Mining and aid, uncomfortable bedfellows

Marco Chown Oved Whether it's peacekeepers or aid workers, Canadians like to see ourselves as helping people in poorer countries. But from South America to sub-Saharan Africa, Canada's international presence is becoming much more about mining than about

COMMENTARY

by Marco Chown Oved

Whether it’s peacekeepers or aid workers, Canadians like to see ourselves as helping people in poorer countries. But from South America to sub-Saharan Africa, Canada’s international presence is becoming much more about mining than about development work.

While the government cuts foreign aid and ends all but the most token involvement in peacekeeping missions, Canadian mining companies have been buying up stakes around the world.

Recognizing that our international reputation is increasingly based on the actions of private mining interests, the Conservative government declared that Canadian mines should be world leaders, cleaner, safer and more beneficial to locals than any other.

Indeed, many Canadian companies already have extensive community involvement and carry out exemplary environmental remediation – collectively referred to as Corporate Social Responsibility (CSR). But companies traded on the exchanges in Toronto have also been implicated in human rights abuses and toxic spills on four continents.

When the international assistance arm of the government, then known as CIDA, announced it was partnering with mining companies and non-governmental organizations (NGOs) to run CSR pilot projects in three countries – Burkina Faso, Ghana and Peru – outcry in the aid community was strong.

Development workers criticized the public-private partnerships as a deal with the devil: in exchange for opening up a huge new private donor pool, NGOs would have to give up their autonomy. Activists argued it was the ultimate sell-out.

Yet other countries have been experimenting with private sector development partnerships and argue that they can make foreign aid more effective. If anything, Canada is a late adopter.

I went to West Africa and South America last year to visit the pilot projects and the mines and to talk to the local people who have been affected by both. I discovered these complex partnerships lie at the intersection of two debates: over the ethics of mining and the effectiveness of aid.

I spent two months traveling from the desert to the jungle to the mountains. Starting at the largely lawless edge of the Sahara desert in northern Burkina Faso, I made my way into the dense tropical jungles of western Ghana. Afterward, I flew to Peru, ascending more than 4,000 metres up into the Andes and hiking through thin air and snowstorms.

While trying out new funding mechanisms is laudable, the Canadian pilot projects have steered clear of some of the more innovative practices developed elsewhere.

Unlike American public-private partnerships, which unabashedly admit successful projects achieve development goals and increase profit, Canada’s projects tried to avoid appearing to subsidize private enterprise. The result was traditional aid projects – teacher training, vocational training for teens and microfinance for small businesses – as opposed to anything innovative and linked to long-term business interests.

While USAID (the American equivalent of CIDA) works with cell phone companies in Ghana to bring market prices to farmers – empowering farmers and building market share for a private telecommunications company – Canada partnered with Rio Tinto Alcan to train farmers to raise pigs – a three year project that ended when the funding ran out.

In fact, Rio Tinto Alcan sold their mine and left the country entirely, demonstrating the fleeting nature of mining interests. During their lifetimes, mines produce vast amounts of wealth in rural and often impoverished regions. When they leave, there isn’t often much of a local economy left.

That’s the problem with marrying international development and mining. While NGOs seek sustainable solutions to poverty, mines, with their limited lifespans, only offer unsustainable prosperity.

So the question becomes how that limited period of prosperity can be invested for the long-term benefit of mining-affected communities in the developing world. Engineers Without Borders has been grappling with this issue for some time. Holding conferences in Canada and overseas, they’ve been pushing for more local procurement as a way to foster local economies.

Instead of importing millions of dollars of cement, tires and other basic construction materials, mines could spend that money locally, building up businesses that could work with other mines and industry once the original mine closes.

In fact, redirecting a small amount of supply chain budget would have an exponentially greater effect than doubling or even tripling CSR funding.

According to a World Gold Council study, CSR spending by gold-mining companies is less than one per cent of the amount they spend on procurement of services and materials. Of the 15 major international gold-mining companies surveyed, the total budget for community projects was $285 million. Those same companies spent more than $35 billion on goods and services.

Mining and aid aren’t obvious partners, and the initial partnerships have hardly been perfect, but both operate in regions of the world desperately in need of aid and investment. That proximity has great potential, if only both sides could realize that aid isn’t just about helping others and mining isn’t just about helping ourselves.

Marco Chown Oved is a reporter with the Toronto Star. He will give a talk at the Yukon College Pit on Thursday at noon as part of International Development Week. Find his three-part series on mining and aid at www.thestar.com.

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