The Canadian International Development Agency’s recent decision to spend millions of dollars funding collaborative projects between Canadian NGOs and mining companies has generated an often heated debate.
This growing polemic is misplaced. It is not a question of what is “right” or “wrong,” or whether Canadian aid money could be better spent in other ways. Such partnerships are inevitable. Growing demand for minerals means that there will be increasing economic pressure to mine. At the same time, true development requires long-term economic resources. It would be a mistake to reject out of hand the important contribution that mineral extraction can provide.
It is not that the critics of this policy-shift object to the ultimate goal, which is a sustainable improvement in the quality of life for the people living in communities impacted by mineral extraction. They reject the means selected for achieving it.
Their arguments seem persuasive: Extraction industries have what is, at best, a mixed record in developing countries, high mineral prices and profits mean they should not be receiving public funding to fulfill such obligations, aid money would be better spent funding traditional development projects.
Such arguments are unrealistic.
First, extractive industries must do a better job in collaborating with the communities they work in to finally put their often blemished past behind them. For years, they have attempted to do this through policies of corporate social responsibility. While CSR has led to many improvements in industry-community relations, it is limited, because it puts the onus on the mining companies whose “responsibility” implies a sense of unilateral action.
The active involvement of the concerned communities as true economic partners is often sidestepped, which, ironically, is why there is a persistent lack of trust of mining by the communities affected by mineral extraction and their advocates. This is the moral equivalent of declaring that a principle of doing no harm is sufficient, when it is only a necessary starting point.
Second, because many mining companies are so profitable, it is imperative that they return more to the communities they work in – but that is easier said than done. Simply pouring money into programs that are not well planned or for which there is no community buy-in only generates frustration and corruption. This is a problem that the international donor community continues to confront, and has been for decades. Mining companies need to understand the challenges of promoting sustainable development and how to relate better to local communities. At the same time, communities often lack the capacity to identify their medium- and long-term goals or to develop projects that can meet them. On both counts, NGOs often have the necessary expertise, which international donors have long recognized.
Third, traditional development programs have intrinsic limits that are easily forgotten. As a form of assistance, there is the ever-present danger of creating dependency rather than productive, sustainable economic structures. And aid money is never sufficient for promoting long-term and sustainable development; it needs to be leveraged with other, more substantial funding sources so that development moves beyond a project mentality and begins to contribute to larger processes of national economic development. The real question is whether the immense wealth generated by mining can be tapped to do just that.
Ultimately, the challenge is to minimize the short-term negative impact of mineral extraction while maximizing the long-term potential it offers for sustainable development. This requires new forms of public-private partnerships between corporations and the communities in which they operate, often facilitated by NGOs with requisite expertise, so that mineral extraction contributes in an integral way to the ability of communities to improve the quality of life of their members.
Is this politically viable, in Canada or in developing countries? For developing countries, centuries of perceived exploitation suggest it may be the only politically viable strategy. The real test will come in Canada, where public debate needs to focus on what is really important: helping people lift themselves out of poverty.
Philip Oxhorn is a professor of political science and founding director of the Institute for the Study of International Development.
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