1. The objectives and scope of mineral compliance activity
There is increasing focus by the international community on how mining activity is conducted and how governments manage and regulate this activity. This is particularly true in countries starting to exploit natural minerals, where mining has not traditionally played a prominent role.
Government objectives for mineral compliance
Government objectives for mineral compliance are typically to ensure:
Efficient utilisation of resources
Health and safety of workers, surrounding communities and the public
Fair distribution of wealth created
Minimisation and management of environmental and other impacts
Mineral compliance – a stakeholder perspective
In addition to government and regulators, organisations involved in the scrutiny of mining activities typically include international organisations such as the United Nations and the World Bank, civil society organisations, faith-based and religious groups, host communities and other interested stakeholders, including the media.
These stakeholder groups have diverse objectives in monitoring mining activity.
For example, investors will be most interested in issues such as the effective management of operational risks, effective governance and the transparent and accurate reporting of resource and management information.
Host communities, civil society organisations and local media are more likely to be interested in issues such as job creation and skills development, land use, public health and safety and environmental impacts.
Related material available on the Extractives Hub
Material on the following related topics is available on the Extractives Hub:
Revenue distribution and local impact
A critical point is that a surprisingly broad range of issues may need to be considered in structuring and carrying out mineral compliance, to accommodate the needs of all stakeholders.
Mineral compliance – an industry perspective
Investors may have differing compliance objectives from governments, although there is some commonality, for example, a desire to prevent harm.
Under global scrutiny by watchdog organisations, both governments and investors are extremely conscious of any reputational risks that may arise from operational practices, particularly in relation to health and safety, environmental protection, safeguarding of communities and the prevention of corruption. Mining companies compete for investment and must satisfy the criteria of funders, whilst governments are accountable to their publics and may also depend on developmental assistance programmes which carry with them obligations to comply with certain standards as a pre-condition. Both parties are vulnerable to allegations of corruption and must ensure transparency as well as compliance with accepted standards.
Should mining operations of all sizes be regulated equally?
A question that is frequently asked is whether the same standards should be applied to small to medium enterprises and large-scale operators. The limited resources available to artisanal or small-scale miners will make it difficult for them to achieve the same standards as large, multinational corporations. However, failures resulting in injury or death of individuals are just as serious and permanent at a small mine as at a large one.
Governments may assist smaller enterprises in various ways to overcome these constraints. They may grant tax relief, provide technical assistance or set timelines to achieve interim targets for compliance.