Mining and Community Development: From Rhetoric to Practice

author: Dr. Ernesto Sirolli

“Conventionally, mining companies have wanted to take immediate measures to alleviate poverty they observed in the neighborhood of their mining projects. Typically this has been by building schools, clinics, or hospitals and by sponsoring external health and education service providers to create new programs.

Often these efforts, although appreciated as generous gifts to local communities, have not lasted beyond the life of the mine, and sometimes not even beyond the tenure of the particular company staff that instigated the projects. The reasons for this are because the projects:

• Were chosen by the mining company people and/or the local elites
• Were built or run by outsiders, with little management involvement from local community members
• Were only accessible by the more affluent members of the community and not by the poorer members
• Required technology or knowledge not locally available to maintain them
• Or because the capacity of local people to manage the programs was not built up to a sufficient level.

The sum of these factors is that, with the best of intentions, the projects were imposed upon local communities and they therefore did not feel any particular ownership of them nor did they have the needed capabilities to sustain them, resulting in a progressive decline once external support was withdrawn.

Further, if local communities and government agencies become accustomed to mining companies taking charge of the provision of infrastructure and services, an unhealthy dependency relationship can evolve, which works against sustainability.”1
What Not to Do
I was about to start this paper with a critique of conventional community development programs when I came across the Community Development Toolkit published by the International Council on Mining and Metals in 2005. (The ICMM was set up in 2001 to represent many of the leading mining and metal companies of the world.)
The critique of “knee-jerk” infrastructure development in the Toolkit is spot on.

For a number of reasons building infrastructures is the easiest thing for mining companies to do. Unfortunately, as recognized by the ICMM, the approach is not sustainable.

I had the opportunity to visit a mining community in the Amazon that had been the recipient, for 45 years, of what I would describe as the paternalistic attention of an international mining company. The mine had built the school, sealed the roads, built for the community of 6000 people the best regional hospital in the State and provided electricity for the town.

When I visited the community the mine had been closed for nine year and…nothing worked anymore!

The power plant had shut down, the roads were reduced to obstacle courses of mud and potholes, the school barely survived and the hospital had shut down. When we asked the local council members what had happened, they told us that they had no resources to keep those infrastructures open. “We are poor,” they said. “Don’t give us infrastructures that we cannot maintain.”

In Valdez, Alaska, we were told a similar story. The City, mostly with money from companies associated with the Trans-Alaska Pipeline, built a multi-million convention center. The 20,000 square foot facility is now an albatross around the neck of the community of 4300 people that has little use for it. It costs the City $200,000 USD a year just to keep it heated!

I am sure that all those associated with mining would be capable of sharing with me many more stories on the subject …

Let’s simply say that I found the ICMM’s observations on the topic of infrastructure development both accurate and welcomed.

What to Do

Accurate and welcomed were also the recommendations of the ICMM in regards to the opportunities for mining companies in community development i.e. the “what to do”.
After discussing the obvious benefit of offering training and apprenticeships in trade areas to build the skill level of the local population, the Community Development Toolkit goes on to say the following:

“The challenge, however, is to not only build the skills but also facilitate the growth of other activities in parallel to mining.…
Mining companies can localize some of their product and service procurement policies to help build local supply capabilities.
In addition to helping train local community members to provide goods and services, companies can also consider supporting micro credit schemes to help encourage small business.”

The way I read the document is that mining companies should look at building the capacity of the communities to survive long after the mine has gone. To do so a parallel economy has to emerge that may be based, initially, on providing goods and services to the mine but that eventually would expand and diversify to provide the same to the community, the region and the State.

The Toolkit even mentions, by name, an enterprise that did, precisely, that:

“…The Lac La Ronge Indian Band initially developed trucking and catering skills with support from the local uranium mines in northern Canada. Over time, they expanded their business away from the mines and now have an annual turnover of $65 million CAD in 2005 supplying services in the surrounding region”.

The Wrong Tools for the Job

The Toolkit’s excellence, in both identifying “what not to do” and in suggesting the “what to do” was lost, in my view, when it started to suggest and enumerate the tools to achieve what it had so eloquently suggested.

The “17 Tools” proposed are all “top down”.

Some of them may be useful in identifying what areas of trade and apprenticeship can be offered to residents but, in our experience, they are useless in fostering entrepreneurship. To “facilitate the growth of other activities in parallel to mining” necessitates “facilitation tools” and facilitation tools have to be, by definition bottom-up and responsive.

The ICMM Community Development Toolkit comprises:
• Four Assessment Tools
• Five Planning Tools
• Three Relationship Tools
• Two Program Management Tools and
• Three Monitoring and Evaluating Tools

All of the above tools are “driven” from the mining company and are perfectly suited to achieve its objectives.

Working with entrepreneurs, on the contrary, requires an environment that allows local people to come and tell us what they want to do, when they want to do it and how!

Working with entrepreneurs in a community requires the creation of a “convivial” social infrastructure that allows for free, confidential, caring, competent and compassionate service to them. Unless such social infrastructure is in place would-be entrepreneurs will shy away from working with us or, even worst, they will come to seek our help for the wrong reasons.

Working with Entrepreneurs

Working with entrepreneurs over the past quarter century we have learned the following:

Assessing how many would-be entrepreneurs may reside in a community by doing community surveys or asking around, as suggested in the Toolkit, does not work. Entrepreneurs do not reveal, in public, their ideas for making money because they fear competition and/or ridicule.

Planning for entrepreneurs to appear to take care of the provision of certain goods or services doesn’t work either. In the words of the foremost scholar of entrepreneurship, Peter Drucker, “planning is actually incompatible with an entrepreneurial society and economy.” Why? Because by definition entrepreneurship is a creative process that starts small, is decentralized, ad hoc, tentative and close to the action. Entrepreneurs see opportunities that nobody else see…by the time the opportunity has been “discovered” by the planners it isn’t an opportunity anymore!

Managing entrepreneurs is futile. If we truly wish to foster an economy that can survive the closure of the mine then we have to have entrepreneurs capable of managing their own enterprises. Managing anything, on our part, will create dependency and achieve the opposite of our aim.

Monitoring is probably the least intrusive of the above tools. But monitoring is not going to create enterprises that will survive long after the mine has closed!

Facilitating Entrepreneurship

The change that is required to go from “planning for infrastructure development” to “facilitating local entrepreneurship” is huge. It is like going from open cut low grade coal mining to prospecting for gold nuggets! Not only the tools are different…everything is different, including the attitude and expectations of the people involved.

We, at the Sirolli Institute, know how to prospect for gold. We know how to find one nugget at the time and have developed a methodology that actually gets the nuggets to come to us!

In 1985 we implemented the first Enterprise Facilitation® project in Esperance, Western Australia. Since them we have been refining the process and have been developing tools for sustainable community development that are ideally suited for capturing the passion, energy and imagination of local would be entrepreneurs.

Fundamental to our work are the following principles:

• We never initiate contacts with local entrepreneurs

• We never motivate local people to do anything


If invited to work in a mining community we engage firstly with the mining company management and train a small team in the principles and practices of Enterprise Facilitation.

We then assist that team (called the Project Management Team) to recruit an Enterprise Facilitator. The Enterprise Facilitator is preferably a native of the country and is both culturally and linguistically suited to operate in the community.

The Enterprise Facilitator, whose selection is based on certain personality characteristics and life experiences, is then trained by us to respond to local would-be entrepreneurs and to facilitate the transformation of their ideas into sustainable enterprises.

As mentioned above, in our methodology the Enterprise Facilitators are taught not to approach local entrepreneurs to offer help nor to motivate local people to start businesses. We instead build a community team to introduce the Enterprise Facilitator, informally, to friends and family members.

These community “helpers” are also trained by us to assist the Enterprise Facilitator with local intelligence and know-how and, taken together, the Management Team, the Enterprise Facilitator and the local Resource Team constitute the “convivial” social infrastructure that we mentioned earlier.

In our view, building the capacity of the community to help itself is the precondition for sustainable development. A community that learns how to help its own people to transform their ideas into viable enterprises is also a community that can benefit from better infrastructures because, in the long term, it will have the resources to maintain them.

Conclusions

While working with mining companies we have noticed that the language and the thinking behind community development have made dramatic changes. It is as if the rhetoric is finally in place. It is the tools that have to catch up!

Reviewing the bibliography of the ICMM Community Development Toolkit I couldn’t fail to notice that some of the tools had been borrowed from international development agencies and institutions that I call, affectionately, the “agents of virtue”!

Affectionately because I have known them since the early ‘70’s, when I started my work in Africa, and they are like those dear but obnoxious relatives that keep showing up at family gatherings retelling those same old, ridiculous stories.

I saw “assessment, planning, managing and monitoring” done in Africa over the past forty years and it didn’t work.

In fact after forty years of international aid and $1 trillion dollars donated to the African continent, Africa is poorer now than forty years ago. Not only that, but the gap between African countries and the rest of the world has actually widened during the period.

The rhetoric in international development circles is becoming even more refined and the names involved even more impressive but what has been done is more of the same. More money to build hospitals, schools, water treatment and roads for communities that cannot maintain them.

Yet, as described in Paul Theroux’s recent book Dark Star Safari2 the agents of virtue are busier in Africa than ever before and, if possible, they are even more righteous. They speed by, whites in their white 4x4s, as angels of the Lord on urgent missions of mercy…it is understandable that they never stop to give a lift to anybody; they are too busy saving Africa!

1 Community Development Tool Kit: International Council on Mining and Minerals (ICMM), The World Bank Group, Energy Sector management Assistance Programme (ESMAP), 2005.

2 Paul Theroux, Dark Star Safari: Overland from Cairo to Cape Town, 2003.