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: firstname.lastname@example.org).
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.
We who have signed and developed the toolbox hope that the toolbox will offer its users valuable information as well as methods for the implementation of stakeholder cooperation in their exploration and mining activities.
The toolbox was developed by the members of the working group for local practices of the Network for Sustainable Mining:
Joanna Kuntonen-van’t Riet, Anglo American Exploration Finland (who led the group)
Anita Alajoutsijärvi, Angico Eagle Kittilä Mine
Riikka Barber, Finnish Association for Nature Conservation
Toni Eerola, Geological Survey of Finland
Sanna Hast, Reindeer Herders’ Association
Jarkko Huovinen, Association of Finnish Local and Regional Authorities
Maiju Hyry, Regional Council of Lapland
Tapani Hyysalo, Mawson Ltd
Kimmo Luukkonen, FQM Pyhäsalmi Mine
Heikki Paltto, Anni-Helena Ruotsala and Inka-Saara Arttijeff, Sámi Parliament
Heikki Sorasahi and Sini Ilmonen, Finnish Innovation Fund Sitra
We would also like to thank the following persons who have contributed to the development of the toolbox by providing valuable information during interviews or workshops or in the form of cases.
Marja Anttonen, Reindeer Herders’ Association
Elina Arponen, Dragon Mining Oy
Markus Ekberg, Endomines Oy
Jarmo Finnilä, Keliber Oy
Anne Foley, Nordkalk Corporation
Timo Halonen, Town of Kuusamo
Maria Hänninen, Pyhäsalmi Mine Oy
Jonna Kangasoja, Akordi Oy
Mika Kavakka, Kemi-Sompio Reindeer Herding Co-operative
Pertti Kortejärvi, Secretary to the Finnish Mine Safety Advisory Board, Finnish Mining Association (FinnMinn)
Markus Latvala, Beldevere Mining Ltd.
Esa Mäkinen, Municipality of Kittilä
Arttu Ohtonen, Sotkamo Silver AB
Anne Ollila, Reindeer Herders’ Association
Lasse Peltonen, Akordi Oy
Anna-Liisa Pennanen, Talvivaara Mining Company Plc
Viljo Pesonen, Municipality of Sodankylä
Jukka Pitkäjärvi, Mustavaara Mine Ltd
Juha Rissanen, Gold Fields Arctic Platinum Oy
Janne Seppälä, Mondo Minerals B.V.
Olle Siren, Keliber Oy
Ulla Syrjälä, FQM Kevitsa
Jouni Torssonen, Yara Suomi Oy
Aki Tuikka, FQM Pyhäsalmi
Anne Valkama, Endomines Oy
Jarmo Vesanto, Boliden AB
Contents of the toolbox – Mining
1.2. Contents of the toolbox
5.2.1. Potential issues and impacts
6.1.1. Crisis communications
126.96.36.199. Crisis communications plan
6.7. Reindeer husbandry
6.8.3. Management plan
6.8.4. Application of the Akwé: Kon Guidelines
8.8. Reporting and review
8.9. Example tables
Stakeholder engagement plan
Small-group meetings in the EIA
Sankey diagram of net sales
Methods for the reconciliation of mining and tourism
Informing neighbours of blasting
Website as a communications tool
The use of blogs and Twitter in stakeholder communications
Monitoring system for environmental observations
Stakeholder cooperation group
Crisis preparedness of mining companies
Processes facilitated by a third party
Contractor management protocol
Good operating models relating to reindeer husbandry
GPS tracking of reindeer
Concert in a quarry
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:
There are several reasons and objectives for active stakeholder engagement. The table below summarises some consequences of active and passive interaction relating to mining.
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.
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.
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.
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.
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:
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.
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.
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:
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:
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:
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.
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.
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”)
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.
When selecting the preferred mode of engagement, the following should be considered:
Key questions to consider when selecting appropriate engagement techniques:
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.
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.
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:
In terms of actual stakeholder activities, there are a number of key principles to remember:
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:
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:
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:
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.
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.
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:
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:
Potential issues and impacts
Some potential issues and impacts raised by stakeholders are listed below:
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:
An example of an integrated risk management risk rating matrix is presented below.
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:
Once the assessment has been conducted, appropriate management actions should be developed and incorporated into the company’s Social Managemen
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.
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.)
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.
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.
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:
Types of employment attributable to the operation
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:
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:
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:
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.
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.
The reconciliation of mining with other land use forms is discussed in the report Hyvä kaivos pohjoisessa (“A good mine in the north”) from the perspectives of various operators and the various stages of the mining project:
(Source: Kokko, Oksanen, Hast, Heikkinen, Hentilä, Jokinen, Komu, Kunnari, Lèpy, Soudunsaari, Suikkanen & Suopajärvi 2014: Hyvä kaivos pohjoisessa – opaskirja ympäristösääntelyyn ja sosiaalista kestävyyttä tukeviin parhaisiin käytäntöihin)
The materialisation of worst case scenarios can be avoided through sufficient and open interaction as well as an in-depth consideration of the needs of tourism in the planning and implementation of mining activities.
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:
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:
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.
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.
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:
The key principles of crisis communications can be summarised as follows:
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:
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:
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)
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.
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:
(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
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
4. Definition of roles and responsibilities
5. Communicating with stakeholders
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.
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:
Key questions to consider when assessing complaints internally
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)
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:
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.)
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:
Planning of actual crisis management
From the key (critical) risks, the company selects the incidents that it will prepare for, such as:
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
2. Preparedness to act in an incident or accident
3. Preparedness for aftercare
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.
Appendix 1. Policy and emergency plan template (in Finnish)
Appendix 3. Template for a risk assessment summary (in Finnish)
Appendices 5. & 6. CMT activities folder template and CMT guidance card template
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:
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)
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:
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:
3. Preventing and mitigating conflicts
3.1. Understand local conflict dynamics, i.e. how the identified conflict situation is evolving over time
3.2. Identify the risks posed by conflicts (to both the company and other stakeholders), and the causes of those conflicts
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.
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 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.
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:
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)
Mining permit and exploration permit (Finnish Safety and Chemicals Agency, TUKES)
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.
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.
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)
This tool helps companies to consider issues related to contractor management. Contractors perform a variety of roles in mining operations:
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:
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:
However, there are also a number of potential benefits:
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:
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:
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:
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:
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:
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:
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:
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;
Depending on the case, pre-mobilisation activities may include:
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:
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.
Figure: Reindeer husbandry year, autumn round ups/reindeer calve marking in the summer. (Source: Reindeer Herders’ Association)
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):
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:
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
B) International legislation
Finnish Sámi Parliament
Relations with indigenous groups require special attention for the following reasons:
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:
The notions of Free, Prior and Informed Consultation and Consent (FPIC):
Summary of overarching engagement principles: (ICMM)
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:
impacts and the associated management measures;
1. Reservation notification stage
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
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.
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
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.
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:
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.
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.
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:
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.
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).
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:
The content for each of these sections is discussed further below.
A general introduction that includes a short description of:
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.
This section identifies and summarises relevant legal and regulatory requirements. This section should, therefore, summarise:
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:
The SMP should describe the priority issues and impacts that need to be managed. The following tools will be useful sources of information:
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:
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:
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:
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.
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:
The generic components of a monitoring plan include:
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.
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.
This section describes the reporting and review protocols for the SMP. The section should set out:
The tables below provide an example of integrated management and monitoring measures for employment and economic development.
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.