SDF-based CSR: The New Standard for Mining Sector

Author recommends that CSR must be built upon the Sustainable Development Framework (SDF) that addresses the issues at all the stages of lining life-cycle i.e. exploration, planning, construction, mineral extraction, closure, reclamation and rehabilitation.


By Himanshu Sekhar Panigrahi

Despite the fact that mining has played a pivotal role in industrial and economic development of many mineral-rich countries, it is undeniably one of the major activities that adversely affect environment and communities. This age-old activity has continually become widespread with the increasing demand for minerals, in volume and variety, of the society. Being an emerging economy, India is always dependent upon the mineral-based industries and mineral export in its mission for poverty elimination and national progress.

As a consequence it is experiencing environmental degradation, disturbance in local economy and social upheaval. Thus, India like other such countries is positioned to deal with the triangle of economic, environmental and social impacts of mining. And, the triangle can be managed effectively and strategically with the concept and principles of sustainable development whose core ethic is intergenerational equity.

Characteristically mining creates both positive and negative local impacts, and the latter is hardly counterbalanced by the former. The negative impact of mining operation unsettles, directly or indirectly, the ancient and venerable features of local livelihood, environment and culture. Some of the effects are inter-related and irreversible. So there is nothing to be surprised that the mining industries are prone to community resistance and derive severe criticism and wrath on issues pertaining to their operation with regard to sustainable development.

First, talking about environmental impact, mining activities disturb local ecosystem and biodiversity. Mining causes large-scale deforestation, loss of grazing land, soil erosion, contamination of soil and water, and noise pollution. Lands where mine-waste residuals are dumped or runoff are no longer usable for the purpose of agriculture. Pollution, of ground water as acidic water seeps into earth, and of surface water caused due to run-off of mine waste, leave the agriculture affected. As most coal reserves in our country are located in river basins, river water is prone to pollution. Environmental degradation leads to destruction of wildlife habitat.

Second, the adverse effect of mining on local economic order cannot be undervalued though mining industries often offer employment to local people. Degradation of agricultural land and grazing land directly hampers the livelihood of farmers who are dependent on farming and livestock rearing. They form a major portion of rural population. Forest dwellers affected by mining are prevented from accessing natural resources their livelihood depends upon. And, the mining industries that cause displacement add to the woes of local inhabitants. Adverse impact of mining on health of local people renders them unfit to carry out any earning activity. All these weaken the household financial situation and disintegrate the community-level economic system.

Third, mining areas have been experiencing several social issues. This sector operates mostly in areas inhabited by indigenous and tribal people. As they have strong emotional link with their land, culture and community, involuntary eviction and resettlement brought about by mining never goes well with them. Impact of mining is not gender-neutral as women get more victimized by its negative effects and get less compensation than men. Instances of conflicts in communities and families, created often by unequal compensation or benefits received by the members from mining industries, are there.

Noteworthy to say, industrial production, needed for economic growth, is directly linked to exploitation of natural resources through mining. And, though negative impacts of mining operations can never be ruled out, a balance must be maintained for environmental, economic and social sustainability.

But, it is missing due to mindless mining and lack of compensatory measures. It is not that community development is not in the agenda of mining companies. However, most of them do it without understanding the entire dimension of impacts, and resort to only ‘reactive CSR’ when faced with resistance from various stakeholders. And, very few go beyond the legal compliance to checks and procedures mining legislations provide. As a result, the effort for integrated sustainable development remains superficial and short-term.

Hence, conscious effort must be put to minimize its negative impact and maximize its positive impact. It is highly desirable that mining companies strive for sustainable development, through their CSR initiative, in consultation with the government and communities. Their CSR must be built upon the Sustainable Development Framework (SDF) that addresses the issues at all the stages of lining life-cycle i.e. exploration, planning, construction, mineral extraction, closure, reclamation and rehabilitation. SDF-based CSR enables the mining house to obtain ‘social licence’ to operate, and gives means of compensation for the social and environment costs of mining.

In recent past several models of SDF, tailor-made for specific mineral bearing areas, have been designed and adopted by mining companies. However, the framework approach, though flexible, must be built upon some core principles. SDF in mining sector is basically modeled on five factors- safety, efficiency, economy, environment and community.

Based on the precautionary principle, the framework incorporates not only regulatory requirements, but also best practices to address the challenges to sustainability in a holistic manner. It guides through participatory means for a productive and continuous relationship between mining industries, government and stakeholders including communities, civil society bodies and NGOs. All involved can provide inputs into and receive outputs from mining projects correspondingly.

This multi-sector approach should be established after conducting Environment Impact Assessment (EIA) and Social Impact Assessment (SIA). Then while designing the impact controlling and management system, special care must be given to the concern of all the stakeholder groups. The framework needs to contain a robust stakeholder engagement and communication method. Execution of SDF requires scalable interventions and strong monitoring system. For maintaining transparency a reporting method and process of disclosure among all stakeholders should fit into the framework.

Sustainable development can be realized in mining sector only if investment in such projects is financially viable for the mining industry, technically suitable, environmentally sensible and socially responsible. A ‘proactive CSR’ practice armed with a robust Sustainable Development Framework is the tool.

About the Author: Himanshu Sekhar Panigrahi is the Dy. Manager-CSR working at Hindustan Copper Limited (A Government of India Enterprise). The views expressed in the article are personal.

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Disclaimer: The views expressed by the author in this feature are entirely his own and do not necessarily reflect the views of India CSR.

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