9. Possible government approaches
There are a number of risk management and adaptation approaches available to governments for dealing with a changing climate for the extractives sector.
‘Reducing exposure and vulnerability’ to climate risks refers to actions that can be taken prior to risk events materialising. This includes climate-informed planning for the extractives sector and more broadly climate informed land, rural, urban and water management as whole, diversifying income sources, and early warning systems.
Other strategies such as, ‘increasing resilience’ can help with better coping and responding during or after an event. For example, creating and maintaining stakeholder networks to absorb shocks, access to public health facilities, strong community organisations and institutional frameworks and good governance.
‘Prepare, respond and recover’ involves having appropriate preparedness, response and emergency strategies and plans in place.
‘Transfer and share risks’ includes financial protection and risk pooling practices for the extractives sector such as insurance.
Lastly, ‘transformation’ involves taking a new approach and pushing the recovery after the event, towards a new state of affairs rather than returning to ‘normalcy’. An example of how a mining company transformed its operations and built resilience after a flooding event in Australia is presented on the next page.
Case Study: tackling repeated flooding in Queensland, Australia
In January 2008, extreme precipitation in Central Queensland led to severe flooding, damaging local infrastructure and the Ensham coal mine amongst others in the area. Excluding the direct loss of revenue from coal sales, the 2008 floods cost Ensham approximately $270-300 million, including lost time in production, clean-up costs and loss of infrastructure and equipment. It took Ensham a whole year to even recover to 80% of its full production. What were the lessons learned from this event?
Work with stakeholders
To better understand and manage such events in the future Ensham embarked on a journey of consultation with external stakeholders and its immediate neighbours. Through this process the company was able to inform its modelling process and their future risk and disaster planning.
Ensham Resources said that “there was no effective warning and little or no real time information about the likely severity of the flood, which was unprecedented”. Some form of anticipatory planning like early warning systems could have helped to prepare and prevent the worse.
Ensham took action and in 2009 revised its mining methodology shifting primarily from open-cut to underground mining. In late 2010/early 2011, an unprecedented volume of rainfall caused widespread flooding in the area once again. The Ensham mine was again inundated, however, due to the transformation of its operations and new systems that Ensham Resources had put in place, the level of the flooding impact at the mine was significantly reduced (prepared with information from Sharma et al, 2013).
Climate change presents governance challenges that are too great for governments or any single stakeholder to tackle themselves. Although governments play a key role, partnerships between public, private and local actors are crucial in addressing climate adaptation. Governments need to share responsibility for dealing with climate adaptation issues and develop suitable responses by engaging in collaborative planning. Working with international agencies, the private sector, and NGOs, can lead to strengthen local adaptation capacity, result in better understanding of the current and future situation and help to create shared frameworks to take decisions and execute plans.
A system of actors and functions for adapting to climate change and a case study from Mozambique are presented on the following pages. A resource in the topic library, which can be accessed here, considers some of the climate change issues that are critical for each stakeholder group in the extractives sector and suggests strategies for addressing them.
Case Study: Extractives sector partners with government and communities to fight Malaria in Mozambique
Changing temperatures and precipitation patterns can present increased health risks with knock-on effects on the extractives sector. Climate change could cause shifts in disease distribution, for example in areas at risk of malaria. BHP Billiton’s Mozal aluminium smelter operation in Southern Mozambique is increasingly threatened by endemic malaria. The disease affected the facility’s performance through absenteeism and low staff morale. Moreover, Mozal became an unattractive destination for skilled employees. The company realised that limiting malaria programmes to the Mozal site itself by spraying its facilities and controlling nearby breeding areas would have little effect. Hence, it became a partner in the Lubombo Spatial Development Initiative (LSDI), a tripartite governmental programme to develop the Lubombo region and decrease malaria prevalence. Within the LSDI, BHP Billiton was more capable of implementing an effective malaria control programme in the area around its Mozal operations. BHP Billiton’s partnership with the LSDI and actions taken to decrease the prevalence of malaria among employees have improved the company’s productivity and supported the health of the community.
Source: UNFCCC, Private Sector Initiative actions on adaptation