February 2010

MAC Economic Commentary

Put the word out: Strategies for countering misinformation about mining

By P. Stothart

The numerous environmental challenges faced by the Canadian mining industry and the fact that it operates in developing countries around the world make it a favourite target for advocacy-driven social and environmental groups. Several NGOs and faith-based groups base their fundraising efforts in part on their ability to curtail the activities and damage the reputation of the mining industry.

In countering these determined organizations, the industry needs to clearly convey a number of messages relating to corporate social responsibility (CSR), of which five are particularly germane.

Explain what the industry produces. The mining industry does not operate simply for the fun of disturbing the landscape. It produces the raw materials required for modern life — for computers, circuitry, telecommunications, water treatment, power grids and much more. That clean energy technologies such as solar panels, wind turbines and hybrid vehicles are not possible without minerals and metals should be a core message. That the cellphones and iPods tucked in the pockets of many activists contain a couple of dozen metals and minerals should also be a core communications message of the Canadian mining industry, if only to highlight hypocrisy where it may exist.

Note that mineral extraction and processing brings environmental impacts. Mining activities are, by nature, not environmentally benign. Extracting ore from rock, where the ore may constitute less than one per cent of the volume, poses many technical challenges. Similarly, turning raw concentrate into 99.99 per cent pure metal also poses innumerable challenges, many of which have environmental considerations.

In this regard, companies should be forthright about the technical and environmental challenges they face, while noting that the Canadian mining industry has strong expertise in minimizing and managing environmental impacts. The industry is committed to continuous improvement in impact reduction and land reclamation. It also draws upon global information-sharing networks to fill any gaps in its knowledge.

Highlight your national and global networks, standards and requirements. The operations of Canada’s mining and processing industry are regulated at numerous levels. Companies seeking financing to build projects are guided by rules espoused by financial institutions such as Export Development Canada, the World Bank and the Equator Principles adopted by commercial banks. Companies dealing in dangerous substances are guided by realities such as the Transportation of Dangerous Goods Act, the Basle Convention and the International Cyanide Management Code.

The practices of many companies are shaped by the UN’s Global Compact, the Extractive Industries Transparency Initiative, the Devonshire Initiative, the Kimberly Process, ISO 14001 certification and other targeted sustainability programs like the ICMM Guiding Principles, TSM and e3 Plus.

Many firms have Impact Benefit Agreements in place with local Aboriginal groups. The Mine Environment Neutral Drainage Program and the International Network for Acid Prevention drive the practices and technologies being adopted to minimize acidic leaching challenges. All of these measures and initiatives, and dozens of others, are stacked on top of the laws, regulations, permits and enforcement mechanisms that already exist in host countries.

Highlight industry CSR investments. Canadian mining companies operate in dozens of countries in all regions of the world, creating jobs, taxes and supply linkages in these countries. In Canada, for example, the industry contributes $40 billion to GDP, brings benefits to over 3,000 supplier companies and pays over $11 billion per year to governments.

Beyond delivering such macroeconomic benefits, individual companies are active, through their CSR programs, in developing countries, helping to pay for schools, roads, electrical grids, hospitals, clinics, school breakfast programs, community buildings, child health and nutrition programs, and a range of other social investments. Companies are fully aware that strong community relationships are essential for a productive, profitable, sustainable and socially responsible mining operation.

Get the message out. Environmental, social and faith- based groups have sophisticated grassroots campaigns to sustain their operations and communications. While the main focus of industry should continue to be the development and operation of sustainable and profitable mining operations, and the associated societal wealth creation, it is also important that Canadian firms pay attention to their corporate communications. For, if left to convey misleading information without rebuttal, NGOs can do serious damage to the credibility and social license of Canadian businesses. As one simple example, companies should ensure that distribution lists for their annual CSR reports and regular press releases include federal and provincial parliamentarians, senators, local and national news media, and senior bureaucrats.

While defeating a federal private member’s bill known as C-300 is a present priority for the mining industry, the CSR outreach strategy and messaging described in this column should be a fundamental, systematic and ongoing activity.

Visit www.mining.ca

Paul Stothart
Paul Stothart is vice-president, economic affairs, at the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues.

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