New course for sustainable mining

Emil Salim, Former Indonesian Environment Minister

I strongly recommend that mining companies voluntarily implement this approach in their operations. The "best technology" mandated in the air pollution case could also become the best practice design in the extractive industries case. In the extractive industries best practice scenario, the industry would not only implement the best available technologies to prevent pollution, but also offset converted habitat to conserved habitat at a 10:1 ratio, similar to that of the Clean Air Act. Within the context of extractive industries offsets are areas that can be conserved by the industry, either adjacent to the project or elsewhere such that the environment is unambiguously better off with the project.

The specific habitat offset for each project must of course take into consideration all the variables and need to be flexible, for which the social and environmental assessment becomes importantly instrumental. Important however is the commitment to move into this direction.

Third: Small Islands As Sensitive Areas. According to the IUCN there are five main types of sensitive areas, valuable when intact, as they are, without extractive industries and whose value would be jeopardized by extractive industries.

The five main types of "Sensitive Areas" are: Cultural property, areas in which Indigenous People's live, or on which they depend, areas of armed conflict, fragile watersheds, such as those protecting a dependent project, and areas of high biodiversity and endemism, rare or endangered species, rare habitats, and intactness,

In these five sensitive areas the potentially affected communities should be able to reject an extractive industry project on their lands, they would be off-limits unless meaningfully informed, prior consent is obtained. The important proviso is that "Offsets" can be more valuable for local communities and conservation, so the possibility of trade-off is available.

It is necessary to pay special attention to mining on small islands. There is a strong case to review the small island issue with the possibility of including them as a new category of "Sensitive Areas" that will need higher standards of social and environmental impact assessment before any decision is made to mine.

Fourth: Leveling the development playing field for developing countries. Looking to the map of mining countries, during the last fifty years upstream economic activities are not accompanied by downstream industrial development, leaving developing countries stuck with producing raw materials for exports.

The reason is obvious. Imports of mining and mineral resources have lower import duties than imports of higher value added mining processed products into industrialized countries. This limits the markets and profits to those producing only raw materials.

But it also deepens the gap between industrialized and developing countries. Globalization has raised international trade and financial flows. But this trade and finance has flowed more among the industrialized countries themselves rather than between the industrialized and the developing countries.

Of course much needs to be done by the developing countries to make their economy much more attractive. At the domestic level adherence to good governance, the rule of law, democracy, anti corruption measures, sound environmental, social and economic policies and enabling environment for investment are the basis for sound sustainable development.

These prerequisites however must also apply at the international level to multilateral agencies, such as the World Bank, International Monetary Fund and the World Trade Organizations. It is undemocratic if decisions with wide global implications are taken on the basis of "one dollar one vote" rather than "one country one vote".

The basic issue at stake is that the level playing field in international development is not fair between industrialized and developing countries.

The crucial question then becomes, what can multi-national corporations do to correct this and strive for a fair level playing field? Especially those corporations operating in developing countries with viable growth is affected by the developing countries development.

The key of development is in raising value added. Developing countries, being underdeveloped, only have natural resources and human resources as their major developmental capital. In the meantime technology and skills are mainly in the industrialized countries. Under these circumstances, developing countries can only raise capital and mobilize funds if they earn higher value added from their natural and human resources.

If mining industries fail to raise their level of activities beyond these upstream economic activities and refrain themselves to go beyond this trap, it is difficult to expect developing countries to conceive these industries as contributing significantly to their growth.

Fifth: The sustainable development agenda. We are entering now a new century. We need to draw the lessons from the past. We must change the conventional developmental mentality into a new sustainable development outlook.

This calls for a greater effort of transparency, accountability and subsidiary from the mining industry. We must enhance the participation by local and indigenous communities to play an active stakeholder role in minerals, metal and mining development through the life cycles of mines, including after its closure.

We must optimize the mining and processing of minerals, including small-scale mining, improve value added processing, reclamation and rehabilitation of degraded sites.

We must ensure real "benefits sharing" with local communities, and not rest at the notion of good revenue management alone.

We must go beyond the prevailing "best available technology" and move towards clean and sustainable technology.

We need to consider the five types of sensitive area as our working fields, with special regard to small island vulnerable eco-systems.

We must strive for a fair level playing field between the industrialized and the developing countries.

It is with this sustainable development agenda that we must change the course of mining industrial development to become a major driving force for eradicating poverty, changing the unsustainable pattern of consumption and production and promoting environmental protection in resource management as the overarching objectives of sustainable development in this coming decade.

The article is taken from Emil Salim's speech in the conference Global Mining Initiative on Recoursing The Future in Toronto on May 14. First part of the article appeared on Wednesday.