An International Overview of Mining Politics Living with Minerals 5 Mark Rachovides, President Euromines London, 17 November 2014
An International Overview
of Mining Politics
Living with Minerals 5
Mark Rachovides, President Euromines
London, 17 November 2014
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Euromines – who we are
• Recognized representative of the European mining industry;
• Service provider to its members with regard to EU policy;
• Network for cooperation and for the exchange of information throughout the sector within Europe;
• Link to contacts with the mining community throughout the world.
Euromines
represents large
and small
companies and
their subsidiaries
in Europe and in
other parts of
the world which
provide jobs to
more than
350,000 people.
Their activities
and operations
produce more
than 42 different
metals and
minerals.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Our Key Messages
RESOURCES • We strongly believe that Europe has a viable resource base
DEMAND • The demand for raw materials is continuously increasing
STANDARDS
• The EU should maintain an enabling environment that provides for achievement of the highest standards in the extractive industries
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Overview of Global Policy
Initiatives (by subject areas)
1. Corporate governance and transparency
2. Communications, stakeholder engagement, and reporting
3. Social and economic development
4. Health & Safety
5. Environment and climate change
6. Materials stewardship
EU Priorities: • Climate Change
• Biodiversity
• Environment issues: Water, Waste, Mercury etc.
• Social Acceptance
• Health & Safety
• Material Stewardship
» 4
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
1. Corporate governance and
transparency
Policy Initiative Issuing Institution IGO/NGO
The Value of Responsible Investment UN Principles for Responsible Investment IGO
Assessing Human Rights Impacts: Where the Rubber Hits the Road UN Global Compact IGO
The Equator Principles (reviewed) The Equator Principles NGO
Business Principles for Countering Bribery Transparency International (TI) NGO
Unmask the Corrupt – G20 Transparency International (TI) NGO
G4 Global Reporting Initiative (GRI) NGO
Mining Company of the Future – Development Partner Framework Kellogg Innovation Network NGO
Integrated Reporting International Integrated Reporting Committee (IIRC) NGO
Non-Renewable Resource Standards Sustainability Accounting Standards Board (SASB) NGO
Financial Valuation Tool IFC IGO
EU Accounting and Transparency Directives European Commission, EU IGO
Natural Resource Charter 2nd Edition NRC/ RWI / Natural Resource Governance Institute NGO
Mining Contracts: How to Read and Understand Them Open Contracting Initiative NGO
» 5
IGO
31%
NGO
69%
IGO/NGO
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Transparency
• The Value of Responsible Investment: UN Principles for Responsible Investment
• The initiative presents the main drivers and debates in responsible investment, and makes a case
for the moral, financial and economic imperatives for more sustainable form of investment.
• The Equator Principles: The Equator Principles
• Risk management framework adopted by financial institutions for addressing social and
environmental risk in projects. They apply to all new projects with total capital costs of more than
US$10 million.
• G4: Global Reporting Initiative (GRI)
• Promotes the use of a sustainability reporting framework for sustainable business and
development.
• Natural Resource Charter 2nd Edition:
• A set of 12 best practice principles for governments and societies on how to best manage
natural resources for development.
• Business Principles for Countering Bribery: Transparency International (TI)
• Principles provide a framework for companies to develop comprehensive anti-bribery programs
that are effectively implemented.
• Unmask the Corrupt – G20: Transparency International (TI)
• Campaign advocating for beneficial ownership disclosure, targeting G-20 meeting
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Reporting and Accounting
• Integrated Reporting: International Integrated Reporting Committee (IIRC) • Advocates and created a standard for improved reporting in the
communication of an organisation’s strategy, governance, performance and prospects.
• (EITI: Extractive Industries Transparency Initiative)
• Non-Renewable Resource Standards: Sustainability Accounting Standards Board (SASB) • The standard provides companies with standardized accounting metrics to
account for performance on industry-level sustainability topics.
• Financial Valuation Tool: IFC • A tool that estimates the financial return of site-specific community
investment portfolios.
• EU Accounting and Transparency Directives: European Commission, EU
• The EU directives require EU extractive companies to disclose all payments to foreign governments of $100,000 or above, on a project-by-project basis.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
2. Communications, stakeholder
engagement, and reporting
» 8
Policy Initiative Issuing Institution IGO/NGO
Building Sustainable Futures:
Communication Strategies for CSR Change Management
International Association for Business Communications NGO
IBA Model Mining Development Agreement Project - Spanish International Bar Association NGO
G4 Global Reporting Initiative (GRI) NGO
Integrated Reporting International Integrated Reporting Committee (IIRC) NGO
Sustainable Development Goals (SDGs) UN IGO
ISO 14001 Revision International Organisation for Standarisation (ISO) NGO
Non-Renewable Resource Standards Sustainability Accounting Standards Board (SASB) NGO
WB EHS Guidelines review WB IGO
IFC Performance Standards IFC IGO
IGO
33%
NGO
67%
IGO/NGO
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
3. Social and
economic development / 1
9
Policy Initiative Issuing Institution IGO/NGO
Global Agenda Council on Responsible Mineral Management 2012-2014 WEF NGO
Mining and Metals in a Sustainable World WEF NGO
Extractives for Development (E4D) World Bank IGO
Natural Resource Charter 2nd Edition NRC/ RWI / Natural Resource Governance Institute NGO
Women in Natural Resource Management UN Women/ UNEP/ UNDP/ PBSO IGO
Strategic Plan 2014-2017 UNDP IGO
Geology and Mineral Information Systems UNECA IGO
Responsible Mineral Development Initiative (RMDI) WEF NGO
EITI Standard EITI NGO
Shared Value Creation and Local Development OECD IGO
Guidance on state national action plans
UN Working Group on Business and Human Rights IGO
Ongoing priorities and themes and post- 2015 development agenda
UN Permanent Forum on Indigenous Peoples IGO
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
3. Social and
economic development / 2
10
Policy Initiative Issuing Institution IGO/NGO
Expert Mechanism on the Rights of Indigenous Peoples, 7th Session UNHRC IGO
World Social Protection Report 2014-2015
International Labour Organization (ILO) IGO
Equal Pay: An Introductory Guide International Labour Organisation (ILO) IGO
Action Plan on Base Erosion and Profit Shifting (BEPS) OECD IGO
EU Emissions Trading System EU Commission IGO
G-8 International Tax Agreement G-8 IGO
IMF Carbon Tax (and other systems) IMF IGO
IFC Performance Standards IFC IGO
IGO
80%
NGO
20%
IGO/NGO
Extractives for Development (E4D): WB-led multi-stakeholder initiative to share knowledge on extractives particularly focused on
tackling rent-seeking and corruption in resource-rich countries. EITI Standard: An initiative which brings together governments, extractive companies, and CSOs in order to address revenue transparency, by disclosing the taxes and other payments made by extractive companies to governments. Shared Value Creation and Local Development: A review of the objectives and approaches to local content, possibly geared towards a local content toolkit for governments and companies.
World Social Protection Report 2014-2015: The report analyses trends and recent policies in the field of social protection, such as the negative impacts of fiscal consolidation and adjustment measures. EU Emissions Trading System: EU’s GHG emissions’ cap-and-trade system.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
4. Health & Safety
11
Policy Initiative Issuing Institution IGO/NGO
MSHA steps up mine fatality prevention efforts
Mine Safety and Health
Administration (MSHA), US Government IGO
Equal Pay: An Introductory Guide International Labour Organisation (ILO) IGO
UNGA Improving Global Road Safety UN General Assembly IGO
IGO
100%
IGO/NGO
Equal Pay: An Introductory Guide
The guide is aimed at government authorities, workers’ and employers’ organizations, as well as policy makers,
and provides insights and examples to how ‘fair pay’ can be implemented in different settings.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
5. Environment and
climate change / 1
12
Policy Initiative Issuing Institution IGO/NGO
First UN Environment Assembly UNEP – World Conservation Monitoring Centre (WCMC) IGO
WB EHS Guidelines review WB IGO
ISO 14001 Revision International Organisation for Standarisation (ISO) NGO
Decisions of the Warsaw Framework for REDD-plus UNFCCC IGO
2014 IUCN World Parks Congress International Union for Conservation of Nature (IUCN) IGO
Sustainable Management of Marginal Drylands – new policy brief UNESCO, Man and Biosphere Program IGO
Testing focus groups as a tool for
connecting indigenous and local
knowledge on abundance of natural
resources with science-based land management systems
UNEP – World Conservation Monitoring Center (WCMC) IGO
Huangshan Declaration on UNESCO
sites, Sustainable Development and the Role of Space Technologies
UNESCO – Man and Biosphere Program IGO
Building Flexibility and Ambition into a 2015 Climate Agreement
Center for Climate and Energy Solutions NGO
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
5. Environment and
climate change / 2
13
Policy Initiative Issuing Institution IGO/NGO
Mobilizing and transferring knowledge
on post-2015 climate policy implications Centre for European Policy Studies NGO
Building Readiness for Carbon Pricing WB Partnership for Market Readiness (PMR) IGO
De-risking Renewable Energy Investments UNDP IGO
Strategy for Success – Delivery as One on Water Related Issues UN Water IGO
G4 Global Reporting Initiative (GRI) NGO
Guidelines for reporting emission data
under the Convention on Long-range Transboundary Air Pollution UN Economic Commission for Europe IGO
IGO
73%
NGO
27%
IGO/NGO
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
5. Preparation of Climate Change
agreement 2015/2016
• Building Flexibility and Ambition into a 2015 Climate Agreement: Centre for Climate and Energy Solutions
• Explores options for a hybrid approach in the 2015 agreement, focusing on mitigation efforts.
• Mobilizing and transferring knowledge on post-2015 climate policy implications: Centre for European Policy Studies
• The initiative will analyze different policies looking for knowledge gaps about implications of
international climate policies, to then cover these gaps with knowledge packages derived
from stakeholder consultation, research, and policy analysis.
• Building Readiness for Carbon Pricing: WB Partnership for Market Readiness (PMR)
• An event which provided a platform for the representatives of business and governments to
share their experiences and views on preparations for carbon pricing policies.
• De-risking Renewable Energy Investments: UNDP
• A framework to support policymakers in selecting public instruments to promote renewable
energy investment in developing countries; accompanied by a financial tool.
• IMF encouraging Carbon Tax (and other systems): IMF
• Mandatory reporting of GHG emissions for quoted companies: UK Dept. for Environment, Food & Rural Affairs
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Emission trading systems
(ETS) in the world
China ETS
Pilots
New Zealand ETS
Australia ETS
California ETS
EU27 ETS
Conn., Delaware,
Maine, Maryland,
Mass., New
Hampshire, NY,
Rhode Is, Vermont:
Cap e
Alberta GHG
Reduction
Program
British
Columbia
Carbon Tax
Quebec cap and trade
system – Western Climate
Initiative (WCI) Carbon
Market
South Africa
carbon tax
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Summary of ETS pilots in China
• Pilots:
• Beijing, Tianjin, Shanghai,
Chongqing(4 Cities),
Guangzhou, Hubei (2
Provinces) + Shenzhen
• Tasks:
• ETS pilot implementation
plan
• Policy and regulation,
scheme design, cap,
allocation, trading rules,
monitoring, registry and
trading system
• Timeline:
• 2013 local/regional
• 2015 national
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Materials stewardship / 1
Policy Initiative Issuing Institution IGO/NGO
7th Environment Action Programme Environment Directorate, EU Commission IGO
Horizon 2020 EU Commission IGO
Global Forum on Environment:
Promoting Sustainable Materials
Management through Extended Producer Responsibility (EPR)
OECD – Environment Directorate
(Sustainable Materials Management) IGO
Responsible Mineral Development Initiative (RMDI) World Economic Forum (WEF) NGO
REACH European Commission IGO
Current landscape of alternatives assessment practice: a meta-review OECD, Environment Directorate IGO
» 17
7th Environment Action Programme: The programme identifies three objectives to be achieved before 2020: protect the EU’s
natural capital, make the EU a resource-efficient economy, and safeguard EU citizens from environment-related pressures to health. Horizon 2020: EU research and innovation programme aimed at securing the EU’s competitiveness. Within its Raw Materials Initiative there is research directed at creating more efficient processes of raw materials. REACH: EU Regulation concerning the registration, evaluation, authorization, and restriction of chemicals, and establishing the European Chemicals Agency.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Materials stewardship / 2
Policy Initiative Issuing Institution IGO/NGO
IOMC Toolbox for Decision Making in Chemicals Management
OECD, Chemical Safety and Biosafety IGO
Mercury Exposure and Health Impacts
among Individuals in the Artisanal and Small-Scale Gold Mining Community WHO/ UNEP Mercury Partnership IGO
G4 Global Reporting Initiative (GRI) NGO
Guidelines for reporting emission data
under the Convention on Long-range Transboundary Air Pollution UN Economic Commission for Europe IGO
Raw Materials Committee Business and Industry Advisory Council (BIAC), OECD IGO
» 18
IGO
82%
NGO
18%
IGO/NGO
Mercury Exposure and Health Impacts among Individuals in the Artisanal and Small-Scale Gold Mining Community:
Report commissioned by the WHO exploring the effects of mercury on the health of communities ASGM communities.
Guidelines for reporting emission data under the Convention on Long-range Transboundary Air Pollution:
guidelines aiming to assist parties in meeting their obligations under the Convention of Long-range Transboundary
Air Pollution and its protocols (e.g. heavy metals).
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Mining’s importance
to national economies
19
Source: ICMM 2013
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Trends in the nominal value
of world mineral production
» 20
• In 2010, the nominal value of world mineral production was nearly four times higher than it had been in 2002. During this period, growth in value has been significantly greater than growth in world gross domestic product (GDP).
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Fraser Institute
Policy Potential Index
The Fraser Institute published the 2012/2013 annual survey of mining and exploration companies to assess how mineral endowments and public policy factors such as taxation and regulation affect exploration investment.
The Policy
Potential Index (PPI) is a composite index, measuring the overall policy attractiveness of the 96 jurisdictions
in the survey.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Key Factors in
Mining Investment Decisions
22
• Geological potential for target mineral
• Profitability of potential operations
• Security of tenure & permitting
• Ability to repatriate profits
• Consistency of mineral policies
• Realistic foreign exchange controls
• Stability of exploration terms/conditions
• Ability to pre-determine environmental obligations
• Ability to pre-determine tax liability
• Stability of fiscal regime
꞊ Source: ICMM 2014, Otto/United Nations Survey of 45 companies
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Export restrictions
23
• Important raw materials sources are increasingly located in parts of the world which lack political and economic stability. Over 50% of major reserves are located in countries with a per capita gross national income $10 per day or less.
• There are over 450 export restrictions on more than 400 different raw materials.
• The OECD Inventory confirms a transparency deficit in the design and implementation of export restrictions.
Location of mining by region, 1850 - present
Source: Raw Materials Group, Sweden
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Recent trends in
the use of export restrictions
24
• Use of export restrictions is often highly unpredictable. Substantive international disciplines in this area are weaker than for import restrictions.
• Export restrictions on raw materials have become more frequent over the last decade. • The OECD Inventory records more than thirteen different types of export-restraining
measures or policies, the most common of which are export permits, export taxes and quantitative restrictions.
• Export restrictions are broadly applied across all raw materials sectors, from minerals and metals, and metal scrap, to wood and agricultural commodities. • They are used mostly, but not exclusively, by emerging and developing countries
and for a variety of reasons.
• Global markets for raw materials often feature a high concentration of supply of, and hence dependency on, production and exports by a small number of countries.
• Experience shows that export controls can trigger similar actions in other supplier countries, driving up prices further, making price volatility worse, and creating a crisis of confidence that spreads from one resource to the next.
Source: Export Restrictions in Raw Materials Trade: Facts, Fallacies and Better Practices, OECD, 2014
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Current NGO agenda on mining
26
Source: SIGWATCH data ©2014
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
Raw Materials:
Increased importance
27
• Minerals and metals represent the basis for any industrial
production process. They provide both everyday products and
new solutions for modern infrastructure and technologies.
• Increase in population and living standards will continue to drive
growing demand for raw materials. Due to these developments
resource efficiency measures such as optimizing reuse and
recycling as well as extension of lifespan of products are not
expected to close the material deficit by 2050.
• European mining companies and technology companies are
playing an increased global role in securing access to raw
materials.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
What we need to help lift
people in the EU out of poverty
• 20% industrial contribution to GDP by 2020 and more later.
• Successful conclusion of the EU-US trade agreement (TTIP).
• Resource efficiency strategies that drive contributions from whole value chains – including mining & quarrying in the EU.
• Development of “environmental footprints” into full “net benefit assessments” of products and processes in economic, environmental and social terms.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
What we need to contribute
to employment rates
• Explicit political support for mining as a particular growth strategy.
• Continued increase of minerals exploration in the EU Member States.
• Free movement of labour (e.g., EU job descriptions, standards, accreditations).
• Financial support for investments that target performance exceeding established standards.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
What we need
to invest in Europe
30
• Predictable and stable policy from the EU and Member States.
• An EU energy policy focussed on creating a viable undistorted internal market that offers long-term supply contracts to industry.
• Deployment of all conventional and unconventional energy sources.
• Reduced permitting times in line with recommendations of the EU Semester.
• Recognition of mine site rehabilitation.
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
What we need to contribute to
reduced greenhouse gas emissions
• An EU Climate policy focused on obtaining a global agreement, allowing efficient mining to grow and avoiding carbon leakage.
• Maintenance of the EU ETS as the main policy instrument – One single GHG reduction target to drive all other measures including renewables and efficiency.
• Separation of the power sector and the manufacturing sectors into two different emission reduction systems.
• Allocation of emission allowances under ETS based on realistic benchmarks, technical standards and actual production.
• Recycling of ETS revenues into innovation of emissions reduction and/or sequestration technologies.
• Compensation for indirect carbon costs.
» 31
European Association of Mining Industries, Metal Ores & Industrial Minerals www.euromines.org
What we need to deliver
maximum value over time
• Predictable and stable policy from the EU and Member States • No new legally binding targets for at least a
decade.
• Protection from unfair global competition • Less unilaterally self-imposed costs (e.g.,
energy, auditing etc.).
• Deployment of all conventional and unconventional energy sources enabling affordable long-term energy contracts.
• Market rewards for stand-out productivity performance • Market reward for CSR etc
Thank you for your kind attention
In case of any questions please contact: Euromines 12, Avenue de Broqueville
B-1150 Brussels Belgium Tel.: +32 2 775 63 31 Fax: +32 2 770 63 03 E-mail: [email protected], [email protected]
www.euromines.org
Society needs Responsible Mining