GLOBAL STAKEHOLDERS: THE INFLUENCE OF NON-GOVERNMENT ORGANISATIONS ON PROJECT DEVELOPMENT

• Jurisdiction: United States

International Resources Law and Projects
(Apr 1999)
CHAPTER 11C
GLOBAL STAKEHOLDERS: THE INFLUENCE OF NON-GOVERNMENT ORGANISATIONS ON PROJECT DEVELOPMENT
Ewan Vickery
Minter Ellison
Adelaide, South Australia, Australia

Contents

1. Introduction

1.1.1. Scope of paper

1.1.2 Objectives

2. Background

2.1 Why the Concern?

2.2 A Shrinking World

3. Non-government Organisations

3.1 What are they?

3.2 Populist causes, and the reasons for them

3.3 Capacity for influence

3.4 How are NGO's organised?

3.5 How are NGO's funded?

3.6 How do NGO's operate?

3.7 Where do they operate?

3.7.1 Domestically

3.7.2 Regionally

3.7.3 Internationally

3.7.4 In Cyberspace

4. Who is influenced?

4.1 Resource Developers

4.2 Legislators

4.3 Courts

4.4 International Law — it's increasing influence on domestic law

5. A Confluence of Agendas?

6. Industry's Inevitable Interaction

6.1 Fundamental Engagement

6.2 Opposing Opponents

6.3 Modus Operandi — a suggestion

7. Conclusions

Appendices

1 Aide Memoire

2 Web Guide — a list of NGO internet Web sites

Acknowledgements

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1. INTRODUCTION

1.1 Scope of paper

The scope of this paper is to attempt an examination of the influence which populist movements have upon resources projects around the world, followed by some observations and suggestions for resources industries public affairs management of the issues discussed. The subject matter is not exclusively legal, economic or political, but necessarily involves aspects of each of those areas of human endeavour. That is because modern populist movements as Non-Government Organisations ('NGO's) operate in those spheres simultaneously.

1.2 Objectives

This paper is not written as an academic treatise, for which the topic would require a work far in excess of a conference paper. Instead, it is written to enhance the levels of exposure of the influence which populist movements around the world have upon resources projects for the assistance of those who direct, manage and invest in corporations active in the search for and development of the earth's natural resources. The content seeks to identify social trends likely to influence governance of access to natural resources, the way those trends are being shaped and by whom, together with an introduction to interacting in those policy formulating and law making processes.

2. Background

2.1 Why the Concern?

Resource development corporations are in the business of finding and developing natural resources to meet the needs of expanding global demand. That is their raison d'ètre. They are organised for that purpose, and make decisions based on internationally competitive practices. Management based in western legal systems is highly regulated in its conduct for the responsible deployment of public investment capital and in seeking calculable returns on investment. For reasons of history and the regulatory styles of western legal systems, investment decisions tend to be executed from a compliance approach to relevant laws rather than a socially based policy approach. Industry has come a long way in recognising and addressing the environmental consequences of its historical actions. Historical reflection would suggest that has been due largely to industry external influences, including NGO's. Should industry now reach further and

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also address issues of social change, which follow the implementation, continuance and closure of resources projects?¹ The growing international NGO movement certainly believes so. The fact remains, however, that private capital continues to be invested in resource corporations for the financial reward expected from risk and enterprise in finding and supplying needed commodities.² To what extent should social policy approaches influence that commercial decision making, and how would the diversity of shareholders, which exists within most resources corporations, indicate acceptance of a social policy approach to investment? Will social involvement evolve to become gradually accepted, as has environmental responsibility? This challenge of compatibility continues to arise and to be addressed in various parts of the world.³ Difficulty arises in attempting to define the nature and extent of social involvement likely to be acceptable to all stakeholders affected by a resource development project. The answers will obviously depend upon the facts and circumstances in each case, but NGO's have begun to promulgate aspirational lists of what they seek from resource corporations.⁴

Fundamental to corporate resource activity of course, is that 'land access is essential if we are to maintain our mineral supplies. We must explore large areas to find deposits and we must produce minerals where the deposits are found.⁵ The reference to 'maintain' must be read in the context of a demand constant that is proportionate to an increasingly industrialised global population desirous of living in the modern world.

Conflict between the historical and emergent social policy approaches to land access for resource development are now issues for resource corporations.⁶ Understanding and addressing the social component requires more than legal compliance or an expectation that what is desired by one part of the global community is also desired by another. Social views and aspirations are generally diverse, and usually ascertained only by diligent research among communities likely to be affected by a project. That may involve a long, arduous and even inconclusive process.

Few corporations are structured and resourced for such tasks, and consultants employed to investigate and help prepare relationships are usually constrained by an already ascertained, commercially based, project timeline. The result has often been the formation of opposition groups, many of which have evolved themselves or in collaboration with other public interest groups into politically active organisations on local, national, regional and international levels. They are the NGO's which now regularly confront industry and seek to impose social changes upon the approaches, decisions and goals of corporate developers. Their internationally collaborative efforts to impose generalist legal principles upon the domestic laws of sovereign states should not be underestimated. They are prepared to conduct litigation in jurisdictions perceived as favourable to adopting international law principles as a means of extending those principles across jurisdications, even if that involves asking a domestic court to intervene in issues taking place within a foreign sovereign jurisdiction.⁷ A concerted effort at using class action litigation for this purpose in the United States has been observed since approximately 1993.⁸

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2.2 A shrinking world

Much has been written on the effect that modern electronic communications has on world affairs.⁹ An era of international short wave radio listening by a minority of enthusiasts in the middle of this century has been all but displaced in the developed world by ready and affordable access to global networks of radio and television news, telephony, facsimile telecopier machines, mobile telephones and the Internet. Since the successful launch of the Telstar communications satellite in the early 1960's we have continually been awed by the capacity of humanity to devise technology for increasing inter-personal and mass communications. That is about to intensify considerably. By the year 2002 a consortium known as Teledesic¹⁰ (and colloquially as 'the Internet in the sky') comprising Bill Gates, Craig McCaw and Motorola expect to have operational a network of Low Orbit Satellites capable of delivering high bandwidth Internet access to over 95% of the Earth. Craig McCaw is reported as saying:

The cost to bring modern communications to poor and remote areas is so high that many of the world's people cannot participate in our global community. Forcing people to migrate into increasingly congested urban areas in search of opportunity is economically and environmentally unsound. All of the world can benefit from efforts to expand access to information technologies.¹¹

Access to existing technological achievements has already increased levels of individual empowerment. This has significantly enhanced the capacity of populist groups to develop and share information, and enabled some to grow rapidly in influence.¹² The ability of people to move and to communicate has lifted our interactive capabilities from local to global communities. Within that broader community the influence of individuals is seen as increasing as the authority of nation states diminishes.¹³

During a speech in 1994, the then Secretary-General of the UN said, advisedly:

Today, we are well aware that the international community must address a human community that is profoundly transnational. For a long time, the international order was regarded as political and firmly established. Now we must learn to accept and to deal with a world that is both social and mobile. The movement of wealth, people, capital and ideas is as important today as control of territory was yesterday ... Non-governmental organisations are a basic form of popular representation in the present day world ... Their development is inseparable from the aspiration for freedom which, in various forms, is today shaking international society.¹⁴

So, perhaps leading this acceleration of social and political development is the rapid advancement of science and technology. It may be observed that these same social and political advances have occurred by employing the products and technologies developed over time by the natural resources industries. Those developments have occurred at a rate to meet demands principally from the industrialised western world, in the latter half of this century embracing Japan¹⁵ and subsequently Taiwan and South Korea, which emerged as dominant manufacturing powers without...