Transparency, Multi-Stakeholder Dialogue and Capacity Building as Drivers of Strengthen Local Governance. March 8th, from 10am-12pm

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1 Transparency, Multi-Stakeholder Dialogue and Capacity Building as Drivers of Strengthen Local Governance 1 March 8th, from 10am-12pm

2 Introduction On March , a session on Transparency, Multi-stakeholder Dialogue and Capacity Building was organized by the Devonshire Initiative, the Federation of Canadian Municipalities and Grupo de Diálogo Latinoamericano. The session took place at the Hudbay Minerals offices, in Toronto. The main objective of the meeting was to initiate a multi-stakeholder discussion on the topic with participation from senior representatives from local, regional and national level governments, the mining industry, and civil society. The main questions that explored were What does good local government capacity look like for a productive relationship with the extractive sector? What does good transparency look like as an enabler of good development? What are the challenges to improving transparency in the mining context? 2

3 Summary The session began with presentations from the perspective of a Canadian municipality, industry and Latin American representatives, who presented different examples of collaborative relationships between the local government (LG), the mining sector, and the community. From these presentations and the discussions that followed, common elements and conclusions could be drawn to respond to questions being explored. What does good local government capacity look like for a productive relationship with the extractive sector? A key factor for success to achieving a productive relationship was for the LG to establish form of Community Sustainability Plan that is developed through a participatory and inclusive process with the community. When the community has a vision for it wants to go, the company can help it get there. The community plan can be a basis for discussion with the company to identify the points of convergence, where the community philosophy finds a match with the corporate philosophy. In this regard, the LG requires capacity in leading participatory processes, ensuring the meaningful inclusion of all marginalized groups. The LG should have established transparent processes, such as organizing open, public meetings where information about plans, projects and agreements with companies will be disclosed. The LG has the onus to ensure community participation and access to information. The LG should also be able to establish and lead multi-stakeholder committees that include the company and members of the community to plan and make decisions key projects/ initiatives. 3

4 The company needs to have certainty and predictability in how the project, relationship and negotiation will unfold. Where this is not the case, the company will refer back to the regulatory frameworks and processes of the country, and so it is important for the LG to have an understanding of the regulatory environment The company will be looking for win-win opportunities, and can support the LG to carry out participatory processes to create the community vision. However, the communities should come with realistic asks and should look for opportunities for diversification since mining is not the only solution nor the only actor at the table. 4

5 There is a need to take the mining company out from the centre of the discussion. They can be an actor at the table, but not be the centre. What does good transparency look like as an enabler of good development? In the discussion of transparency it was evident that there were three key actors: the LG, the company and the community. Transparency is about publishing, disclosing and understanding information. This statement resonated with the group, as it highlighted the importance not only of companies or LGs to produce and disclose information, but also that the information must come in a format that is understandable and accessible by the community. While it was recognized that there needs to be transparency around mining royalties, the idea of transparency was much broader than the disclosure of financial information. From the company perspective, transparency is about the company being open about its plans and doing so as early as possible. For example, announcements of plans to shut down plants are better to happen earlier rather than later. It is also being transparent about when there are problems on the site and what the company is doing about it. For example, if there is a small break in a tailings pond it is better to be open about the issue and the response in order to avoid rumors and misconceptions that could escalate the problem. For LG, transparency is about having an open dialogue with the company and the community. This may also include participation of communities in the design of the community plans and defining how they want mining to contribute to development. The Beyond Zero Harm Framework aims to achieve this by having 5

6 an open, transparent process that engages the community to develop its vision and gather relevant data. LGs can increase their transparency by being open about all their processes. It is a slow process but it can start by publicly listing information about procurement of goods and materials for the municipality. From the community perspective, it is not enough just to disclose information. Firstly, the data produced needs to be in a language that is accessible for the users. Secondly, it is also important for the public to know and to demand the information they should have access to. It is also not just about information, but what they do with it: it is about the community holding others accountable. Social responsibility isn t just corporate. Transparency can achieve greater results than an increased access to information. Transparency can improve the company s relationship with the community. It can also change the relationship between the LG and the community by increasing transparency where processes were not transparent before. Transparency can also be increased if there is co-operation between companies. This coordination can result in more productive relationships with LGs and communities. 6

7 Dialogue without transparency is impossible. Transparency without dialogue is impossible. What are the challenges to improving transparency in the mining context? Several challenges were identified that relate to the political, cultural, and organizational contexts. firstly, one of the major challenges is that communities and LGs are not prepared to have a dialogue with the mining company, and often the embassy or other actors are caught in the middle. The lack of understanding of the regulatory environment, mining projects, and dialogue techniques are a limitation. National government that gives out the concessions, and so companies trust that they have the legal ground to be there, but the LGs and communities were not consulted and so do not accept the company. The change of authorities every four years limits any progress. Secondly, there isn t a culture of participation in Latin America; due to history of military government regimes, communities are typically not used to being respected or having a voice. People don t know about the processes to ask for information. There is a need to strengthen the capacity of the people to understand and participate in a meaningful way. However, public officials are not prepared to deal with the response when the demands come. Changing the political culture is a big challenge. Thirdly, when there is transparency, some power is lost. If communities lay out their plans, they may limit their ability to negotiate in the future. Transparency = Vulnerability. On the other side, if the community is not organized and does not have its vision, where does this leave mining companies? This is beyond their role and it begs the question what should they do if they are getting involved in a community that is not organized? 7

8 Conclusions The discussions showed that effective partnerships between communities, local governments and companies are possible when each assumes their share of the responsibilities. Respect, trust, transparency and constant dialogue are factors of success and are mutually reinforcing concepts. When communities participate actively, create their own institutions and define their own projects, and where there is capacity building of all actors concerned, the results will be beneficial for all actors, the community as a whole, and the environment. 8

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