine

Large copper/gold project in Western Province, PNG– 1968 Mt. Fubilan deposit discovered

– 1984 Gold production begins

– 1987 Copper production begins

– 2010 Planned closure

Project shareholders– PNG Sustainable Development Program

Company - 52%

– GoPNG - 30%

– Inmet Mining - 18%

OTML contributes approx 10% of PNG GDP and 20% export earnings

Workforce of 2,000– 1850 PNG National

– 800 Preferred Area

– 1500 Contractors

Diverse population in mine-impact area of 60,000+

Papua New Guinea

Tabubil

Western

Province

Ningerum

Kiunga

Daru

Lake Murray

Stricklan

d

Riv

er

Fly RiverO

k T

edi R

iver

Telefomin

Obo

Oksapmin

Balimo

Morehead

OK Tedi Case Study

July 16, 2015 © MEA 2006

Ok Tedi Overview

Large copper and gold mine in remote area of PNG. High rainfall area

– 11m p.a.

Pre-mine subsistence economy. Virtually no infrastructure or services,

no towns of any size.

July 16, 2015 © MEA 2006

Ok Tedi Timeline1981 – construction commences; approvals require stable

waste dumps and tailings storage facility

1984 – mining starts; landslide destroys tailings facility; PNG

Government approves riverine disposal on an

interim basis

1990 – PNG Govt reaches further agreement with OTML to

allow riverine disposal of all tailings and much of the

waste rock

early 90’s – downstream landowners bring legal action against

BHP

1997 – BHP agrees to pay damages

July 16, 2015 © MEA 2006

Time Line cont’d

1999 – OTML and PNG Government initiate consultations with

communities affected by mine

2000 – BHP announces intention to exit from OK Tedi, possible

closure

2001 – PNG Govt announces it wants the mine to remain open

and that the local community supports this

2002 – BHPBilliton transfers shares to a Program Company

2010 – Expected mine closure

July 16, 2015 © MEA 2006

Environmental Impacts 90 million tonnes of tailings & overburden discharged

annually into Ok Tedi river – 50 million tonnes reaches Fly River.

Increased flooding, leading to dieback

Currently 1 300 sq km affected

Predicted 2 040 sq km

Loss of land for growing food, reduced fish catch.

No evidence of poisoning, some capacity for environmental recovery once mining ceases.

July 16, 2015 © MEA 2006

July 16, 2015 © MEA 2006

Environmental impacts cont.

July 16, 2015 © MEA 2006

Environment: Dredging

Photo

Sand piles rehab (aerial)

Photo

Unassisted dieback recovery

July 16, 2015 © MEA 2006

Economic Impacts

Mine provides direct and indirect employment for 3,500 people – 90% PNG citizens.

Accounts for 10% of PNG’s GNP and 18 % of foreign exchange earnings.

OTML has constructed most of the infrastructure in the area.

Estimated benefit to Western Province 2002-2010: K 1.35 billion.

July 16, 2015 © MEA 2006

Health Benefits Incidence of malaria in a 40 km radius has fallen

by 80%.

Infant mortality down from 300 per 1,000 to 15 per 1,000.

Life expectancy of men increased from 30 years to 50+ years.

Better nutrition and better services.

July 16, 2015 © MEA 2006

Social Impacts Disruption of traditional lifestyles

Creation of new settlements, including squatter

settlements

Increased social mobility

What happens when the mine closes?

July 16, 2015 © MEA 2006

Closure issues Tabubil township and attendant facilities – office,

workshops and accommodation buildings

Transport infrastructure – roads, bridges, airstrips, wharves, shipping

Utilities – hydro, diesel power, telecommunications, banks, shopping centres

Education and health services

Rehabilitation of the mine pit

Squatters

Livelihoods

Sustainability Objectives Community participation in the development process

Ensuring a food secure population

Developing a sustainable economic base – focus on primary sector

Ensuring effective governance for the future

Mitigating environmental impacts

Ensuring a skilled labor force

Continued access to health and education services

Gender equity i.e. including women in all programs

Integrated development and mine closure planning –community, company and government

July 16, 2015 © MEA 2006

Overcoming Dependencies

Alternate sources of protein – rabbits,

poultry, goats, ducks, fish farming

Community forestry

New food crops – rice, African yams,

taro

STAND (Skills Transfer and No

Dependency)

July 16, 2015 © MEA 2006

Issues for Discussion

1. Should Ok Tedi have ever been built?

2. Should the mine have been shut down by now?

3. Should BHPBilliton have stayed?

4. What should OTML be doing to manage for post-

closure?