Operational Phase

 

While extractive companies can play a positive role in development through investment of financial resources, job creation, transfer of technologies and skills development, the potentially damaging aspects of their activities must be mitigated – such as environmental degradation, poor working conditions, displacement of local communities, corruption and fiscal evasion, etc. particularly in developing countries with weak state administration.

Claude Kabemba's picture

Director of the Southern Africa Resource Watch (SARW)

January 13th, 2014

 

While extractive companies can play a positive role in development through investment of financial resources, job creation, transfer of technologies and skills development, the potentially damaging aspects of their activities must be mitigated – such as environmental degradation, poor working conditions, displacement of local communities, corruption and fiscal evasion, etc. particularly in developing countries with weak state administration.

Poverty, especially in mining communities, is accelerated by the damage caused by mining activities to the environment and the health of workers and community members. SADC countries are very complaisant in terms of protecting the environment and people’s health. Mining increases water and air pollution, degrades the land and destroys biodiversity – all of which have an adverse effect on the health and livelihoods of poor and vulnerable groups.

Operational Principles Regarding Financing

Mining companies are funded by banks to undertake their extractive activities. They also raise funds on stock exchanges. Banks are required to do due diligence before funding mining activities to ensure that the companies have a genuine environmental impact assessment, which has been accepted by the government.

Recommended Principles and Guidelines Regarding Financing

i.            Banks and financial institutions must be required by law to do proper environmental, social, economic and geological assessments in relation to any application for funding of mining projects.

ii.            Banks and other financial institutions must publish the lending practices and mechanisms used in the monitoring and evaluation of the mining projects they fund.

iii.            Banks and other financial institutions must publish information about which mining projects they are funding in each country.

 

Operational Principles Regarding the Environment

Environmental consequences are substantial throughout the life-cycle of a mine. Each stage of the value chain (reconnaissance, prospecting, conceptualisation, exploration, drilling, mining construction, operationalization, processing, transportation and closure) poses serious risks to the environment and public health not only of the employees but also of the communities living in the surrounding areas. Every environmental medium – air, water and land – is affected.

Recommended Principles and Guidelines Regarding the Environment

i.            As a standard requirement in minerals legislation, the state should compel each extracting company to produce an Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) before a licence can be issued. These assessments and plans should be updated annually throughout the life of each project until closure and beyond.

ii.            Local community consultation should be on-going during the drafting and implementation of the initial EIA and EMP and throughout the life of the mine.

iii.            Local communities and the government must be directly involved in disaster management committees and planning.

iv.            Parliamentarians must ensure that EIAs are mandatory and part of mineral legislation, mineral concession contracts and mineral development agreements, and that they include obligatory social and environmental remediation funds.

v.            Social management plans and EMPs should include obligatory social and environmental rehabilitation .

vi.            Extractive companies must always go beyond basic compliance based on legislation in any specific country and adopt the highest possible standards with regard to the environment and ensure that such standards are implemented universally, and should continually seek to improve their performance in this regard.

vii.            Every extractive operator must accept full responsibility for the social and environmental impact of their  operations throughout the life-cycle of their project and beyond the perimeter of their direct operations, including the negative footprint in terms of air and water quality, radiation or toxic impact.

viii.            Governments  and Parliaments must adopt the polluter pays principle and legislate for it.

ix.            Every extractive operator is subject to the polluter pays principle in full and shall not seek to externalise its impact costs onto individuals, communities, government or the wider society.

x.            Every extractive sector operator is subject to the precautionary principle, according to which if there are threats of serious or irreversible environmental damage, lack of full scientific knowledge must not be used as a reason for postponing cost-effective measures to prevent environmental degradation.

xi.            Government must establish standards to evaluate and estimate environmental externalities and their economic cost (and impact on GDP) when deciding whether to exploit a certain mineral in a particular area.

xii.            Mining companies must disseminate full environmental and social cost information to the general public as well as impacted communities before commencement, during operations and after closure of a mining project.

xiii.            Government and mining companies must disseminate full information about environmental and social best practices to raise public awareness and encourage companies to follow these examples.

xiv.            Mining companies must be compelled by Government to put in place an integrated environmental and social management plan, which incorporates land-use planning and post-mining closure.

xv.            Where a mining operation is sold, the mine closure plan, the environmental and social mitigation plans and the mine closure funds must be handed over to the new owners.

xvi.            Government must include provision for a mandatory environmental tax to be paid by mining companies during the lifespan of their projects.

 

About the author(s)

Claude Kabemba is the Director of the Southern Africa Resource Watch (SARW). In 2006, the Open Society Initiative for Southern Africa (OSISA) asked him to spearhead the formation of SARW. He holds a PhD in International Relations (Political economy) at the University of the Witwatersrand (Thesis: Democratisation and the Political Economy of a Dysfunctional State: The Case of the Democratic Republic of Congo). Before joining SARW, he worked at the Human Sciences Research Council and the Electoral institute of Southern Africa as a Chief Research Manager and Research Manager respectively. He has also worked at the Development Bank of Southern Africa and the Centre for Policy Studies as Policy Analyst. Dr. Kabemba’s main areas of research interest include: Political economy of Sub Saharan Africa with focus on Southern and Central Africa looking specifically on issues of democratization and governance, natural resources governance, election politics, citizen participation, conflicts, media, political parties, civil society and social policies. He has consulted for international organizations such Oxfam, UNHCR, The Norwegian People’s Aid, Electoral Commissions and the African Union. He has undertaken various evaluations related to the work of Electoral Commissions and civil society groups interventions in the electoral process in many African countries. He is regularly approached by both local and international media for comments on political and social issues on the continent. His publication record spans from books (as editor), book chapters, journal articles, monographs, research reports, and newspaper articles.

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