Technical File with Grain Malunga – Mining community engagement for socio-economic transformation

Grain Malunga Technical File Mining Malawi

 

Mining community engagement as a tool for social economic transformation in mining areas in Malawi

Abstract

Mining projects have become a point of focus due to social economic opportunities they can offer to local communities. Poverty in the vicinity of wealth is a source of insecurity and is a sign of immoral way of doing business. Benefit sharing and environmental protection bring project acceptance and hope to economic transformation of local communities.

Corporate Social Responsibility is not obligatory but is a good way of doing business.             Community Development Agreements protect mining companies from delivering goods and services that would have been the responsibility of government. These agreements should be a product of Free Prior Informed Consent so that a lasting Social Contract with the community is obtained.

The paper highlights also a consultative process that should be undertaken in order to have community participation and acceptance to mining projects.

Introduction

There has been an outcry from the civil society claiming that mining in Malawi has not benefited communities around mines. This, they claim, has arisen from lack of broader consultation with mining communities during mineral resource development cycle. Decentralised structure of local government has not been effective in promoting popular participation in the governance and development of project areas. This has resulted in the civil society coming up with Area or Village Action Groups to oversee issues of benefit sharing from mining activities.

The paper tries to put into perspective the need to develop smart partnership between mining communities and mining companies in promoting positive cohabitation through benefit shearing and promoting environmental sustainability.

Introducing Mineral Rights to Communities

Government introduced The National Decentralisation Policy in October 1998 and a new Local Government Act was passed in 1998 to enshrine Decentralisation Policy. This eventually led to integration of “governmental agencies at the district and local levels into one administrative unit, through the process of institutional integration, manpower absorption, composite budgeting…..” and promotion of “popular participation in the governance and development of districts.”

Four committees were set through formation of

  1. District Executive Committee (DEC)
  2. District Consultative Forum (DCF)
  3. Area Development Committee (ADC) and
  4. Village Development Committee (VDC)

These committees form levels through which governance and development issues are supposed to be conveyed. DEC is composed of departmental heads under the control of the District Commissioner (DC). DCF is a committee that is composed of DEC, civil society,  political leaders and Traditional Authorities (TAs). All stakeholders are represented here.  The ADC comprises of Group Village Headmen, government operatives, operating civil society and appointed stakeholders by the TA. The ADC receives project proposals from VDCs and approves projects that are supposed to be implemented by the DEC after DCF and DEC have endorsed them for implementation by a subcommittee called District Development Committee (DDC). The VDC is a committee operating at Group Village Level and is the most relevant in planning, management and coordination of development programs at community level.

In terms of collaborating mineral development issues the following structure is recommended:

201705 Malawi Mining Trade Review Mining Stakeholder Engagement Chart

Following the above chart mining projects falling under Exclusive Prospecting Licences and Mining Licences, issued by the Minister responsible for Mines, should first be introduced to the DC and his DEC after which the Mining Committee will take it to the ADC who later introduce the project to the VDC. Once the project has been introduced at these levels a final introduction should be made at DCF level where all relevant stakeholders are briefed.

The process of consultation with mining communities can then be kick started where relevant advocacy groups are introduced by VDCs and the process of Free Prior and Informed Consent (FPIC) starts. This is a process that respects ownership, self-determination and consent to a project that will benefit affected local communities.

Mineral permits are issued at District Council level. This enables the Council to generate local revenue through Property rates; Ground rent; Fees and licences; Commercial undertakings; and Service charges.  Therefore, a Mining Committee is necessary to be established to oversee issues concerning minerals permits and compliance. This committee can be headed by a District Mineral Resources Officer (DIMRO) who has mining or geological qualification.

Community Development Programmes

Mining companies improve their relationship with communities through benefit sharing and working together on programs that sustain good environmental practices. This is done through Corporate Social Responsibility (CSR) and Community Development Agreement (CDA). Further programs can go through Mining Development Agreement (MDA).

CSR programs are done by companies voluntarily through moral obligation and fostering good community relations. CSR can be through sharing social development programs, such as, in education and health; and in economic programs such as enhancing agricultural productivity to supply farm products to the mine and prioritise local employment and skills development.

In the absence or inadequacy of MDA, CDA plays a very important role in obtaining “social licence” for a mining project to be accepted by local communities. This is where FPIC or community engagement becomes more relevant and helps Government and Mining Companies to understand community development needs. The process helps identify what Government can do and what mining companies can offer.  The main component of CDA is to identify processes and development programmes under which stakeholders collaborate in fostering benefit sharing.  This is obligatory and legally binding to the extent of suspending or terminating project operations. VDCs, ADCs and DCF draws leadership to help develop CDA for the good of the local communities. Enlightened leadership and those with entrepreneurship leadership about   natural resource extraction becomes a useful tool for development of a successful CDA.

In case of MDA, this is entered upon between Government and Mining Company when fiscal and environment laws and regulations do not adequately offer security of tenure and fiscal stability to Mining Companies. What is in the agreement is consistent with the needs of the countries citizens, with more emphasis on mining communities, protection of the environment and appropriate return on investment of mining companies. A party to development of this MDA can be relevant Central Government institutions, DCF and ADC. Central Government key players are those institutions that deal with administration of Justice, Government Finance, Mineral Resource Development, Land, Water resources and Agriculture.  The process needs to give update to mining communities to seek their consent.

Social Economic transformation of areas within the vicinity of the mine can be evident if development programmes are undertaken within mining clusters with radius of intervention of  20 kilometres for mining communities.

Basic Needs for Mining Communities

Mineral discoveries are usually found in remote areas where local communities lack basic needs such as education, health, employment, safe and clean water, electricity, food security and nutrition. These needs have formed the basis for negotiation in terms of social economic transformation of the local communities. Education and skills development if properly negotiated can reap benefit for the mine in reducing expensive expatriate packages and promotion of local content for goods and services.  Provision of health service infrastructure can go a long way in promoting standard of living and preventing communicable diseases such as TB, HIV and Aids. Life expectancy can increase too. Health services delivery are essential to creating a health population that contributes to economic development. Mining activities can provide both skilled and non-skilled employment.  The mine should be able to prioritise employment of local communities before sourcing elsewhere.  This employment opportunity contributes to sense of ownership and acceptance to projects. Safe and clean water can be shared with the local community. This reduces health service delivery as water borne diseases are reduced and women are assisted in avoiding long distances to fetch potable water for domestic use. Electricity supply to local communities triggers economic activities within the mining community. Services such as maize milling, welding and opening of barber shops offer economic opportunities to the youth and reduces theft of mine properties.

Food security and nutrition is an important aspect of wellbeing and contribution to local content where communities supply food provisions to the mine strengthens collaboration between the mine and local communities. The mine should be able to employ a community engagement officer to identify the needs of the community that can equally benefit the mine.

Conclusion

Mining companies have the responsibility to develop lines of communication and engagement that make them welcome by local communities. Getting a government contract to undertake mining activities is not enough since the community offer “social contract” through addressing their basic needs and protecting the environment in which they survive upon.

Designing of CDAs and CSRs should be a participatory approach in which local communities are involved. If this is not adhered to, most projects are delayed and abandoned as they will not    promote smart partnership and benefit sharing.

***

This piece was initially published in Malawi’s Mining & Trade Review Issue Number 49 (May 2017).

The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.

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