Community Development - Mining and the Environment: From Ore to Metal - page 641

15.6 LOCAL BENEFITS DO NOT ALWAYS EVENTUATE

Mining companies, as well as most national governments' assert that mining projects contrib-
ute to local development. Other groups deny such assertions (Christian Aid 2005). To judge
the contribution of a mine to local development without time comparative data is not easy.
As detailed elsewhere in this text, social monitoring of a reference community unaffected by
mine development is necessary. Comparisons over time between project-affected communities
and reference communities may help to strengthen the case that mining spurs development,
through means such as taxes received by local government and communities, generation
of long-term employment opportunities, economic stimulation, and improved social services.

To judge the contribution of
a mine to local development
without time comparative data
is not easy.

Taxes and the Case of Strengthening Local Governments

A mining project cannot commit to community development in isolation. Local develop-
ment should always remain the primary responsibility of local governments, supported by
dominant local economic players such as the mining project. To enable local governments to
stimulate and direct local development, a percentage of the income the host country's govern-
ment receives from the exploitation of natural resources should be transferred to the regional
and local governments. Evidence from some countries indicates that such redistribution of
government earnings does not always occur: 'In Peru and Indonesia, laws were created to
ensure that extractive industry revenue would be returned to local communities or the gov-
ernment. Due to the design of the laws and the lack of transparency, however, little revenue
actually reached the communities' (World Bank 2003). Unfortunately it is fair to state that
central governments often fail to transfer even those funds that have been collected.
A number of parties, including local governments, mining companies and some NGOs
have proposed changes to tax distribution, such as:
●

It is fair to state that central
governments often fail to transfer
even those funds that have been
collected.

Revenue distribution to include all income that the government receives as a conse-
quence of natural resource exploitation and not just income tax;

●

Communities that are affected by mining activity to be the principal and direct benei -
ciaries of revenue redistribution; and

●

Revenue distribution to be enforced in a timely, effective manner.

It is fair to say that without support to local development from both local and national gov-
ernment alike, CD efforts of a mining company alone are likely to fail in the long-term.

The Perceived Fallacy of Employment Generation

Mining projects employ signii cant numbers of people. As a result, despite the negative
impacts of mining, local people benei t from decent jobs, at least while the mine is in oper-
ation. A fair comment, however, is that the introduction of new technology has reduced
the number of jobs that are now on offer compared to mining, say, a few decades ago.
Moreover, critics claim that most employment opportunities require skills that local people
tend not to have, so mining companies hire people from outside the region, often foreign-
ers. It is also argued that while mining creates a certain number of jobs, its environmental
impact leads to a corresponding loss of livelihoods in the agricultural sector. Furthermore,
they argue that mining jobs last only as long as the mine is active, but negative effects
of mining on the local agricultural economy can be permanent (Christian Aid 2005).
Successful CD programmes should serve to ameliorate such criticism.