New course for sustainable mining

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.