Back 03.04.2012

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 recently in a seminar arranged by Finnish Business & Society (FiBS) and Gaia in Helsinki, Finland. During the seminar, we heard insights from top experts in the field including Mikko Halonen from Gaia, Pekka Suomela from the Ministry of Employment and the Economy, Rauno Sairinen from the University of Eastern Finland, Casper Herler from Borenius, EevaRuokonenfrom Talvivaara mining company, Joanna Kuntonen-van’t Riet from Northland Resources and Seija Säynevirtafrom Nokia.

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. The responsibility challenges in the exploration phase, project development and process ramp-up are very different from the challenges of the mine closure and subsequent use of the land. All operations are capital intensive and risky. An integrated approach to corporate responsibility also provides an effective means to reduce risks.

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. The discussions during the seminar and Gaia’s experiences in Central Asia underline the use of participatory methods in achieving outcomes that consider a wide range of stakeholder views. This also requires an ongoing process of interaction to make sure that stakeholders are provided with timely information and changes in expectations can be managed.

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 industrysupported 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 license 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.

A summary of the seminar on mining organised by Gaia and FiBS 21 March 2012 in Finnish.

Tiina Pursula is a leading consultant of Gaia with extensive experience on sustainable production concepts and responsibility issues in the process industry, including mining. Julia Illman works at Gaia as an expert in corporate responsibility, carbon footprinting and lifecycle analyses as well as risk management. Gaia offers a wide range of innovative solutions for sustainability in the area of corporate responsibility of mining sector.