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Part E: Local Development, Labour, Health and Safety - 40. Local Development | 40.4 Community Engagement (including Community Development Agreements)

Community development or engagement provisions in a mining law typically address how individuals or communities who stand to be affected by the project should be consulted prior to the development of a project and throughout the mining cycle, as well as how benefits of a mining project should be shared with them. Often in the form of agreements, these provisions are becoming more common under the context of free, prior and informed consent best practices, particularly with note to vulnerable populations (ethnic and religious minorities, gender, children, etc.)

In a mining law, community development provisions may be covered in general obligation provisions requiring license holders to take into account the impact of mining on surrounding communities, particularly in the form of compensation. Elsewhere, the law may specifically require license holders to draw up and sign a development agreement with the community, spelling out the programs, approaches, and financing that will be needed to facilitate efficient and transparent engagement between the license holder and the community. It should be noted that community engagement includes the building of infrastructure as part of a development agreement, and that any construction occurring in this context must be held to the same standards of construction that apply to infrastructure that is built specific to the mining operation. Some laws provide that companies must provide some portion of revenue directly to the affected community. Elsewhere a certain portion of tax revenue collected is required to be redirected to the affected community via regional and/or local authorities. Others jurisdictions have put into place specifics funds with contribution of government and mining companies to be used for local development investments and projects. Each of these approach has its own advantages and challenges and should be carefully designed.

One key factor in promoting community development is to ensure company corporate social responsibility activities are aligned with local development goals. The mining law and its regulation should provide clear guidance for negotiation and development of CDAs. Community Development Agreements (CDAs) should therefore require, rather than encourage, consultation with local communities for setting priorities for community development projects. Further, the agreement should state that the government will require such plans to be aligned with the relevant local government development plan. Agreements should also provide that the Government will ensure formal mechanisms for community and local government involvement in the implementation and monitoring of community development agreements, for example, through a committee with representatives from the mining company, local community and local government. It is also important that the CDAs provide annual report to on implementation requirements, as well as annual meetings.

40.4 Example 1:

Article [_]

(1) The holder of a small-scale or large-scale mining licence shall assist in the development of mining communities affected by its operations to promote sustainable development, enhance the general welfare and the quality of life of the inhabitants, and shall recognize and respect the rights, customs, traditions and religion of local communities.

(2) The holder of a small-scale or large-scale mining licence is required to have and implement a community development agreement with the primary host community if its approved mining operation will or does exceed any of the following limits –

(a) in the case of extraction of minerals from primarily alluvial deposits, where annual throughput is more than one million cubic metres per year;

(b) in the case of underground mining operations, where annual combined run-of mine ore and waste production is more than one hundred thousand tonnes per year (waste material not exiting mine mouth to be excluded);

(c) in the case of open-cast mining operations extracting minerals from primarily non-alluvial deposits, where annual combined run-of mine ore, rock, waste and overburden production is more than two hundred and fifty thousand tonnes per year; or

(d) where the licence holder employs or contracts more than one hundred employees or workers at the mine site on a typical working day (including all shifts).

(3) The primary host community is the single community of persons mutually agreed by the holder of the small-scale or large-scale mining licence and the local council, but if there is no community of persons residing within thirty kilometres of any boundary defining the large-scale mining licence area, the primary host community shall be the local council.

(4) If the holder of the small-scale or large-scale mining licence and local council cannot agree on which community is the primary host community, the licence-holder may notify the [Regulating Authority] requesting clarification, and the [Regulating Authority] shall notify the licence holder and local council within sixty calendar days from the date of such notice, specifying which community is the primary host community.

(5) The holder of a small-scale or large-scale mining licence who is required to have a community development agreement shall negotiate with the primary host

community the terms of the agreement, and such agreement shall include the following-

(a) the person, persons or entity who represent the primary host community for the purposes of the community development agreement;

(b) the objectives of the community development agreement;

(c) the obligations of the licence-holder with regard to the primary host community including but not necessarily limited to-

(i) undertakings with respect to the social and economic contributions that the project will make to the sustainability of the community;

(ii) assistance in creating self-sustaining, income-generating activities, such as but not limited to, production of goods and services needed by the mine and the community;

(iii) consultation with the community in the development of mine closure measures that seek to prepare the community for the eventual closure of the mining operations;

(d) the obligations of the primary host community with regard to the licence- holder;

(e) the means by which the community development agreement shall be reviewed by the licence-holder and primary host community every five calendar years, and the commitment to be bound by the current agreement in the event that any modifications to the agreement sought by one party cannot be mutually agreed with the other party;

(f) the consultative and monitoring frameworks between the licence-holder and the primary host community, and the means by which the community may participate in the planning, implementation, management and monitoring of activities carried out under the agreement; and

(g) a statement to the effect that both the licence-holder and primary host community agree that any dispute regarding the agreement shall in the first instance be resolved by consultation between the licence-holder and the primary host community representative(s), and if this fails to resolve the dispute, either party may submit the matter for the [Regulating Authority], in consultation with the local council, to decide, and the decision of the [Regulating Authority] shall be final and binding on the licence-holder and the primary host community.

(6) A community development agreement shall take into account the unique circumstances of the licence holder and primary host community, and the issues to be addressed in the agreement may include the following issues-

(a) educational scholarship, apprenticeship, technical training and employment opportunities for the people of the community;

(b)financial or other forms of contributory support for infrastructural development and maintenance such as education, health or other community services, roads, water and power;

(c) assistance with the creation, development and support to small-scale and micro enterprises;

(d) agricultural product marketing;

(e) methods and procedures of environment and socio-economic management and local governance enhancement; and

(f) other matters as may be agreed.

(7) A community development agreement may not address any of the following matters-

(a) the imposition of any additional rent, fee, or tax for the benefit of the primary host community;

(b) the provision of any passenger car, truck, or four-by-four vehicle to any individual of the host community or to the host community, other than a specialized purpose vehicle such as an ambulance, fire engine, or bus; and

(c) the provision of any monetary amount, service, good, or facility for the sole benefit of an individual or single family unit.

(8) A community development agreement agreed and signed by the authorized representatives of a small-scale or large-scale mining licence and its primary host community shall be submitted for approval to the [Regulating Authority] who shall, if the agreement meets the requirements set out in this Part, approve such agreement within forty-five calendar days of it being submitted.

(9) If the community development agreement is not approved, the [ Regulating Authority] shall notify the holder of the small-scale or large-scale mining licence and the primary host community representative and such notice shall contain the specific reasons for denial and the means or directions by which such reasons may be corrected.

(10) The holder of the small-scale or large-scale mining licence and host community representatives may submit any number of revised agreements.

(11) If the holder of the small-scale or large-scale mining licence and its primary host community fail after reasonable attempts to conclude a community development agreement by the time the licence-holder is ready to commence development work on the mining licence area, the licence-holder or the primary host community may refer the matter, jointly or individually, by notification to the [Regulating Authority] for resolution, and the decision of the [Regulating Authority], in consultation with the local council, thereon shall be final.

(12) A notification under subsection (4) from either or both parties shall include the draft community development agreement proposed by the party, description of the efforts to negotiate an agreement, issues that have been agreed, issues which have not been agreed, and proposals to resolve issues, and the [Regulating Authority] shall determine the matter within sixty calendar days of such notification.

(13) The holder of the small-scale or large-scale mining licence shall provide a copy of the community development agreement approved by the [Regulating Authority] to the Director within thirty calendar days of the date on which such agreement was approved, and the agreement shall be considered non-confidential and available to the public at the Mining Cadastre Office.”

Annotation

Drawn from Sierra Leone’s mining law (2009), this provision requires mining companies to contribute to the development of the community and protect its rights.

In addition, it requires the signing of a CDA and it articulates clear guidelines for what should be included in it, including:

  • how to define the community
  • how to ensure the full participation of the community in the decision making and monitoring processes
  • the preparations for mine closure
  • the approval process of the CDA by the regulating entity

40.4 Example 2:

Article [_]

(1) From a Mining Fund for Local Development, financing shall be allocated to regional development plans and community development plans.

(2) Money shall be paid into the Fund through contributions, on the one hand, from the State, of up to 20% of the proportional fees collected, which relate to the value of the products extracted and/or sold, and on the other hand, through contributions from mining title holders and recipients of industrial operating permits relating to quarry materials, of up to 1% of their monthly turnover excluding tax, or the value of the products extracted during the month.

(3) All holders of valid mining titles and recipients of valid industrial operating permits relating to quarry materials when the present [Code][Act][Law] comes into operation shall be under an obligation to contribute to the Mining Fund for Local Development.

(4) The Ministries in charge of Mining and Finance shall produce a comprehensive and exhaustive joint annual report on the status of contributions to the Mining Fund for Local Development. This report shall be published in the Faso Official Gazette and it shall be widely circulated in the press at the end of the second quarter of the year in progress, for the status for the previous financial year.

(5) Resources allocated to territorial communities from the Mining Fund for Local Development shall be included in the recipients' community investments programmes. They shall be allocated primarily to social sectors.

(6) Annual reports on the use of such resources are to be submitted to regional and municipal councils for adoption, and to the relevant organisations duly appointed by the State, for review. Annual reports on the use of resources from the Fund shall be widely published.

Annotation

Drawn from Burkina Faso’s mining law (2015), this provision takes an approach based on special funds to finance local project rather on CDAs. It concerns community engagement, as the use of the funds should be based on projects as provided in community development plans and regional development plans. And priority is given to social development projects in those plans.

Noteworthy, the provision requires the contribution of State and mining companies. There are also annuals publications obligations on amount available in the funds and use of the money to ensure transparency. Finally, details concerning the funds will be spelled out in more details in regulations.