CHAPTER 4 FROM COERCION TO CONSENT: THE CONTINUING EVOLUTION OF STAKEHOLDER PROCESSES IN THE ERA OF HUMAN RIGHTS
| Jurisdiction | United States |
(Feb 2016)
FROM COERCION TO CONSENT: THE CONTINUING EVOLUTION OF STAKEHOLDER PROCESSES IN THE ERA OF HUMAN RIGHTS
Attorney, President and Co-Founder
Sustainable Development Strategies Group 1
Gunnison, CO
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LUKE J. DANIELSON is a lawyer, professor, and a principal in the Sustainable Development Strategies Group, a research organization based in Colorado, USA. He was for over eight years a member, and three times Chairman, of the Colorado Mined Land Reclamation Board, the state agency that issues permits for mining. He was also a Trustee of the Colorado Abandoned Mined Land Trust, a government entity that finances and conducts reclamation and rehabilitation of abandoned mines. He led the multi-stakeholder process that developed Colorado's current mined land reclamation legislation in the wake of the Summitville Mine bankruptcy. Mr. Danielson has consulted for a number of governments on issues of rehabilitation of lands affected by mining, including Peru, Chile, and the Peoples Republic of China, and is author of major comparative studies of the reclamation legislation of the various U.S. states, and comparative studies of reclamation approaches in a variety of countries. He was the Director of the Mining Policy Research Initiative of the International Development Research Centre, and the Director of the Mining Minerals and Sustainable Development Project at the International Institute for Environment and Development.
INTRODUCTION
Recent decades have seen something of a revolution in our understanding of who has a say in the development of major natural resource projects, what kinds of governance structures best allow participants to express those interests, and how and by whom such processes are managed. While these changes create difficulties and stresses for those who have to approach these very complex problems with new and different methods, the vision is inspiring. We are moving toward a minerals sector that is better at meeting human needs, consistently operates within ecosystem limits, is a positive social force in the communities in which it operates, and respects human rights. While this sector is a small part of total economic activity, it is a necessary foundation for all other industries, and may therefore play a key role in transforming the broader economy.
While the changes are hardly limited to the natural resource sector, they may be seen in their starkest relief where the continuing growth of human demand for a lengthening list of raw materials collides with the limitations of a finite planet. People want raw materials. But are also passionate about things beyond commodities. They value personal security, and clean and decent places to raise their families. They mostly do not like living next to haul roads, breathing dust, or having their rights ignored.
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There are few other arenas where the actions of a village council in Papua New Guinea can overthrow a board of directors in London, or the actions of executives in Toronto turn life upside down for farmers in up country Mali. On some level, stakeholder processes are about learning to communicate with people we do not understand.
Previous government and legal structures have proven inadequate to the task of accommodating the increased demands to be heard, and are therefore in a dramatic process of change. Systems of corporate management have had to adapt, or be overthrown.2 Traditional community leadership has been challenged, and new local governance systems are emerging. Governments of developing countries have faced enormous challenges of resources and capacity.
One of the biggest problems in elaborating a new and more equitable framework of natural resource development is lack of clarity about the relative roles and responsibilities of the various actors. Communities express deep anger at companies over issues that only government can really manage. Companies and government blame each other, letting problems that really need to be resolved fester endlessly without solution. It is ever clearer that local people and interests have rights in the development process. But do they have any obligations? If they do, what are they?
As the human rights agenda has rightly appeared as a central part of this complex of concerns, it is therefore welcome and extremely useful to have a product such as the United Nations Guiding Principles on Business and Human Rights,3 that focuses intensely on understanding and sorting out the relative roles of the principal actors.
Stakeholders
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"Stakeholders" are called stakeholders4 because (1) someone believes that they have an interest in the proposed activities; and (2) they may not fit traditional categories of recognized rights holders.5 In what I would call the "power based" vision, stakeholders are people with the power to create problems for others - they can prevent projects from being realized, add greatly to the cost, or do reputational injury to project proponents.6
What we might call the 'justice based' concept of stakeholders is broader. In this view, a 'power based' definition wrongly "excludes those who are affected, but who don't [have] any power to respond to or negotiate with an organisation."7
This difference in perspective underlies much of our discussion of stakeholders and their rights.8 A human rights framework necessarily prefers the second of these
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options because it is based on the notion that all people everywhere "are endowed by their Creator with certain unalienable Rights. . . ."9
In the modern world, it may be that there is however less reason to worry about these different perspectives. This is because changes in the world information regime make it possible for the powerless to acquire and wield power - at least sometimes, and to some extent. Because their acquisition of power can never be predicted, even the most cynical of corporate or government managers have learned to tread more warily and treat them with more respect.
The development of Saudi Arabia's enormous oil reserves by western oil companies had enormous and lasting impacts on the environment and local communities in the Kingdom. No one outside the region knew very much about these impacts, certainly not at the time.10 Decades later, in the mid 1980s, Abdul Rahman Munif published a fictional account, Cities of Salt, which paints a very disturbing picture of this process of development. Munif's books were and are banned in Saudi Arabia and elsewhere in the Gulf.
In 1902, J.P. Morgan and other noted capitalists founded the Cerro de Pasco Corporation and began a process of acquiring and developing mineral properties in the central Peruvian highlands. In 1970, Manuel Scorza published Redoble por Rancas, a notable fictional account of the community conflicts provoked by that development. Again, the issues were posed and the questions asked, but decades after the events in question.
Today we have the concerns of local communities resonating worldwide in real time. At least some local citizens aggrieved by the rough edges of development may, through access to the internet, chance meetings with foreign journalists, contacts with development organizations, outstanding local leadership, or other means, find a way into the central focus of the world media spotlight. And they
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may do so not years later, but while the protesters are marching or the bullets still flying.11
It is hard to imagine the Dongria Kondh, a small, poor indigenous culture in the hills of Odisha State in India, having the legal or political power to inconvenience, let alone stop, the development of a major mineral deposit during the years of British colonial rule. In most developing countries, since the time of independence, it is hard to conceive that a major industrial investor would find its efforts to develop an estimated $2 billion deposit thwarted by an impoverished tribe of some 8,000 members. Yet it seems that is precisely what has happened,12 at least for now.
How did this happen? How have a variety of similar outcomes happened, from the Conga project in Peru to Tampakan in the Phillippines, Rosia Montana in Romania, Esquel in Argentina or a long list of others?13
Part of the answer may be that the new global information regime allows local interests, at least some of the time, to gain access to an unprecedented global platform to communicate their messages. Part of it may be the dramatic and very welcome decline in the number of dictatorships with closed information regimes
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and a willingness to use authoritarian means to impose results; in short the spread of democracy and more open societies.
Part of the answer might be that in an era with a world population exceeding 7 billion, there is a difficult combination of increased demand for all kinds of resources, and a declining number of places they can be accessed without serious effects on nearby populations. Declining ore grades require bigger land footprints to provide those materials, with accompanying greater energy demands for mining and processing, and significant demands for water. Mineral exploration is affecting more places; mineral production has a bigger footprint.
Part of the reason that the community voice may be more powerful might also be that there is a clearer yardstick against which to gauge performance. There is a he growing body of codified international expectations of company and government behavior, of which the Guiding Principles are a welcome part.14 There is a clearer measuring stick against which to judge corporate or government behavior.
Whatever the cause of this phenomenon, it may be leading us to a convergence: We may decide to reach out to the weaker stakeholders because we recognize that they have rights. Or we may reach out because we are worried that they, like the Dongria Kondh, will find...
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