Andrew Hewett

October 28, 2011

Poor countries can expect greater control of mining companies.

THERE is no doubt that mining can stimulate economic growth and bring prosperity. But without a commitment to human rights and sustainability, and without regulation, transparency and accountability, it can also cause people to lose their land and way of life, while irreparably damaging the environment.

With two-thirds of the world’s poorest people living in resource-rich countries, too often the extraction of those resources contributes to poverty, corruption and conflict. Australian mining companies have become embroiled in damaging behaviour far from our shores and attention.

This week at CHOGM, the federal government announced initiatives aimed at ensuring the mining sector is better able to contribute to community and social development, and the responsible management of taxes and royalties paid by mining companies to governments, in Australia and overseas.

These initiatives should provide some comfort to communities in poor countries, such as Indonesia, Papua New Guinea, Mongolia and many African nations – where Australian companies operate – as they struggle to get a fair share of their resource wealth, get access to essential services and protect their land and livelihoods.

The government’s Mining for Development Initiative brings greater attention to mining governance and opportunities for government, companies and communities to work together on issues.

The International Mining for Development Centre, for example, aims to build capacity in governance and regulation, community and environmental sustainability and operational effectiveness and safety. The involvement of the Sustainable Minerals Institute at the University of Queensland should ensure a focus on mining’s social impact.

A focus on the social impact of mining is vital. One of the worst examples of how things go wrong is the case of former Australian company Anvil Mining in the Democratic Republic of Congo. It is alleged that the company, by providing logistical help, played a role in human rights abuses, including the massacre by the Congolese military of more than 70 people in 2004.

We have long needed greater assurances that Australian mining companies are adequately meeting their responsibilities in the developing countries in which many of them operate. The government’s emphasis on engaging with communities, promoting transparency, supporting partnerships, and building skills and knowledge in support of international best practice, announced just this week, is spot-on.

For example, the Community and Social Development Program will help ensure a stronger focus on social and environmental responsibility in developing countries, and encourage the benefits of mining to be shard more equitably.

It will help citizens hold mining companies and governments to account for promises made and could help guard against some of the negative effects of mining.

On top of this, a focus on revenue transparency is long overdue. The government yesterday announced the establishment of the Extractive Industry Transparency Initiative pilot – a global standard for managing revenue from natural resources that requires companies to publish what they pay in taxes, royalties and other payments to governments, and for governments to publish what they receive.

Implementing the EITI here will support global commitments to fight bribery and corruption, and will send a positive signal to other resource-rich, but often regulatory poor, countries. Here, it will allow Australians to access information on the value of our natural resources. The more those affected by mining, such as indigenous communities, know about payments made to governments, the greater the likelihood they can negotiate equitable benefit-sharing agreements.

These initiatives have come at a crucial time, as soaring commodity prices contribute to record profits and fuel an increased appetite for risk and business in emerging economies and weak governance zones.

Relying on companies to do the right thing is not enough. These initiatives will send a positive international signal, should improve business practice and enable communities and governments in developing countries to participate in development decisions that affect them.

Andrew Hewett is executive director of Oxfam Australia.
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