Indigenous Peoples Issues - Mining and the Environment: From Ore to Metal - page 680

●

Recipients of compensation whether individuals, communities, representative bodies
or a combination, and

●

Schedule of payments.

Cash payments to Indigenous Peoples can lead to undesirable social impacts particu-
larly in communities unused to the cash economy. More lasting value is usually obtained
from other forms of compensation such as the provision of equipment and infrastructure.
However, it is common for Indigenous Peoples to insist that compensation be made in the
form of cash. In such cases, cash compensation is usually more effective at achieving ben-
ei cial outcomes if paid progressively, e.g. royalty payments and land rental payments.
Many mining companies opt to contribute to the development of local indigenous com-
munities at levels well beyond the compensation stated in the formal agreement. This is par-
ticularly so where initial commitments have been at deliberately modest levels so as to avoid
the risk that they could not be afforded. In disbursing discretionary funds, the company is
faced with a dilemma. On one hand it does not wish to be patronizing, to tell the community
what it needs. On the other hand, it has a valid interest in successful outcomes, not only from
the viewpoint of community relations but through the eyes of the critical outside world.
Some companies create foundations to manage the disbursement of discretionary funds.
Others negotiate agreements that involve foundations or trusts administering royalties and
other legally prescribed payments. Foundations have the following advantages:
●

It is common for Indigenous
Peoples to insist that
compensation be made in the
form of cash.

They enable the company to operate at 'arm's length', thereby removing the perception
of self-interest.

●

They can be more readily administered by people with the appropriate background
and skills. Accordingly, they are less likely to lead to dependency.

●

They may attract additional funding from other sources.

Another approach to the 'arm's length' disbursement of funds for community develop-
ment is to use appropriately qualii ed and experienced NGOs. This arrangement has simi-
lar benei ts to the use of a foundation.

Addressing Social Change

Indigenous societies will change whether or not there is a mining project in the vicinity.
Many changes are welcomed by the communities. A mining project can accelerate the
change so that the communities can no longer adapt, and therefore lose control. On the
other hand, with appropriate planning and commitment, a mining project can deliver
the resources that will help the communities to adapt without losing control.
An impact assessment process which addresses social issues will identify likely changes
and provide measures to ameliorate or control any related adverse impacts. Effective practice
requires local communities to have detailed input to the environmental studies and selection
of improvement and control measures. Accordingly, they need to be informed, before the
event, of the impacts that may occur and the possible means of mitigation or control.
In the past, this ideal situation has been rare. More commonly the local community
has not been prepared for the sudden changes that occurred when the project moved to
the construction stage. In some cases this has led to outrage. In other cases, the commu-
nity has been initially excited by the changes which were seen as signs of progress after
years of expectation. As the excitement declines, however, the impacts become apparent.
Unforeseen social impacts may emerge at this stage. It is therefore important to have an
established consultative mechanism such as a Community Liaison Group where emerging
issues and problems can be discussed and resolved.

Indigenous societies will change
whether or not there is a mining
project in the vicinity.