the changing resource development paradigm: maximizing sustainable local benefits from resource...

The Changing Resource Development Paradigm

Maximizing Sustainable Local Benefits

from Resource Development

Prepared for

Government of British Columbia Ministry of Community Development Cooperatives and Volunteers

January 2001

2457 Bakerview Road Mill Bay, BC CANADA V0R2P0 Tel: +1-250-743-7619 Fax: +1-250-74307659 [email protected] www.waynedunn.com

mailto:[email protected]


Table of Contents Executive Summary ........................................................................................................... i 1 Introduction ........................................................................................................... 1

2 The Growing Importance of Corporate Responsibility and Sustainable Development................................................................................................................................. 3

3 International Multi-Stakeholder Initiatives ..................................................... 15

3.1 Business Partners for Development ................................................................ 15 3.2 Global Mining Initiative .................................................................................. 16 3.3 Prince of Wales Business Leaders Forum ...................................................... 17 3.4 UNEP Annual Round Table with the Finance Industry ............................... 19

4 Examples of Effective Corporate Social Responsibility .................................. 21

4.1 Cameco in Northern Saskatchewan................................................................ 21 4.2 The Porgera Project, Papua New Guinea ...................................................... 24 4.3 Weyerhaeuser and Clayoquot Sound – A Region In Transformation ............... 34 4.4 Mitigating the Impact of Downsizing – Placer Dome in South Africa ........ 39 4.5 NorSask Forest Products/MLTC .................................................................... 45 4.6 Common Themes .............................................................................................. 49

5 A Framework for Understanding and Developing Effective Corporate / Community Relations............................................................................................................... 51

5.1 Traditional Corporate Approaches to Community Relations Management51 5.2 Elements of a Systematic Approach ............................................................... 53

6 Changing the Paradigm ...................................................................................... 58

6.1 The Business Case for Government Support of CSR ................................... 58 6.2 Government Tools for Supporting CSR ........................................................ 59 6.3 Stakeholder Actions ......................................................................................... 61

7 Conclusion ........................................................................................................... 64 List of Tables, Charts and Figures Table 4-1: Clayoquot Economic Comparison (Pre/Post) ................................................. 38 Chart 4-1 Cameco Northern/Aboriginal Purchases .......................................................... 23 Figure 2-1 Growth of International NGOs ......................................................................... 5 Figure 5-1 Ad-hoc Community Relations........................................................................ 52 Figure 5-2 Interaction Continuum ................................................................................... 55

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EXECUTIVE SUMMARY

The discovery and harvesting of primary

resources such as, furs, fish, forestry, natural

gas, minerals and now possibly oil, has been

the economic backbone of British Columbia

since the first Europeans arrived. Even with

the growth of a knowledge-based economy,

natural resources are still critical to the

economic future of many BC communities

and residents. The Ministry of Community

Development, Cooperatives and Volunteers

has commissioned this report to review

resource development from a global

perspective, exploring what is and what can

be done to improve the way in which

resource development impacts the social and

economic well-being of local communities

and residents.

The report is organized into seven sections.

Section 1 identifies and discusses pertinent

introductory issues. Section 2 examines the

changing paradigm of resource

development, illustrating some of the global

trends that have pushed corporate social

responsibility and sustainable development1

into the mainstream, making it a critical

bottom-line issue for many corporations and

industries. A number of factors are

discussed in terms of their impact on the

overall resource development environment.

These include:

• Global democratization;

• Growth of NGOs;

• Growth of the global media;

• Rise of ethical investment funds;

• Internet and other communications

innovations;

• Globalization;

• Increased permeability of institutional

and organizational boundaries;

• Growing value and importance of

reputational capital;

1Many firms refer to their community relations work as Sustainable Development and/or Sustainability. For the purpose of this report, we will use the terms interchangeably.

“In a transparent, globalized world, economic performance, environmental performance and social performance hang together. Business is realizing that it has become an integral part of society and now has wide-ranging responsibilities… shareholder value and social responsibility support each other”

Göran Lindahl, President and CEO, Asea Brown Boveri (ABB)

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• Regulatory frameworks and

licensing/permitting procedures; and

• Growing number of international

standards, directives and codes of

conduct.

Section three examines a number of global,

national and local initiatives aimed at

fostering dialogue and improved

collaboration between industry,

communities, governments and other

stakeholders, (e.g., the Conference Board of

Canada’s Canadian Centre for Business in

the Community, Business at the Summit,

Canadian Council for Aboriginal Business’

Progressive Aboriginal Relations initiative,

University of Warwick’s Mining and Energy

Research Initiative, National Round Table

on Environment and Economy’s Aboriginal

Communities and Non-Renewable Resource

Development, and the World Business

Council on Sustainable Development’s

forestry project.). The report also identifies

and examines four international multi-

stakeholder initiatives that directly relate to

the community component of sustainable

development. The initiatives are:

• Business Partners for Development

• Global Mining Initiative

• Price of Wales Business Leaders Forum

• United Nations Environment Program

Annual Round Table with the Finance

Industry

In Section 4, five best practice examples of

corporate social responsibility in natural

resource development are reviewed to

illustrate the potential for increased

industry-community collaboration. These

examples, drawn from mining and forestry

projects in Canada, Africa and Asia,

demonstrate that effective application of

sustainable development principles can lead

to profitability and meaningful benefits for

all stakeholders. An analysis of the case

studies identifies five common

characteristics:

• A desire to develop mutually beneficial,

action-oriented, collaborative multi-

party approaches to addressing

community and local development;

• Appropriate support from governments

and external stakeholders;

• Long-term stakeholder commitment;

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• Stakeholder leadership – while different

examples demonstrated leadership by

different stakeholders, all of them

exhibited strong leadership (in a

collaborative manner); and

• A long-term approach to capacity

development (no quick fixes).

Section 5 discusses a framework that can be

utilized by all stakeholders to facilitate more

systematic integration of sustainability

principles and priorities into resource

projects and to assist with the development

of common understanding and a map of

specific relationship opportunities. The

framework is designed to assist stakeholders

to move beyond a beads and trinkets

interaction model to embrace more

sustainable, results oriented relationships.

It identifies six critical elements for

successful relationships between

corporations and local communities. They

are:

• Organizational ethos

• Communications and consultations

• Capacity development

• Leveraging other relationships

• Interactions

• Measuring, Monitoring and Reporting

Section 6 focuses on specific actions and

strategies that government and other

stakeholders can utilized to facilitate more

effective relationships between key

stakeholders in the resource development

process. The business case for sustainable

development is examined from a

government perspective and six reasons are

put forth for investing public funds to

encourage and support corporate social

responsibility and sustainable development.

Section 6 concludes with a discussion of

stakeholder opportunities for action and

leadership on sustainable development. To

illustrate, thirteen specific actions that could

be initiated by government, industry and

communities are presented and stakeholders

are encouraged to begin dialogue and

discussions aimed at identifying and

implementing concrete activities in support

of their collective interests.

The concluding section, Section 7, notes

that, throughout the planet, the resource

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development paradigm is changing.

Corporate Social Responsibility (CSR) and

sustainable development have become

business imperatives. Successful projects

require stakeholder collaboration and

participation and, increasingly, a focus on

how resource development can support the

long-term social and economic objectives of

all stakeholders.

Successful CSR therefore requires

commitment and leadership from all

stakeholders (including governments), each

with particular roles to play and support to

provide. Therefore Government of British

Columbia can, and should, support

communities and industry to develop and

maintain mutually beneficial relationships

that will support their respective social and

economic goals.

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1 INTRODUCTION

The

dis

cov

ery

and

har

ves

ting of primary resources, forestry, mining,

natural gas and now possibly oil, has long

been a mainstay of the British Columbia

(BC) economy. Although there is currently

a transition to a more knowledge based

economy, resources still have, and will

continue to have, a major impact on the

economic lifeblood of BC communities.

The 1990s have seen a major shift in the

resource development process. Previously

the regulatory approval procedure was

primarily an interaction between the

applicant-business and relevant government

authorities. Communities and third party

interests had limited influence and minimal

consideration was given for the long-term,

sustainable impact on local people and

communities. Little was done to

strategically address the long-term capacity

and sustainability of local communities,

often leaving them with little economic

diversification and vulnerable to industry

downturns. The resultant impact on

communities was frequently disastrous as

industries often simply closed down,

creating economic havoc. Local citizens

and businesses risked losing everything.

After investing in roads, schools and other

public infrastructure, governments often had

to step in and try to cushion the impact that

closure had on families and local businesses.

Unfortunately, there is often little that can be

done after the fact.

Recently however, a strong trend is

emerging whereby resource companies work

with communities and the public sector to

organize business activities so they

maximize value for a broader range of

stakeholders. Planning for and addressing

issues of social acceptability, local cultural

awareness and the long-term sustainable

economic development of the region are

becoming as important as ensuring

responsible environmental stewardship.

While nothing can ever guarantee the

sustainability of resource dependent

“Social responsibility is a matter of hard-headed business logic... Its about performance and profits” Sir John Browne, CEO BP-Amoco

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communities, stakeholders are discovering

that through collaborative activities, much

can be done to create additional value and

mitigate downside risk.

The Government of British Columbia,

through the Ministry of Community

Development, Cooperatives and Volunteers

(MCDCCV) has recently released a

Discussion Paper, Toward Revitalized,

Resilient and Sustainable Communities

Across British Columbia. The paper

outlines a potential policy and legislative

framework that would provide new methods

for the Government to partner with local

communities to enhance sustainable social

and economic development.

The Ministry of Community Development,

Cooperatives and Volunteers is tasked to

support communities in their efforts to

acquire meaningful and sustainable benefits

from the development and harvesting of

local resources. As part of their ongoing

efforts the Ministry contracted Wayne Dunn

& Associates Ltd. to prepare this report.

This report explores global changes that are

occurring in the resource development

paradigm and suggests strategies for

ensuring that resource development makes a

long-term, sustainable contribution to the

social and economic well being of BC

communities. It also addresses the business

case for sustainable development – the,

what’s in it for me? – from the perspective

of industry, communities and government.

It concludes with an examination of

mutually beneficial, strategic approaches

that could be initiated by various

stakeholders to maximize the long-term,

sustainable benefits that communities

receive from existing and future resource

harvesting projects.

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2 THE GROWING IMPORTANCE OF

CORPORATE RESPONSIBILITY

AND SUSTAINABLE

DEVELOPMENT

Note: To illustrate that corporate

responsibility and sustainable

development are more than local

phenomenon, the following

discussion is based on a global

perspective.

In Canada and throughout the world,

resource companies are recognizing that

there is a direct link between their ability to

meet society’s needs and their own long-

term sustainability. Firms everywhere are

embracing triple bottom line concepts and

many are producing social, environmental

and sustainable development reports. This

is not the work of ‘do-gooders’ – a June

2000 survey of 100 business leaders noted

that 42% saw corporate responsibility as

having a direct impact on share price and

financial performance2. Everywhere that

resources are harvested, local communities

and a business’s ability to work with them

effectively has direct and significant bottom

line impacts. BC is no exception.

What has happened to push social issues

onto the corporate agenda? And, will this

trend last? These are two questions that

must be addressed to understand how to

encourage corporate social responsibility.

While no single factor can be credited with

pushing social issues onto the corporate

agen

da,

we

can

ident

ify a

num

ber

of

events and trends that, together, are driving

the process. Some of these are listed below.

2 Survey conducted by Burson-Marsteller, the world’s

largest communications agency for the United Kingdom

based Prince of Wales Business Leaders Forum

Triple Bottom Line Many companies are moving beyond simply measuring financial performance to embrace some form of triple bottom line, where they strive for performance along financial, social and environmental dimensions. Some, such as BC Hydro, even produce annual Triple Bottom Line Reports.

- 4 -


Global democratization – Democratization

and the ability of citizens and communities

to influence their governments is increasing.

Although in many cases it is far from

perfect, the last decade has seen many

countries move to democratic elections and

more responsible and responsive

governments, (e.g., the toppling of the

government of Slobodan Milosevic in Serbia

and the reversal of ‘officially’ announced

election results in Cote d’Ivoire are recent

examples). Governments and corporations

everywhere must pay more attention to the

will of the people and how resource projects

impact local people and communities.

Non-Governmental Organizations

(NGOs) – Throughout the world there has

been an exponential growth of well-

organized and financed NGOs

(non-governmental organizations), most

with social and environmental agendas and

the ability to influence publics and markets.

Among other things, NGOs have been

largely responsible for; the Anti-Landmine

movement and its subsequent Nobel Peace

Prize, Shell’s loss of business following

Brent Spar and problems in Nigeria, and the

shutting down the World Trade

Organization (WTO) meetings in Seattle.

NGOs have the ability to disrupt corporate

operations, alienate markets and directly

impact financing when they deem

corporations are not meeting social and

environmental responsibilities. BC has

witnessed this first hand, as many NGOs

have been instrumental in influencing

market perceptions of BC forest products

and ultimately, influencing operational

strategies and decisions for the BC forest

industry. For example, according to the

Aug. 25, 2000 Globe and Mail, ‘Seven of the

top ten

U.S.

home

improve

ment

retailers,

includin

g Home

Depot,

have issued restrictive lumber buying

policies in the wake of an aggressive

campaign by environmentalists While

industry is still sorting exactly what this

means, there is no doubt that it threatens a

significant share of the traditional market

for BC forest products’.

“NGOs distribute more aid than World Bank and, if viewed as a nation, would rank 8th in economic power... Key roles in trade, environment, corporate decision making” Washington (AP)

- 5 -


Figure 2-1 Growth of International NGOs

Global media / CNNization of the world –

The global media reaches into every corner

of our planet, influencing consumers,

markets and stakeholders. No matter where

a resource development project is located, it

is only one incident away from international

infamy and its resultant bottom line impact.

Cameco, a Canadian mining company,

discovered this after a relatively minor spill

in Kyrgzstan turned into a costly

international incident in May 1998.

Ethical Investment Funds / Dow Jones

Sustainability Index – Driven by the desire

of some investors to judge more than

financial performance and the recognition

that there is a direct connection between

corporate responsibility and

sustainable long-term

financial performance,

financial markets and

institutions are recognizing the importance

of sustainable development. Numerous

investment funds have been established that

have social/ethical as well as financial

objectives and criteria. Investor interest in a

firm’s non-financial performance has led

Dow Jones, one of the most respected

economic institutions in the world, to create

a Sustainability Index. (Placer Dome, a

global mining company headquartered in

BC has been accepted onto this index.)

Internet and other communications

innovations – We live in an age where, no

matter where one is on the planet, it is

possible to communicate economically and

instantaneously with other individuals and

interests from around the world. According

to Time Fortune “a company’s activities, in

even the remotest parts of the world are

“Corporations must start shouldering their share of social responsibilities… the world could stumble back into warfare if global business interests don’t address the serious social concerns surrounding globalization” Thomas d’Aquino President, Business Council on National Issues (Banff, Sept 21, 2000)

- 6 -


subject to immediate inspection and reaction

by virtual networks of consumer oriented

activists”. NGOs and other interests

regularly use communication to advance

their causes and interests. Email and

internet communications is cited as the key

organizing tool responsible for the Anti-

Landmine campaign’s Nobel Peace Prize,

and for organizing protestors at the WTO

meetings in Seattle and the recent World

Bank meetings in Prague.

Globalization – Resource firms operate in a

world where financial and product markets

are global. How a company operates in one

corner of the planet can quickly affect its

financing, marketing and operations in other

countries and areas.

Increased permeability of institutional

and organizational boundaries –

Boundaries and borders are becoming

blurred – the line between business,

government, community and civil society is

no longer distinct. The old saying, the

business of business is business simply

doesn’t hold any longer.

Reputational Capital – For many firms, the

most valuable asset they have is their brand

(reputation) and they will go to extreme

lengths to protect it. In the resource industry

brand value can translate into improved

marketability, easier permitting and

regulatory approvals and enhanced access to

future opportunities. Firms that are known

for their social, environmental and economic

performance will have distinct advantages in

acquiring new opportunities and operating

existing projects. Reputational capital is

also a factor in project financing. Multi-

lateral financial institutions such as the

International Finance Corporation (IFC) are

beginning to review the social and

environmental performance of projects. In

fact the IFC has recently appointed an

Ombudsperson as part of a drive to boost the

social and environmental performance of its

investments. As well, NGOs are holding

public and private sector financial

institutions responsible for the

environmental and social performance of

investments, and attempting to devalue the

reputational capital, and thus attack the

client base of those institutions that finance

questionable projects.

- 7 -


Regulatory frameworks and

licensing/permitting procedures Resource

projects everywhere must pass through

increasingly detailed environmental review

processes in order to receive necessary

permits and developmental approvals.

Social and community issues are also

becoming a major component of this

process. Public forums draw attention to

these aspects of a project which, if not

addressed in good faith with stakeholders,

can cause expensive delays and add cost and

complexity to project development and

ongoing operations.

International standards and directives

There is a growing surge of initiatives

promoting standards for responsible

business behaviour3. Many of these involve

multi-stakeholder (Business, Governments

and Communities/Civil Society)

collaboration (See Section 3 for several

examples of multi-stakeholder collaborative

initiatives). The latest codes cover all

aspects of sustainable business. Recent

3 For a detailed discussion and analysis of various initiatives see A Content Comparison of Various Codes of Conduct at http://www.web.net/~tccr/benchmarks/rsp-GSP.htm This page was developed by the Global Accountability Program at the Interfaith Center on Corporate Responsibility.

initiatives include United Nations’ Secretary

General Kofi Annan’s January 1999

challenge to global business leaders to sign a

‘Global Compact’ based on international

principles concerning human rights, social

development, labour and environmental

standards4. Another initiative is the Global

Sullivan Principles (built on the original

Sullivan Principles which promoted ethical

business practice in apartheid-era South

Africa), which promote economic, social

and political justice by companies

worldwide.

In additon to the various multi-stakeholder

initiatives, there are a number of

international standards and directives5 (see

footnoted list below) that have been

4 See http://www.unglobalcompact.org/ for details on this initiative. 5 Some of the more important ones include: • World Bank: Operational Directive 4.30 –

Involuntary Resettlement; • World Bank: Operational Directive 4.20 –

Indigenous Peoples; • IDB: Community Consultation, Sustainable

Development; • IDB: Operational Directive 710 – Involuntary

Resettlement; • International Labour Organization Convention 169 on

Indigenous and Tribal Peoples Convention; • United Nations Conference on Environment and

Development: Chapter 26, Agenda 21; • United Nations: Declaration on the Rights of

Indigenous Peoples (Draft)Organization of American States: and

• Declaration on the Rights of Indigenous Peoples (Draft)

http://www.web.net/~tccr/benchmarks/rsp-GSP.htm

http://www.web.net/~tccr/benchmarks/rsp-GSP.htm

http://www.unglobalcompact.org/

- 8 -


promulgated by various multi-lateral

agencies such as the United Nations. A

Directive such as the World Bank’s

Operational Directive 4.20 – Indigenous

Peoples, sets out the expectations and

requirements for how World Bank financed

projects will interact with Indigenous

Peoples. When combined with the multi-

stakeholder initiatives and the other trends

discussed above, these standards and

directives are beginning to create somewhat

of a global standard for business. While

little has been done to formalize this

emerging trend, firms that habitually

transgress it by ignoring the environmental

and social aspects of thier operations risk

undermining their long-term financial

sustainability.

Combined, the trends and activities

discussed above demonstrate the new

paradigm of business. They underscore an

expectation of how companies and

communities should engage and how

resource development and extraction should

occur in a manner which creates sustainable

and meaningful benefits for local people and

communities. Stakeholders in British

Columbia’s resource economy cannot afford

to ignore this reality.

Two recent surveys, one in Canada and the other in Europe, illustrate the global nature of this

issue.

According to a recent Environics Poll:

• 43% of Canadians feel that a company’s role in society should be to “set higher ethical

standards and help build a better society”;

• Only 11% of Canadians feel that a company’s role is to “make profit, pay taxes, create jobs

and obey laws" (meaning that the remaining 89% feel a company has a larger

responsibility).

- 9 -


A recent Burson-Marsteller/Business Leaders Forum survey demonstrates that the corporate

social responsibility agenda is growing in importance, and that significant shifts in emphasis are

occurring. The key trends they identified are:

• Corporate social and environmental responsibility must be dealt with as an integrated part

of business planning;

• Exemplary environmental performance is regarded as a minimum requirement when

assessing a company, but more and more attention to softer, human relations is also now

being demanded; and

• Charitable giving by companies - whilst still commendable - is not of sufficient importance

on its own, and, in fact, unless good social and environmental stewardship is in place,

charitable giving is viewed with suspicion.

Speaking in Ottawa at a conference on

Ethics in the New Millennium, Placer Dome

CEO Jay Taylor noted that their

commitment to community development

“represent(s) an added cost, but is an

essential investment in our future”. He went

on to note that this investment would

improve access to projects, expedite

permitting processes and enable the

company to better manage social and

political risks and “should help us to achieve

greater profitability”.

The growing interest in corporate social

responsibility and sustainable development

has spawned a number of research efforts

and multi-stakeholder initiatives as industry,

governments, institutions, NGOs,

communities and other stakeholders strive to

operate in this new paradigm. In addition to

the international multi-stakeholder

initiatives discussed in detail in the

following section, there are numerous other

efforts to document and encourage improved

- 10 -


corporate involvement in community

development and adjustment. Some

representative examples are discussed

below.

The Conference Board of Canada, and

many other Conference Boards around the

world have launched research efforts and are

coordinating conferences6, round tables and

other fora for the exchange of information

and ideas on corporate social responsibility.

The Conference Board of Canada has

established a special unit, the Canadian

Centre for Business in the Community

(CCBC), which focuses exclusively on

issues related to corporate social

responsibility. In addition to publishing

various reports and organizing conferences,

the CCBC acts as a resource for member

firms. Based on their research and other

work over the past several years they

maintain that corporate social responsibility

can help to achieve a balance between

economic, environmental and social

imperatives as well as addressing

stakeholders’ expectations and demands,

6 Mr. Greg Goodwin, Executive Director of Community Enterprise for the MCDCV recently made a presentation at a Conference Board of Canada Conference in Ottawa, Canada.

with the overall result of sustaining

shareholder value.

Information on past research and

publications can be reviewed at

http://www.conferenceboard.ca/ccbc/.

Business at the Summit is an annual event

organized by British Columbia Indigenous

and Industrial leaders to provide an

opportunity for discussing and enhancing

corporate aboriginal relationships in the

province. The Summit encourages face-to-

face dialogue and cooperation between

Indigenous Peoples and business leading to

the identification of common agendas and

the creation of mutually beneficial economic

opportunities. The Summit first took place

in 1995 at the Squamish Nation Recreation

Centre and has occurred annually since that

time. The 1999 Summit focused on the

theme “Partnerships for Prosperity” with

speakers and workshops dedicated to

profiling successful partnerships and

discussing strategic issues and approaches to

identifying and developing mutually

beneficial relationships between business

and Indigenous Peoples.

http://www.conferenceboard.ca/ccbc/

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The Canadian Council for Aboriginal

Business (CCAB) is a national non-profit

organization that promotes the full

participation of Aboriginal communities in

the Canadian economy. Membership

includes leading Canadian corporations and

Indigenous organizations. Working with

industry and other stakeholders, CCAB

undertakes a number of initiatives aimed at

increasing aboriginal involvement in

business.

CCAB is currently working with the

National Quality Institute and Canadian

Indigenous and business leaders to launch an

innovative program to promote and

recognize leadership in relationships

between corporations and aboriginal people.

The initiative involves a certification

program for corporate aboriginal relations

called Progressive Aboriginal Relations

(PAR). This initiative, which is in the

process of certifying the first four

companies, will provide companies with the

right to use the PAR logo, signifying that

they are committed to community relations,

individual capacity building, aboriginal

employment and business development.

PAR sets out a framework for establishing

performance benchmarks in companies that

want to develop mutually beneficial

relations with Aboriginal people and

communities.

Additional information on CCAB and their

programs, research and other activities is

available on their website at

http://www.ccab-canada.com.

The Mining and Energy Research

Network (MERN), is based in the Corporate

Citizenship Unit of the University of

Warwick at Coventry, United Kingdom.

MERN is an international collaborative

research programme seeking to facilitate

improvements in the social performance and

competitiveness of mining and energy

companies. It seeks to understand the

relationship between regulation, technical

change, social policy and competitiveness in

the global minerals industry. MERN’s

objective is “Can minerals and energy

resource development, demonstrably

essential to modern industrial society, be

undertaken without damaging the

environment or undermining the

development opportunities of local

communities and can the benefits be

http://www.ccab-canada.com/

- 12 -


distributed amongst stakeholders more

equitably?”

Additional information on MERN and its

research projects can be found on their

website at

http://users.wbs.warwick.ac.uk/ccu/mern.

The National Round Table on

Environment and Economy (NRTEE) is

an independent advisory body that provides

decision makers, opinion leaders and the

Canadian public with advice and

recommendations for promoting sustainable

development. National Round Tables were

formed in many countries as a result of

agreements generated at the 1992 United

Nations Conference on Environment and

Development (UNCED) in Rio de Janeiro.

The Canadian National Round Table on the

Environment and the Economy uses; “A

multi-stakeholder approach, combined with

impartiality and neutrality. By creating an

atmosphere in which all points of view can

be expressed freely and debated openly, the

National Round Table has established a

process whereby interested parties

themselves define the environment/economy

interface within issues, determine areas of

consensus and identify the reasons for

disagreement in other areas. The round

table process is a unique form of

consultation, permitting progress on diverse

issues. It is of value in overcoming

entrenched differences and arriving at

recommendations for action.”7

Many of the Round Table’s initiatives, such

as the ongoing Sustaining Canada’s North:

Aboriginal Communities and Non-

Renewable Resource Development seek to

document and promote best practices in

environmental and corporate social

responsibility. The program mentioned

above will focus on non-renewable resource

development issues in the Western Arctic.

Working with industry, local Aboriginal

communities, government and

Environmental Non-Governmental

Organizations (ENGO), the purpose is to

produce concrete recommendations on how

to accommodate competing interests in the

area of mineral development and oil and gas

exploration to ensure long-term

sustainability of these communities. A

7 National Round Table website http://www.nrtee-

trnee.ca/eng/programs/aboriginal/aboriginal-

bulletin4_e.htm

http://users.wbs.warwick.ac.uk/ccu/mern

http://www.nrtee-trnee.ca/eng/programs/aboriginal/aboriginal-bulletin4_e.htm



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recent workshop identified a number of

important themes:

• Doing it right – the high level of

participation demonstrated faith and

optimism that key players are able to

work together to ensure that non-

renewable resource development more

effectively contributes to building

sustainable Aboriginal communities;

• The crisis in community capacity-

building – participants discussed

capacity-building (i.e., skills and

education), as a long-term challenge that

must to addressed to ensure communities

benefit from non-renewable resource

development, and a short-term crisis in

capacity was also identified;

• Respect – the need for all-encompassing

respect was stressed throughout the

workshop;

• Partnerships – partnerships are needed

that will involve Aboriginal people from

the beginning to build a common vision

with all stakeholders; and

• Retention of local benefits – participants

expressed a desire to see the local

retention of revenues generated by non-

renewable resource development.

Additional information on the NRTEE is

available on their website located at

http://www.nrtee-trnee.ca.

The World Business Council for

Sustainable Development (WBCSD) was

also formed as a direct result of UNCED. A

number of global business leaders made a

commitment at UNCED that they would

promote improved social and environmental

responsibility in their own companies and

amongst the global business community in

general. WBCSD is a coalition of some 150

international companies united by a shared

commitment to sustainable development, i.e.

environmental protection, social equity and

economic growth. Members are drawn from

30 countries and more than 20 major

industrial sectors. They organize

conferences, collaborates in research and

other initiatives8 aimed at encouraging and

supporting improved social and

environmental practices. The WBCSD

recognizes Corporate Social Responsibility

8 WBCSD collaborates with the Prince of Wales Business Leaders Forum and is a key stakeholder in the Global Mining Initiative, both of which are discussed in detail in the following section.

http://www.nrtee-trnee.ca/

- 14 -


(CSR) as a critical aspect of their work and

have organized five sectoral projects to

understand, promote and support CSR in

industry specific situations. The five

sectoral projects encompass Forestry,

Mining and Minerals, Cement, Mobility, and

the Electrical Utility Industry.

The forestry project aims to foster dialogue

amongst all forest stakeholders; to provide

global business leadership; and to develop a

strategy to manage the sustainability of

forests. Twenty-one companies and

organizations form the industry working

group for the project. The project’s primary

purpose is to develop a factual base upon

which to begin a constructive dialogue

process with stakeholders in broader forest

issues. Another anticipated outcome is the

ultimate creation of new public–private

partnerships to address the myriad of forest

issues that currently cause so much

confusion.

Additional information on WBCSD can be

found on their website at

http://www.wbcsd.ch.

The above, combined with the four multi-

stakeholder initiatives discussed in the

following section, illustrate the multi-

dimensional interest in corporate social

responsibility. Two common themes

permeate most initiatives. They are:

• The importance of bringing stakeholders

together to participate in developing

their own solutions and to facilitate the

sharing of experiences and initiatives;

and

• The necessity of approaching corporate

social responsibility as a strategic

business issue rather than as a

philanthropic add-on.

Practical examples of the application of

these principles are discussed in five case

studies in Section 4.

http://www.wbcsd.ch/sectoral/forestry/index.htm

http://www.iied.org/mmsd/index.html

http://www.wbcsd.ch/sectoral/cement/index.htm

http://www.wbcsd.ch/sectoral/mobility/index.htm

http://www.wbcsd.ch/sectoral/electricity/index.htm

http://www.wbcsd.ch/

- 15 -


3 INTERNATIONAL MULTI-

STAKEHOLDER INITIATIVES

A number of multi-stakeholder initiatives

have been launched in the past ten years that

directly relate to the community component

of sustainable development. What is

significant is that the institutions involved in

these initiatives are significant global

players in the area of finance and resource

development and are leaders in the changing

paradigm of natural resource development.

3.1 Business Partners for Development

Business Partners for Development (BPD) is

an initiative launched by the World Bank in

1997. It is a “programme designed to study,

support and promote the creative

involvement of businesses as partners

alongside governments and civil society for

the development of communities around the

world”. BPD is divided into four

‘clusters’; Natural Resources, Water and

Sanitation, Youth Development and Road

Safety. Each cluster has identified a number

of focus projects that are being used to better

understand the role of business as a partner

in development.

The Natural resources cluster brings

together a number of corporate and civil

society stakeholders to share information

and examine specific examples. This cluster

is co-convened by CARE International, BP

Amoco and the World Bank Group. The

cluster identified focus projects in mining,

and oil and gas, which demonstrated the

application of the tri-sector (industry,

government and civil society) approach to

development. Project locations were

distributed throughout the developing world

(Venezuela, Colombia, India, Indonesia,

etc.)

The organizational structure of BPD

attempts to ‘lead by example by:

• Involving the World Bank Group and

internationally recognized NGOs in

cluster activities to help companies and

local NGOs transcend issues and work

more effectively with each other and

host country governments

• Providing an opportunity for

practitioners and other stakeholders to

review leading edge projects and

- 16 -


maximize learning and dissemination of

knowledge.

• Convening workshops, study sessions

and other activities to better understand

and build from the focus group

examples.

The focus group projects have identified that

effective sustainability programs have

direct benefits for the tri-sector partners.

Business

• Reduced and shared social risks

• Compliance with emerging social

ethics and regulations

• Improved access to new opportunities

• Increased shareholder value

Civil Society and Government

• Increased local socio-economic impact

• Increased regional development impact

• Greater sustainability of community

projects

•

In order to maximize learning from BPD,

the partners have recently added a fifth

cluster, the Knowledge Resource Group.

This group is convened by the Prince of

Wales Business Leaders Forum (see

discussion on this organization later in this

section).Additional information on Business

Partners in Development is available on

their website at www.bpdweb.org.

3.2 Global Mining Initiative

The Global Mining Initiative (GMI) grew

out of an informal discussion held in 1998

between CEOs from nine companies who

were concerned about the sustainability of

the mining industry in the face of societies

growing discontent with industry

performance and a shift in ability of

stakeholders to effectively impact business

activity. Initial discussions resulted in the

conclusion that the problems facing the

industry would not be resolved with a public

relations program and that to change public

attitude, industry must change the way it

does business.

One of the primary elements of the GMI is

the Mining Minerals and Sustainable

- 17 -


Development Project (MMSD). This project

is an independent process of participatory

analysis with the objective of identifying

how mining and minerals can best contribute

to the global sustainable development

transition. The MMSD project has gained

momentum and industry sponsorship for this

program has grown from nine to twenty

seven of the world’s leading mining

companies.

To ensure transparency and independence,

this study has been commissioned through

the World Business Council for Sustainable

Development and is managed by the

International Institute for Environment and

Development (IIED)9

The expectation is that this Study will

generate:

• Broadly based and authoritative analysis

of key issues which arise from people’s

expectations of sustainable development;

• The foundation for the new relationships

and partnerships which the scale of the

challenges demands;

• More active engagement between the

industry and others in order to

understand the issues better, and the

identification of the priorities as we go

forward; and

Clarification on where the boundaries

lie for action by different participants.

With this information and a new

platform for constructive stakeholder

dialogue, industry sponsors of the

MMSD project will develop” an action

plan for change” based on the priority

issues identified and in partnership with

strategic stakeholders.

Additional information on GMI and MMSD

is available at www.iied.org/mmsd

3.3 Prince of Wales Business Leaders

Forum

The Prince of Wales Business Leaders

Forum (PWBLF) is an international

educational charity set up in 1990 to

promote responsible business practices

9 See IIED website at http://www.iied.org/ for information

on the organization

http://www.iied.org/mmsd

http://www.iied.org/

- 18 -


internationally that benefit business and

society, and which help to achieve social,

economic and environmentally sustainable

development, particularly in new and

emerging market economies.

Fifty leading companies from Europe, the

Americas, Asia and the Middle East support

the Forum. In addition to its corporate

membership, the Forum’s network also

includes valuable strategic alliances with

international agencies such as the World

Bank, United Nations, European

Commission, the United Kingdom

Department for International Development,

major international non-governmental

organizations and international and national

business coalitions.

The Forum:

• Encourages continuous improvement in

responsible business practices in all

aspects of company operations

• Develops geographic or issue-based

partnerships to take effective action on

social, economic and environmental

issues

• Helps to create an 'enabling

environment' to provide the conditions

for these practices and partnerships to

flourish.

Through:

• Making the case that in the new world

order, well-led and competitive

businesses have a positive role to play in

development challenges, through

responsible core business practices and

engagement with society

• Showing that – while partnership and

collective action is difficult – in the

networked society it is essential to

combine business skills and resources

with community support and public

accountability

• Demonstrating that scale can only be

achieved and economic exclusion

addressed through 'enabling

environments' in which governments,

international institutions and the media

play a part.

According to the PWBLF, in the mid-1990s,

its attention on issues of business ethics,

- 19 -


social development and human rights was

seen as rather radical and ill focused. Less

than six years later, the same issues could be

discussed comfortably in most Boardrooms.

This underscores the earlier discussion on

the changing paradigm and shifting of

boundaries and responsibilities.

The Forum's defining characteristics are:

• The Forum provides a focus on the

contribution of business to 'social'

progress, as well as to economic

multipliers and good environmental

practice – the 'triple bottom line' in

practice

• It is a source of 'practice-based' analysis

and information on leading edge

business practices from its 'on the

ground work' - on how the macro trends,

challenges and opportunities in

responsible business practices can be

effectively linked to the practical micro-

level implementation

• It has a strong track record in

partnership-building experience, and is

trusted as a neutral facilitator of cross-

sector partnerships with business, public

and NGO sectors. Its capacity building

experience reaches across cultures,

countries and unfamiliar contexts

• It has recorded demonstrable success in

engaging the attention of business

leaders, and mobilising them at all levels

in practical action - to 'make a

difference' through core business

practices, community involvement and

policy dialogue

• It has experience of implementation in

the demanding conditions of transition

economies – through implementation of

responsible business practices and

public/private partnerships

• It offers in-depth understanding and

widely regarded analysis of the

'enabling public framework' - for

responsible business and cross-sector

partnerships.

Additional information on the Prince of

Wales Business Leaders Forum is available

on their website www.pwblf.org.

3.4 UNEP Annual Round Table with the

Finance Industry

The United Nations Environment Program

(UNEP) Financial Institutions Initiative on

http://www.pwblf.org/

- 20 -


the Environment was launched in 1992 with

the intent to engage a broad range of

financial institutions - from commercial

banks to investment banks to venture

capitalists to asset managers to multi-lateral

development banks and agencies - in a

constructive dialogue about the interface

between economic development,

environmental protection, and sustainable

development.

This Initiative, which maintains a Secretariat

in the United Nations Environment

Programme, promotes the integration of

sustainable development considerations into

all aspects of the financial sector's

operations and services. An additional

objective of the initiative is to foster private

sector investment in environmentally and

socially sound technologies and services.

A core part of this Initiative is to foster

endorsement of the UNEP Statement by

Financial Institutions on the Environment

and Sustainable Development, which

commits signatories to incorporating

environmentally sound practices into their

operations. The following introduction to

the Statement outlines the principles of the

initiative.

“We members of the financial services

industry recognize that sustainable

development depends upon a positive

interaction between economic and social

development, and environmental protection,

to balance the interests of this and future

generations. We further recognize that

sustainable development is the collective

responsibility of government, business, and

individuals. We are committed to working

cooperatively with these sectors within the

framework of market mechanisms toward

common environmental goals.

We regard sustainable development as a

fundamental aspect of sound business

management.

An International Round Table is held every

year to bring together stakeholders.

Additional information is available on the

initiative’s website

www.unep.ch/etu/finserv/fimenu.htm

http://www.unep.ch/etu/finserv/fimenu.htm

- 21 -


4 EXAMPLES OF EFFECTIVE

CORPORATE SOCIAL

RESPONSIBILITY

4.1 Cameco in Northern Saskatchewan

Cameco is the largest uranium producer in

the world, with mining activities in Northern

Saskatchewan. Early in the development of

these properties Cameco recognized that

business success was inextricably connected

to its ability to work effectively with the

residents of the area, ensuring that they

received meaningful and sustainable benefits

from mineral development.

Northern Saskatchewan has a total

population of 38,000 people living in many

small communities scattered over 250,000

square kilometers. Demographically, the

north’s population is 75% aboriginal

representing the Woodland Cree, Dene, and

Metis Nations. The majority of the

aboriginal population of northern

Saskatchewan are treaty Indians (First

Nations) living primarily in communities on

treaty reserve lands. The remaining

aboriginal and non-aboriginal population

- 22 -


lives in small settlements and villages under

provincial jurisdiction.

Cameco’s management knew that failure to

work effectively with Northern

Saskatchewan residents would add cost and

complexity to all aspects of the permitting

and licensing process and could even

undermine the sustainability of the entire

industry in the region. People were not

prepared to support the mining development

unless it provided them with meaningful

benefits such as employment and business

opportunities.

In response, the firm developed a complex

array of economic, social and community

relations programs, with a strong focus on

employment and business development.

Cameco has facilitated the integration of

aboriginal northerners by giving priority to

northern hiring, requiring contractors to

meet northern hiring targets, maintaining a

seven-day in, seven-day out work schedule

and a network of northern air traffic pick-up

points for employees. This system makes it

convenient for northern employees to work

in the mines one week and remain in their

home communities the next, often

participating in trapping, hunting and other

traditional activities when they are not at the

minesite.

By November 1999, 450 aboriginal

employees, representing about 45% of the

site operations workforce, made Cameco

one of Canada’s leading industrial

employers of aboriginal people. Northern

people employed in Cameco’s mining

operations collectively earn approximately

C$20 million in direct salaries and wages

every year, and the majority of this

employment income remains in the north.

Salaries are attractive (Cameco employees at

its Key Lake minesite average $56,000 per

year including benefits) and most

communities have little other permanent

wage based employment.

Cameco has cooperated with various

agencies representing federal and provincial

governments, and First Nations and Metis

organizations to develop a proactive, long-

term labour force development strategy. In

1999, Cameco invested more than a million

dollars in post-secondary education and

training support, scholarships, education

awards programs, summer student

- 23 -


employment, science program sponsorships,

school site tours, school-based athletic

programs and career information initiatives.

All were designed to encourage northern

aboriginal children to stay in school, pursue

post-secondary training and consider

occupations in the mining industry. As a

result of these efforts, Cameco is beginning

to experience substantial gains in the

employment and advancement of aboriginal

people in the management/supervisory,

technical/professional and trades

occupations. As of September 1999,

Cameco directly employed 20 aboriginal

managers/supervisors, 42 aboriginal

employees in technical/professional

occupations and 40 aboriginal tradespeople.

Chart 4-1 Cameco Northern/Aboriginal

Purchases In addition to employment Cameco

systematically promotes northern business

development, giving preferential

consideration to suppliers with northern and

aboriginal involvement. Volumes of

northern purchases have increased by 880%

over eight years, rising from about C$10

million in 1991 to more than C$90 million

in 1998 (see Chart 4-1). Northern

procurement now represents a very

substantial part Cameco’s total purchases in

support of its northern Saskatchewan mining

operations.

Northern Resource Trucking (NRT) is one

example of a successful northern aboriginal

business nurtured by Cameco’s northern

business development strategy. NRT’s 71%

aboriginal ownership consists of nine First

Nations and three Metis communities

Cameco Northern/Aboriginal Purchases

10.6 16.7 $22.8 $27.9$44.5$44.1

$74.5$93.3

0

50

100

1991 1992 1993 1994 1995 1996 1997 1998

Year

Purc

hase

s in

CA

D$

Mill

ions

- 24 -


representing the northern Dene, Woodland

Cree and Metis people of northern

Saskatchewan. Today NRT employs about

140 people, has annual sales of C$18 million

and has a permanent office and transit

warehouse in the north.

Another example is the Mudjatik/Thyssen

joint venture, owned by Thyssen Mining

Construction Ltd. and the Mudjatik

partnership, a consortium of northern

aboriginal partners. In 1999 they provided

over C$39 million in underground mining

and construction services to Cameco,

employing more than 100 aboriginal people

in some of the highest paid industrial jobs

available. Other examples include Tron

Power, wholly owned by the English River

First Nation, which had Cameco contracts

worth more than C$9 million in 1999.

Cameco has developed extensive

community consultation and involvement

procedures and has even appointed Chief

Harry Cook, Chief of the Lac La Ronge

First Nation, the largest First Nation in

Saskatchewan, to Cameco’s Board of

Directors.

The efforts of Cameco and other northern

Saskatchewan mining firms have

precipitated a fundamental shift in the

overall development capacity of northern

Saskatchewan. The education level of the

area is improving and northern aboriginal

peoples have many more professional and

managerial opportunities than ever before.

The revenue and associated salaries enables

communities to be more financially self-

sufficient and enhances the overall

economic capacity.

While, the short-term economic viability of

the region is still very dependent on the

mining industry, over the long-term the

increased capacity will make it easier to

identify and develop alternative economic

activities.

4.2 The Porgera Project, Papua New

Guinea

Situation

The Porgera Project is a world-class gold

mining operation situated in the remote

- 25 -


highland province of Enga in Papua New

Guinea (PNG). Gold in this area was first

discovered by John Black, an Australian

patrol officer, on March 25,1939. This

discovery coincided with the western

world’s making first contact with the people

of the Porgera valley. Due to the remote and

hostile environment encountered in the

Porgera Valley, exploration activity was

limited until the 1970’s when Placer Pacific

Ltd. began exploration in this unique area.

In 1979, a joint venture was formed

between Placer Pacific Pty. Ltd, Rension

Goldfields Pty. Ltd. and Mount Isa Mines

Ltd. in order to further exploration activity.

In the mid 80’s, with the discovery of a

high-grade zone called “Zone Seven,”

commercial development of the Porgera

gold deposit became a possibility.

Concurrent with further mineral exploration

and preparation of a feasibility study, the

Joint Venture engaged in local training,

community relations and business

development activity. In 1988 a decision

was made by the joint venture partners to

proceed with the development of a mining

operation, subject to receiving the necessary

permit approvals. Construction was to occur

in four stages over a five-year period at a

capital cost exceeding one billion dollars

US. Key players involved in impacting the

success of the project were:

• Local Landowners;

• National Government;

• Provincial Government; and

• Joint Venture Partners.

Local Landowners - The mining

development permit approval process in

PNG is unique due to their land ownership

structure. In PNG, landowners have control

over land surface rights. No activity

proceeds on traditional clan land without the

full authorization and support of the

landowner.

The Special Mining Lease area defined for

the Porgera Project occupied over 2,200

hectares of land. Detailed genealogy studies

were conducted on the special mining lease

to identify landowners and their traditional

clan land boundaries. Seven clan groups

were identified which were further broken

down into sub-clan groups totaling twenty-

three. Identification of the geographical

location of sub-clan boundaries presented an

interesting challenge, as historically

- 26 -


boundaries had been the cause of clan

disputes resulting in tribal warfare.

Development of the Porgera Project required

compensation to be paid for surface

disturbance and consequently many old

boundary disputes resurfaced. Through the

traditional process of clan tribal fighting and

negotiation the clan boundary issues were

ultimately resolved

Two important agreements for

compensation and relocation were

negotiated between the joint venture

partners and a Landowner Committee

represented by the twenty-three sub-clan

groups. The Compensation Agreement

determined the rate of compensation to be

paid to a landowner for all improvements

made on the land, as well as determining an

annual lease rate to be paid to the landowner

based on land surface area utilized for

development. This Agreement included a

compensation rate schedule for garden

vegetables, bush material houses, fences, a

wide assortment of jungle trees, vines, ferns

and other bush material traditionally used by

local landowners. The Relocation

Agreement documented the house design

and specifications that would be built for

relocated families in addition to outlining

the criteria that would be used to determine

who would receive a relocation house. Four

hundred families, involving over three

thousand people, were relocated from the

active mining area.

Two important factors contributed to the

success of the Porgera Project. Firstly, the

Landowner Committee played an important

role by participating in frequent fora for

discussion and communication of issues and

concerns for the involved parties. Given the

complexity of the task there were many

opportunities for miscommunication,

misinterpretation, and misunderstanding due

to language, culture and value differences.

Secondly, the Relocation and Compensation

Agreements committee structure formed the

basis for successfully addressing issues.

There were many circumstances and

concerns that arose that were not identified

in the original Agreements that needed

resolution. Due to the fact that these

agreements were not fixed, but flexible, they

could be revisited and re-negotiated as

concerns surfaced. Meetings with the

Landowner Committee were frequent

- 27 -


ensuring the opportunity to resolve issues

and disputes promptly.

National Government – Papua New

Guinea has a democratically elected

government similar in structure to the

British system. One of its key roles was

issuing the necessary permits for allowing

the Project to proceed. The Porgera Project

was permitted under a process called the

Mining Development Forum. This involved

a series of open meetings to hear and record

input at the local, provincial, and national

levels. Two important issues became the

focus of discussion:

• How the wealth created from the mine

would be distributed;

• Resolution of the environmental

impacts.

These discussions then led to the

negotiation of two agreements; one between

the National Government and Landowners

representatives, the other between the

National Government and the Provincial

Government. These agreements largely

focused on how the wealth generated from

the mining operations resulting from

royalties and taxation would be distributed.

They included commitments to construct

community infrastructure such as schools

and hospital facilities. Following the

process of engagement, the National

government issued the Joint Venture

Partners a Special Mining Lease permit

authorizing them to proceed with the

development under the specified terms. As

with the Compensation and Relocation

Agreements, success of the National

Government agreements was due to the fact

they were “living documents”. They

documented the broad intent of the

agreement, but many unidentified issues

needed to be, and were, clarified and

resolved through an ongoing process of

dialogue and negotiation.

Provincial Government – The Provincial

Government’s role as a stakeholder in the

Porgera Project was administration of the

provincial revenue generated by the project.

Road construction creating access for

isolated villages became one of their

primary roles. Providing police services and

bringing law and order to this frontier was

another role receiving provincial

government attention. These were

- 28 -


fundamental and key elements in the success

of the project because without a system

based on order, nothing is sustainable in the

long-term.

The Joint Venture Partners – The

feasibility study completed in 1988 by

Placer Pacific, Renison Goldfields, and

Mount Isa Mines Ltd. indicated

development of the Porgera gold deposit

was economically viable. A decision was

made to develop the project as equal

partners, subject to government approval.

Once the project was approved the National

Government exercised its option to

participate as a joint venture with a 10%

interest. This left the other partners with an

equal share of 30% each. In 1993, after

three years of successful operation, the state

increased its ownership in the property to

25%; the other three partners reluctantly

agreeing to each reduce their ownership to

25%.

Due to the lengthy exploration phase

required for this project, the Joint Venture

Partners had time to work within the local

culture of the Porgera valley and develop a

working understanding with the local

community. Compensation, local business

development aspirations and training were

in place. With the rapid build up of

construction personnel to the mine site,

(2,000 people) the initial culture shock

experienced by this group was significant.

The cultural learning curve was steep which

often resulted in landowners shutting down

the work until issues were resolved. The

frequency of work stoppages due to local

landowner disputes all but disappeared once

the Joint Venture Partners began operating

as a team. This involved the integration of

community relations, lands, and business

development activities with the traditional

construction functions. Local landowners

had taught their visitors an important lesson;

the project would not go forward unless all

landowner issues of compensation, business

development or other community issues

were resolved. Billions of Dollars were at

stake This lesson taught the Joint Venture

Partners to be good listeners and creative

problem solvers.

Driving Factors

The motivation for the Company and the

Community to work together was simple.

The Joint Venture Partners needed the

- 29 -


support of the community to build and

operate the project and the Community

wanted the project to proceed as they saw it

providing them with a better quality of life.

The investors needed the landowners to

lease the land necessary for the project

development and also needed their support

to ensure a stable social environment.

Managing risk to capital invested through

active community relations programs was,

and continues to be, a strategic component

of the Joint Venture Partners business plan.

Staffing within the Lands and Community

relations department is maintained at healthy

levels, between 80-100 employees. They

work closely with landowners to address

community issues and support women’s and

youth organizations. Community relations

staff also work closely with locals to

administer the National Government’s tax

credit program. This program allows for a

portion of the annual tax payable to be short-

circuited directly into local communities

impacted by the mine for the creation of

needed infrastructure. This initiative was

largely in response to local landowner

complaints that they were not seeing the

benefits of taxation being reinvested into

their communities.

The local landowners viewed the

development of the Porgera gold deposit as

their opportunity to improve their quality of

life. In this way they shared a large

commitment to see the project proceed and

become successful. Due to the remoteness of

the Porgera valley, basic infrastructure such

as road access, schools, medical facilities

and electricity were nonexistent or

nonfunctional due to lack of funds for

staffing and maintenance. The Joint

Venture Partner’s investment of $ 1 billion

US dollars provided local employment

opportunities, royalty payments and

infrastructure.

Successes

The main success of this project was the

win-win situation created by the primary

stakeholders. The community of Porgera

achieved their goal of improving access and

services to the valley with the construction

of a good quality road, new airstrip, and

commercially viable electrical power supply

and distribution network. Additionally, they

improved the quality of local educational

- 30 -


service and medical facilities with new

school facilities, a large education trust fund

for advanced education, and a modern new

sixty-bed hospital. In conjunction with

these new facilities the development now

supports additional commercial activity to

provide service to Porgera and the

surrounding area.

While the community enjoys the new wealth

derived from the mining activity town

planners are thinking about life after the

mine closes. Their vision is to continue to

be a hub for goods and services. They plan

to have the best medical facilities in the

country thereby attracting people throughout

the country to come to Porgera to receive

medical attention. They are also planning to

be a commercial distribution center for food

and dry goods to the residents of the Porgera

valley and surrounding district.

Culturally there are many changes too, some

positive and some negative. Tribal fighting

is becoming a less common occurrence and

generally law and order is improving.

Government bureaucrats and politicians are

also improving their performance as they

improve their capacity to govern and

manage state affairs. This is encouraging, as

it requires the support of a functional,

responsible government and legal system in

order to make a sustainable developmental

contribution. The additional wealth

available in the community has complicated

the tradition of polygamy. Traditionally, a

wealthy man would have two or three wives.

With the new wealth generated by the mine

five, six or seven became possible. This

invariably has led to more frequent violence

and breakdown within some family units.

Gambling, alcohol, and sexually transmitted

disease have also become problematic in the

community as people struggle with the

complications of their new wealth. Through

the support of social workers employed by

the mine, as well as government support

workers, families are making progress

dealing with these challenges. Women’s

and youth education programs are two areas

of primary focus.

Mine operation success can be measured by

the fact that the mine was constructed and

has continued operation uninterrupted by

social disturbances. The exceptions to this

were several minor power outages caused by

the downing of power transmission lines to

- 31 -


the site. This circumstance not only impacts

the mine, but all the people in the valley that

enjoy electrical power so the incidences of

power disruption are few and far between.

The integration of local people into the mine

activities has also been a great success for

both the company and the community.

Porgerans have historically been very

anxious to participate as employees or

contractors to the project. With an effective

training program local Porgerans and other

Papua New Guineans perform a high

percentage of the jobs available at Porgera.

The numbers of expatriate workers at the

site continues to drop annually as locals

receive training and develop competency at

the highly skilled trades or management

positions. It is extremely rewarding to see

young Porgerans who have received the

benefit of higher education return to their

homeland to fill senior positions at the

minesite.

Moving beyond the narrowly focused

success of the company and the landowners,

the impact of the Porgera project has had a

large effect on the thinking of both the

company and the community. For the mine

operators, experience at Porgera has

triggered the need for a cultural shift within

Placer Dome, operator of the Joint Venture.

This has led to the expansion of their

Environmental Policy, developed in the

1980’s, to a broader Sustainability Policy. In

addition to an environmental commitment, it

addresses the Company’s broader

commitment to social, cultural, and

economic issues for impacted stakeholders.

The company has also moved to public

reporting of its environmental and social

performance through the use of key

performance measures. They also actively

engage external stakeholders to hear,

understand and work with them to solve

mutual problems.

Meetings with local landowners continue to

be held on a regular basis. The idea of

stakeholder engagement has been expanded

to address the broader issues beyond the

boundaries of the minesite with the

formation of the Porgera Environmental

Advisory Committee. This is a

distinguished group of Papua New Guineans

and Australians. Their role is to oversee and

assess environmental impacts and mitigation

programs to ensure that issues are addressed

- 32 -


openly and proactively. This role is

particularly important given the

controversial riverine discharge system for

disposing of mill tailings. The company has

also developed its internal capacity to think

and act in a more sustainable way, in large

degree due to the lessons taught by the local

community.

Challenges

The main challenge to the process of

collaboration was created by the large

cultural differences that existed between the

community and the mine developers. This

was compounded by the fact that most of the

company employees spoke English and the

locals spoke Ipilli; one of over seven

hundred languages in the country. In a

broad sense, lacking cultural preparedness

was the biggest challenge for newcomers to

Porgera. Characteristics such as rigidity,

narrow thinking, and paternalism were the

key obstacles to collaboration. They were

overcome out of necessity, as the Porgerans

are strong willed, determined negotiators

that controlled an asset fundamental to the

success of the project, access to land.

Being too paternalistic was one of the early

pitfalls encountered by the company. This

characteristic was ultimately modified as

mine management’s capacity to work in a

foreign culture matured. Along with

increased cultural awareness came more

flexibility and creativity in developing

solutions and resolving problems.

Examples of this include innovative

solutions to the local circumstances,

customs, and expectations. Flexible thinking

is necessary to answer the questions: How

do we communicate with and train

employees that have never had jobs before

and do not speak a common language? How

do we involve local contractors in

competitive bidding and winning of

contracts for construction and operation of

the mine? How do we ensure adherence to

the local expectations of awarding jobs to

qualified people in the following order,

Porgerans, Engans and then other Papua

New Guineans? How do we maintain

balance in recruiting equally from sub-clan

groups?

Mine management remains fully aware that

the ongoing success of the mine is

- 33 -


contingent on addressing and solving

problems that arise with the community.

While these two stakeholders may not

always agree on every issue, one aspect of

their behavior remains critical to the

ongoing success of the project, the ability to

communicate and explore for solutions

regardless of individual personalities and

egos.

Lessons learned

The main lessons learned at Porgera were

how to be successful amongst a group of

stakeholders with differing needs and

agendas. Lessons learned were largely

fundamental, but often overlooked, in a

business environment where sometimes the

balance of power between stakeholders

becomes distorted. In point form they are:

• Don’t prejudge an individual’s ability on

the basis of their culture, looks or extent

of their formal education;

• Communicate openly and frequently to

stakeholders;

• Be flexible, don’t be afraid to try new

innovative and creative ideas to fit

different circumstances;

• Be respectful to others;

• Be open and honest. Build credibility

and trust by always doing as you say you

will; and

• Recognize that others must also be

successful, keep an open mind as to how

you can help them achieve their goals

and ambitions.

- 34 -


At Porgera, mine operators learned some of

the principles for sustainable thinking.

Development and refinement of this learning

process is applicable around the world as

people develop an increased awareness of

the need for sustainable development. It is

an essential component of all successful

companies in business today.

4.3 Weyerhaeuser and Clayoquot Sound –

A Region In Transformation

The logging industry in Clayoquot Sound

has been a controversial issue, drawing

worldwide attention and forcing all

stakeholders to search for new and

innovative approaches. The issue is that of

logging (and clear-cutting) of old growth

forests in Clayoquot Sound, the role of First

Nations, and the intervention by

environmental non-government

organizations (ENGO10). Wrapped around

these issues are the contexts of aboriginal

rights, economic welfare, employment,

sustainable development and local versus

‘outside’ decision making.

Clayoquot Sound is a large but remote inlet

located centrally on Vancouver Island’s

rugged West Coast. It is the traditional

home of the Central Nuu-chah-nulth

aboriginal people who have an interest in

reclaiming their lands to promote economic,

social and cultural development for their

people. These people include five bands,

with the northern most three, the Hesquiaht,

Ahousaht and Tla-o-qui-aht being “in”

Clayoquot Sound with the Ucluelet and

Toquaht bordering to the south.

Clayoquot Sound also plays host to forestry

companies Weyerhaeuser (Weyerhaeuser

inherited their role through the acquisition of

MacMillan Bloedel (MB) in 1999), Interfor

and TimberWest. Other area businesses are

fisheries based (wild and farmed) and

tourism based, including hospitality and eco-

tourism.

Before the escalation of conflict,

Weyerhaeuser (MB) with an annual harvest

of over 600,000 cubic metres in Clayoquot

Sound generating annual economic activity

10 ENGOs are part of the global NGO phenomenon discussed earlier.

- 35 -


of well over $100,000,000 had the most

economic value at stake11. However many

small businesses limited to the regional

centres of Tofino, Ucluelet or Port Alberni

were also at risk. Furthermore, government

revenues at the municipal, provincial and

federal levels would all be impacted by

changes in Clayoquot Sound.

Chronological Highlights

In the 1980’s, ENGOs initiated opposition to

Weyerhaeuser’s (MB’s) logging plans.

These plans were based on logging rights

awarded by Provincial Government grants in

the 1950’s and later. The ENGO activists

enlisted the support of First Nations

(aboriginal) people. This coalition used

Native land claims to successfully block

logging through a BC Supreme Court

injunction in 1985.

The Provincial Government formed the

Clayoquot Sound Sustainable Development

Steering Committee in 1990. Its mandate

was to develop a consensus plan for land

allocation achieving sustainable

development for the area. This committee

11 These figures and others in this case study are based on personal interviews with corporate officials and review of

followed a failed task force appointed in

1989. By April 1993, the BC Government

announced its Clayoquot Decision following

recommendations of the Steering

Committee.

By 1993, the “War of the Woods” climaxed

with about 800 arrests of protesters

obstructing legally sanctioned logging

activity. This followed a spring of

international advertising and promotional

campaigns by ENGOs intended to embarrass

the logging companies and encourage a

boycott of their products.

From 1994 to 1996, many Weyerhaeuser

(MB) customers responded to pressure from

ENGOs by dropping long-standing

contracts. And while the ENGOs campaigns

grew internationally, the First Nations and

ENGOs coalition at home was showing

signs of weakness with counter protests

from some First Nation’s peoples.

In July 1996, First Nations hosted an all-

stakeholder meeting to discuss a resolution

to Clayoquot controversy. Signs of a

solution started to appear in the fall with a

corporate documents in the public domain.

- 36 -


joint effort to develop an application for a

UN Biosphere Reserve. In January 1997,

Weyerhaeuser (MB) laid off 110 workers

with a decision to stop logging in Clayoquot

Sound for 18 months.

What forces caused the parties to move from

a zero sum game approach to a mutually

collaborative approach?

Representatives of both Weyerhaeuser (MB)

and ENGOs agree that the impact on

business as a result of the international

market campaign combined with the First

Nations leadership was the catalyst that

stimulated the development of cooperative,

mutually beneficial solutions.

Ultimately it came down to a realization that

after the initial bitter battles, successful

outcomes for the parties depended on

finding common ground. Without change,

Weyerhaeuser (MB) would lose the public

relations battle, and access to markets and

customers; activists would lose leverage

without First Nation’s cooperation, and First

Nations would lose any hope of developing

a ‘modern-traditional’ economic activity

(e.g., logging) as they need the capital and

resource management experience of a firm

like Weyerhaeuser.

The Iisaak Forest Resources concept was

formed in March 1997, as a joint venture

between Nuu-chah-nulth people and

Weyerhaeuser (MB). Iisaak (pronounced e-

sock) would be 51% First Nations owned

and would take over Weyerhaeuser’s

(MB’s) operations in Clayoquot Sound.

However harvests would be reduced to

40,000 cubic metres per year and be put-off

for three years while value-added forest

product opportunities were investigated.

Three years later, the official United Nations

Biosphere was declared in May 2000,

supported with a grant from the Canadian

Federal Government. Then on August 22,

2000, the buzz of a chain saw was heard

once again in Clayoquot Sound. Before an

audience including ENGOs, an Iisaak

employee cut down the first cubic metres of

the 13,000 that would be harvested by the

Company in 2000.

Iisaak Forest Resources will harvest up to

40,000 cubic metres per year. That is less

than 10% of the volume that had been

- 37 -


sustained before the emotional battle. First

Nations control Iisaak, not Weyerhaeuser

(MB), and they have options to increase

their ownership, perhaps to 100% one-day.

Weyerhaeuser (MB) will continue to work

with Iisaak, providing start-up working

capital and management experience. This

element of control was key to earning the

support of Native Elders for resource

extraction from their land and the transfer of

such control should be considered an

important success.

The area will be managed first for

conservation values, second for economic

benefit. This enabled the support of many

ENGOs and the signing of Memorandums of

Understanding between ENGOs, Iisaak and

the local community.

However, this will have a significant

economic impact. The following (Table 4-

1) applies to Weyerhaeuser Coastal

Operations (former MacMillan Bloedel) in

Clayoquot Sound. (It does not include data

for the other tenure holder in the area,

Interfor, which acquired their Clayoquot

tenure with the purchase of an interest in

Western Forest Products some years ago.)

- 38 -


Table 4-1: Clayoquot Economic Comparison

(Pre/Post)

Former Volumes and Values

New Volumes and Values

Annual harvest 900,000 cubic metres (about 27,000 truck loads)

Annual harvest (2000) 10,200 cubic metres (about 300 truck loads). Potential harvest 123,000 cubic metres

Direct employment 400 in logging, 800 in milling

Employment levels Full time 6, seasonal not confirmed at this time.

Stumpage payments roughly $9 million annually

Stumpage levels Assume that it won't exceed 1/9 ($1 million) of former levels, but will likely be about 1/20th ($500,000) in the short term.

Iisaak is committed to an eco-forestry

approach, logging in second growth areas,

supplying wood to local value-added wood

converters and pursuing eco-certifications

through a process agreed to by ENGOs.

Iisaak will set aside “eehmiis” (un-logged)

watersheds for non-timber uses including

eco-tourism and spiritual uses and be

supported for long-term secure status of

such by ENGOs. Conversely, ENGOs have

committed to assist with marketing products

from Iisaak and to continue looking for

other ways to stay positively involved.

Economically, Iisaak expects to operate at

barely above break-even in 2000 and 2001.

So despite the positive feeling of the parties

supporting Iisaak, it is clearly too early to

conclude whether Iisaak will grow to be a

viable success.

While there is much to celebrate in the

joining of forces between corporate

interests, community interests and activist

interests, many issues remain.

Challenges Ahead

There are three key challenges ahead for

Clayoquot Sound. They are:

1. Can Iisaak be financially viable and

meet some or all of the social equity

objectives within its mandate?

2. How will the Provincial and Federal

Governments and the Nuu-chah-nulth

address outstanding aboriginal land

claims? And, will that affect access to

resources?

3. When the participants face challenges,

will their newfound cooperation also be

- 39 -


tested? For example, what will happen if

Iisaak is tempted for financial or

technical reasons to revert to more

traditional logging approaches?

With success, Clayoquot will have

demonstrated that ENGOs, corporations,

First Nations and Government can work

together. But given that this (1990) is the

first commercial year of operation for the

solution of Iisaak Forest Resources, one can

only say the demonstrated success has been

in finding interim common ground with

most of the participants.

Continued good will, help from the

marketplace and perhaps a little luck should

enable Clayoquot to become a long-term

success. In both the Iisaak and MLTC cases

it has been demonstrated that, with

leadership and courage, stakeholders, with

appropriate government support can identify

their own solutions to complex

developmental and operational challenges.

4.4 Mitigating the Impact of

Downsizing – Placer Dome in South

Africa

Placer Dome Inc., a leading Canadian

international mining company, has initiated

a pioneering economic and social

development program in South Africa called

the Care Project. This wide-reaching

initiative was created in 1999 by the Placer

Dome Western Areas Joint Venture

(PDWAJV) to promote sustainable

community development and mitigate the

impact of retrenchment at its South Deep

mining operations in South Africa.

In April 1999, Placer Dome became the

largest Canadian investor in the South

African mining industry (and among the top

three Canadian investors in South Africa’s

economy) through a US $250 million

purchase of a 50% interest in the South

Deep Mine in South Africa’s

Witwaterstrand basin. Additional

investments in excess of $US 300 million

over the next several years will result in

South Deep becoming the largest gold

mining operation in the world.

Ensuring PDWAJV’s viability as a

productive entity and vital employer in

South Africa’s mining sector has required

substantial technological modernization and

- 40 -


other investments in efficiency,

necessitating a 35% reduction in the total

workforce at South Deep. This retrenchment

(2,567 workers) was undertaken from July

to October 1999. The goal of the

PDWAJV Care Project is for 70% of

these workers, or their proxies, to be

economically active within 24 months.

Industry-wide retrenchment of

approximately 100,000 workers in the South

African mining sector in the past decade has

taken a severe toll on mine workers’

communities, removing approximately 50

million Rand per month (about CAD$10.25

million) from local economies. Most

affected are remote communities that

traditionally rely on mine labour for the

majority of their cash economy. The impact

of this retrenchment extends far beyond

those retrenched and their immediate

families: the salary from each migrant

mineworker traditionally supports as many

as 20 individuals in the worker’s village.

Furthermore, the migrant nature of the

labour supply to South Deep and other

South African mines is such that

retrenchment impacts hundreds of

communities from central Mozambique to

Botswana, Lesotho and the Eastern Cape.

These areas, already extremely

impoverished, are also being devastated by

AIDS.

The PDWAJV Care Project, with a focus on

providing community-based skills transfer,

enterprise development and financial

support to retrenched workers and their

extended families, has the potential to be an

effective expandable model for mitigating

the economic impact of mining

retrenchment in the region. The project also

benefits those removed from economic

productivity as a result of AIDS. (It is

estimated that 20-40% of PDWAJV

employees are HIV-positive.)

The Care Project seeks to support local

community economic development by,

hiring and training local community

development workers (to date approximately

40 have been trained), and deploying them

to work directly with the retrenched miners

and their extended families. These

community development workers will

facilitate initiatives to assist the miner and

his extended family to identify viable local

- 41 -


opportunities to replace the mining income

and provide required training, seed capital

and aftercare and coaching to enable them to

develop a sustainable replacement income.

The conventional retrenchment practice in

South Africa has been to provide severance

plus a three-month training and counseling

period. However, few employees took

advantage of the training and counseling, as

it required that they remain at the mine-site,

rather than return to their home villages

immediately after retrenchment. Placer

provided retrenched employees with this

traditional package, investing approximately

CAD$6.5 million for a severance package

(approximately 2 weeks salary for each year

of service) plus training and counseling

following retrenchment. However, as is

traditionally the case, few employees took

advantage of the training and counseling

component.

Placer Dome was unsatisfied with the

traditional retrenchment package and

developed the Care Program to attempt to

provide effective support for retrenchees and

their families. This Program represents the

first time a retrenchment program has

attempted to operate at the community level

(i.e., beyond the employer’s locale) in South

Africa and the first time one has been open

to providing direct benefits to women.

Placer Dome has committed over CAD$3.5

million including two years of extensive

senior management involvement to the Care

Project.

Through the Care Project, Placer Dome, as a

world leader in promoting sustainable

development in the mining industry, has

committed to setting a new standard of

corporate social responsibility in South

Africa. At the same time, the Care Project is

a sustainable development initiative that is

also critical to the financial viability of

South Deep and to ensuring a competitive

advantage for Placer Dome in South Africa.

They recognize that a track record of

operating responsibly at the community

level will provide an advantage acquiring,

permitting and developing new properties

and exploration opportunities.

The Care Project consists of a

comprehensive integrated set of activities

designed to ensure the economic and social

development of retrenched miners and their

- 42 -


“extended families”. A unique feature of the

project is providing the worker with the

option of nominating a ‘proxy’ from their

immediate or extended family. In this way,

Care Project beneficiaries are not limited

just to the original male worker - who for

various reasons (i.e., age, AIDS) may be

unable to benefit from the program - but to

any member of the worker’s community.

Initial results indicate this feature will

benefit women in particular.

Placer Dome’s intermediate goal for this

project is for at least 70% of the retrenched

employees and their families to be

economically active within two years.

Longer-term objectives include: utilizing the

Care Program model as a basis for

developing an AIDS impact mitigation

program; and encouraging other major

South African mining entities to follow

Placer Dome’s lead and become active

participants in the program.

The following describes the components of

the project.

• Community Development Workers -

The Care Project has recruited and

trained 40 community development

workers, 20 of whom are former

PDWAJV employees. Working from

TEBA offices the CD facilitators will

work directly with the retrenched

workers and their extended families,

assisting them to identify and take

advantage of alternative income

opportunities. Following the provision

of counseling and targeted training to the

retrenchees, the CD workers will provide

aftercare and coaching as the retrenchees

begin developing and operating their

micro-enterprises. An initial assessment

of the viability of a range of income

generation opportunities in each region

will be conducted to ensure that the

training has a reasonable chance of

leading to a sustainable income.

Viability criteria will generally include

the requirement that the enterprise target

markets outside of the immediate

community in order to bring new cash

into the region.

• Technical Training and Enterprise

Support - Through local training

agencies, each retrenchee or his

designate will receive targeted training

- 43 -


to enable them to develop alternative

income for themselves and their

families. These activities will be

undertaken throughout several dozen

cluster areas comprising the workers’

communities.

• Micro-Credit program – This

component will address institutional

strengthening and planning for the

development of a micro-credit finance

program. Eventual capitalization of this

program is expected to be in the CAD$5

– 10 million range, sourced from

foundations and other institutions.

• Institutional Strengthening and

support – The capacity of local

organizations is critical to success in

both the short and the long-term. A

significant institutional strengthening

and capacity development program will

be undertaken as part of the overall

initiative.

• Sustainable Agricultural

Development. Agriculture offers a

significant opportunity to many of the

regions where the retrenchees live.

However, current subsistence farming

patterns are rapidly destroying the land

and do not produce sustainable surpluses

able to contribute to the local cash

economies. The development and

implementation of an environmentally

sustainable agricultural strategy will help

to address this challenge.

• Additional Components – in addition

to the above components, Placer Dome

has also developed a set of activities

designed to ensure the long-term

sustainability of the Care project. Long-

term sustainability is being addressed

early in the project and will seek to

identify institutions and financing to

continue the Care project beyond its

current two-year mandate. As well, a

comprehensive monitoring and

documentation process will be

developed to ensure that the learnings

can be shared throughout the industry

and with other stakeholders in the global

mining industry.

Placer Dome has recognized that the success

of the Care project requires collaboration

with a range of stakeholders and expertise.

- 44 -


Key organizations involved in the initiative

include:

Wayne Dunn & Associates Ltd. (WDA) –

WDA is a Canadian based consulting firm

specializing in sustainable development in

resource industries. WDA is working with

PDWAJV to develop strategies to expand

the scope of the Care project through the

development of partnerships and

collaboration, and will assist with project

execution, monitoring and the development

of strategies to facilitate sustainable results-

based operation and long-term growth of the

Care Project.

Mineworkers Development Agency

(MDA) - MDA is an agency of the National

Union of Mineworkers (NUM), which

represents the majority of PDWAJV

workers. MDA was initially established in

1988 in response to massive retrenchments

and the dismissal of 40,000 mineworkers

following a divisive strike in 1987. The

agency is internationally recognized for its

development work with migrant

mineworkers and their families. It receives

support from the South African government,

neighbouring governments and international

organizations and donor countries. This

support enables MDA to operate a network

of regional development and training

centers, allowing them to provide practical

training and support to retrenched

mineworkers and their families. MDA has

identified many local economic

opportunities and has put in place training

and support programs to enable retrenched

mineworkers and their families to begin

developing alternative economic options. In

many cases, MDA has had to literally invent

new technology in order to develop the tools

and equipment necessary to make

opportunities viable. Working closely with

TEBA, MDA has offices and infrastructure

throughout the entire region impacted by

retrenchment. MDA will facilitate and

deliver many of the training programs for

the Care Project beneficiaries.

The Employment Bureau of Africa

(TEBA) - TEBA is a wholly owned

subsidiary of the South Africa Chamber of

Mines, with offices and networks throughout

the entire area impacted by the

retrenchment. Originally launched over 100

years ago to supply migrant labour to the

mines of South Africa, TEBA has evolved

- 45 -


into a sophisticated logistics and support

operation. Its infrastructure and on-the-

ground presence enabled it to continue

working throughout the recent floods in

Mozambique. In addition to its recruitment

and development services, TEBA acts as a

rural bank (often the only one in the area)

for mineworkers and their families. TEBA

will directly manage the community

development workers engaged by the Care

project and will also take a lead role in the

development of a micro-enterprise facility to

provide start-up capital to the retrenches and

their families.

Placer Dome has determined that additional

expertise is required to ensure the long-term

viability of the project. Organizations with

expertise in Micro-credit finance,

organizational development and sustainable

agriculture will be recruited to support the

development of local capacity in these

critical areas.

The Care project is a comprehensive,

industry led initiative designed to mitigate

the impact of retrenchment at one minesite.

While it is too early in the project to

determine success, by increasing the focus

on sustainable development it has already

had a number of impacts on industry,

communities and other stakeholders in the

South African mining industry.

4.5 NorSask Forest Products/MLTC

In 1986 the Saskatchewan government took

ownership of a struggling fifteen-year-old

sawmill located near Meadow Lake in the

northwest part of the province. In 1987 the

Meadow Lake Tribal Council (MLTC) and

the sawmill employees began discussions on

how they could organize themselves to

purchase this sawmill and use it as a base for

developing a profitable forestry industry. In

1988, with financial support from the federal

and provincial governments, the purchase

was finalized with the employees and

MLTC assuming ownership and operational

control of the sawmill and a forest

management license agreement (FMLA) for

much of northwestern Saskatchewan. A

condition of the purchase agreement was

that a use be developed for the aspen

(poplar) in the FMLA area. The ownership

of the sawmill was structured with MLTC

and the employees each owning 40% and

the provincial government retaining a 20%

- 46 -


interest with the understanding that this

could be made available to a suitable partner

who could help to develop uses for the

aspen.

A primary motivator for all parties was the

desire to utilize the abundant forest resource

to develop a sustainable economic future for

the area. The employees were concerned

that the sawmill would be closed and their

jobs lost if something wasn’t done to

improve the mill’s operation. In addition to

the expected profitability of the enterprise,

the MLTC was interested in the potential of

the forest industry to support the economic

development objectives of the nine First

Nations (8,000 members), which comprised

its membership. The provincial government

was motivated by the opportunity to

transform a money-losing government

owned operation into a profitable business

owned and controlled by local stakeholders.

An additional motivation for the province

was to realize the potential for the forest

industry to contribute to the economic

growth of the area; increasing the tax base

and reducing unemployment and associated

social costs.

In 1990 Millar Western Ltd. became a third

shareholder in NorSask by purchasing the

provincial government’s 20% interest and

agreeing to build a pulp mill at Meadow

Lake. In 1992 Millar Western opened a

zero-effluent aspen pulp mill, the first in the

world. With the forest management license

agreement to harvest both hardwoods and

softwoods thereby secured, the long-term

objectives of successive provincial

governments began -- the development of

the potential of 3.3 million hectares of

crown boreal forest for the benefit of the

people of Saskatchewan.

NorSask and Millar Western created a new

company, Mistik Management Ltd. to

undertake woodlands management for the

area supplying the mill. Mistik has

developed a 20-year management plan for

the FMLA and has initiated harvesting

approaches that seek to maximize the

involvement of local First Nations people

and businesses. MLTC Logging and

Reforestation was established in 1991. It is

100% owned and is involved in logging,

silviculture and road construction in

Saskatchewan and Alberta. It provides

- 47 -


opportunities for Meadow Lake First Nation

contractors.

In first ten years of its operation NorSask

has achieved many of the goals set out by its

founders. It has become a major economic

catalyst for the northwest part of the

province and one of Saskatchewan's largest

companies with sales exceeding $50 million

annually. It was named Saskatchewan's

Exporter of the Year in the 1994 ABEX

Awards sponsored by the Saskatchewan

Chamber of Commerce. During the first

ten years MLTC businesses associated with

the initiative have paid $11 million in taxes

and saved governments over $10 million in

social assistance costs.

Today, direct employment at NorSask,

Millar Western, Mistik and associated firms

is over 640 people, many of them from local

First Nations. The area’s forest resources

are being utilized better than ever before.

First Nation and Metis communities play a

role in the entire operation, especially in the

development of Mistik Management Ltd.

Management and leadership training allows

individuals an opportunity to move into

more progressive roles within the company.

Education and training opportunities are

being considered at all levels to ensure the

philosophy of co-management continues

into the future. At the early developmental

level a "school to work" program is being

considered that would take Grade 9 students,

expose them to forest management

opportunities so that, upon graduation they

can decide on a forestry-related career

Mistik has designed forest co-management

principles using a flexible process called

"adaptive management"- piloting concepts,

evaluating results against predictions and

planned actions and continually adjusting to

those changing conditions in the forest. A

scientific advisory board of 10 leading

scientists in North America review plans and

make recommendations to the process and

evaluates the research. A five-year

evaluation of the co-management process

has begun in the communities associated

with the northern district co-management

boards and advisory councils to keep groups

informed of Mistik's activities and work

toward solving local issues.

- 48 -


MLTC’s success at creating a profitable

forestry business through the constructive

involvement of local stakeholders has

resulted in new opportunities. In 1994 they

were approached by representatives of the

Miskito Indians from Nicaragua to look at

collaborating in the development of forestry

resources on the Atlantic (Miskito) coast of

Nicaragua. The Miskito Peoples were

attracted to MLTC’s ability to combine

social and economic goals with the efficient

development of a forest resource. A joint

venture, Makwa Inc., has been established

between MLTC and the Miskito Peoples.

Makwa is currently engaged in the

negotiation of an FMLA and the

development of a forestry operation in

Nicaragua.

The partners in NorSask and Mistik

Management faced significant challenges in

their purchase of a struggling sawmill and

subsequent transformation into an engine of

economic growth for the area.

First Nation’s peoples had traditionally been

excluded from the forest industry in the area.

Often forest harvesting practices had had

detrimental impacts on traditional resource

uses such as trapping, hunting and

commercial fishing. Relationships between

First Nations and non First Nations people

in the area were often strained, with little

experience at collaboration. There was a

significant Metis population in the area that

was excluded from ownership. As well,

there were other many challenges associated

with broad community ownership of such an

important industry.

MLTC, the employees, Millar Western and

the provincial government recognized that

these challenges had to be met if the project

was to succeed. This proved difficult; in the

early years of the project there were often

roadblocks and confrontation between

NorSask and traditional resource users.

Many Metis communities and even MLTC

member Nations actively opposed the

project and its harvesting practices.

Over time, through extensive negotiations

and discussions, and innovative efforts to

accommodate the interests of all

stakeholders, the business has been able to

thrive and most of the challenges have been

overcome. Key to the eventual success was

a values based approach to business

- 49 -


operation and forest management. The

stakeholders were successful in

incorporating cultural issues, elder’s

participation and meaningful local input into

forest harvesting decisions. Extensive

efforts were made to bridge capacity and

experience gaps in order to maximize

employment and business opportunities for

local First Nations peoples. The federal and

provincial governments through training

programs and various business support

programs supported these efforts financially.

Without a concentrated effort to meet the

challenges identified above, it is extremely

doubtful that this venture could have

achieved even part of the success it has.

However, the NorSask/MLTC experience

demonstrates that communities can

successfully take charge of the development

of local resources and create meaningful,

long-term benefits for local people and

communities.

4.6 Common Themes

One would expect the above examples,

drawn as they were from different industries

operating under radically different

circumstances in North America, Africa and

Asia, to present a challenge in terms of

identifying common themes and issues.

Nonetheless, all five projects do share five

important characteristics, namely:

• A desire to develop mutually beneficial,

action-oriented, collaborative multi-

party approaches to addressing

community and local development;

• Appropriate support from governments

and external stakeholders;

• Long-term stakeholder commitment;

• Stakeholder leadership – while different

examples demonstrated leadership by

different stakeholders, all of them

exhibited strong leadership (in a

collaborative manner); and

• A long-term approach to capacity

development (no quick fixes).

Fully integrating sustainable development

practices into corporate culture and

operations is a challenge that was cited by

- 50 -


all of the business stakeholders in the above

examples. This is not dis-similar to the

challenge of integrating environmental

responsibility that has (largely) been

successfully addressed.

The following section discusses a

framework that can be used to both facilitate

more systematic integration of sustainable

development into corporate culture and

operations, and to assist various stakeholders

to develop a common understanding and

‘map’ of specific relationship opportunities.

- 51 -


5 A FRAMEWORK FOR UNDERSTANDING AND DEVELOPING EFFECTIVE CORPORATE / COMMUNITY RELATIONS

A critical challenge facing the creation of

sustainable development initiatives in

natural resource industries is the lack of a

common framework or understanding of

how to approach and manage the crucial

relationships between resource companies

and local communities.

5.1 Traditional Corporate Approaches

to Community Relations

Management

While many resource companies have

recognized the growing importance of social

and community issues, the real problem

many are facing is the need to move beyond

ad-hoc social problem solving and beads 'n

trinkets approaches to develop ways of

systematically and cost-effectively

managing the interface between local

communities and mining and exploration

projects. Communities, governments and

other stakeholders are also facing similar

challenges trying to address this issue. The

following quote taken from a paper on the

issue, Beyond Beads ‘n Trinkets: A

systematic approach to community relations,

written by Mr. Wayne Dunn and published

by the Canadian Institute of Mining and

Metallurgy (Feb 2000) summarizes some of

the challenges being faced by corporations

(While the paper focuses on mining, the

challenges are common to other resource

industries).

Companies are finding that they need new

approaches to managing the interface

between their operations and local

communities. In the past it was often

enough to simply have someone who

‘understood’ the communities and then give

them a budget to ‘help’ communities with

health, education and other local issues and

concerns. This type of approach is no

longer sufficient. Today, communities have

much more influence on resource projects

and they are demanding constructive

involvement and meaningful benefits. In

some cases communities are even beginning

to influence which company will be allowed

to develop local resource deposits. In the

new millennium, mining companies need a

management system for community relations

- 52 -


which will enable them to systematically

apply a cost-effective strategy to the

development and management of local

relationships.

Figure 5-1 Ad-hoc Community Relations

Many companies, and the mining industry as

a whole, have been investing significant

amounts of time and money into improving

community relations. Unfortunately, this

effort has often not produced the results

expected. The problem may be with the

process of developing and managing

relationships with local communities.

Few firms have anything approaching a

standardized, systematic approach to

community relations. In most cases firms

approach the issues with vague policies (i.e.

respect local communities and cultures) and

good intentions. Often initial research is

undertaken to document social and cultural

characteristics of local people and

communities. This research frequently

identifies health, educational and other

community level social problems that need

to be addressed. Project managers, armed

with this research and directed by vague

policies, are instructed to develop 'good

relationships' with local people and

communities. In many cases the person

given direct responsibility for community

relations is chosen because he/she is 'good

at communicating with the local

communities'. Somehow, managers assume

that this communications ability will

magically translate into an ability to cost-

effectively develop mutually beneficial

relationships with local communities. [See

Figure 5-1]

A common problem that must be overcome,

especially in developing countries and with

Indigenous communities, is an apparent lack

of local community capacity to participate

productively in mining projects. Companies

that attempt to develop community relations

programs without an objective plan or a

framework for developing long-term,

sustainable and mutually beneficial

relationships face a strong risk that a

No Framework

No Plan No System

?Results?

- 53 -


paternalistic focus on solving the social

problems will emerge. This creates a

situation that is costly for the company and

demeaning for the community, and does not

produce the types of relationships that either

party requires.

Even when traditional approaches to

community relations work well, there are

still problems. Without a common

framework or management system, the

success is often dependent upon the

individual personalities involved. Also,

without a standardized community relations

management system or operational

framework, intra and inter-company

communications on community relations

frequently is of an anecdotal nature,

hindering the ability to replicate successes.

It is also difficult to duplicate successes or

best practices without some sort of

framework for objective understanding of

the overall community relations program.

The paper goes on to discuss the key

elements of a systematic approach to

sustainable development in the natural

resources sector.

5.2 Elements of a Systematic Approach

Based on analysis of community relations

and sustainable development initiatives at

resource extraction projects in North and

South America, Europe and Africa, our firm

(Wayne Dunn & Associates Ltd.), has

developed a framework for understanding

and developing relationships in this sector.

The framework can assist the various actors

(industry, communities, government, etc.) to

develop a common understanding of

priorities and focus discussion on roles and

responsibilities. Rather than being

prescriptive, it enables a more fluid

approach, encompassing the opportunities

and constraints of specific situations.

The framework identifies the key elements

of a comprehensive, systematized approach

to community and indigenous peoples

relationships as:

a) Organizational Ethos – Effective

community and indigenous relations

require that the corporation, its personnel

and contractors have an overall

understanding of the importance of the

issue, and are provided with the tools,

- 54 -


training and support to effectively

develop and manage mutually beneficial

local relationships12. This is similar to

the manner in which safety and

environmental concerns permeate many

firm’s total operations, with extensive

corporate support and training dedicated

to improving performance in this area.

Similarly, communities, governments

and other stakeholders must have both a

long-term commitment and an overall

understanding of the constraints and

issues faced by the other stakeholders.

b) Communications and consultations is

a key component in the success of

community and indigenous relations.

Stakeholders should be able to

effectively communicate what they are

doing in this area and the successes

achieved. Care must be taken to ensure

that whatever communication methods

12 In today’s global setting, many companies struggle with how to encourage global standards while respecting local conditions and, cultures and issues. Many firms reconcile this issue by adopting some form of global standard and giving responsibility for its application to business units that develop implementation plans and strategies that account for local cultures, issue and conditions. This is the approach utilized by Placer Dome and applied in the Care Project example. Placer’s global Sustainability Policy set the standard and the South Africa Business Unit designed the project to fit both local conditions and the global policy.

and materials are used are effective in

reaching the intended audience.

c) Capacity Development – There are

often huge capacity gaps that must be

overcome to maximize the sustainable

development impact of resource

projects. Local people and businesses

frequently do not have the capacity to

take advantage of employment

opportunities or opportunities to supply

goods and services. Strategic initiatives

to bridge local capacity gaps can

significantly increase local involvement

and the benefits accruing to local

communities. Increasing local business

and economic capacity can also assist in

diversifying the local economy and

lessening dependence on a particular

resource project. Businesses frequently

do not have sufficient practical

experience in sustainable development.

- 55 -


d) Leveraging Relationships –

Corporations can often use their

influence and resources to encourage

national and local governments, donor

agencies (e.g., Foundations, United

Nations, US AID, Aid organizations,

etc.) and other development interests to

collaborate in meeting local health,

education and development needs. This

strategy not only leverages corporate

Figure 5-2 Interaction Continuum

investment and reduces contingent

liabilities; it also creates much less long-

term dependency on the company. This

same strategy can be applied in other

areas such as developing local

infrastructure and in programs aimed at

increasing local capacity and skills, and

in developing local businesses. An

additional benefit of leveraging

relationships is that companies will

develop trust and working relationships

with other international development

interests that could be very useful if the

project ever encounters major

environmental or social problems.

e) I

n

t

e

r

a

c

ti

o

n

s (specific programs and activities) This

section encompasses all community

relationship programs and activities and

situates them along a continuum of

interactions ranging from grants and

donations through to full partnering. A

standardized format for reporting on

existing community relations programs

and initiatives and for considering new

ones will enhance the ability to

communicate successes and for any

region/corporate-wide reporting on

community/social relations.

The Interaction Continuum has been useful

in assisting with an overall understanding of

the range and type of community relations

programs and with identifying opportunities

for building from current programs and

Procurement

Grants & Donations Beads & Trinkets

Partnering

Employment

Training & Education

Com

mun

icat

ion

& C

onsu

ltatio

n

Lev

erag

ing

Rel

atio

nshi

ps

Cap

acity

Dev

elop

men

t

- 56 -


activities. Typically there are a range of

potential programs and activities that extend

from grants and donations through to full

partnering. The intent isn’t to imply that

the further one goes up the Interaction

Continuum, the ‘better’ the program is.

Experience shows that community relations

programs that are successful and sustainable

over the longer term, work towards

developing activities along the full range of

the continuum.

The following descriptions will help in the

understanding the various elements of the

continuum.

• Grants & Donations – This can include

humanitarian aid and support for health

care, education and helping to meet

other worthwhile local needs. While

these are definitely important needs and

it is important for businesses to be

involved in helping to meet them, it is

important to also develop other activities

along the range of the continuum.

• Training & Education – Training and

education initiatives can assist in

developing the skills and abilities that

will enable local people to become more

productively involved in resource

development projects. As well, it will

enable more involvement in other

activities and stimulate a less dependent

and more sustainable form of local

development. As noted previously, it is

generally advantageous to collaborate

with other interests to develop and

implement programs and activities in

this area.

• Employment – Increasing local

employment, both directly and with

suppliers and contractors, offers an

efficient and cost-effective method of

increasing local benefits (see Cameco

case study – Section 4.1 for a successful

application of this). However there are

frequently barriers that must be

overcome before this can occur. Some

of these can be overcome through

training, education and capacity

development. Others, such as union

agreements, physical requirements, work

schedules, etc. must be addressed in

other ways. Sometimes the failure of

previous employment programs can

- 57 -


make it difficult to develop internal

corporate support for another attempt.

• Procurement – Local procurement of

goods and services can substantially

increase the amount of local benefits that

accrue from resource development

projects. As with employment, there are

frequently capacity and structural

barriers that must be overcome to

maximize local procurement. Programs

at other points on the Interaction

Continuum can assist in overcoming

some barriers. Others can be overcome

by facilitating joint ventures and other

forms of collaboration between existing

suppliers and contractors and local

businesses.

• Partnering – At the community level

there is a growing interest in securing

equity participation in local resource

development projects. While this may

not be the case with the current project,

we expect that this will become more

prevalent and that companies will need

to consider how to best address it. It

may offer opportunities for aligning

corporate and community interests and,

may even provide companies with

advantages in acquiring new

opportunities.

f) Measuring, Monitoring and Reporting

– Setting objectives, identifying

indicators and tracking results are

absolutely essential for developing a

consistent and effective community and

indigenous relations program. This

enables all stakeholders to understand

objectives and to track progress towards

them. Additionally, social reporting is

becoming increasingly common amongst

leading resource extraction companies13

(some are even moving to having their

social reports audited). Utilizing a

standardized format and process of

measuring and monitoring will simplify

the roll-up of business unit results into

regional and corporate wide reports.

This framework presents a step-by-step

approach for managing the crucial

relationships between resource companies

and local communities. Utilization of this

13 Over 50 major global corporations are now producing substantive annual social reports (e.g. Nike, BP-Amoco, Shell, Renault, etc.). The London based Institute of Social

- 58 -


framework can mitigate negative social

impacts from resource development and

maximize the value that communities and

other stakeholders receive. The framework

can also provide a structure for

Governments and other interests to better

understand and support communities and

corporations in their efforts to develop more

effective mutually beneficial relationships

and maximize the long-term sustainable

impact of resource development.

and Ethical Accounting has more than 250 members, and social auditing has become a boom business.

6 CHANGING THE PARADIGM

The previous pages have: provided an

overview of the changing paradigm for

resource development; looked at various

efforts to encourage, support and understand

the phenomenon; explored a number of

specific examples of effective corporate

community relationships; and examined a

framework for understanding and

developing more effective community

relations. This section will suggest tools and

approaches that could be available to the

Government of British Columbia in its

efforts to encourage and support more

effective and mutually beneficial

relationships between industry and local

communities.

6.1 The Business Case for Government

Support of CSR

Earlier sections in this report discussed the

business case for corporations to become

more involved in sustainable development

and corporate social responsibility.

Governments and communities have equally

compelling reasons for advancing the

sustainable development agenda.

- 59 -


Encouraging and supporting increased CSR

in the resource sector could:

• Enhance the social and economic

development opportunities available to

resource dependent communities and

Indigenous Peoples in BC;

• Support BC resource companies to adapt

to an emerging global reality;

• Assist single industry towns and

resource dependent communities with

economic diversification;

• Limit the need to finance expensive

interventions during declines and/or

shutdowns in the resource sector;

• Encourage and support a more

sustainable business development

climate in BC; and,

• Promote the long-term social and

economic progress of the province.

6.2 Government Tools for Supporting

CSR

The above points illustrate some of the

reasons a government would want to

encourage and support CSR within its

jurisdiction. While the earlier case studies

demonstrated that the successful

development of sustainable mutually

beneficial relationships between resource

companies and local communities requires

extensive involvement and a long-term

commitment by both partners, governments

can and do play an important role in this

process. Governments have several tools

(e.g., policy and regulatory powers, taxation

[incentives/deterrents], financial support,

public education, etc.) that can be used both

to encourage and support the initiation of

mutually beneficial relationships and to

enhance existing ones.

These tools can be applied in a variety of

ways depending on various priorities,

political and economic situations and other

variables. The following paragraphs will

briefly discuss their application in a generic

form. While, it is beyond the scope of this

report to make recommendations or

prescriptions regarding the applicability of

different possible interventions, we do

recommend that, regardless of what tools are

utilized, they should be deployed in such a

way as to encourage mutually beneficial,

action-oriented, collaborative multi-party

approaches to addressing community and

local development.

- 60 -


• The Regulatory and Policy tool

presents a number of options for

supporting/encouraging CSR. It can

require corporations to report on

various aspects of their CSR (local

purchases, local employment, support

for local economic diversification, etc.).

Reporting, even without setting goals or

targets, forces a focus on the issue

which, combined with the need to

publicly account for activities/results,

will tend to increase corporate

commitment to CSR.

Another application of the regulatory

and policy tool is to require corporations

to meet certain targets in terms of CSR.

The government of Saskatchewan used

this when it adopted the

recommendations from the Bayda

Report14 requiring that the development

of the uranium industry in Saskatchewan

be undertaken in a way that enabled

meaningful involvement of northern

Aboriginal peoples. The employment,

14 Final Report, Cluff Lake Board of Inquiry (Bayda

Report), Regina, Saskatchewan, 1978

procurement and other targets

established by the report are credited

with laying the groundwork for the

current level of involvement (as

discussed in the Cameco case study

earlier).

Other regulatory and policy applications

could include the requirement for

corporations to publicize their CSR

strategy and quantifiable commitments.

• Taxation is another tool available to a

government wishing to encourage and

support CSR. Taxation incentives

and/or penalties can be tied to their level

of CSR (e.g., maintaining a specified

level of local procurement may result in

a reduced royalty or other tax rate).

• Public Education – Often communities

and corporations do not fully understand

how to fully exploit the potential of

collaborative relationships or, are not

able to initiate the relationships at all.

Governments can provide information

and support to enable the various

stakeholders to better understand the

business case for CSR and how to

- 61 -


expand and extend relationships. Public

education could take the form of

community meetings, technology

transfer events (e.g., conferences, round

tables, etc.), publications (electronic,

written, video, etc.), supporting research,

and other similar activities.

• Financial Support could be directed

at any of the stakeholder groups on

either a fully funded or a cost-

sharing basis. For example,

governments could develop criteria

for cost-sharing CSR efforts of

industry (e.g., training,

encouragement of diversification,

stakeholder dialogue, etc.) or

communities could be supported to

develop and implement CSR plans

and strategies or to organize CSR

events. Another example of the

application of financial support is the

way in which the Saskatchewan and

Federal Governments supported the

Meadow Lake Tribal Council to

purchase an interest in the sawmill

(Section 4.5), thus supporting direct

local involvement in the

management and operation.

The above represent an indicative (not an

exhaustive) list of government tools and

how they may be applied. As noted earlier,

it is imperative that, whatever tools are

utilized, government intervention should be

undertaken in a way that will facilitate and

encourage stakeholders to become involved

and take leadership. If stakeholders cannot

see what is in it for them, the chances of

success will be minimal at best.

6.3 Stakeholder Actions

The discussion in earlier sections illustrated

that a new paradigm is emerging – that

throughout the world, leading resource

companies, local communities and

government/civil society are all working

together to make resource development

work more effectively. The following

paragraphs will briefly discuss some

stakeholder opportunities for taking

leadership roles and making positive

changes in the sustainable development

aspect of natural resource projects in British

Columbia. The points that follow are not

meant to be either prescriptive or

exhaustive. They are intended to provide a

- 62 -


basis for stimulating further discussion and

actions by the various stakeholders.

Government could:

• Coordinate a small meeting, perhaps 2 to

3 community participants and a similar

number from industry and government,

to begin discussing how to best

encourage Sustainable

Development/Corporate Social

Responsibility (SD/CSR) in BC resource

communities;

• Develop tools and coordinate events to

support communities and industry to

enhance their capacity to identify and

embark upon collaborative SD/CSR

initiatives;

• Establish a multi-stakeholder steering

committee of 5-6 members to help guide

thinking and development of further

initiatives to support and encourage

SD/CSR;

• Work with Industry, Communities and

other stakeholders to organize a

conference on SD/CSR;

• Provide resources to communities to

support the development of local multi-

stakeholder SD/CSR strategies and

plans; and

• Review licensing and project approval

processes to identify opportunities to

incorporate SD/CSR into the regulatory

framework, (e.g., requiring annual

SD/CSR reports, etc.).

Industry Could:

• Prepare SD/CSR reports, detailing their

sustainable development initiatives. The

discipline of preparing reports helps to

focus management on the issue and

fosters capacity development;

• Begin sharing SD/CSR practices with

other businesses and communities;

• Organize SD/CSR strategic planning

sessions with the communities in which

they work; and

• Become involved in some of the global

SD/CSR initiatives and/or take a lead

role in developing a similar process in

BC.

- 63 -


Communities Could:

• Organize Sustainable Development/CSR

strategic planning sessions with the

major companies working in their

community;

• Take a lead role in bringing local

industry together to begin discussing

SD/CSR on a community specific basis;

and

• Share SD/CSR experiences, strategies,

etc., with other communities and other

stakeholders.

The above represent some possible

initiatives that could be undertaken by the

various stakeholders. Some stakeholders

may have already begun initiatives such as

those listed above. There are undoubtedly

many more opportunities. Discussions

amongst the various stakeholders will begin

to identify them and develop concrete

implementation action plans.

- 64 -


7 CONCLUSION

Throughout the planet, the resource

development paradigm is changing.

Changing expectations and global trends

have made Corporate Social Responsibility

and sustainable development business

imperatives. Everywhere stakeholders are

collaborating with each other to better

understand sustainable development and to

encourage and support more effective

applications of it. Successful projects

require stakeholder collaboration and

participation and, increasingly, a focus on

how resource development can support the

long-term social and economic objectives of

all stakeholders. There are numerous

examples of best practices in corporate –

community relationships which demonstrate

that successful CSR requires commitment

and leadership from all stakeholders, each

with particular roles to play and support to

provide.

The social and economic history of British

Columbia is closely linked with the

harvesting and extraction of its abundant

natural resources. Many communities

throughout BC can trace their origins, and

their current social and economic well being

to resource wealth. Unfortunately, many

current and former communities can

attribute their social and economic decline,

and in many cases their death, to the boom

and bust cycle of natural resource

dependency. Despite the growth of the

knowledge economy and the emergence of

Vancouver as a major international centre,

natural resources remain a critical element

of the province’s economy and the economic

lifeblood of a significant number of

communities. Gold River and Youbou are

two recent examples of communities

affected by the closure of resource

industries.

It is in the interest of all stakeholders,

industry, communities and government to

identify early interventions that can

efficiently and effectively support the

diversification and sustainability of local

communities. This paper has attempted to

bring some focus to this issue by exploring

the global changes that are occurring in the

resource development paradigm, illustrating

specific examples of effective, multi-

- 65 -


stakeholder collaboration and setting forth

the business case for all stakeholders to

support sustainable development.

While the government has done much to

support community development in the past,

there are a number of tools available and

specific steps that can be taken to initiate

more effective multi-stakeholder

collaboration. The government of British

Columbia can, and should, support

communities and industry to develop and

maintain mutually beneficial relationships

that will support their respective social and

economic goals and help to lessen

dependency on single industry economies.

- 1 - Bibliography


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Websites and Electronic Canadian Council for Aboriginal Business website http://www.ccab-canada.com/

Conference Board of Canada – Corporate Social Responsibility website http://www.conferenceboard.ca/ccbc/

Global Mining Initiative website - www.iied.org/mmsd/

MERN website - http://users.wbs.warwick.ac.uk/ccu/mern/

Prince of Wales Business Leaders Forum website - www.pwblf.org

United Nations Environment Program Annual Round Table with the Global Finance Industry website - www.unep.ch/etu/finserv/fimenu.htm

World Bank, Business Partners in Development website - www.bpdweb.org/

World Business Council on Sustainable Development website http://www.wbcsd.ch/

Books, Articles and Hard Copy Publications Ackerman, R. W. (1973). “How companies respond to social demands.” Harvard Business Review (July-

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Acquah, P. C. (1995). Natural Resources Management and Sustainable Development. The Case for Gold in Ghana. United Nations Conference on Trade and Development Country Case Study.

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Table of Acronyms and Abbreviations BC British Columbia BPD Business Partners for Development CCAB Canadian Council for Aboriginal Business CCBC Canadian Centre for Business in the Community CSR Corporate Social Responsibility ENGO Environmental Non-Governmental Organizations FMLA Forest Management License Agreement GMI Global Mining Initiative IFC International Finance Corporation IIED International Institute for Environment and Development MB MacMillan Bloedel MCDCCV Ministry of Community Development, Cooperatives and Volunteers MDA Mineworkers Development Agency MERN Mining and Energy Research Network MLTC Meadow Lake Tribal Council MMSD Mining Minerals and Sustainable Development Project NGOs Non-Governmental Organizations NRT Northern Resource Trucking NRTEE National Round Table on Environment and Economy PAR Progressive Aboriginal Relations PDWAJV Placer Dome Western Areas Joint Venture PGN Papua New Guinea PWBLF Prince of Wales Business Leaders Forum SD Sustainable Development TEBA The Employment Bureau of Africa UNCED United Nations Conference on Environment and Development UNEP United Nations Environment Program WBCSD World Business Council for Sustainable Development WDA Wayne Dunn & Associates Ltd. WTO World Trade Organization

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