Tracking the trends with Deloitte 9 – Stakeholder Engagement

Deloitte have released a list of the top ten industry trends we can expect in 2015. With a number of challenges faced by the sector this year, it’s important to stay a few steps ahead and pay attention to the indicators. As we all know, the mining industry is cyclical in nature, and despite the ongoing commodities downturn after the mining boom, the upswing is on its way; it’s simply a matter of when we will start to see this resurgence.

Australian Mining takes a look at each of these ten tips from Deloitte to see what’s in store through this ebbing year in the mining cycle.

Keeping Everyone Happy

One of the most significant problems for miners in modern times is juggling the issues of stakeholder engagement.

These days there are so many interested parties in the activities of mining companies it is considered near impossible to keep everyone happy, but that is not to say that we shouldn’t make the effort.

Deloitte has claimed that many companies are lagging at effective stakeholder engagement, as the list continues to grow, and fundamental conflicts between such parties increase.

Deloitte Southern Africa mining leader Andrew Lane said that the mining industry does not always fully understand the complexities associated with stakeholder engagement.

“Too often, relationships with stakeholders are adversarial instead of collaborative,” he said.

“Miners need to turn this equation around by building relationships with stakeholders long before requesting any concessions from them.”

Some Australian companies have been extremely successful in their careful engagement with indigenous landholders, most notably Sirius Resources in their negotiation with the Ngadju people last year which enabled a start to development of the Nova Nickel project last year.

However, there have also been a number of cases in which companies have contracted Aboriginal groups to conduct heritage surveys, only to later face the flack from other groups who claim those conducting the survey had no real claim or connection with the land, and could not have conducted adequate research in the area.

Companies need to be extremely careful when dealing with indigenous groups, to ensure they are aware of the particular group that is directly linked with the land in question, to avoid confusion and exposure to legal opposition against the validity of mining leases.

Different heritage surveys of the Pagoda Rocks in the Garden of Stone National Park resulted in confusion over the authenticity of hand paintings in caves near a mining lease controlled by Coalpac, which later went into administration.

Coalpac’s initial heritage survey group were Wiradjuri people, but other Wiradjuri groups said they were from a different area, and later accused of wrongly claiming their connection with the area, a misunderstanding that could have been avoided with careful research. Consequently the company’s relationship with those from the area was started on very poor terms.

By ensuring the relationships had been built earlier with the correct stakeholders, the indigenous stakeholder engagement could have been characterised by a more fluid process in terms of approvals.

Ensuring engagement takes place early and often, companies can also avoid risk of accusations relating to social injustice and the resulting anti-mining sentiment that follows.

Of course, there are many areas of stakeholder engagement, and companies must identify all affected parties in order to understand what matters to each, and engage in a process by which each can be reconciled.

Innovation requires a shared vision among all parties of how the mine development can be mutually beneficial.

Communication strategies are very important, especially in rural areas where word-of-mouth communication is the predominant forum for dissemination of local information, but these principles also apply to the working community on a project, not only landholders and local residents.

Companies must be able to engage in real time to encourage dialogue and identify brewing issues, with a view to building levels of trust.

Corporate giving is one such means of garnering trust in an operation, where practices align with stakeholder needs. Community development is one such example, however cash sums to certain groups can be perceived negatively this can quickly start to seem like corporate bribery, as opposed to the intended sharing of resources wealth in the area.

The Resources for Regions program is one such way of formalising the process, which avoids any perception of payment for privilege, and rather instils a sense of the sharing of benefits within the local community.