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The Mining Industry's Ongoing Sustainability Crisis
‘Mining is an extractive industry, simple as that. Dig it up and it is gone for good.’
Association of Mining and Exploration Companies (AMEC) Year Book 2002
In recent decades the mining industry has faced a ‘sustainability crisis.’ However the inherently unsustainable nature of non renewable resource extraction is only one element at play.
Widespread criticisms centre on the externalisation of the economic, environmental and social costs of the industry, its negative impacts on sustainable development of host communities, and the inequitable and unsustainable distribution of its costs and benefits.
The negative impacts of mining are concentrated disproportionately on marginalised or disadvantaged sections of society, including indigenous peoples, women and economically disadvantaged rural communities. In contrast the majority of the benefits, both in terms of end use of the products of mining and its profits are inequitably directed to limited sections of the population, and particularly to those in industrialised countries.
Current rates and methods of production also reduce the opportunities available to future generations by rapidly degrading environmental resources and ecological services available to them, while consuming disproportionate amounts of the world’s finite mineral resources.
In the late 90’s some of the world largest mining companies initiated a project entitled ‘Mines, Minerals and Sustainable Development’ (MMSD) as a means of responding to sustainability issues. Shortly after, the World Bank also commissioned a report, ‘the Extractive Industry Review’ on its involvement in the sector.
These reports both evidenced what communities impacted by mining and NGO’s monitoring industry conduct have long attested to: that increased poverty within both local communities and nations, human rights abuses, pollution of water resources, loss of biodiversity, and the destruction of other economic, social and environmental values including the basis of people’s livelihood are commonplace impacts of modern mining operations.
The MMSD and a plethora of other voluntary and self regulatory initiatives contributed to public perceptions that the industry had taken on board the concerns of its critics. Yet these processes led to neither concrete commitment to actions nor to the direction of sufficient resources to address the problems identified. Instead they were successful in deflecting the public debate away from demands for regulatory measures, and for the necessary changes in values, production systems and power relations that could ensure meaningful shifts in practice.
This is not to ignore that there are some issues in which companies have begun to take some meaningful steps towards improving environmental and social performance, and reducing the negative impacts of mining. However, some critical questions must be asked.
Is the industry taking steps towards sustainability that go beyond what is either legally mandated or politically necessitated? Can we expect mining companies to ‘do the right thing’ outside the potential for public shaming, opposition by local communities, the threat of regulation, shareholder or financial sector discontent or other forms of public pressure pushing them to improve their social and environmental conduct?
If we clear away the policies and reporting frameworks, the processes and expression of values, have the substantial outcomes really changed?
For those looking towards actions rather than words, the disappointing response to these questions is no.
Despite recent record high metal prices, and corresponding profit levels, there has been little movement on issues at the core of the sustainability debate without concerted public pressure. The uncompromising quest for maximum profit has resulted in only token consideration for pressing issues: These include climate change; the legacy of abandoned mine sites; the respect for no go zones too environmentally or culturally sensitive to mine; the inability of the industry to responsibly manage increasingly volumes of waste; the dislocation of local communities; the negative impact of current extraction rates on the capacity for future generations to meet their needs.
Few companies implement highest performance standards regardless of the location. While aspirational policies suggesting otherwise, practice suggests that the bottom line remains legislative compliance.
The failure of companies to rule out widely condemned practices such as riverine or submarine tailings disposal (dumping of mine waste directly into water bodies) is one of the clearest indictment of the industry’s failure to embody sustainable policies or practice.
Such practices have been outlawed in developed but also increasingly developing countries. In 2004, the Government in PNG, where two of the three remaining 'riverine tailings disposal' operations in the Asia Pacific are located committed to prevent future riverine tailings disposal.
But what of company policies?
BHP Billiton, the world’s largest mining company agreed not to utilise the practice of riverine tailings disposal at any of its future mines after the environmental (and perhaps more relevantly, reputational) disaster caused by the practice at its Ok Tedi mine. Despite the devastation caused at this and other mines, (the environmental degradation caused by riverine dumping at the Panguna mine on Bougainville caused a civil war that claimed thousands of lives) the majority of the industry, including apparently leading players have not rejected this destructive practice.
Companies such as Placer Dome and Freeport McMoran continue to use rivers as waste management system, while claiming to have integrated corporate social responsibility into their ‘core values.’ Any hope that BHPB’s policy indicated moral leadership on this issue dissolved when in 2004 current CEO of BHP reportedly stated at an Ethics Conference, ‘I think it is important to note... mines can be developed in that way, just not at Ok Tedi.’
Riverine tailings disposal is an extreme failure, but not an isolated issue. Staunch opposition to mining activities has grown in recent years in diverse local communities, ranging from the Hunter Valley in Australia to the Yanacocha mine in Peru. Communities around the world are deciding that the costs of mining operations are unacceptable and impede their sustainable development. The ongoing occurrence of mines refused a social license to operate is the clearest indication that regardless of the posturing towards sustainability, key issues at the heart of mining’s sustainability crisis remain unresolved.
by Techa Beaumont, Director, Mineral Policy Institute, first published in ethical investor magazine
For more information, please contact:
Techa Beaumont
Executive Director
Workphone: +61 2 9557 9019
Mobile: +61 (0) 409 318 406
Created: 01 Jan 1970 | Last updated: 16 May 2005
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