Työkalupakki: Kaivostoiminta

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  • 1. The purpose and use of the toolbox

    What is the toolbox and to whom is it targeted?

    The toolbox compiles existing guidance, practices and tools developed for mining companies that can be used in the key areas of local-level stakeholder engagement at the various stages of the mining life cycle. Companies can select individual tools from the toolbox or use broader sections of its content in their operations. An important source for the toolbox has been Anglo American’s SEAT (Socio-Economic Assessment Toolbox). SEAT offers mining companies established practices and templates for stakeholder engagement. Similarly to this toolbox, Anglo American’s SEAT proceeds systematically from gathering socio-economic information and profiling the operation to guidance on their reporting.
    The toolbox of the Network for Sustainable Mining compiles guidance and information on local community and stakeholder interaction applicable in Finland. In addition, it offers various cases to illustrate good practices applied in mining in Finland.
    Do you know any other good practices or interesting cases? You can propose additions to the toolbox by contacting the Network for Sustainable Mining (email: info@kaivosvastuu.fi).


    The Finnish Network for Sustainable Mining was established on 27 May 2014. The founding meeting decided to set up four working groups, one of which focused on collecting operating models and tools for good stakeholder cooperation into a single set of tools. The working group for local practices started its work in August 2014.
    At the early stages of its work, the working group identified key needs and objectives in the area of stakeholder cooperation in the mining industry for which the toolbox was expected to provide guidance and tools. These objectives included the proactive nature of stakeholder cooperation, encouraging dialogue between various operators and increasing interaction between the mining company and its stakeholders, as well as the openness and transparency of mining activities.
    The toolbox supports companies in the implementation of the corporate social responsibility requirements included in the Finnish Towards Sustainable Mining Standard.

  • 2. The important role of local stakeholder engagement

    Mining has an extensive and multidimensional impact on society in terms of economic, environmental and social impacts. Awareness of such impacts is not, however, enough, but the mining company must maintain ongoing, constructive and genuine stakeholder dialogue aiming at cooperation. Good and regular stakeholder engagement should continue throughout the mining life cycle, from exploration to mine closure.

    There are several motives for stakeholder engagement. Awareness of the important role of stakeholder engagement forms the basis for long-term cooperation. The Network for Sustainable Mining conducted approximately 30 interviews with mining companies and their stakeholders in the preparation phase of the network (in 2014). The interviews revealed the following motives for stakeholder engagement:


    • 2.1. Active stakeholder engagement in mining

      There are several reasons and objectives for active stakeholder engagement. The table below summarises some consequences of active and passive interaction relating to mining.

      Active interaction

      Stakeholder engagement started as early as possible builds trust towards the mine.

      Helps to avoid conflicts.

      It is important to seek cooperation with the local community, and a proactive approach is recommended to mining companies especially at the early stages of operation.

      Contributes to business risk management through better understanding of the local community, the identification of potential concerns and issues and provisions made for these (nobody causes trouble on purpose).

      Promotes participation by the local community in the planning of the operation and a genuine consideration of stakeholder concerns from the early stages of the planning process.
      Passive interaction

      Prevents trust and respect and damages company image.

      Increases the risk of appeals, which delay the land use planning and permit processes, for example.

      Without active discussion, lack of knowledge may cause fear and misconceptions.

      Fear creates emotive responses or conflicts, which increase operating expenses considerably.

      Increases stakeholder unwillingness to engage or cooperate and makes recruitment more difficult.

  • 3. Profiling the company’s operation

    The profiling of the company’s operation seeks to systematically describe the key information related to a specific mine project. The aim is to identify and record socio-economic issues and impacts. The company’s understanding of these issues and impacts will be further developed and enhanced during the preparation of the Stakeholder Engagement Plan.

    Profiling the operation is important as it is used as the basis when the company determines the starting points for its activities and sets its social performance and cooperation objectives. The information gathered during profiling is useful when assessing issues and impacts, and evaluating economic impacts and Corporate Social Investment (CSI) projects. In addition, the information can be used in the development of the Social Management Plan.

    Additional material

    The template for operation profiling (in Finnish) is intended for the company’s internal use to aid the systematic identification and collection of information on activities relating to the mine.

  • 4. Mapping and profiling stakeholders and the local operating environment

    It is important to build an understanding of the key factors affecting the operating environment at the local level as well as at national and regional levels. The baseline information gathered on the local area should:

    • build a socio-economic profile of the local area that can be monitored and updated over time, and be used to benchmark changes and impacts in the local area;
    • confirm socio-economic issues and impacts associated with the operation;
    • identify risks that need to be managed (to the community and to the operation); and
    • identify the main development issues and opportunities in the local area.

    Stakeholder engagement is defined as a process leading to a joint effort by stakeholders, technical specialists and the authorities, for example, whose successful work together produces better decisions than if they had acted independently. A Stakeholder Engagement Plan (SEP) provides a framework for proactively engaging and communicating with stakeholders.

    Stakeholder engagement is an ongoing activity that commences during exploration and continues throughout the mining life cycle to mine closure. The SEP should be updated annually as part of the Social Management Plan. The ongoing programme of stakeholder engagement will also include specific engagement activities, such as the stakeholder consultation required for environmental impact assessment.

    This tool provides guidance on the requirements presented in the tool for assessing community outreach performance included in the Finnish Towards Sustainable Mining Standard.

    • 4.1. Profiling the local area

      Gathering information to profile and understand the local area can be done by consulting directly with the relevant stakeholders or organisations (primary sources) or by assessing existing information (secondary sources).

      Profiling the local area should take place both prior to and during stakeholder engagement. Information that can easily be gathered from secondary sources (e.g. census data) should be collated and analysed prior to engagement, to provide the company with the necessary information to design an appropriate engagement process. For example, languages used in affected communities (the Sámi region, the Sámi language, Swedish-speaking areas, etc.) should be reflected in the engagement process. Where information is not available from secondary sources, it should be gathered through engagement with stakeholders. Engagement should also be used to check secondary data, ensuring that they are up to date, and reflect local conditions.

      The local area profile should be compiled before the identification and assessment of social impacts and the development of the Social Management Plan.

      Defining the zone of influence of a mining company is important as it should be used to determine the minimum area of the company’s social responsibilities. It also provides guidance on the zone within which impacts need to be managed, which stakeholders should be engaged and where socio-economic benefit delivery (SEBD) initiatives need to be implemented.

      The data gathered will be used to inform the annual Social Management Plan and the SEBD strategy.

      Additional material

      Preparing an impact profile (in Finnish)

      • 4.1.1. Defining the zone of influence

        The zone of influence is an area within which direct and indirect impacts attributable to the company’s operation can be expected. Typically the zone of influence is:

        1. unique to each company;
        2. larger than the actual footprint of the company; and
        3. encompasses socio-economic issues and impacts as well as issues and impacts associated with other disciplines (e.g. environment, health and safety).

        A number of socio-economic and environmental issues and impacts should be considered when determining the overall zone of influence. For each issue and impact, the boundary of the company’s zone of influence should be determined independently and consolidated into an overarching zone of influence. The zone of influence does not have to be a single area, but may consist of or include non-adjacent areas (e.g. related port sites or labour-sending areas).

        The zone of influence is defined by the impact of the company’s operation on its local area. However, it is equally important to understand those external factors that impact the operation and the local area. These external factors can take many forms (e.g. local livelihoods, changes in government policies, national elections, active campaigning NGOs, key stakeholder opinions, national debates), and at many different levels (international, national and regional level influences). Such external factors may not be possible to manage, but anticipating and understanding their effect is key to the management of any risks and/or opportunities these external influences might bring.

        Typically, the zone of influence includes the following:

        1. The zone of primary physical impact caused by the company’s operation. This includes the mine’s primary site(s) and associated, mine-managed infrastructure (including suppliers and contractors’ infrastructure) and potentially includes items such as power transmission corridors, pipelines, access roads, etc.
        2. The zone of secondary physical impact caused by the company’s operation. This includes areas that may experience environmental or knock-on developmental impacts (e.g. construction of supplier parks to serve the mine).
        3. Associated facilities that are not managed as a part of the company’s operation. These are facilities whose viability and existence depend on the company’s operation, and whose goods or services are essential for the functioning of the operation, but which are not managed by the company (e.g. a loading station or transport networks, such as rail).
        4. The company’s primary labour-sending and money-spending areas. This recognises the surrounding towns, settlements and communities that would be most influenced by the development as well as areas further away that may send labour or receive spending.
        5. Stakeholders and the wider socio-political context that influence or impact the company’s operation. In many instances, external stakeholders (e.g. policy makers, local communities) and the wider socio-political context can influence or impact the company’s operation.

      • 4.1.2. Information requirements for profiling the local area

        When collecting data for the local area profile, it is important to distinguish between different groups and sub-groups of stakeholders, so that their relationships and differences are clearly understood. This helps the company to understand which groups in the local area are most vulnerable to change and impact, and equally which groups will be able to make the most of opportunities provided by the company’s operation. Data to collect for the local area profile include:

        • Geographic and historical context
        • Demographics
        • Socio-political context
        • Stakeholder needs, issues and concerns
        • Stakeholder relations
        • Political and governance context
        • Economy, livelihoods and labour force
        • Health
        • Education
        • Utilities, infrastructure and services
        • Natural resources
        • Safety and nuisance factors

        Types of data

        Data gathered for profiling the area can be quantitative (data expressed in numbers or statistics; e.g. population data, availability of services) or qualitative (verbal descriptions; e.g. perceptions and attitudes to changes that may have occurred in the community). Data are collected from primary and secondary sources.

        • Primary data are collected first-hand through fieldwork (e.g. household surveys, participatory workshops or focus group discussions).
        • Secondary data are existing information collected for other purposes (e.g. census data, books, research papers).

        Secondary data should never be used exclusively in building a profile of a local area, but both the company’s and stakeholders’ perspectives should be obtained on key issues.

    • 4.2. Stakeholder identification and Stakeholder Engagement Plan

      Stakeholder engagement is defined as a “process leading to a joint effort by stakeholders, technical specialists, the authorities and the proponents who work together to produce better decisions than if they had acted independently” (Greyling, 1999). Mapping stakeholders and their issues involves identifying stakeholders, assessing the legitimacy of stakeholder representatives and building an initial understanding of their key issues and concerns.

      Stakeholders are individuals, groups or organisations that can be categorised as affected parties, interested parties or authorities.

      The company should aim to include all relevant stakeholders and sub-groups in stakeholder engagement. It is important to consider the special needs and interests of each group individually. In is also important to understand the relations between stakeholders. If these are not taken into account, paying attention to one group of stakeholders may result in adverse impacts on other groups.

      In addition to identifying stakeholders, it may be necessary to identify conflict actors where conflicts exist. The conflict assessment and management tool provides further details on assessing conflicts, as well as developing strategies to prevent and mitigate conflicts.

      The timing of stakeholder engagement activities must be determined on the basis of stakeholder needs as well as the stage and impacts of the project. Interaction should be started early, and it should be frequent. An operating mine should arrange regular meetings with stakeholders. In addition, it is important to ensure that stakeholders are consulted when there is a significant change in the operations or the operating environment.

      A Stakeholder Engagement Plan is developed to describe stakeholder engagement and its timing. Stakeholder engagement will be a continuous activity and will inevitably evolve over time. The ten most important tasks include: (each of these tasks is discussed below under “Stakeholder engagement plan”)

      • determining objectives and scope of engagement;
      • mapping stakeholders and their issues/concerns;
      • identifying existing engagement processes;
      • developing an SEP (Stakeholder Engagement Plan);
      • ensuring capacity of both staff and stakeholders to participate effectively in the engagement process;
      • implementing the SEP (an ongoing and continuous process);
      • incorporating issues and impacts identified into approaches to the Social Management Plan;
      • assessing the effectiveness of engagement activities;
      • updating stakeholder analysis based on engagement findings; and
      • reporting back to stakeholders.

      • 4.2.1. Levels and representativeness of stakeholder engagement

        Although all stakeholders should be considered, a good understanding of how the resources reserved for stakeholder engagement should be distributed to ensure effectiveness is needed for developing an SEP, as the resources are limited. Stakeholder engagement can be undertaken at different levels. The table below provides examples of different types of stakeholder engagement.

        Consulting with a broad range of stakeholders who may be affected differently, or have different views about the company’s operation, can ensure that the issues identified and proposed mitigation measures are truly representative of stakeholders’ needs, priorities and concerns. In this way, those who are potentially more vulnerable to changes brought about by the project can be identified and their concerns considered. In many cases, it will be necessary to consult separately disadvantaged groups, to ensure that their perspectives are heard.

        The appropriate level and type of engagement will depend on which stakeholders will primarily be affected by the potential impacts of the project and on stakeholders’ opportunities to influence decision-making (e.g. permit authorities). Such categorisation can be performed using the stakeholder analysis presented below in which the variables are the impact of the measure on the group of stakeholders and the group’s influence over and/or interest in the project.

        Figure: A stakeholder analysis to assess the level of stakeholder engagement required (Source: Stakeholder Analysis, IMPERIA project, EU LIFE+ 2013)

        Speaking to unrepresentative stakeholders on the assumption that they represent broader views can undermine the credibility of the company’s stakeholder engagement, and can ultimately derail the engagement process. Disgruntled stakeholders are just as likely to blame the company for engaging with the wrong people as they are to blame the unrepresentative spokespeople. It is, therefore, important to check the extent to which a stakeholder is truly representative of the views and interests of the people on whose behalf they claim to speak.


      • 4.2.2. Approaches to stakeholder engagement

        When selecting the preferred mode of engagement, the following should be considered:

        • Stakeholder willingness to engage: Where willingness is low, the company may need to consider a more personalised approach to engagement (e.g. one-on-one meetings or small group meetings).
        • Stakeholder fatigue: There may be instances where repeated attempts at engagement, or cynicism regarding the outcomes of engagement processes, can hinder stakeholder involvement in the engagement process. This may require more personalised approaches (e.g. one-on-one meetings or small group meetings), and/or involvement of senior level staff (e.g. mine managers).
        • Timeframes: The time available for the completion of the assessment included in the social management process will dictate which approaches are used, since some techniques are more time-consuming.
        • Cultural sensitivities: An understanding of stakeholders’ needs informs the selection of culturally appropriate engagement techniques. For example, reindeer herders and tourism entrepreneurs are not able to participate in meetings during certain periods of the year due to the high workload and high season.
        • Capacity implications: Internal resource gaps (staff availability and skill levels) and capacity of stakeholders to participate (lack of experience in engagement processes) will influence the selection of engagement techniques.
        • Nature of issues likely to be raised: The nature of issues likely to be raised should influence the selected techniques (e.g. smaller focus group meetings are likely to be more suitable than public meetings for highly controversial issues).
        • Stakeholders’ preferred mode of engagement: When selecting the preferred approaches, the stakeholders’ preferred mode on engagement should be considered. This will require discussion with stakeholder representatives during planning.
        • Diversity within the stakeholder group: Stakeholders are not homogeneous groups. Within each group, differences of gender and age will overlay differences of wealth, ethnicity, etc. Each of these sub-groups may have different perspectives according to their experiences, interests and needs. The company must hear a variety of opinions and ensure that more marginalised groups are able to engage.
        • Consideration of the Sámi: If there are Sámi communities in the local area, special consideration should be given towards particular engagement approaches that may be required to enhance their participation in the engagement process.

        Key questions to consider when selecting appropriate engagement techniques:

        • How many people can be effectively engaged?
        • Are issues better suited to small groups?
        • What benefits/risks will there be in bringing different stakeholder groups together?
        • What expectations might be created through the proposed approach?
        • What are the budget constraints?

        Communications materials should be developed to reinforce key messages. These materials should be clear, concise and produced to a high-standard and, where necessary, should be prepared in line with the company’s brand guidelines. Clear and compelling communications materials will help the company tell its story to stakeholders, and reassure them that their input is valued. If there are grounds for believing that legal proceedings may be brought against the company by the stakeholder to be consulted, the company should observe the requirements of its legal response plan.

      • 4.2.3. Mapping and analysing stakeholders

        The table below presents an example of a stakeholder profile. The information included in the table can be copied to be used in the form of a spreadsheet or database. In Excel, for example, a worksheet can be created for each stakeholder group using the information provided in the table.

      • 4.2.4. Assessing and managing tense situations

        Situations of high tension and distrust between the company and its stakeholders can be a daunting environment in which to facilitate an engagement process. This tool provides brief guidance on how to manage such situations. Where high levels of tension and low-trust exists, the company’s stakeholder engagement should have four key aims:

        • to build trust;
        • to increase understanding;
        • to establish dialogue; and
        • to find a solution.

        In terms of actual stakeholder activities, there are a number of key principles to remember:

        • Show compassion and empathy – even when the issue raised is not the responsibility of the company. Be personable and reasonable, show dedication that is backed by a commitment to address stakeholder concerns.
        • Be candid about the company’s room for manoeuvre on key issues. Where possible, identify areas where the company can genuinely show flexibility. Transparency is a critical component in building trust, so be as open as you can, or at least be honest about what you are not able to talk about.
        • Where applicable, acknowledge any past errors. Stress actions taken versus defending those that were not taken. Similarly, publicise those actions that will be taken and stress the company’s willingness to be accountable and to respond to the issue raised. This includes that the appropriate personnel (both technical personnel and management) must participate and be available to provide responses.
        • Acknowledge and record issues and concerns (using the company’s procedure for processing feedback). Working together to address the concern will help to build trust and show that the company is taking stakeholder concerns seriously. Do not provide excessively technical information in your responses/presentations – if people are concerned you first need to address the underlying reason for their concerns.
        • Select appropriate forums for stakeholder engagement (e.g. public meetings, focus groups, open days). The choice of engagement forums should be guided by the specific stakeholder group, expected level of the interest in issues, advice and guidance from key stakeholder representatives, estimated levels of tension/concern, and any past experience.

      • 4.2.5. Developing a Stakeholder Engagement Plan

        Task 1: Determine objectives and scope of stakeholder engagement
        Before embarking on the engagement process, it is important to be clear about the objectives of engagement. It is critical that the company’s senior level staff endorse these objectives and give implementing staff the support and time required to focus on the engagement process as well as to address issues raised.

        Task 2: Map stakeholders, including their issues and concerns
        Whilst most companies will already have a process in place for identifying stakeholders, it is essential to ensure they are comprehensive and inclusive. Sometimes one stakeholder group may attempt to exclude another group during the engagement process. Commitment to stakeholder engagement means that such pressures cannot be acceded to – engagement must be representative and balanced. Excluding groups is a breach of the company’s corporate social responsibility guidelines and could also lead to reputational risks for the company. Company management therefore need to decline such exclusion explicitly and openly.

        Task 3: Identify existing engagement processes
        The company should identify the engagement processes and activities already in place, and decide whether these can be used as part of the Social Management Plan and, if so, how they should be improved. For each engagement activity currently underway, staff need to critically assess the extent to which these are likely to deliver on the objectives set in the Social Management Plan.

        Task 4: Develop a Stakeholder Engagement Plan (SEP)
        A comprehensive SEP should be developed, detailing the following:

        • Scope: Stakeholders to be engaged; known issues and impacts that should be addressed during the engagement.
        • Sensitivities: Any sensitivities between stakeholder groups (e.g. conflicts or power dynamics) that need to be considered in the engagement process.
        • Approach: The preferred mode of engagement and communication for each stakeholder group. The selection of the preferred approach should reflect both the company’s and the stakeholder’s preference (see “Approaches to stakeholder engagement” above for further guidance).
        • Implementation plan: The activities and schedule for implementing the SEP. The approach and frequency of engagement activities should reflect the nature and severity of any issues and impacts.
        • Information: The information required by stakeholders to understand and assess the company’s performance in relation to issues and impacts without compromising stakeholders, personnel or commercial confidentiality.
        • Accessibility: The nature and timing of engagement activities (remembering to provide stakeholders with appropriate notice of meetings), as well as appropriate communications channels relevant for each stakeholder group to ensure accessibility.
        • Resources: The identification of human and financial resources required to implement the SEP, including roles and responsibilities for engagement activities.
        • Communications: Clear communications are essential. When notifying stakeholders about stakeholder engagement, it is important to brief them about their role in the process and what they can expect. A “Stakeholder Fact Sheet”, attached to this tool, can be used to brief stakeholders.
        • Note: When developing the plan, one should be aware of the fact that new and unexpected stakeholder engagement needs may arise (and are likely to arise) as situations change, and the company should be prepared to respond to these.

        Task 5: Ensure the capacity of staff and stakeholders to participate in the engagement process

        When assigning roles and responsibilities, it is important to assess internal and external capacity to engage effectively. Key internal capacity issues to consider include:

        • adequate time to implement the engagement process;
        • availability of required skills (e.g. facilitation skills, conflict resolution skills, language skills);
        • specialised expertise, credibility and/or authority to be able to answer the questions and issues that are likely to be raised; and
        • levels of awareness (e.g. about the principles and objectives of engagement, and the social management process in particular).

        Capacity constraints may also extend to external stakeholders and will need to be addressed in the engagement process. These constraints can include language barriers, technical knowledge, availability or financial constraints (e.g. transportation to meetings).

        Where capacity is lacking, the company will need to consider building capacity (both internally and among stakeholders), tailoring its approach to engagement (based on these constraints), or seeking external support for the engagement process.

        Task 6: Engage with stakeholders

        This task involves engaging with stakeholders, as detailed in the SEP. Adequate notes or minutes must be taken during engagement activities. This is best done by a dedicated note-taker (i.e. separate from the meeting facilitator). Reliable notes are a key resource for ensuring that issues have been adequately captured. In some instances, stakeholders may ask for the notes from the meeting, and the company will need to be in a position to provide them. If a meeting is being recorded on video or audio, all those present must agree. The company must also take sufficient precautions to protect the sources of information, where necessary.

        Task 7: Incorporate issues and impact into the Social Management Plan (SMP)

        Issues raised during engagement should be considered carefully and translated into actions, where appropriate. After the engagement process has been completed, the implementing team should engage with colleagues who have the responsibility for addressing the issues raised to ensure that adequate responses can be planned. If complaints have been made during the engagement process, these should be recorded in the company’s feedback system.

        Task 8: Assess engagement activities

        In order to ensure continuous improvement, it is recommended that the company assess the engagement activities undertaken. Some of the proposed indicators of success may not be immediately measurable. Key questions to consider are listed below:

        • Engagement and outcomes: Did stakeholders perceive the engagement in a positive way, and did it result in improved understanding?
        • Trust: Did the engagement strengthen mutual trust such that stakeholders are willing to engage with the company, utilise the company’s complaints and grievance procedure and work together to address any issues or concerns?
        • Increased understanding: Did the engagement process facilitate and enhance the company’s understanding and management of stakeholder concerns (where applicable), as well as enhance stakeholders’ understanding of the company’s operation?
        • Awareness of emerging issues: Did the stakeholder engagement decrease the time lag between the emergence of stakeholder issues and awareness of the issue within the company?
        • Development of indicators: Has learning from the engagement resulted in identification of meaningful indicators to monitor and measure performance within the company?

        The company should use the results of the above assessment to improve or confirm the appropriateness of subsequent stakeholder engagement activities.

        Task 9: Update the stakeholder profile

        The findings gathered during the engagement process should be fed into the stakeholder profile (see the “Mapping and analysing stakeholders” tool above), so that the company has an updated record of each stakeholder’s details and key issues raised.

        Task 10: Report back to stakeholders

        It is essential that the company provides feedback to stakeholders regarding:

        the key issues identified during the engagement process; and

        the manner in which the company has addressed or will address these issues, including a time frame for doing so, using the most appropriate channels for each stakeholder.

        Where possible, the social management team should aim to provide feedback before the finalisation of responses to issues raised. This will allow the company to confirm that it has accurately understood stakeholder concerns.

      • 4.2.6. Cases

  • 5. Identification and assessment of social impacts

    The Social Impact Assessment (SIA) of a mine refers to the Human Impact Assessment (HuIA) conducted for the first time during the mine planning stage. An SIA is generally conducted as part of the Environmental Impact Assessment (EIA). A Human Impact Assessment includes both a Social Impact Assessment (SIA) and a Health Impact Assessment (HIA). In Finland, Human Impact Assessments have been conducted systematically since 1994 when the Act on Environmental Impact Assessment Procedure (Laki ympäristövaikutusten arviointimenettelystä) entered into force. In addition, assessing human rights impacts must be considered in the context of an SIA. However, the role of such assessments is narrower in the Finnish operating environment than in countries with weak state structures, for example.
    Key performance indicators (KPIs) are identified during the SIA and monitored during the project life cycle. When selecting social performance measures or indicators, the following should be considered:
    participation by stakeholders and residents in the production of information;
    representativeness of the local communities’ interest groups (ensuring the consideration of the views of women and young people, in particular);
    identification of the parties affected by the project and specification of the impacts by stakeholder group in order to prepare for crises;
    consultation of both internal and external stakeholders to ensure their views on issues are heard;
    the scope and potential cumulative impacts of the project – a social impact assessment during the operational stage of the mine to identify the actual impacts of the project.
    This tool provides guidance on the requirements presented in the tools for assessing water management performance and community outreach performance included in the Finnish Towards Sustainable Mining Standard.

    • 5.1. Methods for analysing social impacts

      The table below presents a simple way to analyse and summarise the social issues and impacts associated with an operation. In developing this analysis, it will be important to:

      • gain perspectives of both internal and external stakeholders on issues and impacts (this is important in order to ensure that any links between issues and impacts and the operation and its stakeholders can be assessed and understood correctly);
      • assess positive and negative dimensions of an issue or impact:
      • understand implication for other disciplines; and
      • consider any human rights impacts.

    • 5.2. Identification of issues and human impacts

      The identification and assessment of social impacts is a process for assessing and prioritising issues and impacts, raised by both internal and external stakeholders.

      Issues raised by stakeholders are only recognised as “impacts” once the link between an issue and the company’s operation can be made. Prior to this, they are referred to as “issues” as a way of distinguishing them from impacts for which the company is directly or indirectly responsible. However, issues that are not directly linked to the company’s activities, may still be regarded as significant and require proactive management, as stakeholders may perceive the company to be responsible for them.

      The information gathered in this process will feed directly into the annual Social Management Plan (SMP).

      For each issue and impact, it will be important to build an understanding of the:

      • root causes;
      • secondary impacts;
      • stakeholders affected;
      • effectiveness of existing management measures; and
      • risks/opportunities.

      Additional material

      Assessment of human rights impacts (UN Guiding Principles on Business and Human Rights; United Nations 2011)

      Social Impact Assessment (Social Impact Assessment: Guidance for assessing and managing the social impacts of projects; IAIA 2015)

      • 5.2.1. Potential issues and impacts

        Potential issues and impacts

        Some potential issues and impacts raised by stakeholders are listed below:

        • Demographic change
          • in- and out-migration
          • breakdown of social networks and community relationships
          • increased vulnerability of disadvantaged groups
          • issues raised by the Sámi and reindeer herding co-operatives
        • Economic development and change
          • changed economic and livelihood activities
          • employment
          • enhanced local work experience, skills development and employability
          • local price inflation
          • price increases/falls in the housing market
        • Change in health status
        • Capacity and quality of infrastructure and services
          • increased provision of infrastructure and services
          • decreased capacity/performance of infrastructure and services
        • Quality or availability of natural resources
          • decreased quality, availability or access to natural resources or ecosystem services
          • damage to cultural, historical or archaeological resources
        • Social nuisance factors
        • Safety and security
          • safety hazards (relating to work and the operation)
          • mine site security (access to the site)
          • increase in disorder

      • 5.2.2. Assessing the significance of social risks

        The annual social risk assessment requires that the company build an understanding of the inherent risks that issues and impacts may present. The significance of risk levels is determined by each mining company itself.

        It can be assessed using an integrated risk management methodology that comprises the following elements:

        1. Consequence type (financial, safety, occupational health, environment, legal regulatory, social/communities, reputation)
        2. Consequence categories (insignificant, minor, moderate, high, major)
        3. Likelihood (rankings from “rare” to “almost certain”)
        4. Prioritisation (a colour coding for the level of risk combined with the extent to which stakeholders perceive the company to be responsible for the issues identified)


        An example of an integrated risk management risk rating matrix is presented below.

      • 5.2.3. Assessing social opportunities

        For issues and impacts that deliver benefits to the operation and its stakeholders, an opportunity assessment should be completed. The assessment can be adapted to local needs and can be conducted together with stakeholders where appropriate. A simple assessment matrix considering the following issues can help with the assessment process:

        • level of need in the local area;
        • extent to which stakeholders perceive the company to be responsible for the issues and impacts;
        • operational priorities;
        • human and financial resources available at the site;
        • reputation benefits for the operation; and
        • risks to the operation or the company should an initiative fail.

        Once the assessment has been conducted, appropriate management actions should be developed and incorporated into the company’s Social Managemen

      • 5.2.4. Cases

    • 5.3. Evaluating economic impacts

      The social impact assessment also includes an evaluation of the economic impacts of the operation. Economic impacts are often positive, especially at the local level. When making decisions, the company should have as comprehensive a picture as possible of the benefits and adverse effects of the project or operation. Therefore, a comprehensive assessment of economic impacts is also essential.

      • The economic impacts of mining activities are assessed at local, regional and national levels by evaluating the following aspects:
      • payments made to the public sector;
      • direct, indirect and induced employment;
      • total procurement generated by the operation;
      • contributions to the national or regional economy;
      • any direct negative impacts on other livelihoods in the area (e.g. if a company must terminate its operations due to mining activities).

      Mining affects human welfare through direct and indirect impacts. Economic impacts are one of these impact mechanisms.


      Figure: Valuation of economic benefits, environmental impacts and effects on well-being that result from mining activities. (Source: Pellervo Economic Research PTT, 2012.)

      • 5.3.1. Template for reporting payments made to the public sector

        Payments to the public sector are reported on an annual basis (Extractive Industries Transparency Initiative, EITI). Other information on the company’s financial performance can be updated each time a corporate social responsibility report is prepared, for example.

        In order to meet the requirements of the EITI, the aim is to identify all payments made to the public sector.

        Additional information

        A template for reporting payments prepared by the EITI for the mining sector; Advancing the EITI in the Mining Sector, A consultation with stakeholders, 2009.

      • 5.3.2. Calculating employment impacts

        Employment is one of the most significant economic impacts of mining. A definition of a full-time job and an example of calculating employment impacts are presented below.

        Definition of a full-time job

        All employment should be expressed as full-time equivalents (FTE) for a year. A full-time job is one that occupies employees for thirty hours or more per week. Therefore, the following employment examples each constitute one FTE year of employment:

        • an employee who works a permanent five-day week contract with a full working day, or on a full-time shift pattern;
        • two part-time employees, each of whom works two full days a week throughout the year; and
        • four seasonal or casual employees who work for five full days a week, but only for three months of the year.

        Types of employment attributable to the operation

        1. Direct employment by the company
        2. Indirect employment in the region (off-site contractors; employees working at the operation’s suppliers or their contractors or sub-contractors; employment generated by the company’s Corporate Social Investment (CSI) activities
        3. Induced employment (shops, transport, public services)

        Indirect employment in the supply chain can be calculated using the table below:

        If the supplier/contractor does not wish to cooperate for reasons of commercial confidentiality, the following alternative approach to estimating indirect employment can be used:

        • Identify the annual net sales of the supplier/contractor through published accounts
        • Identify the supplier’s/contractor’s total employment from annual reports, websites, etc.
        • Calculate the supplier’s/contractor’s net sales per job by dividing total net sales by total employment.
        • Divide the size of the operation’s spending with that of the supplier/contractor by the net sales per job figure to provide an estimate of employment generated by the operation’s custom.

      • 5.3.3. Calculating local and national procurement

        Money spent by mining operations on local and national procurement can be considerable: at its best, procurement can boost local production and promote the development of supply chains. Examples of the sectors that can benefit from mining operations in this way usually include utilities, construction, manufacturing, food supply, hotels, restaurants, road, rail and air transport, and banking and insurance.

        In the assessment of procurement, it is useful to estimate how procurement spend has changed compared to the situation 5 or 10 years ago, and is expected to continue to evolve after the next 5 or 10 years in the future.

        Profile of a supply chain

        Provide a brief overview of the supply chain by answering the following questions:

        1. How many suppliers are there in total (both domestic and international)?
        2. How much is spent each year on these external suppliers?
        3. How many of these are based domestically (locally/nationally)?
        4. Does the company procure from suppliers representing a cross-section of the local community (in terms of gender, ethnicity, religion, etc.)?

        Value of local and national procurement

        A sample of domestic suppliers should be contacted. The sample should be representative in terms of type of supplier, geography, size of purchase and skills required. Then use the following steps:

        1. Calculate the total value of procurement purchased through these suppliers. This information should be available from the supply chain or accounts departments.
        2. Liaise with each supplier to assess what proportion of this procurement relates to economic activity undertaken in the company’s locality or host country. Refer to the guidance on zone of influence in the “Profiling of the area” tool to define local area. For example, imported fuels will have a very low percentage of local content, while locally-grown food will have a very high percentage. Note that invoicing addresses are often a poor indication of where the economic activity has taken place.
        3. The value of the sample multiplied by the percentage of local/national content will give you the value of local/national content in the sample.
        4. Gross this sample up to estimate the total value of procurement sourced locally/domestically (assuming that the sample is accurately representative of the domestic supply chain).

        For example, if the value of procurement for a third of domestic suppliers was calculated, then multiply the value of the sample by a factor of three to get the total value of domestic procurement.

        Capital expenditure projects

        For major capital expenditure projects, procurement can be described using the table below:

        Calculating contributions to the national economy

        National value added is calculated by adding up the following:

        + total payments to employees;
        + taxes and royalties disbursed to governments and others; and
        + all returns to providers of capital (including interest payments, dividends paid to shareholders, and profits retained in the business for investment and replacement of depreciated assets).

        Those elements of value added that do not remain in the host country must be deducted from the calculation:

        – repatriated wages of expatriate staff and migrant labourers;
        – any management fees paid to overseas headquarters;
        – interest paid to foreign banks; and
        – profits/dividends paid to owners/shareholders based abroad.

        In addition, the significance of economic impacts should be assessed at regional and municipal levels.


      • 5.3.4. Cases

    • 5.4. Assessing impacts on tourism

      A mine established in the vicinity of a tourist resort or tourism enterprise always affects their operating conditions. In the best case, the infrastructure constructed for a mine (roads, broadband connections, heating plants, etc.) may also benefit tourism. In general, any conflicts between tourism and mining due to differing interests relate to environmental impacts: adverse impacts on the landscape or water bodies as well as noise and dust nuisance. Mining may also impair the image of the area as a tourist attraction, especially if existing tourism is based on the area’s wilderness-like nature.

      In Northern and Eastern Finland, tourism is primarily based on nature and nature-based activities: cross-country skiing, snowmobile and dog sled safaris, cross-country cycling, hiking, canoeing, recreation, etc. The quality of the natural environment and scenery are of primary importance to tourism. In order to reconcile the land use interests of mining with those of tourism, areas with reconciliation needs can be mapped, and these can be incorporated into a reconciliation plan for natural resources.

  • 6. Key methods for stakeholder engagement

    Interaction with the local community and stakeholders must play a key role in the planning and implementation of a project and in the context of mine closure.

    Key methods for successful interaction include:

    • Extensive and timely communications on the project
    • Ensuring active interaction
    • Use of stakeholder feedback systems
    • Stakeholder engagement in crisis planning
    • Management of any conflicts
    • Interaction with municipalities
    • Contractor management
    • Consideration of special issues related to the project (e.g. reindeer husbandry and the Sámi).

    The methods used in stakeholder engagement and any material related to interaction must be described carefully and analysed openly so that it is easy to understand the reasoning that has led to the interpretations made on the basis of the material. Any positive and negative impacts on the local community and stakeholders must be assessed both at the early stages of project planning and if the mining project is implemented.

    This tool provides guidance on the following assessment protocols included in the Finnish Towards Sustainable Mining Standard:

    • Water Management
    • Biodiversity Conservation Management
    • Crisis Management Planning
    • Community Outreach
    • Energy Use and Greenhouse Gas Emissions Management
    • Tailings Management
    • Health and Safety Management

    • 6.1. Communications and interaction

      Open and continuous communications and dialogue with stakeholders related to the project must be ensured through all stages of the mining life cycle. During a mining project or mining activities, interactive discussions help to communicate project plans and various opportunities to participate in the process as well as to gather views and information relating to the project.
      It is important to start communications early enough so that interested parties have an opportunity to participate throughout the project life cycle.

      Today, there are several channels available for inclusive participatory engagement, ranging from traditional public meetings and one-on-one discussions to websites and social media tools, such as Twitter, Instagram and Facebook. Therefore, the most important thing is to determine what the company wishes to communicate and to whom, as well as what type of stakeholder participation is sought for. The company should enable stakeholder participation with the preferred mode of engagement for each stakeholder group, taking into account the group-specific realities. For example, it is pointless to schedule meetings with reindeer herders or tourism entrepreneurs for the period of round ups or the high season of tourism.
      In a genuinely interactive discussion, the parties leave prejudice behind and share and receive information openly. You should respect the views of others even if these are contrary to your own.

      Mining companies should commence communications in a mining project by preparing a communications plan that describes the target groups, methods, and key content of communications. The communications plan should provide a schedule for communications activities, assign the persons responsible in the mining company and identify the communications needs of special situations, such as communications required in any change in operations. Communications must be systematic, planned and proactive, where possible. Successful communications can adapt to changes in the operations, and at their best are open, timely, interactive and reliable.


      Figure: Transparency in effective stakeholder engagement. (Source: Nathan Lewit http://www.nathanlewit.com/wp-content/uploads/2012/12/ladder-of-inference-all.jpg)

      At its best, active and effective stakeholder engagement results through an open and genuinely participatory dialogue in “climbing the ladder together”. Instead of the company and its stakeholders keeping to “their side of the wall” from the start, resolutely defending their interests and simplifying issues, they seek to produce common information and increase understanding of the issue through constructive cooperation on the “same side of the wall”. This helps to create a basis for transparent stakeholder engagement that is based on the parties’ mutual trust and understanding of each other despite their differing interests. In this way, solutions based on shared interests are also easier to find.

      Additional material

      The Finnish Association for Nature Conservation (FANC) has prepared an information package (in Finnish), the purpose of which is to help citizens to follow the permit process of mining projects and use the related channels provided for participation.

      • 6.1.1. Crisis communications

        Crisis communications refers to enhanced, targeted and expedited communications, the purpose of which is to respond to the need of information that has arisen due to a crisis in a goal-oriented manner and as intended.

        Key principles of crisis communications include openness, initiative, speed, honesty, responsibility and humanity. Crisis communications should not be an activity separated from the organisation’s normal operations, but rather an integral part of the normal communications process and planning.

        Active and open communications in normal conditions help to build good partnerships and confidence in the company’s preparedness and response. In crisis conditions, stakeholders’ information needs grow as can be expected, and the organisation should be able to respond to their needs actively on its own initiative, shifting the focus from strategic and everyday communications towards crisis communications.

        The communications culture of an organisation has found to be of great importance in terms of the success of crisis communications. Crisis management needs to be supported by effective crisis communications and vice versa. In normal conditions, communications are an important part of the management and strategy of an organisation, and the same approach should be applied in a crisis. The cornerstone of crisis communications is to provide the right target group with the right information. In practice, this requires anticipation, consideration and planning.

        Crisis communications planning starts with the identification of risks and hazards and the mapping of potential crises. Each crisis is unique and requires a case-specific assessment of the course of action to be taken. A crisis creates a human need for information on the incident and its consequences. The organisation should determine in advance who will be affected by the incident, who needs information to be able to carry out their tasks and who else should be informed.

        When updating contact details, it is also important to re-assess who are affected by different types of crises. Successful crisis communications also prevent unnecessary rumours and fears.
        At the early stages of a crisis, the organisation must determine what it wishes to communicate and what the key objectives of communications are. These may include:

        • ensuring the safety of people;
        • communicating accurate information to the parties concerned, parents, stakeholders and the media;
        • ensuring the conditions for and continuity of the community’s operations;
        • building a sense of solidarity and a sense of safety;
        • protecting any casualties and their next-of-kin;
        • minimising the impacts of rumours, perceptions and misinformation.

        The key principles of crisis communications can be summarised as follows:

        • concentration of communications and responsibilities;
        • planning;
        • reliability, honesty and openness;
        • speed and efficiency; and
        • a multi-channel approach and equality.

        In a crisis, communications is led by the same person who has overall responsibility for the management of the operations. In crisis communications, responsibility for communications is usually concentrated at as high a level in the organisation as possible, which enables consistent communications.

        Different types of media should be considered in crisis communications:

        • Mass media (online newspapers, radio, television, printed newspapers)
        • Social media (internet forums, Facebook, Twitter, Instagram, Google+, etc.)

        Each type of media should be provided with information suitable for it, where necessary. If social media tools are not used for communications in a crisis, the organisation must ensure media monitoring that includes both traditional media and other channels.

        The guidelines issued on crisis communications also apply to those responsible for various social media channels. In addition, the following issues should be considered:

        • Who will be responsible for the approval of social media updates?
        • What can be communicated without a separate approval?
        • How should social media monitoring be adapted?
        • Will each comment be responded to?
        • Will inappropriate comments be removed?
        • Will the organisation also participate in external forums?

        • Crisis communications plan

          A separate plan must be developed for crisis communications, defining the responsibilities and containing contact details (internal communications, authorities, stakeholders, external communications, media).

          In addition, the plan must describe the premises and communications systems required by the Crisis Management Team (CMT) activities.

          The plan should also include media release templates for different types of crisis. Such templates should be prepared for the area that were used as the basis for the CMT activities.

          Definition of a crisis:

          A crisis is an event or process that poses a threat to the health, safety and well-being of employees, the local community or the general public, and/or to the environment. A crisis may also be an observation of an unexpected event that poses a threat to the expectations of key stakeholders. A crisis significantly affects the company’s ability to carry out its business and/or damages the company’s reputation. (Kriisi- ja poikkeustilanteiden hallinta – suunnitteluopas 2015)

        • Media release template for crisis communications (1/2)

        • Media release template for crisis communications (2/2)

      • Cases

    • 6.2. Stakeholder feedback system

      A stakeholder feedback system developed for mining operators enables the systematic documentation, processing and solving of stakeholder feedback. The system offers a mechanism for responding to stakeholder concerns and needs before these escalate. The internal reporting of project-specific feedback should be obligatory. At its simplest, all concerns and information on their processing are recorded in an Excel spreadsheet. A template for this is provided below in the additional material section. If the volume of feedback and management measures is higher, a web-based feedback system can be a useful tool.

      A stakeholder feedback system helps to strengthen mutual trust and increases the transparency of the mine’s operations. It provides a feedback monitoring and management process in addition to directing feedback to the relevant persons. It helps mining operators to better understand the impacts of their operations on various stakeholders and the related views of the local community.

      A feedback system can also be used to document stakeholder feedback other than complaints. These include job enquiries, cooperation proposals, sponsorship requests, etc. Documenting such feedback is important in order to ensure that stakeholder enquiries are responded to appropriately.

      This tool provides guidance on the requirements presented in the tool for assessing community outreach performance included in the Finnish Towards Sustainable Mining Standard.

      • 6.2.1. Basic principles for the processing of feedback and complaints

        The objective of this tool is to provide guidance on the development and implementation of a stakeholder feedback system for the recording, handling and resolution of complaints submitted by stakeholders. The aim is that stakeholders can express their concerns through the mechanism before the concerns escalate.

        Mining companies must designate a contact person who can be contacted by all stakeholders where necessary. The contact details for this person must be provided clearly during stakeholder communications and on the mining company’s website, for example.

        Guiding principles for designing a stakeholder feedback mechanism include:

        • transparent;
        • legitimate (“trustworthy”);
        • accessible;
        • predictable;
        • equitable;
        • rights-compatible;
        • continuous learning;
        • engagement and dialogue.

        (Source: United Nations Guiding Principles on Business and Human Rights – Access to Remedy.)

        The eight key elements of a feedback system are presented below, with key issues to consider under each point.

        1. Transparent and structured procedure

        • It is critical that the procedure is communicated to stakeholders.
        • Involving stakeholders in the design and implementation of the mechanism can assist in ensuring that the process is “fit for purpose”. The mechanism should comprise at least one but preferably more than one means of submitting feedback, such as:
          • a 24-hour telephone hotline;
          • in person to identified staff members;
          • in writing by post or email;
          • in person to elected community members or NGO members who will gather and forward stakeholder feedback;
          • a feedback box in a public place;
          • informally through employees.
        • The mechanism must allow for feedback to be submitted anonymously.
        • The selection of the most appropriate model should be determined by the volume and type of feedback and complaints.
        • In addition, the company must have an internal whistle blowing mechanism in place.

        2. Recording, classifying and processing feedback/complaints

        All complaints and feedback should be recorded. In addition, each complaint or grievance should be assessed and classified into minor, moderate or serious.

        3. Internal notification procedures

        • The company’s senior management should be kept informed of trends, and they should be involved in the resolution of moderate and serious complaints and grievances.
        • All moderate complaints and grievances must be reported within 24 hours to the mining project management, while all serious complaints and grievances must be reported immediately.

        4. Definition of roles and responsibilities

        • One senior staff member should take overall responsibility for the procedure. He/she must ensure that complaints and grievances received are logged promptly.
        • Complaints and grievances should then be directed to an appropriate staff member or department for investigation and resolution.
        • Systems for managing and forwarding “informal” complaints and grievances should also be established. For example, the switchboard operator and/or secretaries are often the first point of contact. Such employees must be trained to recognise a complaint or grievance and log or redirect it.
        • Actions taken for minor social complaints or grievances should be reviewed periodically to ensure their correct handling and classification.
        • Operational staff (beyond community relations personnel) should be trained in the key components, commitments and lines of communication for the procedure to ensure that responsibilities are met.
        • In addition, the company should establish an inter-disciplinary panel of senior management to ensure that the relevant departments investigate the complaint or grievance, and that any knock-on effects for other departments are identified and addressed.

        5. Communicating with stakeholders

        • Clear and practically feasible timeframes must be set for the resolution of complaints and communicated to stakeholders in advance. It may be necessary to have a timeframe for an initial response (i.e. acknowledgement that the complaint or grievance has been received and logged) and another for resolution.
        • Where there is a clear sense of urgency regarding a complaint or grievance, it may need to be resolved more quickly. In instances where the deadline cannot be met (e.g. if a detailed investigation is required), an interim response should be provided (explaining that there will be a delay, the reasons for this, and the revised date for resolution). The following should be considered when responding to stakeholders:
        • It may be appropriate that feedback is provided by the staff member responsible for the investigation, accompanied by the coordinator of the complaints and grievance procedure.
        • The site manager may also wish to participate in the feedback, depending on the seriousness of the complaint or grievance.
        • The company’s response to complainants should be recorded in the system for any later use.

        6. Sign-off procedures

        By a senior member of staff (who must assure that the complaint or grievance has been adequately resolved).

        The person responsible for addressing the complaint or grievance should not be the same person who signs-off the resolution.
        7. Appeals

        • Companies should establish a complaints appeal panel comprising senior managers and one or more reputable and independent third parties. It may also be useful to appoint technical specialists and/or the company’s staff from outside the operation or business unit.
        • If the issue is particularly contentious, it may be necessary to form an external panel without any company representation. The company should drive the establishment of such panels to enable resolution before a stakeholder resorts to legal proceedings.

        8. Monitoring mechanisms

        The effectiveness of the feedback system and the content of feedback should be monitored systematically. The monitoring mechanisms provide management with useful information, such as:

        • whether the agreed procedures and principles have been implemented;
        • whether the complaints have been resolved successfully;
        • the volume and nature of complaints received, as well as the linking of the information to the annual risk assessment process.

        Key questions to consider when assessing complaints internally

        • Is the complaint/grievance linked to the company’s operation?
        • Which stakeholders does the issue affect?
        • How does the complaint/grievance affect the company’s relationship with its stakeholders?
        • How does the complaint/grievance affect the company and the operation (both locally and beyond), including reputational issues and both the legal and social licence to operate?


        • A single human rights complaint is a serious matter that must be investigated robustly, even if it has only been raised once.
        • The importance of a complaint or grievance is, in part, determined by the credibility of the complainant. For example, any complaint or grievance from a senior government official or politician would have to be treated as a serious complaint or grievance, even if the issue raised was itself relatively minor.
        • Complaints and grievances that may seem unjustified to the company may seem very real to the complainant. In particular, complaints and grievances that allege non-compliance with laws or human rights abuses must be addressed in full compliance with the relevant regulations and standards.

      • 6.2.2. Template: Key information on feedback and complaints

    • 6.3. Stakeholder engagement in crisis planning

      The operations of mines and exploration companies attracts strong interest with respect to a wide range of issues. Stakeholders are interested in how a company has prepared for any risks related to its operations and the scope of its actions in potential crises. Discussing risk assessments and management measures (especially for residual risks) with stakeholders as appropriate is a good concrete way to engage stakeholders.

      At first, presenting an overview of safety activities and discussing crisis planning can constitute a separate element of stakeholder engagement, but as the activities become established, crisis planning can be discussed as one of the topics on the agenda of meetings.

      A company can be classified as an establishment that is required to draw up a safety report. In this case, communicating to the local community is based on legislation. However, a similar approach can also be applied without such statutory obligations. The report can discuss the basics and practices of the company’s safety activities as well as crisis management planning and crisis management, and provide its key contact details.

      Cooperation with authorities is also based on legislation. With respect to each area of safety activities, the company has hazard identification practices and risk management measures in place based on conditions set in permits or otherwise, and may also have policies and other necessary plans and guidelines. Mines are subject to various inspections conducted by authorities (e.g. mining safety, fire, chemicals and occupational safety and health inspections). These should be combined, where possible (depending on the topic of the inspection).

      The various areas of safety are not separate components, but interconnect. Therefore, the company should also discuss overall management, impacts and crisis management planning with the authorities. In terms of determining the status and managing the emergency as well as communications, it is essential that operators and authorities plan their cooperation for emergency situations together.



      Figure: Overview of cooperation between the company and the rescue services: Cooperation partners to be considered in the planning of emergency operations and crisis management. (Source: Network for Sustainable Mining 2015, Kriisi- ja poikkeustilanteiden hallinta – suunnitteluopas)

      Additional material

      Crisis communications

      • 6.3.1. Identification of relevant stakeholders and cooperation

        In terms of stakeholder engagement, it is essential to identify the operators directly related to potential crisis situations (e.g. authorities), the parties directly affected by a potential crisis (e.g. local residents, the municipality, local communities and organisations, businesses in the area) as well as the parties indirectly affected and/or parties likely to be interested in the matter (e.g. local communities and organisations, national interest groups) and the media (local, national, international).

        Stakeholders must be identified taking into account the various risk factors and/or areas:

        1. Employees/employee associations/unions.
        2. Rescue services – fire brigades, police, ambulances/paramedics, hospitals, poison centres and other civil defence organisations.
        3. Local, regional and national government – rescue authorities, environmental protection agencies, local planning authorities, municipal councils, safety regulators, specific agencies responsible for environmentally sensitive or protected areas, etc.
        4. Affected stakeholders – this includes nearby communities that are potentially directly/physically affected, but also other communities such as those providing employees or services to the mine, communities living along transport routes or those downstream of tailings dams, chemical stores, etc.
        5. Specialist service providers (e.g. spill clean-up).
        6. Professional service providers, including lawyers, insurance companies, safety and environmental advisors.
        7. General suppliers/customers and other businesses in the area that may affect or be affected by the company’s operation, and with whom the company may wish to develop joint emergency plans.
        8. Business unit and corporate headquarters.
        9. Welfare services such as Red Cross, and their local counterparts.
        10. Industry colleagues and industry associations/chambers of mines.
        11. Joint venture partners and minority investors in the company’s operations.
        12. Public information authorities and media organisations. Note: It is important that the first contact with the media is not crisis planning focused; media partners should be selected carefully to avoid unhelpful, sensationalist coverage.

        Stakeholders should be involved at all stages in the crisis management planning life cycle.

        Stakeholders need to be involved in the development and testing of the plans. However, it is preferable if an initial plan has been developed by the company to provide a basis for stakeholder input.

        Usually the level of community motivation to get involved depends on the perceived level of risk. This may be determined by a range of factors such as site history, impacts (e.g. noise and dust) and the company’s relationships with local stakeholders and local press, etc.

        The inherent risk (i.e. the objectively estimated likelihood and extent) of crises is dictated by the actual nature of operations, conditions on the site and nature of the surrounding environment (e.g. potential for external hazards such as earthquakes).

        The balance between inherent and perceived risks:

        Total risk = actual risk + perceived risk.

        Interests and needs behind demands

        In conflicts, the parties express their positions and demands publicly that are based on more fundamental interests and needs. For example, opposition to mining activities (demand) may be connected to concerns about the pollution of the living environment (interest) that is linked to health (basic need). Akordi Oy has translated and developed a model based on Oliver Escobar’s figure to describe the relationship between demands, interests and needs. The two overlapping triangles in the figure represent the relationship of the two parties with each other. The parts visible of the triangles are only the tip of the iceberg, i.e. the level of publicly expressed positions and demands. At this level, we can see their differing, incompatible demands and an open conflict. Under the surface, there is an invisible level of interests and needs that can be used to find a resolution to the conflict. The golden triangle in the figure represents the area of convergent interests, and the blue area a more extensive base of shared needs. The key message of the figure is that conflicts are not resolved at the level of publicly expressed demands or views, but at the level of interests and needs. This means that any interaction should provide safe means for the parties to express their interests and needs. At the level of expressed demands, any efforts to resolve the conflict will only result in bad compromises, whereas sustainable solutions can be found by understanding and reconciling the various interests and needs. (Akordi Oy 2014)

        Figure: Interests and needs behind demands. (Source: Akordi Oy 2014. Adapted from Oliver Escobar 2011, Public Dialogue and Deliberation. A Communication perspective for public engagement practitioners.)

      • 6.3.2. Stages of crisis management planning

        Crisis management planning is part of overall safety management. In various sectors and both in public entities and companies, crisis management often only focuses on crisis communications. The aim of this guidance is to consider crisis management as a whole. The scope of crisis management preparedness must be determined on the basis of the risks identified in the company’s operation.

        Successful crisis management planning is based on the company’s normal safety activities:

        • The hazards caused by the company’s operations or external factors have been identified and the risks have been assessed.
        • The company has defined the objectives of its safety activities and the related roles and responsibilities clearly.
        • Risk management measures have been planned, and their scope is sufficient to cover the risks caused by the company’s operations.
        • Any residual risks have been identified and assessed.
        • Management measures have been defined, and they are being implemented.

        Planning of actual crisis management

        From the key (critical) risks, the company selects the incidents that it will prepare for, such as:

        • Underground accident: traffic accident, fire, cave-in, explosives accident, external impact (flood, gases from combustion or chemicals).
        • Aboveground accident: traffic accident (crash, falling from a bank or similar), vehicle or building fire, processing plant or warehouse fire, cave-in, rail accident.
        • Chemical accident; leak (gas or liquid), transportation (train, traffic).
        • Dam incident; uncontrolled seepage, leakage over the walls, leaking pond bottom, dam failure.
        • Natural conditions; flood, troubles/damage caused by ice/snow, storms.
        • Consequences or combinations of the above: e.g. extensive power cut caused by a storm that has a wide impact on the operations.
        • Adverse impact on the environment: any of the above or a combination thereof may have impacts on the surrounding environment or its residents. The impacts must be assessed.
        • Nuisance and/or hazard caused by external factors: natural conditions, theft, obstruction, prevention of transports.

        In terms of crisis management, it is sensible to combine the areas of crisis management planning into larger components so as to avoid developing a separate protocol for each individual risk factor.

        In practice, maintaining and practising several protocols so that they could be applied effectively in real-life situations would be very challenging and require considerable resources.

        Risk management measures are based on individual risk factors, but crisis management measures are thus planned for larger components.

        Levels of crisis management activities

        The company must decide how it prepares for activities to be carried out in a crisis. This decision must be based on a realistic risk assessment. The decision is used as a basis for determining the scope of activities in a crisis.

        The operative activities focus on the practical management of the crisis (e.g. firefighting, first aid, leakage repair, process failure repair, restoration of power supply, fixing of data communications failures, etc., as well as cooperation with authorities to manage the crisis).

        In many companies, these activities are referred to as the ERT (Emergency Response Team) activities. The term includes rescue units or personnel, maintenance groups or other expert groups that have been planned for managing crises. Due to the nature of the operations of mines and industrial plants, such activities typically concern preparedness for accidents and thus focus on emergency operations.

        The administrative activities provide the ERT with the appropriate conditions and assistance, is responsible for communications (internal, external), acquires the additional resources required (own employees, contractors) and keeps contact with the authorities. These activities are referred to as the CMT (Crisis Management Team) activities.

        Crisis prevention and crisis management planning

        For the components selected, the sufficient scope of safety activities is assessed and implemented to ensure the operative and administrative activities.

        1. Preventive measures

        • Administrative methods (plans, guidelines, etc.)
        • Technical methods (structural, safety automation, detectors/alarms, extinguishing systems, etc.)
        • Methods relating to personal conduct (e.g. induction training, personal protective equipment, etc.)
        • Sufficient introduction of staff (skills) to preventive measures

        2. Preparedness to act in an incident or accident

        • Sufficient skills of staff (able to identify a hazard, notify of an incident/raise alarm and take the first measures)
        • Functioning communications and alarm procedures and systems, and staff know how to use them
          • Internal communications and alarms
          • Alarms and communications to stakeholders as well as contact details
          • Communications to the media and contract details
        • The activities of each person in an incident or accident have been planned and practised.
        • Sufficient external resources have been identified and reserved, if necessary (e.g. contractor equipment or similar).
        • The measures to be taken in an incident or accident have been planned, the equipment required has been reserved and the relevant staff members have been assigned and trained (persons/groups able to participate in emergency operations, maintenance, electricity, etc.).
        • Cooperation has been planned and practised with authorities.

        3. Preparedness for aftercare

        • Staff are provided with opportunities for debriefing/defusing, as necessary
        • Plans are developed for preventing and limiting damage, and the persons responsible are assigned
        • Plans are developed for restoring production, and the persons responsible are assigned

        The focus of safety activities and crisis management planning is on preventive measures, quick detection of incidents, correct response to and thus control of a situation as well as damage minimisation and control.

      • 6.3.3. Cases

    • 6.4. Conflict assessment and management

      Conflicts relating to mining may be triggered by environmental or social factors, for example. They are most likely to occur during periods of social, environmental or economic change.

      Conflict analysis is defined as: “the systematic study of the profile, issues and stakeholders that shape an existing or potential conflict, as well as factors in the interaction between the three. It helps companies gain a better understanding of the environment in which they operate and their role in that context” (International Alert, Conflict Sensitive Business Practices). Although a conflict analysis can be completed as a desk-based exercise, it its recommended that a cross-functional team of the company conduct the analysis and the results be validated by external stakeholders.

      Components of a conflict analysis:

      1. context/issues
      2. causes, drivers and triggers
      3. actors
      4. dynamics between the above

      Additional material

      Crisis communications (section 6.1.1)
      Maankäytön konfliktit ja niiden ratkaisumahdollisuudet (Ministry of the Environment 2004)
      (English abstract: Land use conflicts and solutions)
      Konfliktien kartoitus suunnittelun apuvälineenä (Yhdyskuntasuunnittelu/The Finnish Journal of Urban Studies 2009)
      Lyhyt opas intressien yhteensovittamiseen (Lawrence Susskind 2014, published in Finnish by Akordi Oy; English original: Lawrence Susskind (1999) “An Alternative to Robert’s Rules of Order for Groups, Organizations, and Ad Hoc Assemblies that Want to Operate by Consensus” in The Consensus Building Handbook: A Comprehensive Guide to Reaching Agreement, eds. Lawrence Susskind, Sarah McKernan, and Jennifer Thomas-Larmer (1999) Sage Publications).
      Sovittelu osana paikallisten ympäristökiistojen hallintaa (Peltonen L., Verkasalo A., Mynttinen E. & J. Kangasoja 2012; Aalto-yliopiston julkaisusarja, Tiede+Teknologia 9/2012)

      • 6.4.1. Conflict management and mitigation

        In Finland, conflict analysis and management usually means studying of the causes of conflicts at different levels (see points 1.-3. below). The links between needs, interests and demands relating to mining should be studied.

        1. Analysing issues

        In profiling the local area and assessing impacts as well as in the context of the stakeholder feedback system, it is important to identify any issues that could be a potential trigger of conflict.

        Such analysis may identify conflict risks associated with:

        • economic issues and concerns;
        • social issues;
        • land use rights and conflicts (e.g. reindeer husbandry and tourism);
        • acquisition of properties or land;
        • environmental problems; and
        • value issues.

        Issues and impact are often the root causes or drivers of conflict. It is important to distinguish these from the symptoms of conflict. Dealing with the symptoms will not address the causes of conflict. For example, boosting security may limit damage to company property (symptom), but is unlikely to address underlying conflict drivers.

        2. Identifying potential conflict actors

        Conflict actors should be identified in the context of developing the Stakeholder Engagement Plan. It is important to understand that conflict actors are not stakeholders to the company, but stakeholders to a conflict.

        A conflict map simplifies a conflict and presents:

        1. the actors, their “power” or influence on the conflict;
        2. their relationship with each other; and
        3. the conflict theme or issues.

        3. Preventing and mitigating conflicts

        3.1. Understand local conflict dynamics, i.e. how the identified conflict situation is evolving over time

        • The conflict dynamics should be mapped and monitored regularly as this may help to detect otherwise unforeseeable changes.

        3.2. Identify the risks posed by conflicts (to both the company and other stakeholders), and the causes of those conflicts

        • Only by being aware of conflicts and associated risks can companies operate in a conflict-sensitive manner.
        • Companies should understand that their activities can also contribute to conflict (conflicts are not only external problems).
        • Identifying the risks should build on the profile of the local area and the assessment of issues and impacts, supplemented by information from the stakeholder feedback system.
        • Examples of conflict risks to mining operations:
          • Security (higher costs)
          • Risk management costs (e.g. insurance)
          • Material losses (e.g. destruction of property or materials)
          • Opportunity costs (e.g. disrupted/suspended production, inability to expand)
          • Personnel costs (e.g. employee security and well-being)
          • Legal costs (e.g. legal proceedings)
          • Reputation costs (negative impacts)
          • Weakening of the social licence to operate
        • Examples of operational or environmental impacts that might contribute to conflict:
          • Land acquisition
          • Unfair hiring/procurement policy
          • Operational changes resulting in unemployment
          • Land use conflicts
          • Tailings dams or effluent discharges affecting water quality or fish stocks

        3.3. Design and implement prevention and/or mitigation strategies

        Depending on the nature or stage of the conflict, the approach required is either prevention or mitigation. The table below presents some examples of conflict prevention and mitigation measures.

        The table below presents some examples of conflict prevention and mitigation measures.

      • 6.4.2. Cases

    • 6.5. Preparations and investments by municipalities

      It is essential that municipalities make preparations from the very start of mining activities. Municipalities should prepare for the environmental, social and economic impacts of a mine in advance. The mining operator should meet municipal decision-makers at an early stage to help them understand what the establishment of the mine in the area will mean.

      • During mining operations, the municipality can provide, for example:
        training needs mapping and training based on the results;
      • communications and advertising on job opportunities offered by the mine, etc.;
      • establishment and management of a mine fund, which would benefit both the mine and the municipality;
      • housing support systems, etc.

      During the operations of the mine, the municipality should maintain continuous contacts with the mine to be able to prepare itself for any changes in the operations of the mine. In a small locality, local people become aware of measures carried out in the area very quickly, for example, the movements of a drilling machine are soon known to all. Stakeholder engagement should be started and local residents should be informed of the project when submitting a reservation notification or at the latest when applying for an exploration permit.

      In many ways, municipalities have a pronounced role when mining activities are started in the area. It is essential for the municipality to assess how the activities and characteristics of the area as well as values will change due to mining activities. In addition, the municipality should develop discussion and management mechanisms for its own use to address these issues.

      At mine closure, the municipality and mining operator should have a joint exit plan developed at an early stage on the future uses and options of the mining site and what is required to implement them. Continuous contacts between the company and the municipality also ensures that the municipality will not be left alone to assess potential risks and mitigate any adverse impacts.

      • 6.5.1. Attractiveness of the municipality and municipal service provision

        Municipalities often attract mining activities by providing infrastructure and services. Their investments should be assessed carefully, and debt ratio should not be too high. The provision of services should correspond to the realistic demand, and any plans should be developed in close cooperation with the mining company. The municipal plans should also consider changes typical of mining activities to ensure that services are not underused for longer periods. Some examples of services provided by municipalities are listed below:

        • Daycare
          As the number of mine workers increases, the municipality may need to increase the provision of daycare services. As mines usually work in two or three shifts, round-the-clock nurseries are also needed. When planning the capacity of services, sudden changes in needs must be taken into account so as not to create overcapacity.
        • School education
          The content and volume of school teaching must often be adapted to the needs of the new miner families moving to the area. For example, new instruction languages may need to be introduced at schools after mining activities have started in the area.
        • Industrial premises and warehouses
          Municipalities can also offer services not normally included in their basic service provision. For example, industrial service providers need industrial buildings, which municipalities rarely can offer without new investments.
        • Labour force
          The establishment of a mine usually increases the need of industrial workers in the area. As many of the mine’s employees as possible should be local people so that the tax revenue and the use of services would benefit the host municipality.

      • 6.5.2. Land use planning and permits relating to mining

        In small municipalities, the various statements as well as issues relating to land use planning and permits required by mining projects may overburden the municipal officials. The mining operator should pay attention to the quality of the project material and translate it into Finnish so as to avoid unnecessary delays or misunderstandings.

        Land use planning is based on the reconciliation of land use interests. Therefore, no land use forms susceptible to the adverse impacts of mines should be located in the vicinity of a mining site marked in the plan. Land use plans can also include such regulations that promote the creation of buffer zones round a mine. This helps to protect areas sensitive to the impacts of the mine.

        Land use planning and construction of infrastructure by municipalities require long-term cooperation and several years of interaction with the mining company.


        Tukes = Finnish Safety and Chemicals Agency

        ELY Centre = Centre for Economic Development, Transport and the Environment

        AVI = Regional State Administrative Agency


        SOVA Act = Act on the environmental impact assessment of plans and programmes of authorities

        Figure: Overview of authority processes (Source: Finnish Association for Nature Conservation, Tietopaketti kaivoslaista ja kaivoshankkeiden viranomaisvaiheista)

        Additional material

        Mining permit and exploration permit (Finnish Safety and Chemicals Agency, TUKES)

        Tietopaketti kaivoslaista ja kaivoshankkeiden viranomaisvaiheista (FANC 2013)

      • 6.5.3. Housing supply in municipalities

        In many sparsely populated areas, housing production provides a challenge in the context of starting mining operations. Housing production in these areas does not usually interest developers or real estate investors as the increase in demand is often only temporary. Therefore, the production responsibility is often left to the municipality if no agreement on joint real estate or housing companies have been made with the mining operator. Developers interest in the area can be increased by offering opportunities for tourism or other similar construction projects.

        Housing supply, including the occupancy rate of rented housing, should be assessed in the host municipality. Low demand for rented housing may help to solve housing shortage, and thus high investments in housing production can be avoided.

        Any housing construction needs must be planned as carefully as possible, and the plans must be updated as the project advances.

      • 6.5.4. Municipal economic development strategy

        The economic development strategy of a municipality should enhance cooperation between industry, companies and the municipality. It forms the basis for systematic and consistent policy making, and facilitates the completion of issues and the municipal budgeting process. The strategy must be updated regularly, and it must take account of any changes in the economic life in the municipality. In order to ensure economic development, the strategy must be based on mutual understanding and all parties must commit themselves to the related projects. The municipality must be aware of the mining company’s views and the impacts of the mining activities on the municipality.

        The municipal economic development strategy must describe the present situation and the objectives for the future. In addition, the strategy identifies ways to meet the objectives and describes how progress and implementation will be monitored.

        The municipality must focus on its basic tasks and maintain its practices. The municipal economic development strategy helps to develop the municipality consistently. Mining must be considered in the strategy as it typically poses various opportunities and threats in the area of the municipality. Mining brings jobs and services to the area, which are key factors in terms of the attractiveness of municipalities. Mining may also impact on local infrastructure as well as on training opportunities, for example. A comprehensive municipal planning process and economic development strategy monitor the activities of mines, and the municipality changes its operations accordingly, as necessary, but retains its identity and avoids unnecessary risks. Municipal infrastructure and economic development planning must be balanced, avoiding a too strong focus on a particular livelihood.

      • 6.5.5. Frontloading of investments and financing models

        Mining-related investments made by municipalities are usually front-loaded. When making investment calculations, the cash flow expected for each year should be evaluated. The economic benefits of a mining project to a municipality should also be assessed separately for the construction and production stages.

        A mining fund is an example of various financing models used in the mining sector. A mining fund can consist of contributions to the provision of municipal services, for example. Another way of investing is a financial contribution made as initial capital, the unused part of which can produce return on investment. In terms of legal form, a mining fund should be a foundation or a fund, and it can also collect capital from other business sector operators. The fund can provide start up loans to industrial service providers and other companies, if necessary. Municipalities and their affiliated companies cannot invest in such funds due to the EU’s de minimis rule.

        Figure: Financing of a mining project. (Source: Niemi T., 2011, Kaivosrahoituksen selvitysmiestehtävä. Dnro TEM/3385/06.02.01/2010)

    • 6.6. Contractor management

      This tool helps companies to consider issues related to contractor management. Contractors perform a variety of roles in mining operations:

      • engineering, procurement and construction management (EPCM) activities;
      • regular equipment maintenance;
      • mining services;
      • ongoing professional services; and
      • security, catering, gardening and other general site services.

      Contractor management and supply chain issues should consider the socio-economic impacts associated with contractors and their social performance. The operating mining company is likely to be blamed for any social issues associated with contractors. Therefore, it is the mining company’s obligation to ensure that the social impacts of contractor activities are managed professionally. This is comparable to safety management.

      In particular, attention should be paid to the following as contractor should be able to:

      • identify and manage their impacts on stakeholders;
      • engage stakeholders;
      • handle feedback and complaints; and
      • identify opportunities to improve the company’s local social licence to operate.

      • 6.6.1. Socio-economic impacts associated with contractors

        In many cases, the use of contractors increases the number of non-local workers in the project area. This can give rise to a variety of impacts that need to be managed:

        • Economic tensions between local residents and contractors, particularly where there are disparities in wealth or where local unemployment is high
        • Contractors’ inappropriate behaviour and resultant conflicts
        • Increased pressure on local services
        • Shortages of housing
        • Boom-bust impacts on local economies

        However, there are also a number of potential benefits:

        • increased local employment;
        • increased skill and training opportunities in the local area; and
        • increased demand for goods and services and associated indirect employment opportunities in the local area.

      • 6.6.2. Social performance requirements for contractors in the contracting process

        Contractors should be made aware of social performance requirements as early on in the contracting process as possible. Ensuring social performance/incorporating it into contractors’ operations is very difficult unless appropriate conditions have been included in contracts. Attempts to include requirements once contract has been made will usually entail additional cost and delay.

        International standards, such as the IFC’s financing criteria and the ILO standards for labour and working conditions must be considered in contractor management.

        The following section describes tasks/measures to be undertaken during the sourcing and contracting process.

        No matter at which level procurement decisions take place, social performance managers should participate in the process to identify risks and opportunities.

        1. Determine the social implication of value creation

        The procurement process should identify whether the procurement of goods or services considered could have positive social implications in the area. In order to be able to do this, the mining company should have information on the current situation of the area. Where no material social implications are identified, the procurement process can continue without further measures. If such implications are possible, the procurement process should consider the issues presented under the following points.

        2. Identify potential social impacts

        At this stage, the task is to identify any social impacts associated with the activities identified and profiled at stage 1. Defining these impacts requires consideration of the different work packages that will be contracted out (e.g. site clearing, road construction, etc.). In addition, the aim is to identify how local procurement can support the local socio-economic benefit delivery.

        The generic impacts that may be associated with contractors are listed below:

        • managing an influx of job seekers;
        • increase in social problems;
        • housing and accommodation;
        • increased pressure on local services and infrastructure;
        • cultural and religious sensitivities;
        • potential for tension/conflict between contractor workforce and local residents;
        • increased local employment;
          increase in skills and experience in the local area; and
        • increased demand for goods and services and associated employment.

        3. Identify social requirements, request information and screen contractors

        At this stage, the company determines the type and level of social management required. This a relatively high-level exercise (e.g. social performance standards are established, responsibilities and resources are defined).

        Social management requirements can be included in the contractor request for information and screening process. This will give contractors the opportunity to demonstrate their experience and suitability in meeting these requirements.

        The types of information that can be requested include:

        • compliance with ILO and national legal standards;
        • allocation of appropriate resources for social performance and the provision of internal training;
        • maximising benefits and minimising negative effects on local communities, for example through their approach to local procurement, employment and training;
        • previous experience of working in similar situations and maximising local benefits;
        • policy and approach to managing potential negative social impacts, for example alcohol or accommodation camp management policies;
        • internal and external records and reports of employee and community relations; and
        • evidence of how social management systems are incorporated into general project management.

        Select the contractors that pre-qualify

        The persons responsible for sustainable development in the company and its parent company’s supply chain should be involved in shortlisting contractors. It is possible that contractors who qualify according to non-social performance requirements (e.g. quality, technical, etc.) may not meet all the social requirements. It must be ensured that the social requirements have appropriate weight in short-listing contractors.

        Contractors who do not meet the social requirements or are not willing to work jointly with the mining company to improve their operations to meet the standards are not suitable for contractors. Otherwise contractors’ performance could result in reputational or legal liabilities for the company.

        4. Include social management requirements in the request for proposal and issue tender

        A. Prepare the request for proposal (RFP) documentation

        Where relevant, contractors should be given:

        • a description of the local socio-economic context (e.g. from the social impact assessment);
        • the potential impacts and any existing social performance strategy of the company’s operation
        • a description of the standards and regulations that need to be met, including national and international legislation; and
        • the company’s relevant internal standards and guidance.

        For large capital projects, the documentation should include the construction management plan that will have been prepared as a part of the environmental and social impact assessment (EIA) of the project.

        The RFP/tender documentation should both provide and request information from the contractor regarding social management capabilities. The amount of information requested should be commensurate with the type of category and contract, the associated impact, and the expected level of contractor responsibility.

        The impact assessments for any major construction activity should include a detailed contractor management plan. This should be checked against the requirements set out in this tool to ensure its adequacy.

        The type of information required from potential contractors should include:

        • confirmation of compliance with occupational safety and health legislation and effective management of occupational safety and health risks;
        • stakeholder engagement techniques, including complaints and grievance procedures where these need to be operated by the contractor;
        • local hiring, training and procurement policy and experience;
        • workforce codes of conduct and the management plan for ensuring delivery on these standards;
        • confirmation of compliance with national labour and social legislation;
        • previous examples of plans developed for similar projects, e.g. labour force management and development plans, camp management plans, etc.

        Where social impacts are likely to be a particular issue (e.g. a large temporary workforce), it may also be necessary to ask for detailed information on topics such as:

        • how contractors will ensure the availability of appropriate social management and other relevant skills (e.g. counselling or medical skills);
        • contractors’ understanding of the types of social and community issues that will need to be dealt with, and proposed methods of dealing with them;
        • evidence of how particular national standards will be met; and
        • proposed approach to accommodation provision and management, and workforce codes of conduct.

        Contractors should also have a ring-fenced budget for social performance and impact management activities.

        B. Evaluate the proposals submitted

        Where significant social impacts are envisaged, it is essential that the company is involved in the proposal evaluation process. The method for this will be dependent on the overall contract evaluation process.
        The proposals should be assessed against the information requested. The relevant key indicators are:

        • evidence of previous experience;
          concrete commitments; and
          sufficient allocation of resources to managing social issues.

        5. Identify any contractor capacity constraints for addressing social issues and agree on a way forward

        If the preferred contractor’s tender does not demonstrate sufficient capacity to deal with social issues, an agreement should be made on how this should be addressed. Either the contractor should commit to building its capacity to meet these requirements, or the company and the contractor can agree to share responsibilities. In defining responsibilities consider:

        • Contractor experience (with implementing social management plans and/or the resources available for this).
        • The duration of the contract (long-term or short-term work; if it is short term, it may be better for the company to take implementation responsibility for some aspects, e.g. stakeholder engagement, so that stakeholders are part of a long-term, continuous process).
        • The size of the contract and whether the contractor is likely to sub-contract components. If the contractor has insufficient capacity to manage their sub-contractors’ social performance, the company may need to play a greater role.

        6. Finalise Social Management Plan and pre-mobilisation activities

        The contractor-specific plan should detail who is responsible for what and cover relevant social issues;

        • local hiring and procurement;
        • worker awareness and training programmes;
        • accommodation provision and management protocols;
        • occupational safety and health programmes;
        • community liaison and complaints procedures; and
        • any mitigation measures identified as being necessary.

        Depending on the case, pre-mobilisation activities may include:

        • training contractors to implement management strategies (e.g. complaints procedures);
        • induction into existing management systems (e.g. stakeholder engagement);
        • developing management systems and plans with contractors; and
        • briefing the contractor team on the local communities, and associated stakeholders and issues.

        7. Management and monitoring of contractor-related social issues

        The company must ensure that contractors implement their commitments in accordance with the contract. This can be done through:

        • Progress meetings
          Regular progress meetings should be held to discuss social performance with the contractor.
        • Monitoring, evaluation and reporting
          The company should agree on a monitoring and reporting programme with the contractor. The operator should work with the contractor to adapt a management system to promote continuous improvement, where necessary.

      • 6.6.3. Cases

    • 6.7. Reindeer husbandry

      Reindeer husbandry is a land use form that has a significant and long tradition throughout the reindeer herding area. It is important in terms of employment and the vitality of villages, especially in the smallest villages in the north. Reindeer husbandry is the oldest of the livelihoods still practised in Northern Finland: its significance to the Finnish and Sámi cultural heritage and landscape is irreplaceable. As it uses extensive land areas, however, it is susceptible to the effects of other land use forms. This is why land-use planning in the reindeer herding area is an extremely important question/issue in terms of ensuring the continuity of this livelihood and cultural heritage.

      The reindeer herding area is the area specifically intended for reindeer herding specified in the Reindeer Husbandry Act (Poronhoitolaki 848/1990). It covers 122,936 square kilometres and accounts for 36% of Finland’s total area. It comprises the Region of Lapland (excluding the Kemi-Tornio area) as well as the northern parts of the Regions of Northern Ostrobothnia and Kainuu. The Finnish reindeer herding area is divided into 54 reindeer herding co-operatives. They are reindeer herding units of varying sizes in terms of their area and reindeer numbers.

      The right to practice reindeer herding, including the free reindeer grazing right integral to it, is a traditional form of usufruct, a special right secured by the Reindeer Husbandry Act. It is valid throughout the reindeer herding area irrespective of land ownership or possession rights (Reindeer Husbandry Act, Section 3). According to Section 53 of the Act, when planning measures concerning State land that will have a substantial effect on the practice of reindeer herding, the representatives of the reindeer herding co-operative in question must always be consulted. In such consultation, the reindeer co-operative is represented by its chief of district. The land in the reindeer herding area may not be used in a manner that may significantly hinder reindeer herding (Reindeer Husbandry Act, Section 2).

      Reindeer husbandry must be considered in stakeholder engagement if:
      1) the mine is located in the reindeer herding area or
      2) the mine has impacts on reindeer husbandry.

      K7_Poronhoidon_kierto_01 K7_Poronhoidon_kierto_02

      Figure: Reindeer husbandry year, autumn round ups/reindeer calve marking in the summer. (Source: Reindeer Herders’ Association)

      Additional material

      Good operating models relating to reindeer husbandry
      The website of the Reindeer Herders’ Association
      Reindeer EIA guide (Guide to examining reindeer husbandry in land use projects)

      • 6.7.1. Cases

        • Good operating models relating to reindeer husbandry

          When assessing impacts on reindeer husbandry, sufficient and in-depth baseline information on current conditions in the area is essential. Baseline data forms the basis for the environmental impact assessment (EIA) of the project and the impact assessment of implementation options presented in land use plans. Documented data on reindeer husbandry activities and reindeer grazing in the project area is also important for the monitoring of impacts during the operational stage. Baseline studies concerning reindeer husbandry must be focused on an expansive area, at least on the entire reindeer herding co-operative area where the project is located. The project is likely to have impacts on areas outside the actual project area. In some cases, studies may need to be extended to cover a number of reindeer herding co-operatives. In large-scale projects, reindeer husbandry studies should be compiled into a separate report.

          The following basic matters should be covered when assessing impacts on reindeer husbandry (materials and methods):

          • Basic information on the reindeer herding co-operative (reindeer, reindeer owners, traffic accidents, predation), location in the reindeer herding area, and the special characteristics of reindeer husbandry activities (statistics, publications, interviews)
          • The nature of reindeer husbandry activities in the project area and the entire reindeer herding co-operative (reindeer husbandry GIS data, maps, GPS tracking data, interviews)
          • Description of the basic infrastructure for reindeer husbandry in the project area and the entire reindeer herding co-operative (reindeer husbandry GIS data, maps, interviews)
          • The location of the project area in relation to the grazing of reindeer and other activities (reindeer husbandry GIS data, maps, interviews, GPS tracking data)
          • Pasture inventory data on the pastures of the reindeer herding co-operative (Natural Resources Institute Finland, LUKE)
          • Reindeer density data on the project area (e.g. processing information from the closest round-up enclosure or interviews)
          • The significance of the area from the reindeer husbandry prospective: How important is the area for the activities of the reindeer herding co-operative? What proportion of the reindeer graze or are handled in the area? How many reindeer herders are directly affected by the project? What is the significance of the closest round-up enclosure (main enclosure or less used)? (the data mentioned above, interviews of the chief of district)
          • Land ownership in the project area: which affects the liability of the reindeer herding co-operative for compensating for damage caused by reindeer, consultation obligation with authorities, etc. in the different parts of the reindeer herding area (Reindeer Husbandry Act, Section 53)
          • In the Sámi Homeland, basic information on reindeer herding communities (family communities, i.e. siidas) and their use of the area, the status of the traditional Sámi reindeer herding practice (freely roaming and grazing reindeer) in the area, grazing cycle, summer and winter pastures, calving grounds and rutting areas. In the Sámi region, reindeer herding co-operatives consist of several reindeer herding communities. The reindeer herding communities herd their reindeer in various areas. Therefore, it is important to assess impacts comprehensively by contacting the reindeer herders of the herding community concerned in addition to the chief of district. As freely roaming and grazing reindeer graze in different grazing areas during different times of the year, moving from one area to another (grazing cycle), the adequacy of different areas is essential.

          There are also other good operating models relating to reindeer husbandry. Further information on these can be requested from reindeer herding co-operatives and the Reindeer Herder’s Association. The application of such models should be considered on a case-by-case basis. These include:

          • how to schedule the consultation required by the Reindeer Husbandry Act (Section 53) and reconcile it with EIA and land use planning procedures
          • how to connect the assessments of environmental impacts and impacts on reindeer husbandry more clearly to each other (measurement and monitoring of concentrations of harmful substances in lichen and fungi, other vegetation used by reindeer in the mine’s zone of influence), both in the assessment of current conditions and impacts as well as in monitoring
          • filling up quarries in the context of satellite ore deposits to restore the area for reindeer husbandry
          • participation in annual reindeer herding work (costs): e.g. use of helicopters, supplementary feeding and fuel costs, construction/transfer costs of fences/cabins
          • use of electric carpets at the entrance gates of the mining area to keep reindeer outside the mining area.

        • GPS tracking of reindeer

    • 6.8. Special issues to be considered in the Sámi region

      The Sámi

      The Sámi are the only indigenous people of the European Union whose status as an indigenous people is confirmed in the constitution of Finland. There are some 10,000 Sámi in Finland, who can be divided into the Northern Sámi, the Inari Sámi and the Skolt Sámi. The following are considered as traditional Sámi livelihoods: reindeer herding, fishing, hunting, handicrafts and gathering. The traditional livelihoods are still of great communal and cultural importance to the Sámi.

      Finnish Sámi Parliament

      The Sámi Parliament expresses the official position of the Sámi. It is the self-government body of the Sámi, and its main purpose is to implement the cultural self-government guaranteed to the Sámi and safeguard the vitality of the Sámi culture. The scope of the cultural self-government of the Sámi covers the Sámi Homeland, i.e. the area comprising the municipalities of Enontekiö, Inari and Utsjoki as well as the area of the reindeer herding co-operative of Lappi in the municipality of Sodankylä. In addition to the Sámi Parliament, the Skolt Sámi have a separate governance body of their own, the Skolt village meeting, in the Skolt Sámi area. The Skolt Sámi area comprises parts of the municipality of Inari.

      The Sámi and mining

      It is important to consider the special rights, interests and possible vulnerabilities of the Sámi in mining operations. Because of the historical disadvantage suffered by many indigenous groups, their distinctive situation and increased awareness thereof, management of indigenous peoples’ issues has become increasingly important. The aim of engagement with the Sámi Parliament and the village meeting of the Skolt Sámi is to develop respectful, long-term relationships with the Sámi to the mutual benefit of all parties.

      The Sámi must be considered in stakeholder engagement if:

      1) the mine is located in the Sámi Homeland/Skolt Sámi area, or

      2) the impacts of the mine may extend to the Sámi Homeland/Skolt Sámi area or are of considerable significance to the rights of the Sámi (e.g. land use culture) as an indigenous people.

      National and international legislation governing the Sámi and land use in the Sámi region:

      A) National legislation

      • The Constitution of Finland
      • Act on the Sámi Parliament (Laki Saamelaiskäräjistä)
      • Nature Conservation Act (Luonnonsuojelulaki)
      • Wilderness Act (Erämaalaki)
      • Mining Act (Kaivoslaki)
      • Water Act (Vesilaki)
      • Act on Metsähallitus (Laki Metsähallituksesta)
      • Skolt Act (Kolttalaki)
      • Reindeer Husbandry Act (Poronhoitolaki)
      • Environmental Protection Act (Ympäristönsuojelulaki)

      B) International legislation

      • International Covenant on Civil and Political Rights (ICCPR)
      • International Covenant on Economic, Social and Cultural Rights (ICESCR)
      • Convention of Biological Diversity (CBD)
      • International Convention on the Elimination of All Forms of Racial Discrimination (ICERD)
      • Council of Europe Treaties (European Convention of Human Rights (ECHR), Framework Convention on the Protection of National Minorities, and European Landscape Convention)
      • UN Declaration on the Rights of Indigenous Peoples (Free, Prior and Informed Consent, FPIC)

      Additional material
      Finnish Sámi Parliament

      • 6.8.1. Recognising the special status and rights of indigenous peoples

        Relations with indigenous groups require special attention for the following reasons:

        • reliance of many indigenous groups on land for traditional livelihoods and subsistence activities;
        • The vitality of the Sámi community is based on nature, and the Sámi have invaluable knowledge about its diversity in the north.
        • close cultural attachments to land, including particular landscapes and culturally significant places;
        • sense of affinity due to historic discrimination by mainstream society, which has weakened access to economic opportunities;
        • poor socio-economic status of many indigenous groups;
        • vulnerability of some traditional cultures to an influx of migrants, especially social impacts;
        • unique and rich cultural heritage of many indigenous groups;
        • different value systems: approaches to negotiation and reaching agreement may differ considerably from those in mainstream society;
        • special legal status afforded to many indigenous groups.

        It is essential to recognise the special status and vulnerabilities of indigenous peoples and, at a minimum, recognise formal legal or other generally accepted protections. This is also reflected in the UN Guiding Principles on Business and Human Rights (2011).

        Failure to recognise these may have several negative consequences to the mining operator:

        • legal problems when developing projects;
        • project delays, particularly when companies underestimate the time it can take for indigenous groups to negotiate and reach agreements;
        • protests and disruptions at operations at the company’s sites or conflict in surrounding communities;
        • reputational damage to the company, which may affect the financing opportunities for mining operations; and
        • failure to benefit from the knowledge and service offered by indigenous communities.

      • 6.8.2. Overarching principles for engagement

        The notions of Free, Prior and Informed Consultation and Consent (FPIC):

        • Free (free from any hindrances or reasons why indigenous peoples may not take part in consultation)
        • Prior (as early as possible in the project planning, enough time to go through the processes of decision-making)
        • Informed (enough information on the impacts in an understandable form that can be fed into the decision-making process where appropriate)
        • Consultation (a two-way process that allows indigenous peoples to participate meaningfully in decisions that affect them directly, proposed management and mitigation measures, as well as sharing of development benefits and any compensation measures)

        Summary of overarching engagement principles: (ICMM)

        • Prepare properly
        • Be culturally sensitive
        • Be honest and transparent
        • Build capacity to engage
        • Allow time for deliberation
        • Be consistent and build relationships
        • Understand indigenous calendars of events
        • Respect local knowledge
        • Keep good records
        • Involve indigenous groups in decisions that affect them

      • 6.8.3. Management plan

        If the mine is located in the Sámi Homeland/Skolt Sámi area or the impacts of the mine may extend to the Sámi Homeland/Skolt Sámi area or are of considerable significance to the rights of the Sámi as an indigenous people, an indigenous peoples management plan should be developed in compliance with the principle of FPIC to take account of any issues important to the Sámi throughout the mining life cycle. When preparing and implementing the management plan, the Akwé: Kon Guidelines must be complied with, where necessary.

        The management plan should contain the following sections:

        1. Baseline information on the area and the affected communities living in the area and its surroundings. The following information should be included:
        • social and economic structures, mechanisms and institutions;
        • cultural traditions, characteristics and practices;
        • political and/or administrative structures and procedures (e.g. the role of women in decision-making), including decision-making and dispute resolution processes;
        • other aspects of indigenous culture that require understanding, respect and conservation;
        • extent of dependence on the land and natural resources;
        • types of land tenure; and
        • local community’s experience of mining in the area, mental well-being.
        1. Impact, risk and opportunity analysis
        • For example, reduced water quality or quantity or the loss of biodiversity may be significant to the Sámi (may interfere with livelihoods and traditions).
        • Indigenous peoples have valuable cultural and environmental knowledge.
        • For new projects, risks and opportunities should be assessed using methods developed in advance. For existing mines, and particularly for older sites that have not previously considered indigenous peoples, they should be consulted as part of the socio-economic impact assessment process or as a stand-alone exercise.
        1. Engagement process and plan for the Sámi Parliament and other stakeholders concerned (e.g. the village meeting of the Skolt Sámi, reindeer herding co-operatives and reindeer herding communities), including the complaint mechanism
        • This does not necessarily need to be a separate exercise from the overall stakeholder engagement processes, but it must respect the characteristics and special legal status of the stakeholder groups concerned.
        • Although extensive engagement may be costly and time-intensive, it can have many benefits: better project design; easier and less risky project implementation; and reputational benefits.
        1. Management, mitigation and optimisation of impacts, risks and opportunities
        • This should contain impacts to be managed, objectives, management actions, performance targets; resources to be deployed; roles and responsibilities; timing; and key performance indicators (KPIs).
        • It is important to develop mutually beneficial relationships: e.g. a formal agreement on how the Sámi will benefit from the mining operation.
          Examples of benefits covered by Impact and Benefit Agreements (IBAs):
        • Financial agreements (equities, royalties, profit shares,
          other payments)

          • Preferential hiring/procurement procedures
          • Contributions in-kind (infrastructure, schools, clinics, etc.)
          • Elements of successful agreements (ICMM 2010):
            ➔ Recognition from all parties involved that the process that led to the agreement was fair and equitable.
            ➔ The agreement includes a long-term focus.
          • Flexibility
          • All parties are willing to change and improve the agreement as circumstances require.
        • Actions to ensure that employees and contractors behave appropriately
          • implementing programmes of cross-cultural training for all employees and contractors;
          • ensuring that employees and contractors understand what is expected of them;
          • taking disciplinary action where there are significant breaches of these standards up to and including dismissal and termination of contracts; and
          • ensuring that contracts with employees, contractors, agents and joint venture partners contain appropriate provisions to govern their behaviour.
        1. Monitoring, evaluation and reporting plan

        impacts and the associated management measures;

        • monitoring measures;
        • roles and responsibilities;
        • timing/frequency of monitoring; and
        • reporting of KPIs.
        1. Pay special attention to the following issues at the various stages of the mining life cycle.

        1. Reservation notification stage

        • Identify any traditional land use in the area and impacts on the mental well-being of the communities at the very start.
        • Give special consideration to places of great significance in terms of culture and livelihoods, such as sacred places and round-up enclosures.
        1. Exploration stage
        • Consider the cumulative adverse impacts of various activities.
        1. Mining
        • Assess the impacts of mining.
        1. Termination of exploration activities/mine closure
        • Emphasise the controlled termination of activities.

        Additional information on indigenous peoples engagement:

        http://www.icmm.com/document/5433 Indigenous Peoples and Mining Position Statement
        http://www.icmm.com/document/1221 Indigenous Peoples and Mining Good Practice Guide
        MEKO opas: Akwé: Kon -ohjeet: http://www.tem.fi/files/39765/TEM_Opas_MEKO_02052014.pdf (in Finnish)
        OH 1/2011 Akwé: Kon -ohjeet – Ympäristöministeriö (Ministry of the Environment), translation into Finnish from the English original: https://www.cbd.int/doc/publications/akwe-brochure-en.pdf

      • 6.8.4. Application of the Akwé: Kon Guidelines

        • Application of the Akwé: Kon Guidelines

          The updating of the Hammastunturi Wilderness Area management and land use plan commenced in late 2010. An informative meeting was held for the members of the Akwé: Kon working group and Metsähallitus employees involved in management and land-use planning in February 2011. According to the Guidelines, expert and other resources shall be made available to representatives of indigenous people involved in the assessment process of a project to enable them to fully participate in the planning and impact assessment of the project.

          The objective in the compilation of the Hammastunturi management and land use plan was to test the applicability of the Guidelines in management and land use planning. This objective was achieved, and a model was created how the guidelines could be implemented in future in Metsähallitus’ land use planning system. The application of the Guidelines improved the precision of the planning, as more detailed information was received from the area’s users to base the plan upon. The knowledge base and baseline studies for the plan were expanded to include the Sámi culture, traditional knowledge and the sustainable use of nature on a broader scale. By implementing the Guidelines, biodiversity and its relation to the Sámi culture was discussed more comprehensively in the plan, and the process enabled a more defined recognition of the interaction between man and nature as well as the impacts of human activities on nature.

          Based on the experiences attained in the compilation of the Hammastunturi plan, establishing a separate Akwé: Kon working group to act in cooperation with the collaborative panel is a functional solution. Interaction with Metsähallitus and those who use the area was enhanced through the working group activity. The Akwé: Kon working group has complemented Metsähallitus’ participatory land use planning system and supported the activities of the collaborative panel. The impact assessment was made into an integrated part of the planning instead of remaining a separate stage after the planning, facilitating revisions to the plan in the drafting stage. As regards the impacts on the Sámi culture, the assessment was carried out by people who use the area, which improved the reliability of the impact assessment.

          The application of the Akwé: Kon Guidelines brought new content into the Hammastunturi area’s management and land use plan. Metsähallitus received valuable information from the people using the area on the area’s current state and development needs. The plan recognised various problematic scenarios. The method is interactive and brought about new ideas and models for practices and procedures. The application of the Akwé: Kon Guidelines also developed the plan’s impact assessment. In practice, the Akwé: Kon working group was engaged in assessing the impacts of the proposals included in the plan on the Sámi culture throughout the planning process, in addition to assessing the values of and threats to the Hammastunturi area from the viewpoint of practising the Sámi culture. At the same time, concrete tools for avoiding possible threats were discussed.

          Further information
          Akwé: Kon -ohjeiden soveltaminen Hammastunturin erämaa-alueen hoito- ja käyttösuunnitelmassa/Application of Akwé: Kon Guidelines in the Management and Land Use Plan for the Hammastunturi Wilderness Area

        • Lack of interaction at the early stages of a mining project

          Karelian Diamond Resources Plc. (KDR) submitted a reservation notification for a potential exploration permit for diamonds on 8 May 2014. The reservation area was located in the municipality of Utsjoki in the Sámi Homeland and covered 9 km2. The reservation area was located in the catchment of the Teno River, which is the best salmon river in Europe and a spawning area for anadromous salmon, within an area significant in terms of the grazing cycle of reindeer used in reindeer husbandry by the Sámi in the area of two reindeer herding co-operatives and the area of one reindeer farm. In addition, the reservation area was located in a Natura 2000 area, the Kevo National Park and the Paistunturi Wilderness Area.

          KDR did not contact the Sámi, the reindeer herders or other people practising traditional livelihoods in the area in any way either before or after submitting the reservation notification. The local community became aware of the matter through a public notice concerning the reservation decision issued by the Finnish Safety and Chemicals Agency (Tukes) on 20 May 2014. Due to the location of the reservation area, the project caused great concern in the local community and led to appeals against Tukes’ reservation decision, for example.

          Due to the concerns of the local community, the Sámi and other communities and individuals in the Teno River valley both from Finland and Norway established a network, the Anti-Mining Coalition of Deatnu Valley. The network aimed to influence KDR and its partner Rio Tinto with a direct letter on 20 March 2015. As a result of the letter, KDR notified through the press on 6 May 2015 that it would abandon the plan and withdrew its reservation notification.

          The almost year-long uncertainty and lack of dialogue between the local communities and the mining operator caused great distress among those living and operating in the area affected by the project. KDR never contacted the local communities, whereas the chief executive of its partner Rio Tinto, Sam Walsh, sent a letter to the above-mentioned network.

  • 7. Delivery of socio-economic benefits

    Through the delivery of socio-economic benefits the company seeks to increase the value of the benefits produced by the mining operation for both the beneficiaries and the company’s operation.

    Socio-economic benefit delivery promotes a positive image of mining, and at its best helps to develop activities or commodities that improve the socio-economic conditions of the local community.

    Examples of Corporate Social Investment (CSI) projects:

    • annual sponsorship and contributions to youth activities;
    • support to senior citizen activities;
    • support to develop local music or sports activities;
    • support to organisations;
    • training for immigrants;
    • locally tailored and targeted training in collaboration with local vocational institutions; and
    • conversion training in collaboration with universities.

    In order to be able to distribute the socio-economic benefits equally, the mining operator must know the socio-economic operating environment and the stakeholders operating in the area as well as understand the expectations and objectives of the other operators in the area. The selected CSI projects must be well justified, and the activities related to socio-economic benefit delivery must be transparent so that the various parties do not perceive themselves as being treated unfairly. The mining operator should develop a Social Investment Plan to define the types of projects that the company is willing to participate in and the conditions for its participation.

    Existing CSI projects should be assessed on an annual basis, and the cooperation activities related to beneficiaries or benefit delivery should be updated as necessary. Mining operators are recommended to document CSI projects and sponsorships for later review.

    • 7.1. Partnerships

      Mining activities should be supported by establishing various partnerships. The purpose is to ensure the sustainability of the mining activities and the achievement of long-term objectives. Potential partners include the municipality, authorities, NGOs and other parties that wish to ensure that their views are heard in the activities of the mine. At the same time, the mining company can ensure that stakeholder views are considered in its activities and maintain its social licence to operate in the area.

      Partnerships can also be established with operators with which stakeholders do not necessary have any contact. Some operators may prefer partnerships to traditional stakeholder engagement. A mining company can seek funding for its development projects from operators connected to their objectives and thus establish partnerships that create better conditions for the success of such projects. An agreement-based partnership established between the mining operator and the public sector at an early stage promotes social acceptance.

    • 7.2. Local workforce development and training

      One way of securing social acceptance is to favour the local workforce as well as local services and procurement wherever possible. The mining operator’s policies on giving preference to local labour and procurement must be incorporated into the company’s procurement guidelines and tender documents. Local procurement can be included in the assessment criteria of tender selection processes. Local businesses may be too small to be able to offer alone services to mining operators. Therefore, mining operators should encourage local businesses to establish networks with each other to be able to provide sufficiently large service packages. The duration of contracts made with local businesses should also be long enough so that they would have the courage to invest in the development of their business operations.

      Local workforce should be developed and committed on a long-term basis. Local workforce development and training contributes to securing the social licence to operate. One of the objectives of local workforce development is to increase the ability of local residents to gain employment in the mining project. Another objective is to develop the skills of the local communities and thus promote their employment in other sectors. For example, mines can offer job opportunities for local trainees and summer jobs for students. Mining operators should establish close contacts with local upper secondary education and training providers to ensure that their workforce and skills needs can be considered in training.

      Services provided by the local private sector will develop, thanks to increased economic activity and local procurement. In addition, the use of local public services will increase as the population grows. This requires investments by the municipality to provide and develop services. Mining operators can contribute financially to the provision of local services, for example, to the costs of immigrant training.

      Phases of local workforce development:

      1. Identify local employment opportunities
      • Identify employment opportunities and workforce skill requirements in advance during the different stages of the project life cycle.
      • Anticipate any factors affecting workforce needs, such as retirement and reductions in production volumes.
      1. Understand the local employment market and training institutions
      • Baseline data describing the socio-economic operating environment helps to identify the special characteristics of the area.
      • Map institutions offering training for professionals required by the mine. Anticipate future skills needs together with the training institutions.
      1. Define local workforce (employment area)
      • Preference should be given to local workforce.
      1. Prepare a local workforce development plan
      • The plan should be developed together with key stakeholders, such as training institutions, the municipality, contractors and representatives of the local workforce.
      • The plan should include:
        • future (3-5 years) workforce composition: jobs, skills and knowledge;
        • workforce skill shortages, definition of local workforce priorities, description of the recruitment and selection process;
        • key training activities;
        • budget and description of human resources allocated to local workforce development;
        • timetables;
        • methods for monitoring progress.
      1. Align contractors
      • A significant number of employment opportunities are created by contractors. The mining operator should agree on recruitment policies with contracting companies. Contracts made with contractors can include incentives to ensure that they source from the local workforce.
      1. Build the required workforce capacity
      • Having finalised the local workforce development plan, the next task is to implement the identified training measures. Examples of training programmes:
        • on-the-job training and apprenticeship programmes;
        • certification programmes;
        • intensive training; and
        • training cooperation with local training institutions.
      • Mining operators can contribute to the development of local training, for example, by providing funding or offering their members of staff to teach at the institutions.
      1. Build the required mining operator capacity
      • Identify a manager to implement the local workforce development plan and reserve the appropriate human and financial resources.
      • Identify and train internal specialists to assist local training institutions in developing their training to meet the mining operator’s needs.
      • Incorporate local workforce development metrics into management incentive programmes.
      1. Monitoring and evaluation
      • In order to track performance, key indicators should be defined for local workforce development, such as:
        • levels of local employment by job category;
        • total amount paid out for local payroll;
        • youth and women’s participation in the workforce; and
        • outcomes of skills development measures.

    • 7.3. Developing alternative livelihoods

      Mining companies can promote the development of alternative livelihoods in the area in order to diversify the industrial structure of the area and thus reduce the local community’s dependence on the mine. The mining company should actively identify needs and opportunities for such development and determine the capacity of stakeholders to take ownership of the potential projects. The mining company should have a good understanding of the characteristics, environmental aspects and livelihoods of the local economy to be able to consider constraints to and opportunities for developing alternative livelihoods before starting any development activities.

      The mining company should offer its expertise to support the monitoring, reporting and evaluation of alternative livelihoods projects. The development of alternative livelihoods helps to maintain the vitality of the local economy after mine closure, diversify service provision in the area and increase the attractiveness of the area. In addition, the development of alternative livelihoods enhances interaction between the mining company and the local community and maintains the mine’s social licence to operate.

    • 7.4. Cases

  • 8. Social Management Plan (SMP)

    The development of a Social Management Plan (SMP) is one of the most critical elements of the social management process. It is important that the plan covers the priority issues identified during the assessment of issues and impacts relating to the operations of the mine. The SMP includes management measures, monitoring measures as well as identified key impacts and associated management measures.

    The purpose of the SMP is to develop suitable management responses to address the issues and concerns relating to the mining operations raised by stakeholders. These responses should be clear and credible and address genuine stakeholder concerns/issues. Progress in implementing them should be measurable.

    The SMP is not the same as the Stakeholder Engagement Plan (SEP).

    Additional material

    Structure and contents of an SMP

    The SMP should be connected to other reporting by the mine: significant operations should report on their social management processes at least every three years, for example. It is critical that senior managers (e.g. business unit head of social performance) provide their input into the development and approval of the plan.

    Contents for SMPs:

    1. Introduction
    2. Methods to prepare/update the SMP
    3. Regulations and requirements
    4. Stakeholder engagement review and plan
    5. Key issues and impacts
    6. Initiatives to improve social performance
    7. Resources and accountabilities
    8. Reporting and review

    The content for each of these sections is discussed further below.

    • 8.1. Introduction

      A general introduction that includes a short description of:

      • the operation and its location;
      • the general social and economic conditions within the operation’s zone of influence;
      • key stakeholders; and
      • the priority social issues and impacts.

    • 8.2. Methods to prepare/update the SMP

      The objective of this section is to describe (very briefly) the method used to prepare the SMP. SMPs will primarily be based on the outcomes of ongoing stakeholder engagement, the feedback system and relevant sources of secondary data. In the case of new operations (under three years), the EIA procedure is likely to be a key source of information.

    • 8.3. Regulations and requirements

      This section identifies and summarises relevant legal and regulatory requirements. This section should, therefore, summarise:

      • any socio-economic legal or permit requirements; as well as
      • company policies and commitments (at parent company and operation level).

    • 8.4. Stakeholder engagement review and plan

      The objective is to evaluate the previous years’ engagement activities in order to identify successes and areas for improvement and provide the basis for future stakeholder engagement activities. The plan should outline:

      • stakeholder mapping and analysis;
      • summary of engagement;
      • issues identified during engagement;
      • plans for future engagement; and
      • resources and accountabilities.

    • 8.5. Key issues and impacts

      The SMP should describe the priority issues and impacts that need to be managed. The following tools will be useful sources of information:

    • 8.6. Management actions and initiatives to improve social performance

      The objective of this section is to outline the management and monitoring measures planned to improve social performance.

      The management actions and monitoring measures should include:

      • Key stakeholders (internal and external)
      • Timelines (implementation and completion)
      • Key Performance Indicators (KPIs)
      • Performance targets
      • Monitoring and evaluation measures

      Management and monitoring plans should be developed based on an analysis of existing management actions, as well as input from key stakeholders.

      All existing social performance management actions and initiatives should be identified and assessed for effectiveness. Under normal circumstances, a three-yearly review should be adequate. However, any significant changes in either the operation or the local area may require more regular reviews. The results of the evaluation activity should be reflected in the management plan for the forthcoming years. If planned initiatives were not implemented, the reasons should be recorded.

      It is important to consider any input from internal or external stakeholders in the development of management and monitoring plans. This helps to ensure that the measures are locally appropriate and improves the social licence to operate. Key stakeholders include:

      • local interest groups, such as chambers of commerce, fishing corporations, youth groups, conservation organisations, etc.;
      • community representatives; and special interest groups, where appropriate (including NGOs). The management and monitoring measures are described in more detail below.

      Management actions

      SMPs should provide sufficient detail for the effective implementation of management actions. This is particularly important for annual budgets and staff resourcing, for example.

      Each SMP should document the management actions that are needed to meet the defined objectives. When developing management actions, the following need to be considered:

      • effectiveness (in addressing the issue or impact; whether root causes or just symptoms are addressed)
      • resourcing (sufficient resources internally or among partners to implement the measures)

      Key stakeholders (internal and external)

      This section should identify the stakeholders responsible for management actions. External stakeholders may need to be involved in delivering management actions (e.g. partnerships) or by providing direction through ongoing engagement (e.g. focus groups or stakeholder panels).


      The SMP should clearly document the timetable and deadlines for implementation of the management measures and, if appropriate, the frequency for implementation of the management measures (e.g. for ongoing engagement that does not have an end date) alongside interim milestones and completion dates.

      Key Performance Indicators (KPIs)

      The SMP should include indicators that are not included in other social management tools/processes (CSI projects and the stakeholder feedback system). The SMP should therefore identify appropriate indicators that allow the company to monitor its social performance in relation to the objectives and targets set out in the SMP.

      The KPIs must be measurable, useful, widely recognised, simple to report, easily understood, informative and relevant. They should be able to monitor the inputs, outputs and impacts of each performance area.

      Performance targets

      The SMP should outline the performance targets associated with each issue or impact. The performance target should specify the desired outcome of the management measures (e.g. percentage of local people represented in the workforce). It may be useful to set a number of sub-targets, which take the operations along a journey of improvement towards a final target (e.g. percentage targets for local representation in the workforce over six-month and 12-month periods).

      Monitoring and evaluation measures

      Monitoring measures should be developed in conjunction with management measures; failure to monitor the effectiveness of management interventions may weaken the implementation of the SMP.

      Appropriate monitoring actions/tools help to review the effectiveness of existing management actions regularly. It is important that the monitoring reflects the nature of the level of risk/opportunity identified. Monitoring can include:

      • Management review
      • Internal assurance (if the identified risk/opportunity is significant, it is important to ensure internally that actions are being implemented correctly)
      • External assurance (if the identified risk/opportunity is significant, it may be necessary to commission external assurance to confirm that issues are being managed effectively)

      The generic components of a monitoring plan include:

      • Monitoring approach (document the specific approach to monitor the effectiveness of the management actions; appropriate quantitative and qualitative indicators should be used where relevant; monitor whether the management measure is being implemented as planned and whether it is successfully managing the identified impact)
      • Timing/frequency (document how often monitoring should be conducted)
      • Responsibility (document the persons/team responsible for implementing the monitoring)
      • Reporting (document which internal and external stakeholders need to be reported to and how often: e.g. periodic reports on the management measures, more regular feedback to groups such as stakeholder panels or focus groups)

      It is important to secure feedback from both internal and external stakeholders. Feedback from internal stakeholders can be formally solicited during the annual review of the SMP or on an ad hoc basis. Sufficient feedback from external stakeholders can be ensured through stakeholder engagement, the feedback system and targeted feedback sessions on aspects of social performance.

      If monitoring measures indicate that the identified impacts are not adequately addressed, changes should be made to the management action to improve its effectiveness.

    • 8.7. Resources and accountabilities

      This section of the SMP should present the human and financial resources required to deliver the SMP for the year ahead and summarise, in full-time equivalents, the number of staff required to deliver the SMP alongside the required budget to implement any actions.

      Additionally, it should set out the reporting lines and accountabilities within the operation and business unit. In developing the resource plan, the individuals and organisations responsible for implementing the management actions should be identified. Responsible individuals may be situated in a wide range of business functions, depending on the issue/impact being managed. For example, an action relating to local procurement may need to be addressed by supply chain management, with input from other functions where necessary.

    • 8.8. Reporting and review

      This section describes the reporting and review protocols for the SMP. The section should set out:

      • Responsibility (individuals responsible for authoring, reviewing and approving the SMP; the review and approval process should include the General Manager, project manager (where appropriate) and business unit head of social performance).
      • Distribution (individuals within the operation and the business unit)

    • 8.9. Example tables

      The tables below provide an example of integrated management and monitoring measures for employment and economic development.


  • 9. Reporting


    Companies should report on the implementation of the social management system internally on a regular basis. For example, key performance indicators can be included in company management meetings. On an annual basis, companies should report on the implementation of the Social Management Plan in their annual report.

    The Network for Sustainable Mining publishes an annual mining industry responsibility report, which also discusses social performance indicators.

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