Mining and Social License to Operate:

differences and similarities South Africa & Sweden

Håkan Tarras-WahlbergSustainability Research Group (SuRe)Stockholm School of Economics Institue for Research

The research: What do mining companies do to gain a Social Licence to Operate (”SLO”) ?

Sweden: • Completed: study of choices made by companies in applying for mining licenses (-2012)

• Later, case study

In South Africa: • Ongoing case study of Sishen/Kumba

What is meant by ”SLO”? Origins in western (Anglo-American) Mining Industry

Example of definition:”SLO refers to the acceptance within local communities of both mining companies and their projects. In order to obtain an SLO it is necessary to develop good relationships with all stakeholders, especially with local communities. The credibility of mining companies is based on mutual respect, honesty, open dialogue, transparency, timely responses to community concerns, information disclosure, and constancy and predictability in the companies’ ethical behavior. Obtaining an SLO is essential for reducing the risks of social conflicts and for enhancing a company’s reputation”.www.miningfacts.org

How obtain ”SLO”?

Abide by ”hard law”, in addition: • Following ”soft laws” (ICCM, OECD, WB, EITI, SveMin etc.)

• Establishment of CSR policy & Co C • Create local work & business opportunities

• Initiatives for transparent disclosure

• Local agreements (e.g. Impact Benefit Agreements)

• Provision of information / educative efforts

• Philantropy

Why focus on permitting process: Scope & expectations of EIA

Issues - Sweden

Results - Sweden:Social license to mine in Sweden: do companies go the extra mile to gain community acceptance?

Established mining companies:- no more than necessary

New mining and exploration companies:- more than legally required

In spite of this:- The established companies accepted; new ones resisted

Results - Sweden:

Results - Sweden:

Sishen Mine 39Mt/yr (2011)

Reyneke & Snyman (BenchMarks & HHS), 2013:

”Billions of Rands invested, but communities not benefitting as intended”

”The current state of affairs in the communities surrounding Sishen Mine is one of poverty, unemployment and various health risks….”

”… the   question   can   be   asked:   Where   does   the   mining   company’s   responsibility begin and end?”

Early 1900s:”LKAB does everything”

2013:”LKAB shoulddo more”

Who should do what – LKAB case

Concluding thoughts: Swedish mining companies – beginners at CSR. Does that make them irresponsible or bad?

Kumba /Anglo American – far from beginners at CSR, yet results & efficiency contested.

Swedish companies have become alerted to the need for CSR by influences from abroad.

How well does CSR fit in a Nordic, welfare state based context ?

Is there anything in the Swedish experiences that can be usefully applied in Southern Africa?