MATTESON ELLIS There are significant economic implications if a sophisticated approach to handling community relationships is not taken
With South America being rich in natural minerals, and communities having a strong relation to the land, mining companies have to approach communities correctly if they want projects to be sustainable, Washington-based law firm Miller & Chevalier tells Mining Weekly.
“There have been instances where mining operations have been permanently shut, owing to community relations having been unsuccessfully managed. To address this, companies often enter into agreements, or convenios, with local communities that govern the company’s support of communities and help ensure that the social responsibility commitments of the mining company are upheld,” states Miller & Chevalier member and Latin America practice lead Matteson Ellis.
He notes that mining companies should heed fundamental principles of human rights when operating in an area that is considered significant to an indigenous community. These principles help guide the company so that best practices are implemented, and should conflict arise, it can be resolved.
“Mining companies are learning two things. Firstly, there are significant economic implications if a sophisticated approach to handling community relationships is not taken. It is not only about corporate social responsibility and doing the right thing – if relationships are not managed carefully, this could easily lead to the permanent closure of mining operations.
“Secondly, there are best practices that need to be employed by a company to manage the relationships with the community successfully, which requires investment and sustained commitment by the mining company,” Ellis explains.
These best practices include adopting specific policies that explain the company’s approach to the community in a transparent way. It includes, in the written convenio, the ways in which the company intends to address issues with the community, should any issues arise.
“Moreover, companies often establish dedicated teams to manage community relations, which helps ensure that the company separates commercial considerations from community interactions.”
He explains that having a designated team enables more positive interactions with community leaders and helps ensure proper monitoring, so that royalties and donations to the community – such as goods and services, school construction and infrastructure contributions – are implemented effectively.
“It ensures that monetary contributions are used by the community for the intended purposes and for the full benefit of the community, not diverted improperly to individuals, which can raise bribery and corruption concerns,” Ellis concludes.