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Firm develops compensation framework for KZN mining-affected community

28th April 2017

By: David Oliveira

Creamer Media Staff Writer

     

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A complicated dispute over compensation for land damages has led to the development of a compensation framework aimed at strengthening trust between a mining company and the affected community at a mining operation in KwaZulu-Natal.

While the framework was developed to address this specific mining-affected community, the concept could possibly be duplicated within the specific parameters of other mines.

South African multidisciplinary engineering consultancy Gibb was appointed in October last year by the KwaZulu-Natal Department of Economic Development, Tourism and Environmental Affairs to develop this framework.

Gibb notes that the current compensation management procedures of the mine show some gaps, from both a policy and a “system interface standpoint”, particularly in terms of how the compensation claim process is logged and captured and how the process is managed.

Further, there is no indication of how postproject monitoring is undertaken with regard to compensation and, as such, the framework could act as a best practice guideline for mines to consider when they improve on and address the issues brought to the fore, going forward.

The new compensation framework was developed in December 2016, however, it will not be implemented until outstanding historical and degradation claims have been addressed.

The need for the framework arose after the mining community concerned claimed compensation for mining-related environmental impacts.

With the community having blockaded roads in May last year, jeopardising the continuous operations at the KwaZulu-Natal-based mine, a meeting was held with all parties, where a resolution was passed that a framework be developed after the review had been undertaken by Gibb.

It was concluded that claimants would be paid and the shortcomings of the current compensation process addressed.

The Gibb team comprised senior social scientist and project lead Jessica de Beer, mining expert and project manager Daniel Lachenicht and compensation and sustainability expert Shantal Beharie.

The key objectives of the project were to get independent views on the legitimacy of previous claims logged with the mine, the fairness of the compensation process that had been followed up to that point and the grounds of approval for beneficiaries’ claims, as well as recommending the best approach for future mining-induced environmental damage claims and corrective actions where necessary.

De Beer highlights that her role during the process was mainly community consultation, where the community indicated their concerns that the compensation process had previously been biased and unfair. “We had to investigate their complaints and develop a plan, which included the community’s inputs, that would provide the company with a best practice guideline going forward.”

Workshops were also held with community members and traditional councils and a sample of respondents were visited to gain insight into the concerns of community members that needed to be resolved.

A geotechnical investigation was also conducted by a Gibb engineer, which included a site visit to determine any vibration impacts caused by mining activity.

Several reports had to be drawn up to inform the drafting of the framework, including a baseline report, which established the status quo, and a report that identified the existing challenges. To complete this report, interviews were conducted with all concerned parties, including the Gibb professionals, the community’s leaders, traditional council members and municipal officials. This report was vital in generating a holistic view of the situation.

Beharie points out that a lot of research had to be done: “There was the massive task of reviewing all the historical documents relating to the claims and payments, [as well as] the policies and protocols the company follows regarding compensation.”

The solution-driven approach was needed to develop best practice guidelines for any future claims, ensure the sustainability of the process and restore the community’s faith by developing a transparent and fair compensation process.

Following the commissioning of the reports and the drafting of the framework, the next phase of the project is to develop an implementation plan, which Beharie points out provides the means to efficiently and fairly log, investigate and settle, through compensation or other corrective means, damages relating to mining activities.

The plan is in alignment with international best practice and the World Bank’s compensation standards.

De Beer highlights that the project provided insight into how compensation processes were dealt with in the past, how poor processes can be rectified by establishing best practice guidelines for mining companies to follow, and how communities can be provided with a defensible and depandable framework to deal with future compensation problems.

Gibb is awaiting feedback from KwaZulu- Natal Economic Development, Tourism and Environmental Affairs MEC Sihle Zikalala.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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