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Mining companies around the world increasingly require formal permission and informed consent of local communities to access mineral resources. Community-level permission is often sought in the form of benefit agreements (BAs): documents that stipulate how mining companies will compensate local communities for the environmental and social costs of a mineral development project as well as share in the economic benefits.
Many developing countries neither reap fair benefits from their natural resource wealth nor translate it into poverty reduction or capacity enhancement. This outcome results in part from the absence of effective agreements between communities and resource developers, and of adequate post-agreement implementation and monitoring.
Over the past 15 years, the use of BAs has expanded from an initial implementation in Australia and Canada to an international practice that is being adopted by governments around the world in regulatory requirements for oil, gas, and mining projects. Canada has become an early hub of knowledge and experience in the developing field of BAs, and is generally seen as having notable success with the BA process – a 2010 analysis assessed the effectiveness of 14 BAs signed between 1996 and 2007 across three northern-Canadian diamond mines and found the BAs to be generally meeting their objectives, especially with respect to the delivery of benefits.
This project was global in scope. As the application of BAs – and the experience with them – varies across countries, the project has selected a handful of countries within which to operate and carry out targeted research and knowledge dissemination. These countries have been identified based on need as well as to generate enough differences across jurisdictions so as to work towards a training module and build out a diverse community of practice. In addition, the project created globally-relevant products that can be applied wherever BAs exist.
Governance & Human Rights
The project aimed to provide tools to improve both the BA formulation and implementation process such that developing nations can benefit more from resource extraction taking place within their borders and translate the resource extraction into a reduction in poverty in the affected communities. Capacity creation was the key link from the project activities to poverty reduction, through new knowledge creation and dissemination applied to particular countries and communities with a view towards improving global best practice. The project’s activities also aligned to expectations outlined in Canada’s Official Development Assistance Accountability Act.
The project’s aim was to close gaps in policy and research by focusing on the record of implementation of BAs and different fiscal/royalty regimes to contribute to successful BA implementation in developing nations. It focused on advisory-driven applied research to provide governments, communities, and industry stakeholders with tools to boost the effectiveness of their BAs.
This project worked with specific case-study communities to improve understanding of the BA process and develop tools for improved BA formulation and implementation. While there was a direct positive impact on the case-study communities, the findings were also broadly applicable across mining communities and were disseminated beyond the studied communities. In addition, the project targeted some of the weak links in the global practice of BA negotiation, implementation, and monitoring, producing a globally-relevant database, handbook, and analysis. The project leveraged the experience and knowledge of a leading group of scholars and practitioners who have worked on benefit agreements around the world so as to maximize impact per dollar spent.
In 2018, CIRDI, in partnership with Columbia Center on Sustainable Investment, created an online repository of publicly available agreements between communities and investors Open Community Contracts. The agreements featured on the repository include benefit-sharing agreements, leases, memoranda of understanding (MOUs), and revenue sharing agreements concluded in the context of agriculture, forestry, mining, oil and gas extraction, renewable energy, and other natural resource projects. The repository features plain language summaries of each agreement’s key social, environmental, and fiscal terms, among others. Where available, agreement pages include links to studies or reports relevant to the agreement to provide further context.
Mining companies around the world increasingly require formal permission and informed consent of local communities to access mineral resources. Community-level permission is often sought in the form of benefit […]