Closing the gaps

…and accelerating progress on responsible mining

Closing The Gaps Report

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➥ English

An accelerated shift to responsible mining worldwide will inevitably need to take account of a complex set of contradictions and tensions that exists within the industry and across global society. Many of these high-level issues are longstanding and inherent to mining or to global dynamics, and some are becoming more acute, making them particularly difficult to resolve. Nonetheless it is critical to acknowledge the challenges posed by these systemic issues and consider the opportunities available to mitigate them with incisive leadership and complementary action by all actors.

We are so familiar now with the term ‘ESG’, often used by companies as something to tick off in an investor presentation before getting to the primary focus on growth, expansion and profits. We use the same term in this report as a useful shorthand to cover the plethora of issues involved in responsible mining. Yet the easy way that the term ESG has entered the business lexicon, as part of the business case to manage company risk, has somewhat divorced discussions from the universal concepts of justice, rights, harm, deprivation and fairness that underlie the need for reference to ESG in the first place.

Similarly, corporate sustainability reports, though often weighty in word count and graphics, are mostly silent on the need for justice for the communities and environments disrupted by mining. And they include no mention of any efforts taken to reduce the power differential between mine operators and local stakeholders.

Current practice, treated as received wisdom, holds that it has been necessary to make a ‘business case’ if one wants to entice companies to incorporate ESG and respect for the rights of others into their normal work processes. Yet in a world where the economic narrative dominates, what is the role of the normative narrative, of the rights narrative – does there always need to be a business case for the industry to do the right thing?

Does there always need to be a business case for the industry to do the right thing?

In the absence of comprehensive legislation as an articulation of society expectations, should one need to make a business case for the non-deprivation of, for example, the right to clean drinking water, the right to livelihood, the right to a healthy environment, the right to traditional ways, the right to representation, the right to information and the right to be free from intimidation and violence?

More than twenty years ago, CEOs of leading mining companies publicly acknowledged a significant gap between industry practices and society expectations. This led to the establishment of the Mining, Minerals and Sustainable Development (MMSD) initiative, which proposed an agenda for change to better align the industry with society expectations for sustainable development. Since then, numerous initiatives have been established to address this gap. Yet the results of RMF’s research over the last six years have consistently shown that the shortfall between industry norms and society expectations remains very wide. While corporate commitments on ESG issues are becoming the norm, progress on responsible practices has been slow and highly variable even among the companies assessed in the RMI Reports which represent some of the largest, best resourced, and most-media exposed companies in the world (see Box 1). Much of the rest of the industry, tens of thousands of large and small companies operating uncounted number of sites, is far behind and often showing even less sign of movement.

The shortfall between industry norms and society expectations remains very wide.

The question arises as to why even the best resourced companies are not living up to their declared agenda, and what is getting in the way of real progress across this globally critical industry. Why, as a mining sector analyst recently noted, is the industry “still very much in transition from ambition to execution” on ESG matters?

[Box 1] Progress on responsible practices remains slow

The overall results of the RMI Reports 2018, 2020 and 2022 show some degree of improvement in average company performance levels. The assessed companies, representing 25-30% of global mining production, improved their results by an average of 17% between 2018 and 2020, and by 11% between 2020 and 2022. And overall, performance progress has been slow and in many cases marginal. Even the better performing companies are still far from meeting society expectations on most issues. Of particular concern is the evidence that leading companies are slowing down in their progress. For example, the top tier companies in the RMI Report 2022 show an average increase in results of only 4% since the 2020 results.

A gap analysis to support accelerated action

Closing the gaps presents a systemic view of opportunities and critical conditions for accelerating progress on responsible mining.4 The report looks at key aspects of the ‘ecosystem’ – actors and their interactions – of relevance to responsible mining, including those in the mineral value chain and those with influence on industry practices and the global system, such as governments, investors, lenders, downstream customers, industry associations, voluntary initiatives, civil society and labour unions. The report pinpoints where the most radical and urgent shifts are needed to normalise mining activities that are responsible towards people and the planet.

Opportunities for systemic change

The main opportunities highlighted in the report include considerations on how to address society’s conflict of conscience, the power disparities in the system, the reluctance of governments to regulate, access to justice, and the tension between profits and ESG for investors. This analysis emphasises the importance of access to information, open space for civic discourse, and the harmonisation and codification of internationally agreed norms for responsible extraction.

The report concludes by presenting four potential indicators that can be used to help track major shifts towards responsible mining. These include:

  1. ESG-led business models with accountability and agency for ESG issues embedded across all functions and high in company hierarchies;
  2. Meaningful information-sharing of public interest data as a minimal tool to reduce the power disparities and information asymmetries in company-community interactions;
  3. Rights-based approach to harm prevention, notable in company actions that go beyond compliance and company reporting that includes disclosures of how any harmful impacts are being managed and remedied;
  4. International action on responsible mining among home country and producing country governments, including more widespread application of legislative and regulatory tools and collaboration towards an international policy instrument on responsible extractives.

RMF shares this analysis as a forward-looking contribution to the ongoing efforts by many different stakeholders to advance mining’s contribution to sustainable development.

And we thank all those from whom we have learned, who inspire us and who carry the baton for responsible extractives. It can be done — with good faith and collective effort.

Footnotes

  1. See history of the Global Mining Initiative and the Mining, Minerals and Sustainable Development Initiative: https://resolve.ngo/docs/global-mining-initiative.pdf; https://www.iied.org/mining-minerals-sustainable-development-mmsd
  2. See for example, RMF, 2019. Mine-site ESG data disclosure by small and mid-tier mining companies. https://www.responsibleminingfoundation.org/app/uploads/2019/05/RMF_2019_Mine-site_study_EN.pdf
  3. Swart, A., 2022. Where The Rubber Meets The Road: Getting Serious About ESG In Mining. Forbes 18 April 2022. https://www.forbes.com/sites/deloitte/2022/04/18/where-the-rubber-meets-the-road-getting-serious-about-esg-in-mining/?sh=19f055b34b8c