Extractive industry challenge – going beyond the islands of development

Stina Nilsson By Stina Nilsson, Senior Engagement Manager at GES

At the end of last year, I went to Peru to meet with various companies, NGOs and authorities working within, or towards, the extractive industry. I wanted to learn more and to engage companies on issues related to the industry’s impacts on communities near the operations. I always find it fascinating going on such trips, for the simple reason that you always come back home with lots of new knowledge and impressions. Many times, issues you were not expecting to become key matters end up being the focus of attention. This time that issue was the effects that come from defining an operation’s area of influence. Let me explain further what I heard, and what I thought about it.

In Peru, the area of influence for an extractive operation is determined in the Environmental Impact Study and based on where the impacts from the operation are expected to be most elevated. During my trip, I became more and more aware that who is included in the area of influence (and who is not) becomes increasingly important as the operations move ahead. The area of influence is where the company will focus its efforts, including social and economic interventions for the communities, and for community members this can provide an opportunity to develop a small-scale business, start a community project or to get a relatively well-paid job. From their point of view, what can be at stake is the possibility to create a better future for themselves and their communities. In Peru, where the state capacity is limited, corporate support becomes even more crucial.

While this creates opportunities for community members inside the area of influence, the same is not true for neighbouring communities that fall outside the scope. With this comes, in many cases, unfulfilled expectations and the notion that the extractive operation is not providing positive gains for people in the region. Peru has seen a number of anti-extractive protests where this has been one of the issues behind the opposition. With this being said, a mining company of course has to draw the line somewhere and cannot alone be responsible for creating development.

So what can be done?

In order to be a respected neighbour in an area, extractive companies need to be ready to share opportunities and wealth and to have a firm community relation strategy in place to do so. As one of the NGOs I met with in Peru put it – there must not be surprises to communities on company plans and actions. Communication is one of the key points. One mining company I met is laying grounds for a potential expansion of its mining operations, and years before this is likely to materialise it is present in communities in the area to inform and to get feedback. This includes communities outside its area of influence, with workshops also arranged with their leaders in order to hear their expectations and needs, and for the company to give answers on what it will, and will not, commit to. When I participated in such a gathering, one of the leaders pointed out that the mistake the company made in the beginning was that it had not gone to the communities outside of the area of influence. In this case, as in many others, it spurred a protest movement against the operation.

Job opportunities was another important point raised by the leaders, and several of them asked the company not to forget about their communities when hiring. Last but not least, some leaders expressed disappointment about the government not being present in their communities. This latter aspect is of course not a direct responsibility of the company, but there is a lot to win for everybody involved if the company makes sure to coordinate its community interventions with the government’s and local authorities’ development plans. Together they can ensure increased presence and development interventions in a particular region. Without such private-public collaboration and with sometimes too limited commitments to local development from extractive companies, the industry will at best create small islands of development, while missing the opportunity to be an important force for development regionally, if not nationally. Choosing the latter option will also put the company in a situation where it is much more likely to be able to proceed with its activities in a stable and positive local context, where protests and other interventions stalling the operations can be avoided.

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