It isn’t academic!

Sustainable development has certainly become the hot topic. During April and May 2002, Canada played host to two major mining conventions organized around the subject.

First came the annual meeting of the Canadian Institute of Mining, Metallurgy and Petroleum in Vancouver, which was dedicated to this theme. More recently (as we went to press, in fact) was the Global Mining Initiative (GMI) conference in Toronto, which was expected to feature the results of the Mining, Minerals and Sustainable Development (MMSD) project.

It is widely anticipated that the GMI will lead to adoption of a vision and various initiatives by which the global mining industry will commit to making sustainable development a core element of business practice.

Many operating companies, and particularly the big multinationals, are already immersing themselves in these ideals, but where exactly do the juniors fit in?

The author was part of a recent study that revealed a lot of confusion and cynicism among junior-company people. There is a widely held feeling that sustainable development is strictly a big-company game, and is either not relevant to the exploration juniors or a ploy to push them and the smaller producers out of business.

Junior exploration companies ask,

– Just how real is all this?

– What is the business case for a junior, and do we really have to take on all this stuff?

– After all, isn’t this push for sustainable development just an academic exercise in how to look good?

Not in Canada. Sustainable development as a benchmark for performance by the mining industry has already arrived. Quietly, and almost without notice, it has become the new standard for environmental assessment, and as such the law.

The Tulsequah Chief decision, which was confirmed on appeal earlier this year, is best know as a case where a permit was reversed because of a failure to consult with First Nations over the mine access road. But the decision is probably much more significant in another, more subtle way. Tulsequah Chief was the third environmental impact assessment in which the panel applied the test of sustainable development, following the lead taken by earlier panels for Voisey’s Bay in Labrador and a road project in Ontario.

These legal decisions have established the necessary precedent to shift the passing grade for a new project from one of demonstrating management and mitigation of impacts to a level of “acceptable harm,” to one in which the proposed development must show “net gains.” The challenge is for explorers to prepare successful projects for this higher test.

So what does sustainable development mean at the exploration stage? Most people will relate first to the environmental leg of the sustainable development triad — environment, social/people, economy — and point to the low impact of most exploration activities. Indeed, environmental management of exploration projects is generally something the industry feels justifiably proud of. The social and economic components, largely because they are new and there is a gross lack of experience, are a bigger problem.

The final report of the MMSD project will throw some light on these issues with an important contribution coming from the MMSD North America work group, which has produced a lens or test for evaluating the contribution to sustainable development made by a project at any stage of the mining cycle; from exploration through production and into post-closure. The Seven Questions to Sustainability framework, first introduced at a meeting in Vancouver last year, was profiled in March at the annual convention of the Prospectors & Developers Association of Canada, and a final working document will be launched at the GMI in Toronto this May.

The Seven Questions framework sets up a process of integration, assessment and trade-offs that lead to a judgment as to whether project contributions to sustainable development are net positive or negative. The approach can be used for project evaluations, for benchmarking to establish viability, to identify where change is required, and also for planning and design.

Of consequence to explorers is that a process engagement with the community and other stakeholders is central to meeting sustainable development objectives. This need not be financially onerous; it is the quality of the relationship with the community that is of utmost importance. This should be reassuring — but it also points to a challenge.

Establishing and maintaining a positive relationship with the community is not necessarily easy. Managing expectations, strengthening the social capital of the community, and helping them prepare for a successful project while anticipating failure as the more probable outcome, are key requirements. Other essentials are an exit strategy (to leave the community feeling good about the experience of having exploration in their area) and, since exploration projects typically pass from operator to operator, a protocol for handing over to a new management. The challenge is to start early and get this right. There are few, if any, second chances when dealing with community relations.

Sustainable development has arrived, it is real, and it has become the hurdle test for new mineral development projects in Canada. Engagement with the community is central to reaching sustainable development objectives. All this has arrived quietly and rapidly, and few explorers are adequately equipped to manage the new challenge of full community engagement. To survive and prosper, the junior companies will have to learn new skills because the large companies who are the market for their product — orebodies for new mines — will be reluctant to accept properties that are socially compromised and difficult to permit. There will be a premium available to those juniors who incorporate sustainable development into their business practice, and do it well.

— The author is based in Vancouver, B.C., and specializes in the management of social issues in resource development projects.