Governance, Risk and Stakeholder Engagement: What Lessons can be Learnt from Mining?

Abstract

Considerations about governance at the level of local or national often focus on how engaged citizens are in protecting democracy, the influence of civil society on policy making and whether or not attaining specific developmental objectives can be justified if the rights of citizens are trampled on in the process. Corporate governance as well as the way national and local governments practise governance can have direct impact on communities located in areas near to extractive industries and even further afield. However, although risk analyses are considered in feasibility studies, including the conduct of environmental impact assessments of mining investments, what has attracted less attention are the consequences of poor governance in managing/mitigating risks when communities which traditionally are ‘resource guardians’ are not consulted during stakeholder discussions as part of investment negotiations.Academic literature and popular media are replete with examples of the high price paid by some communities, including loss of lives and livelihoods, when investors and governments ignore opportunities for meaningful engagement with stakeholders. And, although recommendations have been made on how to improve meaningful stakeholder engagement, the various discussions/articles have not revealed consensus on how best to create meaningful stakeholder engagement in regions rich in natural resources sometimes described as suffering from ‘resource curse’. In considering ways in which meaningful stakeholder engagement could convert the resource curse into ‘resource blessings’, the question may well be asked, what are the indicators of meaningful stakeholder engagement and how can this be strengthened through greater transparency in governance?Drawing on a case study of diamond mining in Botswana and the mining of platinum in South Africa, this chapter provides an overview of approaches to risk assessment by companies and governments and examines key indicators of governance which impact on the lives and livelihoods of communities directly affecting by mining operations. In addition, the author highlights how risks associated with poor governance can derail attainment of development objectives as well as opportunities that act as catalysts in transforming communities and meeting national development objectives.