Responsibility of mining – complex, challenging, and no shortcuts
Mining is a growing business in Finland. We are not alone. Increasing global demand for metals and minerals is creating opportunities and positive societal effects, such as stimulating the economy and employment.
However, mining inevitably has environmental and social impacts. How can they be managed and maintained at an acceptable level? The evident solution is adopting an integrated approach to corporate responsibility.
These topics were discussed in a seminar arranged by Finnish Business & Society (FiBS) and Gaia in Helsinki, Finland.
A crucial issue that was raised is the complexity of the mining and metals value chain all the way from the mine up until the end consumer covering various processing steps, product streams and associated technology and services. It involves many operations where raw material traceability is challenging. An additional flavor to the overall complexity comes from the long life span of mining operations and large scale investments.
Mining-related conflicts in Central Asia were discussed together with lessons learnt from domestic experiences of Talvivaara. The benefits of having a social license to operate are obvious: fulfilling expectations and responsibilities towards stakeholders. However, this license to operate also makes it easier to handle permits and manage the development of the business. In addition, it makes it easier for a company to withstand criticism.
Social aspects are considered equal to environmental issues, for example, in The Equator Principles that offer guidance for investors’ decision making. Yet compared to societal risks, environmental issues are, to some degree, much more regulated, easier to define, and easier to manage due to the abundance of expertise available in the field.
In the context of the mining industry, the importance of a social license to operate is highlighted by the sheer scale of projects and the promises they make coupled with long project lead times. This makes it more challenging to manage changes and expectations.
The ultimate aim is to find solutions that benefit all stakeholders. It can realistically be questioned whether this is even possible to achieve especially given, for example, the inevitable political interest that mining projects attract.
An integrated approach to corporate responsibility requires companies to work together with their suppliers and to consider the impacts of the full value chain. It requires cooperation within the industry supported by experts in the field.
Other stakeholders, such as local communities, must also be involved, and here participatory methods result in the most beneficial outcomes. Together, these efforts will help achieve the needed social licence to operate. Once this license has been achieved, impacts of the operations and changes must be managed carefully, because once this licence is lost, it can be costly to regain stakeholders’ trust.
Environmental problems related to mining have received a lot of publicity in Finland. Improvement to corporate responsibility and public image will require systematic and long-term concrete work to reduce environmental impacts, openness to real engagement with stakeholders as well as disciplined work to implement and monitor responsibility strategies with measurable impacts.