10-year review critiques the mining industry's sustainability

The mining and minerals industry has made major advances towards sustainability, but the sector faces new challenges as governments reassert control over their natural resources, but lack capacity to ensure mining can contribute to sustainable development.

These are among the findings of a 10-year review published today by the International Institute for Environment and Development (IIED), a U.K.- based development and environment policy research agency.

The report urges the sector to move from improving its standards in principle to implementing them in practice. It also highlights new opportunities for governments and the mining industry to work together and engage with communities and other stakeholders to improve the sector’s performance.

Researcher Abbi Buxton reviewed progress the mining sector has made over the past ten years, since its leading companies joined on-governmental organizations in calling for the Mining, Minerals and Sustainable Development initiative to provide a landmark independent review of the sector’s role in sustainability and set standards for it to meet. She will share its findings at IIED’s Fair ideas conference in Rio de Janeiro, Brazil next week.

“The 2002 MMSD report was a game-changer,” says Buxton. “For the first time, mining executives committed to act to maximize their sector’s contribution to sustainable development, and they adopted the MMSD agenda as a robust and credible way to do this. Ten years on, however, the results are mixed and new challenges have emerged.”

Small companies falling behind

Buxton’s report shows how the International Council on Mining and Metals – an umbrella organization of leading companies such as Rio Tinto (LON & NYSE: LON) and Anglo American (LON:AAL) — has succeeded in implementing many of MMSD’s recommendations for the industry.

However, it also warns the small-scale mining firms and communities have not matched that success and that bad deeds persist despite good intentions across the industry.

“The past 10 years have been about setting standards, identifying best practices and demonstrating to stakeholders what sustainable development means,” says Buxton. “The next 10 have to be about implementation. The ambition must also build from reducing environmental and social impacts to also sharing the benefits of mining to promote social and economic development. That means moving from ‘do no harm’ to a net positive impact.”

Developing nations disappoint

One area in which there has been minimal progress over the past 10 years, says the report, is in the capacity of governments in developing nations to ensure that mining contributes to sustainable development.

This poses additional challenges, it says, in light of the new trend for such governments to reassert control over their mineral resources in response to the boom in commodity prices on the global market over the same period.

Governments are doing this by, for instance, changing their tax laws and mining policies or by acquiring equity stakes in companies that are active in the sector. This has been the case in countries such as Indonesia, Ghana, Zambia, and Zimbabwe, among the most recent examples.

The IIED report adds that mining companies need not see this trend a threat, but as an opportunity to redefine roles and responsibilities.

“Mining companies have often played a role that governments should have played,” says Steve Bass, head of IIED’s Sustainable Markets Group. “As states move to reclaim their roles in community and economic development, there will be opportunities for improved partnerships between governments, mining companies and local communities,” he concludes.

Other trends that have emerged since the MMSD report was published in 2002 include:

  • The rise in prominence of investors and operators from China, Brazil, India and elsewhere – that did not play a major role in defining the sector’s direction 10 years ago.
  • The dramatic increase in community expectations, including demands for Free, Prior and Informed Consent (FPIC), which governments and companies must respond to like never before.
  • The growing scientific evidence for climate change and its implications for the mining sector, which to-date has adopted a ‘wait and see’ approach.