john_groom.pdf
TRANSCRIPT
Natural Resources & National DevelopmentViews from the ICMM
Dr John GroomHead of Safety, Health & Environment,
Anglo American& Chair of ICMM’s Resource Endowment Initiative
September 11th, XXVIII Convención Minera, Arequipa
The Challenge of Mineral Wealth: using resource endowments to foster sustainable development
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Scope of presentation
Background on ICMM
The Resource Endowment Initiative
The Peru Country Case study
Way Forward
ICMM Corporate Members
Goal: Raise Standards of PerformanceGoal: Raise Standards of Performance
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Identifying and promoting ways to assist mineral-rich countries across the developing world to use their mineral resources to achieve broad-based economic growth and sustainable development
The Resource Endowment Initiative
Resource Endowment Work Program
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May – December 2004 January – December 2005 January 2006 onwards
Analytical Framework
May – December 2004 January – December 2005 January 2006 onwardsMay – December 2004 January – December 2005 January 2006 onwards
Analytical Framework
Two Overall Research Questions
What are the critical success factors that have enabled some countries to benefit from substantial resource endowments and avoid the so-called resource curse?
What practical steps might be taken by the industry, governments, local communities and aid agencies to build these success factors?
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Outputs from Phases 1 and 2
Toolkit which provides a systematic and consistent approach to documenting impacts of individual mining projects on a local, regional and national level
Practical policy recommendations for mining companies, governments, development institutions and NGOs aimed at enhancing the socio-economic contribution of mining
Country case studies for Peru, Chile, Ghana and Tanzania:
reviewed in depth the economic and social impact of one large mine
examined the national (macro) economic impact of the mining industry as well as poverty and social indicators
Synthesis Report which contrasts and compares similarities and differences
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Overall findings in synthesis report
The contribution of mining investments to socio-economic development and poverty reduction can be significant
The performance of different mineral dependent countries varies greatly, but apparent success factors include:
A stable macroeconomic climate
Mineral legislation supportive of inward investment (e.g. in Peru, $9.8 billion between 1992-2004 (domestic & international)
Good governance and institutional capacity are important –especially at local and regional levels
Effective partnerships between companies and governments – in fostering local supply chains, for example, or improving local social provision
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Mining’s resurgence in Peru has coincided with period of greater economic stability….
Mining in Peru makes a crucial economic contribution: approximately 55% of merchandise exports and 5% of GDP in 2006
Between 1990-2006, Peru’s overall GDP increased by 93% whereas mining GDP increased by 135%
Mining contributed to around 21% of Peru’s government tax revenues in 2006 (a massive increase from around 5% in 2004)
While direct employment small ….65% of procurement from the industry in Peru is sourced locally
Overall, sector employs 95,000 directly, but 380,000 indirectly (with mining salaries averaging 7.5 times agricultural salaries)
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National level governance reforms in Peru are not matched at regional/local levels….
Important recent developments:
Canon Minero: 50% of corporate income tax to mining areas; this is significant contribution
Mining Royalty: 1-3% value of production, 100% to mining areas
Voluntary Support Fund (VSF): $790 million over five years to reduce poverty and social exclusion in mining areas
But… proactive arrangements are needed where capacity of local and regional governments need strengthening
Companies can support capacity building, e.g. integrating socialinvestment into local/regional government development plans
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Antamina: substantial contribution at local and national levels in Peru…
Company has sustainable development objectives. Through the Antamina Mining Fund (AMF), it is working to reduce child malnutrition, improve education, promote income generation and enhance institutional capabilities of local governments.
Significant direct/indirect employment: 9,000-12,000 jobs created -- but… share of directly employed personnel from the region is 16%
Social investment of $7.9 million in 2006, with local populationinvolved in project design and implementation
Antamina contributed $1,2 billion to the Peruvian economy in 2006 through taxes, transfers and national procurement of goods and services.
This year Antamina has transferred $64 million for social investments to be carried out in the Ancash Region, through the AMF.
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Way Forward: Lessons from four countries
Collaborative action is needed to capture the full potential benefits of mineral wealth and achieve enhanced and lasting outcomes
This requires partnership approaches between companies, governments, social representatives (including NGO’s) and donor agencies
Individual partners have specific responsibilities, comparative advantages, and contributions to make – but collaboration is fundamental
Phase 3 of the Resource Endowment Initiative is seeking to encourage uptake of the Phase 2 recommendations and enhance the contribution of mining to social and economic development
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Potential areas for collaborative action in Peru could focus on:
Mining and Poverty Reduction
Mining and Economic DevelopmentRevenue management
Regional development planning
Increasing local content
Social Investment and Compensation
Dispute Resolution and Communication
The clusters in the Synthesis Report identify actions and responsibilities for (i) companies, (ii) host governments, and (iii) development organizations and the voluntary sector.
Peru Phase 3 Work Program
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Stages 1 – 4: Catalytic and leadership role by ICMM
Stages 5 – 8: Leadership of partners in-country
July 2007 August 2007 Q4 2007
1. Desk-based
review of mining sector
initiatives
2.In-countrymappingand gap analysis
3.Discussion of
options for pilots
2.In-countrymappingand gap analysis
4.Workshop to
discusspriority areas
for partnership
July 2007 August 2007 Q4 2007
1. Desk-based
review of mining sector
initiatives
2.In-countrymappingand gap analysis
3.Discussion of
options for pilots
2.In-countrymappingand gap analysis
4.Workshop to
discusspriority areas
for partnership
5. Development
of M&E framework
6. Action plan
implementation
7.Periodic external
evaluation
8. Reporting & dissemination
of lessonslearned
6. Action plan
implementation
7.Periodic external
evaluation
8. Reporting & dissemination
of lessonslearned
5. Development
of M&E framework
6. Action plan
implementation
7.Periodic external
evaluation
8. Reporting & dissemination
of lessonslearned
6. Action plan
implementation
7.Periodic external
evaluation
8. Reporting & dissemination
of lessonslearned
Results of in-country mapping
Mining and Poverty Reduction: challenge is how mining industry could work with others to directly address poverty alleviation at national level?
Mining and Economic Development:Revenue management: multi-stakeholder initiatives are underway
Regional development planning: Limited activity and generally not supportive of management of public funds (e.g. Canon Minero)
Increasing local content: Individual corporate effort but more collaborative action could have positive benefits
Social Investment and Compensation: individual companies active but effectiveness of approaches vary widely
Dispute Resolution: multi-stakeholder initiatives are underway
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Way Forward: Peru multi-stakeholder workshop…
A workshop is planned for later this year with two objectives:
Providing feedback to stakeholders in-country on the Resource Endowment work so far
Workshop participants to be engaged on identifying priority projects for partnerships as basis for action-plan in country
