1
While expectations of mineral development continue to evolve (Anaya, 2015), the components of the mineral development model that has informed benefit sharing agreements have remained largely unchanged for the past two decades (Sosa and Keenan, 2001). Arguably, the model has been premised on the assumption that the delivery of a combination of royalties, jobs, contracts and community investment to Indigenous communities would result in these communities being ‘better off’ for having hosted a mine on their land. Essentially this can be considered the hypothesis behind a multi-decade experiment, and only now, with the closure of some of the more progressive and iconic mines (with reputations for excellence in their delivery of the mineral development model) are the results able to be assessed.
The extent to which benefit sharing agreements are delivering on the expectations of Indigenous communities requires a consideration of several fields—mining’s contribution to development, the application and purpose of benefit sharing agreements, and the social aspects of mine closure—and that we define what may constitute a successful outcome for an indigenous community. In reviewing the literature across each of these fields, this chapter reinforces existing calls (Bainton and Holcombe, 2018b; Cohen, 2017; O’Faircheallaigh, 1998; Rixen and Blangy, 2016) for more case study research on the experience of Indigenous communities and their perceptions of a successful outcome. This review addresses the need to conduct an outcome evaluation (United Nations Development Programme (undp), 2009; 2002) of existing benefit sharing approaches as judged at the time of mine closure. Reference sources selected for the chapter were drawn from three principal lines of evidence. Firstly, those references considered most influential from the experience of the lead author as a practitioner in the subject matter area over two decades of practical experience both from the mining industry perspective and that of a global funding agency. Secondly, from a literature search of peer-reviewed publications from mainstream scholarly publication houses. Thirdly, references from global institutions and active industry and government participants in the area of the paper’s focus, including the World Bank, United Nations, mining companies, industry bodies, and applied academic research institutions. References were chosen primarily focusing on the period 2000–20, although references to prior seminal works in the field are also included to give due credit to past work on which the more contemporary contributions build.
2
For many centuries, a large mineral endowment was considered beneficial to a country’s development (McMahon and Moreira, 2014); however, this optimism was tempered during the twentieth century with global recognition that ‘realising the potential for mining to contribute to development in all countries where it takes places is arguably one of the greatest priorities facing the mining and minerals sector’ (International Institute for Environment and Development (iied), 2002, 172). Questions related to mining’s contribution to development arose in the 1950s, focusing on the weakness of linkages between primary production and the rest of the economy. These questions gained momentum with The Economist’s introduction of the concept of the Dutch Disease in 1977 (Mien and Goujon, 2021). This concept sought to explain the troubles experienced by the Dutch economy in the 1960s, in relation to the allocation of revenues from natural gas developments, and the consequence of these revenues on the strength of the currency and the competitiveness of the Netherlands’ other exports (McMahon and Moreira, 2014). It was not until the late 1980s that Gelb (1988) analysed the growth rates experienced in a number of oil-exporting countries, coining the term ‘resource curse’ to describe how countries developing natural resources experienced growth rates below those that would have otherwise been predicted (Gelb, 1988). Subsequent studies (Auty, 1990; Sachs and Warner, 1995; 1997) drew similar conclusions to those of Gelb, firmly entrenching a shift in perception from natural resources providing development opportunities to one of an inverse relationship between mineral endowment and realised economic growth (McMahon and Moreira, 2014; Mien and Goujon, 2021).
The significant body of literature that has developed around the resource curse began with an economic focus, before expanding into analysis of the impact of natural resource wealth on sociopolitical development, including analysis of rent seeking, corruption, lack of democracy, conflict (McMahon and Moreira, 2014; Van der Ploeg, 2011) and the strength of institutions (Robinson, Torvik and Verdier, 2006; 2014). More recently, the accuracy of the resource-curse thesis has come under pressure, with leading proponents of the theory acknowledging that the question of whether an abundance of natural resources is a curse or blessing is a source of fundamental debate within economics (Collier, 2010; Van Der Ploeg and Poelhekke, 2017). McMahon and Moreira (2014) further this questioning through their examination of five low- and middle-income countries with long histories of mining, concluding each country experienced either a relatively high human development index (hdi) or a strong improvement in its hdi compared to those experienced by
Principal among those debates is the discussion around extractivism and neo-extractivism in Latin America and, increasingly, beyond. Referring to the predominance of economic activities primarily based on resource extraction and nature valorisation without distributive politics (Brand, Dietz and Lang, 2016), extractivism has formed the basis of much government policy in recent decades in Latin America. With economies dominated by the export of primary goods (including agriculture, forestry, hunting and mining) (Brand, Dietz and Lang, 2016), questions naturally arose in relation to the conversion from economic growth into poverty reduction (Burchardt and Dietz, 2014). More recently, a shift towards neo-extractivism—the use of surplus revenue from extractive activities to address poverty and enhance the material well-being of the population (Brand, Dietz and Lang, 2016)—is being considered as a new model for development in the region. However, much debate persists on how this model can be balanced with societal–nature relations, as articulated in the commitment to ‘living well’ (buen vivir) in the constitutions of Ecuador and Bolivia (Brand, Dietz and Lang, 2016; Gudynas, 2016; 2018; 2019; Van Teijlingen, 2016), the current social and political debate over extractivism in Europe (del Mármol and Vaccaro, 2020), and reflections on how different actors position themselves in relation to the ‘multiplicity of effects of resource extraction’ (Pijpers and Eriksen, 2019, 2).
Notwithstanding reservations or questions about the role of mining in development, many organisations and development initiatives have continued to focus on the development potential afforded by mineral development. These include the Australian-led International Mining for Development Centre (im4dc, 2015), the World Bank’s Extractive Sector Programmatic Support initiative (World Bank, 2021a), and material published by mining sector representative bodies (Cardno and mca, 2018; icmm, 2018).
Within the literature considering the potential for mining to generate either positive or negative development impacts, the vast majority of research has been focused on the national level. As highlighted by Horowitz et al. (2018), comparable analysis of the development contribution of mining to specific communities, such as Indigenous groups, is limited. Both regional-level analysis of Dutch Disease impacts (Papyrakis and Raveh, 2014) and community-level analyses in Indigenous communities (Langton and Mazel, 2008; O’Faircheallaigh, 2012) have been undertaken; they are, however, limited in number and have tended to be undertaken part way through the mining cycle. Hence, while such studies often foreshadow the impacts of mine closure,
3 Benefit Sharing with Indigenous Communities
Expectations around the sharing of benefits and compensation for damages generated by mining projects have increased in the past two decades due to a combination of widespread liberalisation of mining investment regimes, increased advocacy and empowerment of communities, the growth of corporate social responsibility, and demands for governments to be able to demonstrate a local positive impact from mining through a project’s life cycle (Wall and Pelon, 2011). Mining projects can contribute to development through a number of benefit sharing channels, including: employment, procurement, value-adding beneficiation (the treatment of a raw material to improve its properties), project infrastructure, taxes, royalties, equity, community investment, and compensation (Wall and Pelon, 2011). Kung et al. (2022) and Bainton (2020) highlight a number of areas where expectations have grown and continue to increase—specifically around Indigenous equity participation and the transition from a focus on jobs and accumulation to a broader discussion around rights and long-term benefit.
While a company’s obligations to compensate for or remedy identified impacts are typically legislated (with variable levels of enforcement), the nature of a mining company’s relationships with the communities it directly affects (defined as ‘affected communities’ by the International Finance Corporation, ifc, 2012) and the sharing of benefits sit largely outside the remit of national legislation or policy (Parsons, Lacey and Moffat, 2014). In recognition of this gap, the concept of a Social Licence to Operate (slo) was, in its contemporary usage, coined in 1997 by James Cooney, the then Vice President of External Relations for Placer Dome (Boutilier, 2014), comparing the need for community approval of projects with that of legal licences and permits (Boutilier, 2021). While much debate surrounds this concept, including over what it looks like, whether it is a veto, and how it can be achieved (Boutilier, 2021; Harvey, 2014; Kemp and Owen, 2016; Owen and Kemp, 2013; Parsons, Lacey and Moffat, 2014; Thomson and Boutilier, 2011), it has been pivotal in framing conversations about the roles and responsibilities of mining companies in communities. In more recent years the conversation has increasingly focused on the need to maintain a social licence throughout the duration of a mining project (Moffat and Zhang, 2014).
In Australia specifically, iluas grew out of the landmark Mabo legal case recognising native title (the right of Aboriginal peoples to own their traditional lands and waters, as recognised by common law). iluas are voluntary agreements between native title parties and other people or bodies about the use and management of areas of land and/or waters, and many have been developed in relation to mining. By June 2022, over 1,400 iluas had been registered with the National Native Title Tribunal (nntt, 2022). Figure 5.1 illustrates the geographic coverage of iluas that have been signed.
There is a growing body of literature examining best practice in benefit sharing agreements (Cascadden, Gunton and Rutherford, 2021; Everingham et al., 2016; Gibson and O’Faircheallaigh, 2015; O’Faircheallaigh, 2015; 2018; 2012; Söderholm and Svahn, 2015; Sosa and Keenan, 2001; World Bank, 2012); most, however, has focused on the process and establishment of the conditions of agreements, with less focus on the outcomes they have achieved.
Moreover, expectations of what ‘fair and equitable’ benefit sharing should comprise vary significantly across jurisdictions and between various rights holders (Wilson, 2019). The rights of Indigenous and land-connected communities directly impacted by mining projects to participate in benefit sharing agreements have been enshrined in Australia and Canada (amongst other countries) through legislative requirements to develop iluas and Impact and Benefit Agreements (ibas), respectively (O’Faircheallaigh, 2018). While legislation notes the requirement that such agreements should be developed, it largely leaves the content and value of the benefit sharing agreement to be determined through negotiation between the company and the affected community (O’Faircheallaigh, 2015; Wilson, 2019).
Wilson (2019) has described a typology of benefit sharing models for local and Indigenous communities, which includes state-controlled benefit sharing, voluntary company-led initiatives, partnership models, and Indigenous ownership and control, each with several subcategories. The dominant benefit sharing models typically include a combination of a revenue stream from the extractive project (possibly in the form of royalties), priority access to jobs and procurement contracts, training opportunities, cultural support, environmental protection and community investment initiatives (Cascadden, Gunton and Rutherford, 2021; O’Faircheallaigh, 2015; Wilson, 2019). Such benefit sharing models have been in use since the 1990s, and while the value of benefits in some instances have changed significantly, the components of the model have remained largely stable. The development contribution of specific parts of these models have come under scrutiny (Holcombe and Kemp, 2020; O’Faircheallaigh, 2018; Wilson and Istomin, 2019), but limited work has been undertaken to evaluate the aggregate development impact achieved by them, especially at the conclusion of the revenue producing activity.
Increasingly, the negotiation of project consent and associated benefits with Indigenous communities is framed in the context of free, prior
Within this context, discussions on the contribution of mining projects to development in Indigenous communities are often focused on the pre-project approval period, with primacy increasingly given to considerations of fpic and good faith negotiation of benefit packages. To the extent that development outcomes of agreed benefit packages have been assessed, as Söderholm and Svahn (2015) identified in their synthesised analysis of the literature on development impacts in four developed countries much of the analysis is based on assessments of inputs and outputs. Notable exceptions include the analysis of ‘curse or opportunity’ from mining for Aboriginal Australia by O’Faircheallaigh (2012), efforts to analyse the resource curse in Aboriginal communities neighbouring mining by Langton and Mazel (2008), case study research conducted by Altman and Martin (2009), empirical studies on regional well-being indicators among Western Australian Indigenous communities affected by mining by Taylor (2018; 2019), and Rodon’s (2018) critique of development outcomes for Indigenous Peoples in Canada’s Arctic.
Although failure to address impacts generated by mining will undoubtedly result in a poor or adverse development contribution, impact management and development contribution are generally not the same thing. Impact management is often described as mitigating or ameliorating the negative consequence of a project, with development contribution adding a positive contribution. During his tenure as the United Nations Special Rapporteur on the Rights of Indigenous Peoples, James Anaya investigated the experience of Indigenous communities living in close proximity to mining projects (Anaya,
[the] prevailing model of resource extraction is one in which an outside company, with backing by the State, controls and profits from the extractive operation, with the affected Indigenous peoples at best being offered benefits in the form of jobs or community development projects that typically pale in economic value in comparison to profits gained by the corporation.
anaya, 2013, 12
He went on to call for a new model that would prioritise Indigenous-controlled extraction (Anaya, 2013). In the intervening years, an increasing number of equity based agreements and Indigenous owned and controlled extractive projects (Denedeh Investments Corporation, 2021; First Nations Major Project Coalition, 2021; Gulkula, 2021; nrcan, 2017; Suncor Energy Inc, 2021; TNDC, 2021) and associated contracting, infrastructure and financing projects (Carey Mining, 2021; First Nations Major Project Coalition, 2021) have emerged (although not all have been consummated; see, e.g., naif, 2021), but this is yet to become a dominant element of the mining industry.
Indigenous peoples will derive significant and sustainable benefit from bhp operations through the effective governance and management of land access, cultural heritage management, agreement making and benefit distribution processes […] bhp will contribute to improved quality of life for Indigenous peoples through voluntary social investment, support
bhp, 2021for reinforcement and promotion of Indigenous culture and building the Indigenous cultural awareness of our workforce.
And a third sets out its commitment to ‘work with Indigenous Peoples to achieve self-determined community goals that provide lasting benefits’ (Teck, 2021).
4 The Perspective Gained from Mine Closure
The development outcomes of mining projects and their associated benefit sharing agreements are often evaluated during the operational phase of a project, when jobs and contracts are available, royalties are being paid and community investment initiatives are being implemented. However, the best time to assess the success of the existing model in achieving sustainable development outcomes is upon, or preferably after, mine closure. Mine closure has received considerably less attention as a research topic than other, arguably more optimistic phases of the mining cycle, and this lack of focus is evident in the small body of literature addressing the social aspects of mine closure (Bainton and Holcombe, 2018a). It was only at the turn of the millennium that significant focus started to be applied to this topic, through the World Bank Group’s Mine Closure and Sustainable Development volume (Khanna, 2000) and the Mining, Minerals and Sustainable Development (mmsd) review (iied, 2002). One of mmsd’s nine key findings was that ensuring ‘that improved health and education or economic activity will endure after mines close’ required a level of planning that too often was not achieved (p. xvii). While mine closure is regulated in a growing number of countries, most regulation continues to focus on environmental and safety considerations, with very few standards set for the social outcomes to be achieved at mine closure. To the extent that social aspects of mine closure are anticipated in regulatory frameworks, requirements are typically limited to demonstrations of engagement with affected communities through closure planning (Kung, Everingham and Vivoda, 2020).
In the two decades since the appearance of the Bank’s volume and of mmsd, many of the developments in this space have focused on closure planning from a practitioner perspective (Bainton and Holcombe, 2018a), including the development of good practice guides and frameworks (icmm, 2020; mca, 2015; Mining Association of Canada (mac, 2008). These guides increasingly call for
Recognising the need for a central repository of knowledge, the Social Aspects of Mine Closure Research Consortium (2019) developed an e-library to capture the body of knowledge in this space. Most literature on social closure planning has sought to address challenges associated with ‘transitioning’ communities to a new socio-economic context. Such transitions can be complex, and can include impacts on local employment and business opportunities, the loss or transition of infrastructure and assets, loss of income (e.g. royalties and taxes), long-term or permanent changes to the landscape and environment, ongoing management of potentially hazardous infrastructure, and permanent impacts on cultural heritage. However, the experience evidenced in recent comparisons of mine closure plans (Kabir et al., 2015; Monosky and Keeling, 2021) indicates there remains a long way to go to adequately plan for and achieve success in the social aspects of mine closure.
Within the mine closure literature there is a small body of work focused on the impact of closure on Indigenous communities, and particularly on what a positive post-mining legacy might look like for these communities. In the operational closure context, there has been a temptation to reduce social closure to the cessation of an agreement, and to consider the cessation of an agreement an administrative exercise, neglecting mine closure’s often significant economic, social and cultural impacts on Indigenous communities. The extent to which Indigenous communities have been involved in closure planning has tended to be driven by the need of the mining companies and their consultants to inform closure designs, rather than such involvement being a process via which to define and enable post-closure socio-economic legacies for the communities affected (Kung, Everingham and Vivoda, 2020; Monosky and Keeling, 2021). There is a growing chorus of calls for more work to be undertaken in this area (O’Faircheallaigh and Lawrence, 2019; Rodon and Levesque, 2015) and for an actor-oriented approach to mine closure, placing the knowledge, views
Notably absent from most discussions of the social aspects of mine closure is a reflection on whether the expectations of communities have been met at the time of mine closure. This is not unsurprising given the often vague commitments made around economic growth and opportunity at the time of mine development and the considerable number of years that have typically passed from mine development to mine closure. This does, however, appear to constitute an obvious gap in which the assertions of ‘sustainable benefits and opportunities’ for host communities are yet to be fully tested. Questions asked of communities during engagement around mine closure tend to focus on whether they are satisfied with the closure process and specific details of the environmental remediation plan, but fail to ask or adequately assess whether the community is—and whether Indigenous communities in particular are—satisfied with the experience of having hosted a mine and the outcomes of the iluas and ibas. Social impact assessments undertaken for mine closure are precisely as described, impact assessments of the experience of closure and its associated transitions, with little opportunity to address the more fundamental question of the impact of having hosted a mine, with mine closure representing only the final stage in this continuum.
5 Evaluating the Outcome
To quote undp, ‘outcomes are developmental changes between the completion of outputs and the achievement of impact’ (undp, 2002, 6). In the two decades since undp prepared its guidelines for outcome evaluators, outcome evaluation (and in some cases impact evaluation (Belcher and Palenberg, 2018)) has become a standard and critical element of most, if not all, development initiatives. While benefit sharing models are not always described as or considered to be development initiatives—and as with all analyses of outcomes and impact there can be a multitude of causal relationships (Belcher and Palenberg, 2018)—there is no obvious reason why an outcome evaluation approach should not be applied to them.
For the development outcomes achieved for an Indigenous community under a benefit sharing model to be assessed, a definition of what ‘better off’ means for that community and how it can be measured or evaluated is needed. Being ‘better off’ might better be considered to mean achieving some level of ‘development’. As observed in the introduction of the first Human Development Report, ‘the basic objective of development is to create an
Prior to Amartya Sen’s capability approach (ca) (Sen, 1979a; 1979b; 1985), the objectives of development focused primarily on utilitarian concepts of income and possession of commodities (Deneulin and McGregor, 2010). The ca instead placed the primary focus on an individual’s freedom to achieve well-being, considering not what an individual has, but what individuals are able to do with what they have. Prioritising multidimensional approaches to progress and poverty, the ca is often credited with expanding the notion of well-being beyond ‘objective’ criteria such as life expectancy, rates of literacy and levels of unemployment (Manning, Ambrey and Fleming, 2016). As an approach, rather than a development theory the ca is focused on the informational basis for ethical judgements, and does not advocate some specific way of identifying what people might have reason to value (Deneulin and McGregor, 2010).
Utilitarian indicators of economic development were placed under further scrutiny in 2008 when the French Government commissioned its Report on the Measurement of Economic Performance and Social Progress (Stiglitz, Sen and Fitoussi, 2009). Bringing together a number of leading scholars, the Commission concluded that there was a need to ‘shift [the] emphasis from measuring economic production to measuring people’s well-being’ (Stiglitz et al., 2009, 12). Rising to this challenge, the Organisation for Economic Co-operation and Development (oecd) and the European Union (EU) collated both objective and subjective data across countries to measure national well-being (Anderson and Mossialos, 2019), and a number of countries have also established well-being indicators and priorities (Caria and Domínguez, 2016; Dalziel, 2019; Thinley and Hartz-Karp, 2019). Specifically within the extractive sector, researchers have also started to probe relationships between the resource curse and happiness levels (Ali, Murshed and Papyrakis, 2020).
Embracing the expansion of well-being to go beyond indicators of economic growth, the set of eight Millennium Development Goals (mdgs) signed up to by all 189 UN Member States in 2000 (to be achieved by 2015) and the subsequent 17 Sustainable Development Goals (sdgs) specifically sought to establish global-level development targets, with associated indicators. Notwithstanding the holistic objectives of the mdgs and sdgs as global indicators, and the various national and regional initiatives to measure well-being, many are necessarily generic in nature and from their earliest inception questions were raised about how best to incorporate greater recognition of Indigenous concerns, interests and interpretations of development and well-being (Taylor, 2008).
Indigenous well-being frameworks seek to ensure Indigenous voice and world views form the basis of an analysis of Indigenous well-being. For example, greater participation in the formal economy (through employment) would be considered an indicator of improved well-being in most analyses but may be considered negatively by Indigenous communities if it impinges on the maintenance of traditional cultural practices (Taylor, 2008). Existing indicators, and the ca in general, place considerable focus on individuals, which can often be inconsistent with more communal concepts of well-being held by Indigenous communities (Mero-Figueroa et al., 2020; Prout, 2012; Yap and Yu, 2016). Analysis of specific indicators can also fail to capture the highly interrelated nature of cultural, social and economic dynamics (Fonda and Anderson, 2009). Western models often fail to consider concepts of place and country and the need to ensure their protection (Barletti, 2016; Prout, 2012). Indicators of cultural autonomy and the strength of Indigenous governance also constitute a key gap (Prout, 2012). There are no ‘off-the-shelf’ models of Indigenous well-being that can (or should) be applied; there are, however, lessons from Australia (Prout, 2012; Yap and Yu, 2016) and Canada (Rixen and Blangy, 2016) upon which approaches can be built in collaboration with affected communities. This is an evolving field, with increasing pressure within Indigenous groups to take the lead in the development of environmental, social and governance (esg) indicators (Podlasly, 2021).
6
Indigenous communities are present in more than 90 countries (United Nations, 2009), many of which have significant mineral resources.1 Indigenous people represent approximately 5 per cent of the global population, but comprise approximately 15 per cent of the extreme poor (World Bank, 2021b). With mineral endowments located all over the globe, and most new mining development projects contingent upon community support, it is clear that the future expansion of the mining industry will be (or should be) dependent on being able to develop mutually beneficial relationships with Indigenous communities. In recent decades, the achievement of these mutually beneficial relationships has largely been assumed to be delivered through benefit sharing agreements between extractive sector companies and affected Indigenous communities. However, as highlighted by O’Faircheallaigh (1998; 2010; 2013a; 2013b; 2017; 2021) there remains a significant power imbalance in the negotiating positions of mining companies and Indigenous communities when such agreements are developed and implemented. While the development outcomes delivered by the extractive industry have been much assessed, the analysis has tended to focus on the national or regional levels, with a knowledge gap regarding the extent to which the effectiveness of existing benefit sharing agreements delivering on the expectations of in situ Indigenous communities has been realised.
This chapter reinforces the call for more case study–based research around the experience of Indigenous people hosting extractive sector projects on their lands and points to the vacuum around assessing this experience at mine closure, when the totality of the experience and final impact can be determined. Efforts are underway to begin to address that vacuum, as can be seen in a recent collaboration facilitated by the University of Queensland’s Centre for Social Responsibility in Mining bringing together Indigenous communities in Australia, New Zealand and Canada to discuss their experiences of mine closure (csrm, 2021). It is, however, acknowledged by all that this is only the beginning of the research and collaboration that is required. The chapter also highlights the critical importance of conducting assessments by working in collaboration with, if not led by, affected communities themselves, thus ensuring that any outcome evaluation is truly reflective of the values and priorities of those communities—that is to say, that it judges the experience against the host community’s definition of ‘success’. Such evaluation will also be critical
Mining in Australia generated over usd 140 billion (aud 200 billion) in 2019 and 2020 combined (mca, 2020), in a country in which more than 60 per cent of all mineral resources are located in proximity to Indigenous communities (Australian Government, 2016). In Canada, the government estimated in 2015 that then current and planned resource development projects would yield investments of approximately usd 514 billion (cad 650 billion) over the following decade, with over 1,200 Aboriginal communities located within a 200 kilometre radius of producing mines or active exploration areas (Kielland, 2015). While these two countries may be somewhat extreme cases, they illustrate that there is a business and an ethical case, both compelling, for assessing whether current benefit sharing agreements are delivering on Indigenous expectations. While the level of rights of Indigenous peoples recognised by host governments varies considerably across jurisdictions, at both a local and a global level Indigenous peoples are key stakeholders in extractive sector development. With so many significant mine closures expected to occur in the coming decade or so, the time is ripe to evaluate the outcomes achieved under the existing benefit sharing model in order to better inform the models needed for future mineral development.
Of the 71 countries and territories reporting to the International Work Group for Indigenous Affairs (iwgia), 86% also export mineral products (iwgia, 2021).
Disclosure statement
No potential conflict of interest was reported by the authors.
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