THE STRATEGIC RISK ASSESSMENT AND MANAGEMENT OF INDIGENOUS ISSUES IN THE EXTRACTIVE SECTOR
The extractive sector today faces growing social, legal and political risks (SLPs) from so many different stakeholders including national and local governments, name and shame groups, civil society and environmental groups, and the “Occupy” movement. Beyond these stakeholders, there are the indigenous peoples who have growing legal, social, political and economic influence which can often determine the outcome of the Project. The development curve in the extractive sector from initial exploration to mine start-up has become longer, steeper and more risky and expensive as these SLPs have grown in scope and complexity. Even if a project is permitted or starts commercial production, its ongoing development and operations are also facing these SLPs. The continuous assessment of these SLPs and the strategy to mitigate for them has now become critical for every project in the extractive sector. A project will only be successful if it is able to obtain the legal permits to operate, then withstand any judicial reviews, and then also to be able to gain and maintain the Social License to Operate (SLO). Stakeholder identification, management and engagement are key risk-mitigation tools. This paper focuses on the growing influence that indigenous peoples are now enjoying and the impacts on the extractive sector. Indigenous peoples are a unique stakeholder group because their legal rights and interests to lands and resources, their aboriginal title and rights, are gaining more recognition. When indigenous peoples form alliances with other stakeholders, this simply adds to their growing momentum and leverage, and this can become a daunting challenge for the extractive sector. More due diligence is required by companies to understand and assess the challenges posed by operating in areas claimed by indigenous peoples. There is a real need for mining companies to develop an effective indigenous engagement strategy to address these challenges in order to successfully convert risks into opportunities. Early identification and engagement with the indigenous peoples is required and the goal should be to conclude an Impact Benefits Agreement (IBA) with the affected indigenous peoples. The real objective must be to develop a real and transparent relationship between the company and the indigenous peoples so as to gain and maintain the SLO.
Projects; Government; Governments; Process; Processes; Development; Developments; Challenges; Impact; Impacts;