The Global Context of Community Engagement in Mining

What India can learn and what India can do

Kuntala Lahiri-Dutt
Fellow, Resource Management in Asia Pacific Program
Research School of Pacific and Asian Studies
The Australian National University, ACT 0200
Australia

Email: Kuntala.lahiri-dutt@anu.edu.au

Introduction
I thank DRET for the opportunity to speak at this Workshop. I was brought up near a coal
mining area in West Bengal and have many years of work experience on the social issues
surrounding Indian mining, but have been fortunate to be able to learn about good practice
in mining in Australia and other parts of the world from my base in one of the world’s best
universities – the Australian National University. For this reason, I am pleased that I have
been able to come back as an Australian representative to talk to my colleagues about the
nature of these leading practices and how they could be used in the Indian context, one
with which I continue to remain engaged.

1
Some of my Indian colleagues, when exposed to international mining practices on
community, express the feeling that many of the measures taken by Australia ‘cannot be
done in India’. The reason appears simple enough: too many people! ‘The community’,
therefore is seen as the problem in mining development in India; my presentation will
show how communities can be turned from trouble into treasures.

Whilst India and Australia share many characteristics relevant to mining – such as our
common Gondwana geology, our common colonial history of mining that also vests the
ownership of the minerals with the State, thriving democracies, and our knowledge and
skill-based economies – almost every inch of India’s mineral tracts unlike Australia is
covered by dense human habitations with great heterogeneity in society and culture.
Moreover, new mining projects in India lead to a population influx and rapid change in the
demography wiping out the clear-cut distinction between who is local and who is not –
again, somewhat like the gold rush times experienced by Australian countryside in late
1800s.

Therefore, whilst outlining the global efforts in community engagement as part of

sustainable development framework, I will focus on what India can do under the current
scenario. Mine closure is not specifically mentioned many a time in my presentation, but
community engagement begins at the exploration stage, goes on throughout the project
cycle, and continues well after the mine has stopped operation. It is thus as important in a
mining project as any other activity irrespective of the stage of mine life.

Mining in India and Australia

There are significant differences between the mining sectors of India and Australia: mining
and minerals are important for the Australian economy accounting for AU$45 billion (~7%
of GDP, 35% of Australian export value) and the existence of the “Native Titles Act’
which represents an official acceptance of the indigenous people as ‘custodians’ of the
country and its resources. In stark contrast, mining is not the dominant economic sector in
India; contributing only ~ 2.6% of GDP, and thus would not seem even critical for the
Indian economy. However, for India and the continued economic growth of the country,
mining is hugely relevant, indeed essential. This is for several reasons: although the
minerals produced in India primarily serve the domestic market, the mining sector is one of
the largest employers of workers. According to the 2001 Census data, there were over 2.2

2
million people1 (around 14% of all ‘main’ workers) formally employed by large and small
mining enterprises, with another 2.3 million2 (around 33% of all ‘marginal’ workers)
working in mines on a casual, part-time or informal basis3. The mining sector of India is
also influential for sustaining the overall economic performance of the country. The
continued availability of minerals and ores are crucial for the development of competitive
local industries, for providing an alternative livelihood base to landless labourers, for
providing electricity to the 550 million people without access to electricity, for building
roads and infrastructure to meet the Millennium Development Goal of reducing poverty by
half by 2015. Coal for example, is the biggest source of energy in India, 75% of all coal is
consumed is used for power generation and is responsible for ~ 55% of India’s current
commercial energy consumption. Mining and minerals are, therefore, inextricably linked
to the goal of ensuring India’s economic development, energy security and the well-being
of its population.

Social Performance of the Mining Industry in India

The fundamental differences between Australian and Indian mining industry lies in how
projects deal with the communities. Mining in India is undoubtedly the quintessential
‘footprint’ industry having a large impact on social, environmental and institutional
aspects. Poor management of these issues, even when only local or regional in nature, can
damage international reputation, cause long-term conflicts, and reflect negatively on the
economic parameters countrywide.

Social issues around mining are of crucial importance; it is imperative that mining, like any
other human endeavour, should follow the key sustainable development principles by
contributing to the social, economic and institutional development of the communities
within which it operates4. Social and community issues also follow the UN Declaration on
Human Rights, and forms foundation-stone of the democratic system that characterises

1
6% of these workers are women.
2
17% of these workers are women.
3
Together, this population is larger than the entire population of Sydney, Australia’s biggest city. In
comparison, mining in Australia employs around 1.3% of the labour force, and is currently suffering an acute
skills shortage.
4
ICMM SD Framework, Principle 9: ‘Contribute to the social, economic and institutional development of the
communities in which we operate.’ This is achieved through: community development from project
development through closure in collaboration with host communities and their representatives, and enhanced
social and economic development by seeking opportunities to address poverty.

3
India’s political milieu. In a democracy, the mining industry can make this contribution
only through an open and transparent process of consultation with the community. The
mining industry does not operate only through a ‘business license’; it requires a ‘social
license’ to operate because all mining projects exist within a social and cultural context. It
is thus, important to weigh the benefits of community engagement against the risks and
costs surrounding Indian mining industry’s operations and to mitigate the negative impacts.

Unfortunately, the mining sector of India is not amongst the world’s best managed. In spite
of efforts, India’s mining sector has become well-known for the ailments of economic
inefficiencies, poor management and dismal health and safety records. The Government of
India’s High Level Committee noted in its 2006 report (p. 69):
‘Land is often used without the consent of the indigenous people. Mining companies should act
as if consent to gain access to land is required even when the law of the land does not require
this. In making decisions, the cultural circumstances of the local people and loss of access to
common resources should be kept in mind…..Mineral development can bring benefits to the
local level. However, the relationship between mining companies and local communities has a
legacy of abuse and mistrust.’

What is most significant for India is that the country’s poorest people – the scheduled
tribes and lower castes – tend to live on the lands that are richest in mineral reserves. Many
of these people make a living from land and land-based resources on a subsistence basis,
are poorly educated or lack education, and are not yet a full part of the cash economy.
They are disproportionately represented amongst those negatively affected or directly or
indirectly affected by mining5.

Consequent to the neglect of social concerns, widespread community demands have arisen
for direct and sustained benefits from mineral wealth. The mineral tracts of India are now
approximately synonymous with political violence and strife. In poorly governed areas,
communities demand that some basic services and facilities be provided by mining
companies. Unfortunately, there has not yet been any productive dialogue between the
mining companies and the civil society. The Non-Governmental Organisations (NGOs)

5
SCs comprise 16% and STs 8% of India’s population, but comprise 40% of those displaced. Of the 1.7
million people displaced by large mining projects, almost 50% were tribals.

4
working on these issues are generally seen by mining companies as trouble-makers inciting
the local communities.

A consequence of the neglect of social (and environmental) impacts has been the rampant
illegal mining sector which has multiple ramifications. One aspect of it is the flourish of a
small-scale mining sector: as much as US $65 million worth of coal was carried and
distributed in 2005 only by the cyclists on roads and highways. Whilst supporting the
livelihoods of a large number of people, this kind of mining encroaches upon, endangers
and also pollutes common resources (such as air and water), impedes the production in
legal operations, and causes a loss of revenues to the State.

Unplanned closure of mines without assessing the social impacts and without engaging the
community has in fact been a key feature of the poor social performance. In eastern Indian
collieries, for example, breakage into shut underground pits, or scavenging from old
abandoned mines are common features. Accidents leading to injuries and deaths are not
uncommon in these abandoned mines. Scavenging from abandoned mines may cause
breathing of oxygen into the coal seam and light up subsurface fires, affecting operating
mines nearby. Examples of unplanned mine closure leading to total collapse of local social
fabric are not uncommon elsewhere too, the case of Kolar Gold Fields being the best
known among them.

The International Context: What India can learn

The commitment expressed by the High-Level Committee on India’s National Mineral
Policy to social development is entirely in tune with the practices that are now prescribed
by the international mining industry. Let me briefly describe the context in which the
international mining industry has internalized the socially sustainable practices. Since
1999, nine major mining companies of the world began a three-year Global Mining
Initiative in response to increasing complaints, escalating protests and violent conflicts in
and around mining operations resulting at times in forcible closure6. This initiative
developed an independent process of ‘analysis and consultation’ around key issues facing
the mining sector by the Mines, Minerals and Sustainable Development (MMSD)
process led by the London-based international NGO International Institute of Environment

6
Bougainville in Papua New Guinea.

5
and Development (IIED), and a global stakeholder conference to discuss the outcomes and
implications of MMSD.

After MMSD, an international industry association – the International Council of

Mining and Metals (ICMM) – was set up to serve as an effective representative vehicle
for relating to wider global concerns within an SD framework. ICMM put forth 10
Principles for improving mining industry performance and for its contribution to
sustainable development. This was accompanied by several parallel initiatives based on
voluntary principles: US and UK government’s joint Voluntary Principles on Security and
Human Rights (2000), Global Reporting Initiative (2000), and a UNECE conventions on
Access to Information, Public Participation in Decision-Making, and Access to Justice in
Environmental Matters (Aarhus Convention in 2001). Governments and financial
Institutions also undertook similar initiatives: Extractive Industries Review (Bali, 2002);
Extractive Industries Transparency Initiative (2003), ‘Equator Principles’ (International
Finance Corporation and the commercial banking community – 2003), and finally, the
International Finance Corporations’ revised Social and Environmental Performance
Standards (2005).

Since then, there has been a series of guidelines providing directions to the mining
industry. Industry associations often mobilised them: in 2004, the Mining Association of
Canada put forth its Guiding Principles, the Minerals Council of Australia published its
guidelines in 2005, and the Mineral Exploration, Mining and Aboriginal Community
Engagement (MEM-ACE) Guidebook published by the Association for Mineral
Exploration of British Columbia. There has also been a series of internal company-based
initiatives, the most notable of them being the Anglo-American Socio-Economic
Assessment Toolbox published in 2003 and BHP Billiton’s Human Rights Self-
Assessment Tool (2007). Third party initiatives that deal or consult with the mining
industry also stood up – IFC’s HIV/AIDS Guide for the Mining Sector, and International
Alert’s Conflict-Sensitive Business Practice: Guidance for Extractive Industries are
amongst these. There have also been collaborative initiatives such as the Business Partners
for Development’s Natural Resources Cluster that has published a series of Case Studies
giving examples of successful partnerships for managing social issues in the oil, gas and
mining industries. The most widely known collaborative initiative is ICMM, whose
Community Development Toolkit was published in 2005, with Mandarin and Spanish

6
translations published in 2007. The Australian Government’s handbook, freely
downloadable from the internet source, is titled Community Engagement and
Development, and was published in October 2006.

These guidelines put forth three major reasons for community participation, engagement
and development in the mining sector namely the development case, the human rights case
and the business case. Of this, the human rights case is not trivial: the ICMM notes that it
is the duty of the mining industry to ‘uphold fundamental human rights and respect
cultures, customs, and values in dealings with all those who are affected by mining
activities.’ By pointing out the mutual benefits of engagement, they also make a business
case, and by invoking the overall sustainable development framework they make a
development case. Above all, they prove the need to move beyond the use of simple tools
and point out to the need to involve the community in the decision-making process, and
above all, differentiate between the top-down approach inherent in terms such as
‘community consultation’ and instead imply deeper, meaningful and longer-term
involvement and even at times a bottom-up approach in ‘community engagement’. Again,
this trend – that projects work more efficiently, produce better outcomes and satisfy those
for whom they are intended - has been well-established in development of other natural
resource sectors.

The main message that these various guidelines, toolkits and toolboxes give is loud and
clear, and extremely relevant for this Workshop. These are saying in unison that it is not
only ‘the right thing to do’, but it also makes good business sense to effectively involve the
communities in decisions which affect them; that mining can contribute to making the
community livelihoods more sustainable if it works with the consent of and in consultation
with the community; that credible monitoring and evaluation of industry claims is
essential; that verification and reporting systems need to be mandatory; that indigenous and
human rights cannot be easily ignored; that it is good business sense to give training and
resources to the community in order to build competencies for delivering on social
responsibilities and that more R&D is needed on alternate options for realizing
sustainability objectives and for minimizing harm.

A major and strongly felt motivation behind development of these tool-kits was the lack of
expertise within the mining industry professionals (because social concerns are not part of

7
their core business) to comprehend the depth and significance of the adverse impacts of
mining projects on the society and culture. In fact the MEM-ACE Guidebook begins with a
brief outline of the history of the aboriginal people, how they were taken over by the
colonialists, what their social fabric commonly is and how their cultures operate, and how
some of the resource laws that mining companies operate within came about during the
colonial occupation. This training of mining engineers in sociology, human geography and
history of the areas in which they work is intended to give the first lesson that communities
are complex and dynamic entities. It also means that the mining companies need to take a
long-term view when assessing the success of community initiatives.

Whilst making a space for social scientists in mining projects, almost all the guidelines
also address the universal intra-company need of internally training people to do it ‘hands
on’ if necessary by providing frameworks, describing the basic steps in effective planning
community engagement and development, and set out the key principles that should guide
these activities. They also acknowledge that community engagement is not an easy task
and many of the methods are still evolving; and that there are no simple solutions for
success.

Community Engagement and Development: What India can do

Let me now focus closely on the point of applicability of these various guidelines and
toolkits to the Indian situation. After decades of license raj and excessive state control, the
Indian mining industry is on the threshold of major changes. Even the coal sector – the
symbolic icon of nationalism – is gradual ‘opening up’. How should we interpret
community engagement in the context of this gradual process of economic reforms? It is an
important question to answer, because under state control, mining companies such as Coal
India Limited had always interacted with a diversity of external groups such as regulators,
governments, customers and suppliers, indigenous peoples, local administrators, political
representatives, and employees. This was indeed a form of community engagement, and by
virtue of being synonymous with the state, all their actions were accepted as contributing
to the ‘greater common good’, the ‘national interest’.

Which way?
With economic liberalisation and divestment, two options have been thrown open to the
Indian mining sector – the first is to engage with the international context and develop a set

8
of country-specific guidelines under the rubric of some new rules and regulations; the
second is to allow companies to develop their own moral or ethical business practices
under the rubric of Corporate Social Responsibility (CSR). In a country famous for the
Bhopal incident, with 88% of its economy in informal sector, depending on the corporate
largesse and benevolence towards the society may not be an informed choice. Some
developing countries – such as Indonesia – have indeed allowed their mining sectors to
develop their own CSR principles, using a carrot and (at times) a stick method.

For a thriving democracy like India, with conflicts over mining raging throughout the
mineral belt, and with a watchful civil society keeping tabs on the actions of mining
companies, it is undoubtedly a better option to take up the Australian model of regulations
and ensure strict enforcement and compliance to these rules. This would require
commitment far beyond the audience of this workshop. It would require revisiting some of
the laws that oversee mining operations in India.

Indeed efforts are underway to ensure the loosening the mining sector from the grip of the
State, and although a Bill to amend the Coal Mines Nationalisation Act (to allow private
companies to explore, mine and own coal in India) has been lying with the Indian
Parliament since 2000, there may be a gradual opening up of the sector. Under these
circumstances, a way for Coal India Limited to obtain its ‘social license’ would be to lobby
the government not only for guidelines but also to press for changes in the law. Laws such
as the Coal Bearing Areas Act which supersedes the inalienability of tribal land need to be
re-considered in view of SD framework and ICMM principles. It would also require setting
up separate departments, with adequate funding and powers, to undertake the specialised
tasks of community engagement from the exploration till closure.

SIA
Till last year, there was no provision for the use of tools such as Social Impact Assessment
in preparing the mine plan or for mine closure. The Draft National Policy for Resettlement
and Rehabilitation, following the observations by the High Level Committee of the
Planning Commission of India, has now recommended that Social Impact Assessments
(SIA) be made in addition to EIAs. However, it must be borne in mind that SIA is is
specialised tool to be used by the specialists, and that it is not just the one tool, so it would
be important to select the most participatory ones from the range of approaches to SIA.

9
 Above all, SIA is just a tool to make the first entry into community engagement that can
build sustainable livelihoods not just for the life of a mine but enduring after closure. It is
SD and sustainability of livelihood opportunities that form the overall background and
includes many other tools besides SIA.

Robustness of Indian Laws

The two statutes, Forest Conservation Act (FCA, 1980) and Environment Protection Act
(EPA, 1986) that are important for mining in India, do not fully and specifically reflect the
question of sustainable development in the mining sector by bringing into the fold
community engagement needs. There is a pre-occupation towards various forms of
compensation for the diversion of forest land-use, including compensating afforestation,
and the need for EIA studies prior to grant of environmental clearances in India. Clearly
stronger laws are needed to accommodate the emergent global thinking within the country.
On this lacuna, the High Level Committee observed (p. 71):
‘it is necessary to recognise that the global level dialogue currently underway has taken the
entire issue of sustainable development in mining to a much higher level. The basic approach is
that …..mining can and should contribute to the economic, social and cultural well-being of
indigenous and host populations and local communities, particularly by creating stakeholder
interest in mining operations for the project affected persons (PAPs)’.

In this context it would be appropriate to assert that what community engagement aims to
achieve dovetail accurately into the Indian Constitutional mandate. The International
Association of Public Participation (IAP2) has created a spectrum to show how community
engagement works: from information to consultation to involvement to collaborate and
finally to empower.

INFORM -► CONSULT -► INVOLVE -► COLLABORATE -► EMPOWER

(Source: www.iap2.org.au)

From the point of view of what is required by the law, India is currently at the lower or the
‘information’ end of the spectrum in that only information-sharing and Public Hearings are
mandatory. These Public Hearings have yet to move on to becoming a two-way interactive
process, and under the current laws and the scenario of mutual distrust can never aim to

10
achieve to move on to the involvement and collaborative steps. These should be
stakeholder-driven interactions that include workshops, focus group discussions, learning
circles, interviews, reference groups and community consultative committees.

At the other end of the spectrum ‘empowerment’ represents a level of engagement that can
extend to participation in planning and decision-making, not only on issues related to
operational impacts but also on decisions regarding the community’s future once the mine
has closed.

Community engagement: Indian accomplishments

The Indian mining sector has traditionally used compensatory jobs – either permanent in
the company or casual jobs with labour contractors – as the main tool in rehabilitating
communities affected by mining. It had also engaged with stakeholders through the
compliance/legal framework with technical and scientific considerations being the focus of
engagement.

These, however, are ‘first or second’ generation model of stakeholder engagement The
emergent approaches that are being adopted in some cases in Australia can be described as
third and fourth generation in which the mining industry engages seriously with the
sustainable development agenda, moving away from a defensive and crisis mentality and
taking active steps to build a dialogue with the local communities.

Ultimate objective: Community empowerment

Community development based on partnerships, and driven by collaborative relationships
is a key aspect of community engagement. In this emerging model, companies work with
governments and communities on initiatives that help to strengthen the social, human,
cultural, and economic capital of an area. This ‘strength from within’ – not ‘power over’ -
is the essence of community empowerment. Empowerment is fundamentally about helping
the communities to help themselves, to empower themselves to such a level in which they
are better able to meet their livelihood needs and aspirations, both now and into the future.
For the mining industry, community development would mean working with or influencing
other institutions or agencies to contribute in, for example, the improvement of public
health and other services, enhancing the local environmental quality and building
community pride, strengthening local institutions including the NGOs, working with

11
marginalised groups to help them participate more fully in the development of their
community. Community development and engagement are thus overlapping but distinct
processes leading ultimately to community empowerment to sustain their livelihoods.

Importance of gender: An example

A lot can be done and indeed much is being done at different levels. I will give a brief
example of a successful partnership between the Australian National University, the
Australian Government (its research branch, Australian Research Council7), and a large
coal mining company in Indonesia. This collaborative project is working out an answer to
the simple question: ‘how can mining benefit both men and women in local communities’?
This question arises because evidence has pointed out that in mining projects benefits
accrue to men whilst women bear the risks and the greater burden of negative impacts. I
have pointed out that there is no homogeneous and simple ‘the community’ out there, and
the task of dealing with the heterogeneity is complex and specialized. Similarly, an
important distinction within any one community is that women and men’s roles, needs and
interests are not the same.

With increasing attention on the relationship of gender to economic development in

international forums and the prominence of gender issues in the policy agendas of major
donors – specifically the role and levels of participation of women – the question of
women’s empowerment has assumed greater significance for the mining industry.
Evidence has pointed out that women’s empowerment leads to better developmental
outcomes within the family and the community.

Although largely beyond the scope of today’s discussion, this question would not be
entirely irrelevant in the Indian context where women have worked as equal partners in the
production process since early colonial collieries. In many indigenous communities too,
women constitute the backbone of the household subsistence as major livelihood earners,
and any engagement with the community must remember and respect this role by putting
women at par with men rather than reinforcing the gender inequalities.

7
More information on this partnership can be found in https://empoweringcommunities.anu.edu.au

12
Conclusion
The contribution of a mining sector to a country’s economy does not take place in
isolation, but rather in the country’s overall socio-cultural and political context. It is thus
the quality and competency of social policies and institutions that will determine whether a
mining sector can promote economic growth whilst ensuring the sustained livelihood
opportunities for its peoples. There are many examples in the world where the revenues
generated by the mining sector have actually impeded development and affected the well-
being of communities. In India, in spite of some minor efforts in this regard, as I have
shown, the consequences of social neglect in the mining sector have been serious. A great
amount of initiative now needs to be undertaken. However, the good news is that there are
a wealth of information now freely available, and that help and expertise is at hand. All
that is required is will. Within the constraints of existing laws, much can be done to engage
and empower the communities.

In conclusion, I would note that for India to turn its natural endowment into mineral
wealth, it would not only mean that incomes are generated for the State or the mining
companies, but to create wealth and incomes for people around the mines by helping them
to improve their capabilities, build livelihoods and options that can be sustained even after
the mine has ended.

13