public participation
local content –
mining agreements as tools to
build trust between stakeholders
otsile matlou
sadc law association annual conference
august 2014
overview
FPIC
local content as part of the modern mining
model
local content in different jurisdictions
regional local content
the distinction between local content and
local participation
building trust between stakeholders
free, prior, informed and consent
free
• right of indigenous peoples and communities to exercise
free choice
prior
• the requirement that the consent must be sought before
project authorisations are secured
informed
• right to appraise indigenous peoples and communities of
project details
consent
• consent not unreasonably withheld
local content and the modern mining model
the historical model
•
•
skills import, minerals export,
exploitation colonialism
the new model:
•
•
unprecedented demand for resources requires revision of the old
model
local content as part of the plan for mining companies, regulators and
communities to benefit from local economic development of host
communities and host countries.
local content: comparative study
south africa
zambia
zimbabwe
local content: lessons from other countries
local content is no longer unique
there are different ways to measure local
content
local content policies should be
transitory
phased approaches work well
enforcement is key
regional local content
cross-border economic linkages
SADC Protocol 1997
AU African Mining Vision 2009
local content vs local participation
procurement vs ownership
common aim: local economic
development
the interplay of the two with social
license to operate
building trust between stakeholders
local content is important for:
• investors
• communities
• regulators
example: the BHP Billiton Cluster Programme
for the Development of World-Class Suppliers
where are the opportunities?
reading list
McKinsey Global Institute (McKinsey & Company) “Reverse the curse: Maximizing the potential of
resource-driven economies” December 2013 accessed at
http://www.mckinsey.com/insights/energy_resources_materials/reverse_the_curse_maximizing_the_po
tential_of_resource_driven_economies on 16 August 2014 at page 13
See for instance ‘An overview of land use conflicts in mining communities’ Hilson, Gavin, Land & Policy,
Vol 19, Issue 1, pages 65-73 and Darimani, A “Mineral Resource Capture & Conflicts in Africa”, MAC, 2005
(www.minesandcommunities.org/article-php?a=7746)
For more on the NSI, see S Manzini “The National System of Innovation Concept: An ontological review
and critique” South African Journal of Science 2012; 108 (9/10) accessed at
http://www.sajs.co.za/sites/default/files/publications/pdf/1038-9432-4-PB.pdf on 16 August 2014
See D Kaplan “South African mining equipment and related services: Growth, constraints and policy”
Making the Most of Commodities Programme Discussion Paper March 2011 accessed at
http://www.prism.uct.ac.za/papers/mmcp%20paper%205_0.pdf on 16 August 2014
See http://www.sadc.int/information-services/tax-database/zambia-investment-incentives/
See “Increasing local content in the procurement of infrastructure projects in low income countries”
Institution of Civil Engineers – Engineers Against Poverty briefing note November 2008 accessed at
http://www.engineersagainstpoverty.org/documentdownload.axd?documentresourceid=23 on 16
August 2014
reading list continued
Mintek 2007 map at page 45 of the Africa Mining Vision accessed at
http://www.africaminingvision.org/amv_resources/AMV/Africa_Mining_Vision_English.pdf on 16 August
2014
See http://ewn.co.za/2014/08/14/Dlamini-Zuma-pushes-mining-industry-for-highspeed-railway accessed
on 16 August 2014
For more on the Ghanaian legislation, see
http://thenewcrusadingguideonline.com/index.php?option=com_content&view=article&id=2415:localcontent-law-engine-of-growth-for-ghanaian-enterprises-in-oi last accessed on 16 August 2014
M Hackenbruch and J Davis Pluess “Commercial Value From Sustainable Local Benefits in the Extractive
Industries: Local Content” (March 2011), accessed at
http://www.bsr.org/reports/BSR_LocalContent_March2011.pdf on 16 August 2014.
For more on the programme see, A Barnett and M Bell “Is BHP Billiton’s Cluster-Programme in Chile relevant
for Africa’s mining industry?” The Policy Practice, Policy Practice Brief 7 August 2011 last accessed at
http://www.thepolicypractice.com/papers/18.pdf on 16 August 2014.
Report No. 66585-AFR Increasing Local Procurement By the Mining Industry in West Africa Road-test
version January 2012 last accessed at http://siteresources.worldbank.org/INTENERGY2/Resources/8411West_Africa.pdf on 16 August 2014
reading list continued
For instance, the ILO Convention 169 on Indigenous and Tribal Peoples
The McKinsey view is that governments must consider six important dimensions to transform sub-soil
wealth into long term prosperity: to produce resources efficiently, governments must promote
institutions and governance and develop infrastructure; to capture value from resources, governments
must make industries competitive through fiscal policy and they must promote local content
development (of interest to us here; and to transform value into long-term development, governments
must spend the windfall wisely and focus on economic diversification
See McKinsey report supra at page 72-73
See McKinsey report supra at page 75
See the McKinsey report above at page 86
thank you