Social engagement - stakeholders
Author: Meghan Cartwright
The Robert M. Buchan Department of Mining
Created: March, 2009
Stakeholders can be defined as individuals or groups who have an interest in particular decisions made regarding a project; these people may or may not have an influence on decisions made(Department of Industry, Tourism and Resources of the Australian Government, 2006). A list of possible stakeholders in a mining operation is featured below (International Finance Corporation, 2009):
- Government agencies
- Non-government organizations (NGO's)
- Financial institutions
- Labour unions
- Environmental groups
- Religious and traditional groups
- Commercial & industrial enterprises
Local communities are often considered stakeholders. However, it is important to note that not everyone in a community will consider themselves a stakeholder; therefore, a discrepancy should be made between the two (Department of Industry, Tourism and Resources of the Australian Government, 2006). For instance, a teenager who works at a local grocery store may not be interested or aware of the new mining/exploration operation underway outside of town; therefore, he or she would not be considered a stakeholder. However, a Native group whose traditional land is centrally located on the mining company's property may have strong concerns regarding the project; therefore, they would be considered a stakeholder.
From a mining perspective, it is important to recognize all stakeholders in and outside of the community for several reasons. First, those who will be impacted the most by mining operations (often Native groups) need to feel secure and content with decisions and agreements made. If this is not done in the early stages of the project (i.e. when junior mining companies own mineral rights), operations may be unable to progress as quickly as originally planned, and headaches may be caused later in the project's life. This often leads to negative media attention and those who originally had no interest regarding the operation, may adopt a negative outlook further damaging the reputation of the project. Eventually, if enough controversy exists, investors outside the community may back-out driving share prices down and possibly ending the project altogether. For these reasons it is important to acknowledge and listen to stakeholders.
The role of non-governmental organizations
Non-government organizations (NGOs) are an integral part of many local communities and even on larger national or international stage. The role of a non-government organization is to provide services or to offer help to communities such as religion, human affairs and emergency relief aid. In particular NGOs provide services where governments cannot provide help. To make these services available it imperative that NGOs have good relations with the public and large companies to be able to raise the funds required. It should be noted that this latter statement is a two way street as for instance mining companies also need good relations with NGOs not only to earn the respect of the public but to establish a positive image in the community and to build a reputation of honour and respect.
As many NGOs are pro environmental it is important for mining companies to establish open communication with such groups on what the intentions of the company are environmentally and how they will help local communities. If the plan put forth by the mining company to the NGOs is not adequate the NGOs are able to paint a bad image of the company and can even protest the project. If this happens a mining may potentially lose a profitable project and may lose many other projects in the future because of poor plans that were selfish and did not help a community as a whole. Therefore it is important for the mining companies to engage with NGOs and not wait for NGOs to come to them and to institute high standards provides a positive self image of the company.
To sustain a positive image over the life of a project and beyond mining companies should work with the local non-profit groups to establish funding, start recreational leagues, developing annual fundraising concerts, holding tours at the mine, helping education for future generations and establishing long term stable and sustainable businesses to attract other industries in the area so that can local small communities can still thrive once mining has stopped.
Consequently NGOs are an indirect check for mining companies to be responsible for there actions and to be unselfish for the greater good of the people in a long term sustainable community.