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February 22, 2002
Mining and Minerals Sector Trying to Clean Up Its Act
    by Susan Wennemyr

Large international mining companies, in an effort to improve their image with investors, are working on a project to define how the industry can best contribute to global sustainable development.


Sometime in the next few weeks, the Mining, Minerals, and Sustainable Development Project (MMSD) will release a report that has been two years in the making. The report will suggest practical means by which the mineral and mining industries can make their practices conducive to sustainable human and ecological development.

MMSD was established by the London-based International Institute for Environment and Development, under contract to the World Business Council for Sustainable Development (WBCSD). The report's completion was consciously planned to coincide with the UN's upcoming World Summit on Sustainable Development (Rio+10), which will be held in Johannesburg, South Africa from August 26 to September 4, 2001.

Mining companies are proactively seeking global operating standards in an effort to put a better public face on the industry. They are getting increasingly worried that large financial institutions will abandon the sector, which would increase mining companies' cost of capital and insurance.

There are 28 mining companies participating in MMSD, and each has given at least $150,000 to sponsor the project. Participants include Freeport-McMorRan (ticker: FCX), Placer Dome (PDG), and Rio Tinto (RTP), companies whose operations have been linked to human rights abuses and major environmental degradation in the past.

Sir Robert Wilson, chairman of Rio Tinto, said, "A pressing need for the mining and metals industry is the need to overcome poor public perceptions of our industry's performance in relation to the environment, and our consequent growing vulnerability to increased regulation based not on scientific analysis but popular prejudice."

Environmental and human rights activists are hoping that the final MMSD report will spell out monitoring and certification mechanisms. MMSD literature indicates that the organization is open to establishing inspection panels, though only as a measure of last recourse. MMSD itself will not become a monitoring agent, as its charter requires its dissolution in August of 2002.

But is it greenwash? Undoubtedly to allay such fears, MMSD stresses that corporate sponsors have a partnership with other stakeholders and that all meeting proceedings are fully transparent. Stakeholders are represented in the project by 24 people who have varied backgrounds in such areas as the environment, international law, and economic development.

MiningWatch Canada, a mining industry watchdog, is one of a number of organizations that fear MMSD may not improve performance. MiningWatch's Catherine Coumans says that some high standards are being discussed, but it remains to be seen if those standards make it into the final list of recommendations. MiningWatch chose not to participate in MMSD.

Dr. Coumans also voiced concern about the implementation of standards, noting the disjunction between present goals of mining companies and their actual practices in the field. "It's what happens after Rio +10 that counts," Dr. Coumans said.

Industry accounts are more optimistic about outcomes. De Beers Group chairman Nicky Oppenheimer defends existing self-regulated practices in the diamond industry, contending that the vast majority of diamond operations are an agent for growth and development in local areas.

Nevertheless, Dr. Coumans reports that communities affected by mining oppose the work of MMSD. She said that communities view the MMSD project as a propaganda mechanism. They believe the mining industry is panicking over the public's increased awareness of its actual conduct.

Can such an array of interests come to agreement in the final report of MMSD? Even if it does establish high standards, MMSD can recommend, but not require, particular practices. The MMSD participants do, however, hope to influence policy making in a number of countries.

 

 
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