Politics of Poverty

North American mining disasters remind us of risks for developing countries

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Along a river in western El Salvador. The Central American country is considering the first national ban on metallic mining due to environmental concerns, and urging Pacific Rim/Oceana Gold to respect the will of the people to not proceed with mining. Photo: Luis Galdámez / Oxfam America

Citizens in every country should understand the potential environmental risks of oil and mining projects.

This has not been a good week for the global mining industry. Two major accidents at mine sites in Canada and Mexico produced millions of gallons of waste water that gushed into local rivers. The clean-up costs at both sites are estimated to run into the hundreds of millions of dollars.

The environmental agencies in both Canada and Mexico have taken action to try to monitor water quality and control the damage and have ordered the responsible companies to pay for clean-up. These accidents took place in countries that have long experience with mining and that have relevant regulatory bodies and frameworks in place (however ineffective they may be).

What would happen if something like this occurred in a country where this is not the case, like Haiti, Burkina Faso or Cambodia? The risks of large-scale mining in poor countries with little experience controlling the potential impacts need to be evaluated closely in assessing the overall benefit of mining to a country.

Mining is a difficult industry to regulate effectively. There are myriad environmental, social and financial issues that regulators must understand and monitor. Everything from water quality, air emissions, production volumes, tax collection and community development falls under regulators’ purview. Making the task even more complicated are the remote geographic locations of most major mining projects. The sites are often difficult to access and far from a country’s administrative center.  Just physically making the trip to a mine site can be difficult and expensive. Over-stretched and under-resource regulators simply cannot keep up with demand. In most developing countries there just isn’t the technical expertise within regulatory agencies to match that brought by the industry and their army of lawyers and technical consultants.

There are no easy ways to address this problem. Capacity-building for regulators is important, but it only goes so far given high turnover in government agencies, whose capacitated officials often cash-in on their newly-developed skills by going to work for the mining industry. Industry self-regulation, which is essentially what is practiced in developing countries, is inadequate and creates conflicts of interest.

One route to controlling the risks of large-scale mining in weak regulatory environments is to ensure greater transparency about those risks from the moment a project is proposed. Average citizens can’t be expected to master the technical details of geology and hydrology that mining regulators need to know. But much more can be done to ensure that there is independently-verified and understandable information about the risks – information that is provided not only by industry and industry- paid consultants as is the case now, but by truly independent experts that have no financial stake in whether a project goes forward.

Among the information that should be provided to local communities is: 1) the potential for pollution and destruction of ground and surface water, 2) the potential impacts on agriculturally productive areas and food security, and 3) the real long-term benefits to local communities set against the costs of the impacts that will be generated.  Rural communities in particular need this information as agricultural and extractive industries are increasingly found in the same areas of developing countries such as Peru and Ghana, as we demonstrated in a report released earlier this year.  Providing this information is also critical for obtaining the free, prior and informed consent of affected communities, which should be an essential component of all mining projects.

Large-scale mining will never be risk-free. It’s technologically impossible to move such massive amounts of rock and create such huge volumes of waste without creating the risk of catastrophic damage. Whether those risks are worth the benefits that mining can generate needs, especially in governance-challenged developing countries, must be the subject of intense – and independently-informed – public debate.

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