Social Equity and Large Mining Projects: Voluntary Industry Initiatives, Public Regulation and Community Development Agreements

Abstract

Large mining projects can generate highly inequitable outcomes, with affected communities bearing the burden of social and environmental costs while economic benefits accrue largely to domestic and foreign metropolitan centres. This raises important ethical and social justice issues, as does the finite nature of mineral resources, which can mean that current generations enjoy the benefits of mining while future generations bear the costs of environmental and social impacts that can continue long after mining ends. During recent decades two broad approaches, voluntary industry initiatives and government regulation, have been employed in attempts to achieve a more equitable distribution of mining’s positive and negative effects. Both have serious drawbacks. Industry initiatives are ultimately voluntary and may be abandoned in tough economic times; they can be highly variable across companies and projects; and they suffer from serious compliance issues. Public regulation can be inflexible, is subject to industry capture, and in many major mineral producing nations a ‘retreat from regulation’ is reducing its relevance. This article considers whether, and under what conditions, a third and emergent instrument, community development agreements (CDAs), can help overcome the shortcomings associated with industry initiatives and public regulation. It argues that CDAs have considerable potential in this regard, but that communities can encounter significant practical challenges in their negotiation and implementation. In addition, disparities in negotiation power between communities and project developers can result in inequitable agreements, indicating a continued need for government involvement to create a more level ‘negotiation terrain’.