SHARING THE VALUE OF MINERAL WEALTH: EFFECTIVE STATE PARTICIPATION IN NATURAL RESOURCES DEVELOPMENT (ENGLISH AND SPANISH VERSIONS)

• Jurisdiction: Derecho Internacional

Mining and Oil and Gas Law, Development, and Investment - Book 1
(Apr 2007)
CHAPTER 4A
SHARING THE VALUE OF MINERAL WEALTH: EFFECTIVE STATE PARTICIPATION IN NATURAL RESOURCES DEVELOPMENT (ENGLISH AND SPANISH VERSIONS)
Britt D. Banks
Executive Vice President, Legal & External Affairs
Newmont Mining Corporation
Denver, Colorado, USA

BRITT D. BANKS

Britt D. Banks was elected Executive Vice President, Legal and Public Affairs in 2006. He served as Senior Vice president and General Counsel from 2005-06 and as Vice President and General Counsel from 2001-05. He served as Secretary from 2001-04. Prior to that, he served as Associate General Counsel from 1996-2001.

Mr. Banks joined Newmont in 1993 from the law firm of Holland & Hart, where he practiced for four years. He served as a law clerk to the Hon. Oliver Seth, U.S. Court of Appeals for the Tenth Circuit, and is a member of the Colorado State Bar. He earned a law degree from the University of Colorado, where he was the articles editor for the University of Colorado Law Review.

Britt Banks ocupa el cargo de Vicepresidente Ejecutivo, Legal y Asuntos Externos, de Newmont Mining Corporation, con sede en Denver, Colorado. Newmont figura entre las empresas productoras de oro más grandes del mundo, con operaciones en Nevada, Perú, Bolivia, Australia, Nueva Zelanda, Indonesia y Ghana, y mantiene propiedades en exploración en todo el mundo.

Además de manejar los asuntos legales de la compañía, el señor Banks tiene la responsabilidad de supervisar los asuntos ambientales, el desarrollo sustentable, la rehabilitación y el cierre, las relaciones con el gobierno, las comunicaciones corporativas y la seguridad en Newmont. Durante el período 2005-06 presidió el Grupo de Trabajo Ejecutivo del Consejo Internacional sobre Minería y Metales, un sociedad de industrias abocada a mejorar el desempeño de sus miembros en las áreas de desarrollo sustentable, gestión ambiental, salud ocupacional, seguridad industrial, y responsabilidad social. También es miembro del Grupo de Trabajo del La Campaña Asociativa Contra la Corrupción del Foro Económico Mundial.

El señor Banks es egresado de la Universidad de Denver (Bachiller en Ciencias cum laude, 1983) y de la Facultad de Leyes de la Universidad de Colorado (Juris Doctor 1988), en donde se desempeñó como Editor de Artículos de la Revista de Leyes de la Universidad de Colorado. Cursó el Programa de Administración Avanzada ("Advanced Management Program") en la Escuela de Negocios de Harvard en el año 2000. El señor Banks fue secretario legal del Honorable Oliver Seth, Corte de Apelaciones del Décimo Circuito, y formó parte del Estudio Holland & Hart en Denver. Fue admitido al Colegio de Abogados del Estado de Colorado en el año 1989.

This paper offers an overview of the evolution of the global mining industry's perspective on practical ways that industry, host governments and civil society can work together to enhance positive socio-economic outcomes from mining projects, in ways that help to reduce poverty and promote other sustaining sectors of the local economy, all to the end of preserving and enhancing the industry's access to land.¹

It is now widely acknowledged within the global mining sector that the single biggest challenge facing the industry today is continued access to land. In the 1990s, access to land was largely viewed as a matter of legal compliance--with national mining laws, environmental laws and regulations, mining concession agreements, labor laws, collective bargaining agreements, and the like.

Beginning in the late 1990s, however, a group of the largest companies in the industry recognized that a compliance-based approach to land access was not enough. They saw that, increasingly, there is a sense by host governments and communities that mining may be a valuable and profitable venture, but perhaps only for the producers. They also saw that, increasingly, communities and governments around the world are demanding more--they want to see that having a mine in a community will result in economic opportunities and poverty reduction for local residents, and that the ultimate benefits of an operation will outweigh the perceived costs at a societal level.

The MMSD Project and the Formation of the ICMM

This realization has led to a greater emphasis, industry-wide, on the concepts of sustainable development, environmental stewardship and social responsibility. It led to the initiation of the Mining, Minerals and Sustainable Development (MMSD) Project, a two year independent process of research and consultation to examine the role of the mining sector in contributing to sustainable development, and how that contribution

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could be increased.² Industry responded to the MMSD Project at a global conference held in Toronto in May 2002, in anticipation of the World Summit on Sustainable Development held later that year in Johannesburg. And as a result of industry commitments flowing out of the MMSD Project and the Toronto conference, the International Council on Mining and Metals (ICMM) was formed to provide leadership and develop best practice on sustainable development and related issues.

The ICMM is comprised of 15 of the world's leading natural resources companies, and is committed to raising the bar of industry performance through a mandatory three-pronged framework. Each member is committed to: (1) adhering to the ten sustainable development principles featured in the accompanying chart; (2) publicly reporting on its performance against these principles in accordance with the Global Reporting Initiative (GRI); and (3) providing third party assurance of its performance and reporting. In 2006, ICMM members launched a pilot third party assurance procedure, under which members will be required to secure independent assurance that they have in place management systems to implement the ten principles referenced above and that their public reporting is indeed in accordance with the GRI framework.

Recognizing that achieving sustainable development outcomes will require--in addition to improved industry performance--action by governments, NGOs and other stakeholders, ICMM is working with a number of such organizations, including the UN, the World Bank, and the IUCN (World Conservation Union), on joint initiatives on community engagement, biodiversity, emergency preparedness, indigenous rights, mine safety and a host of other topics.

ICMM Principles of Sustainable Development

1. Implement and maintain ethical business practices and sound systems of corporate governance.

2. Integrate sustainable development considerations within the corporate decision-making process.

3. Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities.

4. Implement risk management strategies based on valid data and sound science.

5. Seek continual improvement of our health and safety performance.

6. Seek continual improvement of our environmental performance.

7. Contribute to conservation of biodiversity and integrated approaches to land use planning.

8. Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products.

9. Contribute to the social, economic and institutional development of the communities in which we operate.

10. Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders.

The Resource Curse Theory and the Extractive Industries Review

Critics of the mining industry maintain that the costs of resource development often outweigh the benefits. The idea that mineral resources constitute a "curse" has gained great currency in policy debates over the last decade, and has been endorsed by

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prominent economists such as Jeffrey Sachs.³ This theory postulates that mineral-rich countries almost always experience lower rates of economic growth as a result of: authoritarian regimes funded by high extractive-sector income; inevitable corruption and a corresponding lack of transparency: the lack of incentives for national governments to fund or encourage the development of non-extractive sectors; all leading to the eventual breakdown of non-extractive sectors and ultimately to conflict and the breakdown of the rule of law. The notion is that affected communities further suffer because they have relied on the economic benefits on natural resource development, which are short-lived, often misappropriated, and at the end of the project life have failed to develop other sustaining sectors of their economy.

Clearly many of these impacts have been observed in many resource-rich countries (e.g. Nigeria, Venezuela), and in many cases, the socio-economic performance of mineral-dependent developing economies has been poor. But why? Answers are not to be found in the body of "resource curse" literature, which focuses heavily on identifying the pattern but gives scant attention to causation or solutions. The Extractive Industries Review (EIR), commissioned by the World Bank Group in 2002, attempted to answer some of the questions around the purported resource curse, in the context of the Bank's involvement in financing the extractive sector in developing countries.⁴ The EIR concluded, among other findings, that the World Bank (and presumably other financial institutions such as the Equator Banks) should continue to engage in the extractive sector "only when countries can meet a comprehensive set of preconditions ranging from propoor policies, effective public and corporate governance, effective social and environmental policies, and respect for human rights."⁵

With respect to its conclusion that investments in natural resource development should only be made in countries with effective public sector governance structures, the EIR identified a real problem: where country governance is weak, increased...