Community Development in Mining Laws

The Extractive Industries and Society 1 (2014) 200–215 Contents lists available at ScienceDirect The Extractive Industries and Society journal homepage: www.elsevier.com/locate/exis Original Article Community development requirements in mining laws Kendra E. Dupuy a,b,* a Department of Political Science, University of Washington, Box 353530, Seattle, WA 98195-3530, USA b Christian Michelsen Institute, P.O. Box 6033, N-5892 Bergen, Norway A R T I C L E I N F O A B S T R A C T Article history: Since the mid-1980s, 32 countries around the world have adopted community development Received 3 March 2014 requirements into their mining laws, while nine countries are in the midst of doing so. This new Received in revised form 28 April 2014 public regulation approach to addressing mining’s impact goes beyond mitigating the negative effect of Available online 3 June 2014 mining on local communities (such as through compensation arrangements and environmental laws), to requiring firms and/or states to ensure that mining translates into real, positive social and economic Keywords: gains for mining-affected communities, thereby redressing the inequitable distribution of mining’s costs Mining and benefits. I address the question of cross-national variation in the adoption of these laws through a Community development Regulatory reform combination of statistical analysis and a case study of regulatory reform in Sierra Leone. I find that strong Corporate social responsibility regional, organizational, and economic pressures provide material and normative incentives for states to Foreign direct investment adopt these laws, with global norms diffusing from the international to the domestic level through international institutions, actors, and financial flows. Countries with community development in mining laws are likely to influence neighboring states to adopt similar laws, while soft law initiatives like the Extractive Industries Transparency Initiative exert normative influences on member states to adopt new laws that benefit mining-affected local communities. States further adopt the laws to attract foreign investment into their mining sectors, as community development in mining laws serve as a signal to the international community about the quality of a country’s investment climate – in particular, the security of the investment environment. ß 2014 Elsevier Ltd. All rights reserved. 1. Introduction services to communities, including basic infrastructure like roads, schools, water wells, and hospitals, as well as educational Over the last twenty years, community development pro- scholarships, health services, and agricultural and small business grams have achieved prominence in the corporate social assistance. responsibility (CSR) activities of mining firms (Eweje, 2006; Despite the widespread implementation of voluntary commu- Kemp and Owen, 2013; Newell, 2005; Hamann, 2003; Kemp, nity development programs by mining firms, resource-rich states 2009, 2010). Concerned with formulating a positive reputation in around the world are increasingly turning to hard law1 to force the eyes of foreign and domestic stakeholders, pre-empting the mining companies, and in some cases the government itself, to adoption of new regulations, and maintaining a social license to carry out socio-economic development projects in mining-affected operate within the local communities living in geographical communities. Since the mid-1980s, states have been passing new proximity to their areas of operation, mining companies such as mining laws, or amending existing ones, to require firms and/or the Rio Tinto Group, Newmont Mining Corporation, and BHP governments to generate positive socio-economic outcomes for Billiton as well as smaller multinationals and domestic firms have local communities affected by mining operations. This upward voluntarily implemented a variety of programs that deliver social trend has, however, largely been overlooked by scholars studying and economic benefits to local communities (Kapelus, 2002; natural resource management, corporate social responsibility, and Yakovleva, 2005; Jenkins, 2004; World Bank, 2012; ICMM, socio-economic development. 2012b). Local development programs provide public goods and 1 Hard law ‘‘refers to legally binding obligations that are precise. . .and that * Correspondence to: Department of Political Science, University of Washington, delegate authority for interpreting and implementing the law’’ (Abbott and Snidal, Box 353530, Seattle, WA 98195-3530, USA. Tel.: +47 47 93 80 17; 2000, p. 421). Hard law consists of rules that are uniform over geographical space, fax: +47 55 31 03 13/1 206 685 2146; mobile: +47 41 04 45 11. are legally binding and mandatory, and are enforceable (and ideally enforced) by E-mail addresses: kdupuy@uw.edu, kendra.dupuy@cmi.no states (Abbott and Snidal, 2000). http://dx.doi.org/10.1016/j.exis.2014.04.007 2214-790X/ß 2014 Elsevier Ltd. All rights reserved.  K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 201 In this paper, I explain the cross-national variation in the Table 1 States with community development laws (adopted and pending). adoption of community development requirements into mining laws. While one-half of the world’s major mining producer Countries that have adopted community development provisions into their countries (10 out of 20)2 have adopted community development national or sub-national mining laws and policies requirements into their mining laws, not all mining producer China (1986) Laos (2008) countries have adopted these laws. Understanding the variation in Ghana (1986) Central African Republic (2009) the adoption of community development in mining laws is Papua New Guinea (1992) Ecuador (2009) Colombia (1994) Indonesia (2009) important because these laws represent a new approach to natural Philippines (1995) Sierra Leone (2001, 2009) resource management, wherein states are directly regulating Nicaragua (2001) Ethiopia (2010) social investment in the mining sector in an effort to reverse the Canada (2002) Afghanistan (2010) paradoxically negative effects of natural resource wealth (McNab Democratic Republic of Congo (2002) Kazakhstan (2010) Mozambique (2002) Vietnam (2010) et al., 2012). South Africa (2002) Yemen (2010) I proceed as follows. First, I briefly outline the requirements of Peru (2004) Zimbabwe (2010) the community development requirements that have been Equatorial Guinea (2006) Guinea (2011) adopted (or are pending adoption) into the mining laws of Fiji (2006) India (2011) countries around the world, and discuss the puzzling nature of Mongolia (2006) Mali (2012) Niger (2006) Kyrgyzstan (2012) their adoption. I then review the existing literature on progressive Nigeria (2007) South Sudan (2012) domestic regulatory reform, generating hypotheses regarding the Adoption of new, or enhancement of existing, community development in effects of international and domestic pressures on the adoption of mining laws is pending in the following countries community development in mining laws. In the third section, I test my hypotheses on a dataset of 124 countries with mining sectors Ghana Guatemala Burkina Faso Myanmar from 1993 to 2013. I then discuss Sierra Leone’s regulatory reform Kenya South Africa of 2009 to illustrate my findings in greater depth. I conclude with Mongolia Togo reflections on the implications of my findings. Mozambique 2. A new approach to providing benefits to mining-affected communities well-being.5 Because national-level developmental gains from resource wealth hide the inequitable distribution of the costs and Since the mid-1980s, 32 out of 124 countries with mining sectors benefits of mining, it is critical to study the adoption of new have adopted new, or amended existing, mining laws, while nine regulatory tools that mandate the targeted creation of positive countries are in the midst of changing their mining laws. These laws social and economic gains for those who bear the greater costs of mandate firms and/or national or sub-national governments to carry mining and that ensure that more people in resource-rich out socio-economic development projects in communities that countries actually benefit from their mineral resources. reside in proximity to mining areas. These projects include In Table 1, I list the countries that have adopted, or that plan to infrastructure and social service provision as well as the establish- adopt, community development requirements into their mining ment of trust funds for these purposes. These laws are represent an laws. Appendix A provides more detail about each country’s legal important advance for mining-affected local communities,3 who are requirements. Fig. 1 depicts the upward trend in the adoption of often hardest hit by the negative externalities of mining, including community development in mining laws. livelihood destruction when land and water sources are used for mining, through the production of pollution, and through the influx 3. The puzzling nature of progressive mining law reform of migrant laborers.4 Yet ‘‘mining operations are sometimes the only viable option that remote communities have for social develop- The adoption of community development in mining laws is ment’’ (Kemp, 2009, p. 202). Despite this, they generally do not puzzling for three reasons: one, the spatial and temporal variation benefit from mining operations since regional or national elites in their passage; two, their adoption despite the influence of strong instead capture the benefits or because there is little redistribution systems of transnational private regulation, soft law, and industry of resource revenues back to the areas from which those resources are extracted (ICMM, 2012b). 5 Besides general public goods spending and redistribution of mineral revenues, Community development in mining laws represent a new there are several other ways in which the state plays a role in the direct distribution institutional pathway to try to overcome the so-called resource of benefits to mining-affected communities. The first is through the legal curse – that is, to mitigate the well-documented negative recognition of indigenous land rights, which in practice empowers indigenous communities to directly negotiate the provision of socio-economic benefits with outcomes of resource wealth by improving natural resource mining companies. However, this has occurred in only a handful of states, such as management, turning a curse into a blessing (Rosser, 2006; Ross, Norway, Canada, Australia, and Finland. The second way is through recognition and 1999; Davis and Tilton, 2005). These laws target the distribution of enforcement of strong communal land tenure rights, which can in some cases force resource revenues and benefits to the sub-national level, mining companies to directly negotiate rights to land and mineral rights with local communities. Finally, when governments (re)negotiate the terms of mining leases mandating the provision of public goods and services that can with mining companies, they can require that mining companies implement boost economic growth and improve individual and collective community development projects in the new mining agreements. This occurred in Liberia when the government renegotiated Arcelor Mittal’s mineral development 2 Numbers are calculated based on data from the International Council on Mining agreement, and also in Ghana when AngloGold Ashanti’s agreement was and Metals (2012a). renegotiated; both companies are required to establish and contribute to social 3 By local community, I mean a ‘‘population that is significantly affected by a development trust funds that benefit communities in mining areas. I do not include nearby mining operation’’ (Veiga et al., 2001, p. 192), or that is in the ‘‘immediate recognition of indigenous land rights or types of land rights systems in my analysis, impact zone’’ (Kemp, 2009, p. 202). as these laws do not directly call for community development in mining-affected 4 In some cases, rather than being areas of local economic growth, mining- areas; rather, community development programs are their (sometimes unintended) affected communities become among the most impoverished in a country. For outcome. I also do not include contract renegotiation, or the adoption of voluntary example, gold mining areas in Western Ghana are among the poorest areas of community development agreements by mining firms and local communities, since Ghana, as are the diamond mining areas of Sierra Leone, despite the large amount of the unit of analysis in my data is the adoption of a new law or policy that requires mineral resources flowing out of these areas. community development in mining areas. 202 K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 Cumulative Adoption of Community Development in Mining Laws, Council on Mining and Metals Sustainable Development Framework 1985-2012 and Community Development Toolkit, and guiding principles (2001); the Kimberley Process Certification Scheme (2002); the Extractives Industry Transparency Initiative (EITI; 2002); the 30 Alliance for Responsible Mining (2004); the Responsible Jewelry Council’s certification system (2006); the Initiative for Responsible Running Total of Laws Passed Per Year Mining Assurance (2006); and the Global Reporting Initiative Mining 25 Sector Supplement (2011).7 Each of these initiatives has some type of requirement for member companies and/or states to mitigate the 20 destructive social and environmental impact of mining on local communities and to help ensure that mining-affected communities positively benefit from the extraction of finite natural resources 15 (Jenkins, 2004; Kemp, 2009, 2010; Kapelus, 2002; Hamann, 2003; Labonne, 1999). In poor countries in particular, mining companies 10 voluntarily help to provide the essential public goods and services that the state is often unable (or unwilling) to (Bo¨rzel and Risse, 2010). But if private regulatory and voluntary intergovernmental 5 initiatives have been successful in improving the behavior of states and mining firms in revenue management and providing community 0 benefits, then why are states turning to hard law to require 1985 1990 1995 2000 2005 2010 community development projects in mining-affected areas? Year Third, many resource-rich countries are also poor countries, such Fig. 1. Cumulative increase in the adoption of community development in mining as the Democratic Republic of Congo, Ghana, Sierra Leone, Nigeria, laws since 1985. Laos, and Afghanistan. This poses two puzzles. One, why would politicians in poor states pass laws that require the central government to redistribute mining revenues to mining-affected and individual firm self-regulation programs in the mining sector; local communities or sub-national regions, or to directly implement and three, their potentially negative impact on foreign direct community development projects? Two, why would poor states pass investment in the mining sector. laws that might deter foreign direct investment? The conventional First, a cursory look at the data on the mining sectors of the 124 wisdom is that financial globalization – the cross-border flows of countries in my sample indicate that adoption of community goods, services, and financial resources – should lead to a regulatory development in mining laws does not vary by the economic race to the bottom via the loosening of domestic regulations in order salience of the mining sector or by the type of resource being to attract foreign investment (Greenhill et al., 2009; Prakash and mined. While some countries with large mining sectors such as Potoski, 2006; Vogel and Kagan, 2004). However, adopting commu- Guinea and South Africa have adopted mining laws that mandate nity development requirements into mining laws represents a move community development, other states with major mining sectors, toward higher regulatory standards, because they go beyond the such as Angola and Zambia, have not. These countries mine similar mere mitigation of mining’s negative effects on local areas (through, resources: diamonds are mined in Angola and South Africa, and for instance, compensation measures and environmental laws8) and copper in Zambia and South Africa. Moreover, most of the place a higher burden on firms and states for public goods provision. countries that have adopted community development in mining This is especially so where these new requirements mandate firms to laws (27 out of 32) did so after the year 2000 (see Table 1). Why enter into formal, legally binding agreements with local communi- have some mining countries chosen to include community ties, also known as Community Development Agreements.9 development requirements into their mining laws, while others have not? What explains the timing of adoption? Second, strong international norms exist within the mining 7 Other global voluntary initiatives such as the 1976 OECD Guidelines for industry and the international community more generally regarding Multinational Enterprises, the 1977 International Labor Organization Tripartite Declaration of Principles Concerning Multinational Enterprises, and the 2000 Global sustainable development, accountability in how firms and states use Compact pressure firms to uphold and respect human rights principles more resource revenues, and how firms should behave toward local generally. ILO Convention 169 requires that indigenous people engage in free, communities while mining (i.e., upholding and respecting human informed, and prior consultation on issues that affect them, to include mining rights). These norms have evolved and strengthened over the years operations (see Ruggie, 2007). 8 since the 1992 Rio Declaration on Environment and Development, An example of these types of measures can be seen in Liberia’s mining legislation, which requires mining companies to submit plans for managing which introduced the concept of sustainable development and environmental and social impacts in their environmental and social impact stipulated that states have the sovereign right to exploit their own assessments. These plans detail how a company will redress the physical impacts of resources for developmental purposes. Twenty years later, the 2002 mining once a mine is closed. Furthermore, the legislation requires landowners to World Summit on Sustainable Development in Johannesburg be compensated for disturbance of their rights. These types of measures adhere to the ‘‘polluter pays’’ principle by requiring mining companies to clean up after recognized the contribution of mining to sustainable development themselves and to compensate those affected by the negative externalities of and stressed the role of local communities in mining development.6 mining, but they do not necessarily ensure that communities are socio- These international norms are further conveyed through several economically better off as a result of mining activities. 9 voluntary initiatives, including: the Berlin II Guidelines for Mining Firms are required by law to enter into community development agreements and Sustainable Development (adopted in 1991); the International (CDAs) in Sierra Leone, Nigeria, Guinea, Mali, South Sudan, Afghanistan, and Yemen. A CDA is defined as ‘‘any negotiated agreement between industry (mining sector) and communities agreeing how these communities will access development 6 The 2002 summit resulted in the formation of the Intergovernmental Forum on initiatives’’ (Environmental Resources Management, 2010, p. 2). A CDA is a formal, Mining, Minerals, Metals and Sustainable Development to promote the implemen- written agreement designed to ‘‘impose obligations on each participating entity tation of the Johannesburg World Summit Plan of Implementation and the priorities and. . .affect the distribution of costs and the allocation of benefits from a project’’ identified in that plan for enhancing mining’s contribution to sustainable (O’Faircheallaigh, 2012, p. 3), with the goal of reducing conflict surrounding mineral development and poverty reduction. Membership of United Nations states is extraction. CDAs are also used in contexts where they are not legally required, such voluntary in the forum. as Ghana, Australia, and some provinces in Canada.  K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 203 Deterrence of foreign direct investment is not simply hypo- their natural resources in order to reap more revenue from high thetical; multinational companies have themselves expressed resource prices (a phenomenon known as ‘‘resource national- fears that community development in mining laws might deter, ism’’13). But as mining companies generate higher profits, citizens rather than attract, foreign direct investment. For instance, can demand that their governments legislate ‘‘more equitable Guinea’s new Mining Code of 2011 increased the amount of revenue-sharing codes and adopt a larger developmental role for control the Guinean state exerts over the mining industry as well the state’’ (Besada and Martin, 2013, p. 20). Politicians can leverage as the amount of benefits that go to ordinary Guineans through greater redistribution of mining revenues via public goods delivery increased taxes on mineral exports, increased government to buy political support from citizens. ownership shares in mining operations, and through a require- In order to both retain power and maintain revenue generation for ment that mining firms enter into, and spend a substantial amount the state, politicians have an interest in placating restive populations of money to fulfill, formal agreements with local communities living in mining areas, who demand more state-led public goods affected by mining operations, called Conventions of Development provision and revenue sharing. Past neo-liberal regulatory reforms (also known as community development agreements).10 In implemented in developing countries that hollowed out the state reaction to the adoption of the new Code, a representative of have heightened community expectations that mining companies Rusal, the world’s largest aluminum company and an operator of should provide public goods and social services (Maconachie and bauxite mines in Guinea, publicly stated that, ‘‘any investor of good Hilson, 2013; Hilson, 2012). Local communities can pose a serious sense will look for investment opportunities outside of Guinea’’.11 threat to the operations of mining firms and in turn to revenue Why would one of the world’s poorest countries adopt a law that generation by the state from the mining sector as well as to the would seem to deter much-needed foreign direct investment? political survival of politicians who represent these areas. Embol- dened and informed about their rights through links with domestic and international civil society organizations, local communities can 4. Pressures for progressive regulatory reform in the mining block or sabotage operations if mining firms do not acquire a social sector license (community approval) to operate, as famously occurred in Papua New Guinea in 1989 when local opposition led to the closure of Many of the community development in mining laws appeared the Panguna mine (World Bank, 2012). as part of the larger global movement to reform mining laws that Yet domestic-level explanations for the adoption of community started in the late 1990s. During the 1980s and the 1990s, many development requirements in mining laws are unconvincing for resource-rich countries liberalized their mining laws in order to three reasons. First, mineral prices hit their high between 2004 and encourage foreign direct investment, leading to a ‘‘geographical 2007, but community development laws began to appear much restructuring of capital flows in the mining sector’’ by opening up earlier than that and their adoption has continued despite the drop in countries to increased inflows of mining capital (Bridge, 2004, p. prices. Second, mining-affected communities do not, in fact, have 408; see also Campbell, 2009; Yakovleva, 2005). State-owned much power to effect national-level regulatory change, as Otto enterprises were privatized and opened for foreign investment, (2013) writes: ‘‘Examples of a local populous exerting enough regulations and taxation decreased, and social and labor policies pressure to. . .create a new regulatory system at the local or liberalized (Besada and Martin, 2013). But these laws came under provincial level are rare’’ (10). This is because mining areas are scrutiny during the early 2000s when states and international often remote and the communities living there poor, and because the actors realized that earlier legislation did not stimulate national transnational ties that convey global human rights norms are usually development and that state regulation of the mining sector was formed between international organizations and elites in capital- necessary, and also because states wanted to capitalize on the high level civil society organizations rather than with mining-affected resource prices of the mid-2000s (Campbell, 2009, 2010; Otto, local communities (Perla, 2012). Rather, local community action 2013). Resulting calls to overhaul existing legislation and against mining operations is more likely to result in targeted firm- renegotiate existing mining contracts led to a ‘‘fourth generation’’ level CSR programs, not in national or sub-national level legal reform. of mining codes, which include voluntary, regional, and transna- Moreover, states everywhere are exposed to global human rights tional initiatives that emphasize transparency and accountability norms and the transnational advocacy groups that convey these in natural resource management (Campbell, 2009; Besada and norms and pressure states to adhere to them. Yet even major mining Martin, 2013).12 A hitherto unexamined component of this fourth countries such as Zambia, Brazil, and Chile that are also democracies generation of mining codes are progressive mining laws that (and should thus be more receptive to civil society organizations) contain specific provisions to address socio-economic develop- have not adopted community development requirements into their ment in mining-affected local communities. mining laws. Third, if governments are concerned about local One argument that has been put forward to explain the populations blockading mining operations, they can either forcibly progressive trend in mining legislation reform is domestic-level repress those areas, or redistribute mining revenue from the central pressure on politicians. After all, it is politicians who must decide to the local level in order to buy local support under existing laws. whether and when to adopt new laws. Domestic pressures come in Instead, we must look to international-level factors to explain two intertwined forms: the desire to increase revenues to the state, the rise of national-level mining laws that target local, mining- and the desire to buy citizen support in order to stay in power. affected communities, because it is at the international level that Besada and Martin (2013) argue that states are adopting fourth- important changes have occurred that influence the passage of generation mining laws and thereby exerting strong authority over these laws: namely, the rise of new global norms and ideas about 10 sustainable development, human rights, prior consent, and Among other things, these Development Agreements obligate mining firms to consultation and participation. Global flows of not only financial protect the environment and health of people in affected local communities, to develop social projects in those communities, and to establish Local Development resources but also of these influential ideas have influenced states Funds for local affected communities, to which mining titleholders must contribute to adopt higher regulatory standards in mining laws, such as 0.5–1% of the company’s turnover. community development requirements. The diffusion of global 11 See http://www.bloomberg.com/news/2011-09-13/rusal-says-senseless-to- invest-in-guinea-projects-current-accords-safe.html (accessed 17.02.14). 12 13 The first three generations of mining laws occurred during the 1980s and the Otto (2013) defines resource nationalism as ‘‘the regulatory rebalancing of 1990s; these laws liberalized and privatized the mining sector (see Besada and interests, relating to natural resource projects, to the benefit of society and Martin, 2013 as well as Campbell, 2009). government at the expense of investors’’ (2). 204 K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 norms from the international to the domestic level has occurred wherein states provide a credible commitment to protect mining via international institutions, actors, and financial flows. firms’ investment and reputation in return for growth-enhancing foreign direct investment. This leads to the first hypothesis: 5. Theoretical expectations: how international institutions, Hypothesis 1. Mining countries that trade more are more likely to actors, and financial flows influence progressive regulatory adopt community development requirements in their mining laws. reform In addition to trade, foreign aid donors also provide material Global norms can spread from the international to the domestic incentives for states to engage in progressive regulatory reform. level through coercive, material, and normative mechanisms (Hafner- During the 1980s and 1990s, under the guise of the ‘‘Washington Burton, 2005; Greenhill, 2010; Keck and Sikkink, 1998).14 Such Consensus’’, poor countries were coerced by the international influence can occur in several ways: through financial flows of trade financial institutions such as the World Bank and other Western and foreign aid; through international non-governmental organiza- development donors to liberalize markets in exchange for much- tions and voluntary initiatives; and through interactions with other needed foreign aid. This led to a loosening of regulatory standards states, such as in inter-governmental organizations. I outline across sectors, including in mining (Besada and Martin, 2013). theoretical expectations for the influence of each of these factors However, the World Bank in particular modified its view of on the adoption of community development in mining laws in turn. extractives industries’ management in client countries in 2003 Foreign direct investment is critical to the viability of many with the launching of the Extractives Industry Review (EIR) of the countries’ mining sectors; in some mining countries, the mining Bank’s support for extractive industries in poverty alleviation sector is a major foreign exchange earner and a primary (Campbell, 2009). The recommendations that emerged from the destination for FDI inflows (Bridge, 2004; Africa Progress Panel, EIR included ensuring that local communities should receive an 2013; ICMM, 2012a). The conventional wisdom is that globaliza- equitable share of resource rents, that local communities and tion leads to a regulatory race to the bottom as states compete to indigenous peoples should be consented prior to the start of attract foreign investment; the mining sector is no different in this mining projects, and that the Bank should assist governments to respect, as states around the world have since the mid-1980s develop and harmonize modern policy and regulatory frameworks liberalized their mining laws in order to increase foreign for the extractive sectors (Campbell, 2009). Part of the Bank’s investment flows (Campbell, 2009; Bridge, 2004; Maconachie support to client countries’ extractive industries is delivered via and Hilson, 2013). Yet, attracting foreign investment does not technical assistance, the use of consultants and advisors from necessarily force states to adopt lower regulatory standards; donor countries who serve in recipient countries (Godfrey et al., rather, under some conditions, it can lead states to adopt higher 2002).16 These technical assistants help advise the host govern- standards. For instance, Vogel (1995) argues that liberal trade ment, and they can spread international norms by drafting new policies can lead to the strengthening of regulatory standards and laws on behalf of the recipient country. This leads to the second that poor countries adopt laws that reflect the higher regulatory hypothesis: standards of the foreign markets to which they export their goods – the so-called ‘‘California effect’’. Trade can therefore serve as a Hypothesis 2. Mining countries that receive greater amounts of mechanism to diffuse good norms and practices, with importing foreign aid are more likely to adopt community development countries exerting progressive regulatory reform pressure on requirements in their mining laws. exporting countries in order to avoid media scrutiny, action by Norm transmission can occur through international non- activist groups, and/or a consumer backlash (Greenhill et al., 2009). governmental organizations (INGOs), which can directly influence Foreign direct investors wish to invest in states that exhibit states by pressuring them to change practices and policies, or certain qualities and behaviors, and in order to attract foreign indirectly pressure governments through transnational advocacy investors to a particular geographical location, states must find a networks (TANS) (Hafner-Burton, 2008). While mining-affected way to signal the quality and stability of their investment climate communities are unlikely to directly effect regulatory change and to differentiate themselves from their economic competitors either because they lack the resources to do so or because the (Simmons and Elkins, 2004; Perry, 2000).15 Foreign investors in the government is unresponsive to citizen demands, citizens and/or mining sector face a number of political risks when investing, domestic civil society organizations in mining countries could including the threats of expropriation, violence and instability, reach out to international advocacy groups to press for regulatory corruption and poorly functioning domestic institutions, and the change either directly, or via a boomerang effect17 (Keck and imposition of new regulations that raise operational costs or prevent Sikkink, 1998). In the mining sector, TANS have led to the exit (Busse and Hefeker, 2007). These risks are heightened due to the successful institutionalization of voluntary initiatives such as the asset specificity of mining operations. Higher regulatory standards Kimberley Process Certification Scheme (KCPS) and the Extractive can be viewed as a benefit by foreign investors since community Industries Transparency Initiative.18 Soft law initiatives can trigger development requirements clarify responsibilities toward, and thus reduce the potential for conflict with, mining-affected communities. 16 Since 2009, the World Bank’s technical assistance has been institutionalized Community development in mining laws thus provide international under the Extractive Industries Technical Advisory Facility. investors with information about the security of the investment 17 The boomerang effect occurs when local civil society actors appeal to the environment in a high risk, high reward industry since these laws citizens of another state via a transnational advocacy network, and these citizens then pressure their own government to pressure the offending regime to change its help mining firms to mitigate the political risks of operations. In behavior. However, shaming tactics and the boomerang effect are not always particular, these laws represent a mutually beneficial bargain, successful in changing government behavior, as Hamberg (2013) and Dupuy, Ron, and Prakash (2013) show. 14 18 Coercive methods increase the costs of non-compliance (defecting) through Started in 2002 as the result of Global Witness’ successful ‘‘blood diamond’’ punishments, while material methods increase the benefits of compliance through campaign, the KCPS is a voluntary international diamond certification program rewards. Normative methods change the beliefs of actors about legitimate, designed to ensure that countries do not trade in diamonds mined in conflict areas appropriate social behavior and thus actors’ preferences for those behaviors. (Haufler, 2009; Grant and Taylor, 2004). Though initially aimed at the firms mining 15 There is a large literature on the determinants of FDI, and the role that rule of and trading in conflict diamonds (in particular, DeBeers), member countries have law plays in attracting FDI across sectors and types of countries. See, for instance, enshrined it in their national mining laws. The EITI also grew out of efforts by Anyanwu (2012), who argues that rule of law is associated with higher FDI inflows international NGOs to increase the transparency of revenue flows between to Africa. extractive industries companies and states.  K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 205 the domestic and international adoption of hard laws either these states must further ensure that the rights of local because the initiative itself requires it or because the norms communities are respected at all times; that they acquire the contained in these initiatives achieve a mass of critical authority free, prior, and informed consent of local communities prior to the behind them, increasing the belief that the norm is legally binding start of each phase of mining operations; that they consult and (Zillman et al., 2002).19 This leads to the third and fourth negotiate with the local community on all important decisions hypotheses: affecting them; and that socio-economic community development funds are established, to which mining rights holders are required Hypothesis 3. Mining countries that have a greater number of to contribute by law. international non-governmental organizations operating within This leads to the fifth and sixth hypotheses: their borders are more likely to adopt community development requirements in their mining laws. Hypothesis 5. Mining countries with more memberships in inter- governmental organizations are more likely to adopt community Hypothesis 4. Mining countries that are members of soft development requirements in their mining laws. law initiatives that govern the mining sector are more likely to adopt community development requirements in their mining Hypothesis 6. Mining countries located in the same region as laws. other countries that have adopted community development requirements into their mining laws will be more likely to adopt Intergovernmental organizations (IGOs) promote norm diffu- such requirements into their own mining laws. sion by providing venues for socialization into appropriate behaviors and by changing the interests of states to engage in certain behaviors via interactions with other countries (Greenhill, 2010). IGOs also set common standards that spread values and 6. Empirical analysis norms across national boundaries, and they can curtail regulatory races to the bottom either via agreements among governments or I test my six hypotheses using an event history approach to as the result of private initiatives (Vogel and Kagan, 2004). model the timing of the passage of community development Regional IGOs are especially likely to promote regular interaction provisions into mining laws across countries. To do so, I collected among states and to provide a forum for both norm transmission panel data for the years 199323–2012 on the adoption of and for government officials to learn about the successful policies community development in mining laws across all countries of other member states (Simmons and Elkins, 2004). The likelihood with mining sectors – 124 countries in total.24 The dependent of adopting community development requirements into mining variable is a binary indicator of the year in which a country laws should increase as a higher number of IGO member or adopted a community development in mining law (the year of regional states pass these laws, given the reputational and other ‘‘onset’’); I do not code for whether a country is considering payoffs to new adopters of coordinating their policies and adhering adopting such a law. Only observations at risk of adopting a to dominant global norms (Otto, 2013; Simmons and Elkins, 2004; community development requirement into their mining laws are Keohane, 1998).20 included in the sample, with country-years following the In the mining sector, regional IGOs have put pressure on adoption of a community development in mining law omitted individual states to adopt community development requirements while countries that have not adopted such a law by 2012 are in mining laws. For instance, the African Union’s African Mining considered right-censored (Box-Steffensmeier and Jones, 1997, Vision agreement (adopted in February, 2009) advocates for the 2004). I follow Beck et al. (1998) and estimate a logistic ‘‘transparent, equitable, and optimal exploitation of mineral regression model with duration-dependent time dummy vari- resources to underpin broad-based sustainable growth and ables for each year a country is at risk of adopting community socio-economic development’’ and the improvement of mining development in mining laws.25 Robust standard errors are regulations to reflect the highest international standards.21 clustered by country. Additionally, Articles 11, 15 and 16 of the Economic Community The key independent variables are trade, foreign direct of West African States (ECOWAS) Directive on the Harmonization investment, foreign aid, INGO influences, EITI membership, IGO of Guiding Principles and Policies in the Mining Sector (adopted in memberships, and the passage of laws in neighboring countries. I February, 2008) stipulate a number of community development use two different logged measures of trade: trade as a percentage requirements that member states must fulfill.22 ECOWAS member of GDP, and net inflows of foreign direct investment as a states must harmonize their mining laws and require mining percentage of GDP. Both variables come from the World Bank’s companies to submit information on community-focused corpo- World Development Indicators, as does the logged measure of rate social responsibility programs in the mining rights application foreign aid, measured as net development assistance and official process. Both member states and the mining firms operating in aid received. I also include a binary variable for whether a country receives World Bank financial assistance. 19 As Zillman et al. (2002) write, ‘‘‘[s]oft law’. . .has been described as an ‘indicator 23 of where the international community envisions the law developing’. ‘Companies I selected 1993 as the starting point of the dataset as most of the community should seriously monitor ‘‘soft law’’ developments’, industry experts advise, development in mining laws were adopted after this year. 24 because the soft law of today is quite likely the hard law of tomorrow’’ (72). Data on mining sectors comes from the World Bank’s World Development 20 Peer pressure in the mining industry is not a new phenomenon, as Otto (2013) Indicators dataset (measured as mineral rents as a percentage of GDP), the points out: ‘‘Earlier examples of ‘peer pressure’ phenomena can be pointed to with International Council on Mining and Metals, and the Extractives Industry regard to mine expropriations by governments in the 1960s and 1970s, and the Transparency Initiative. Countries with active mining sectors, as well as those reduction of mineral sector taxes that occurred as countries competed for with mining sectors that are the process of becoming active (such as Afghanistan) investment in the 1980s and 1990s’’ (5). are included in the sample. 21 25 See http://www.africaminingvision.org/index.htm. These dummy variables mark how many years have occurred either since the 22 Likewise, in 2007, the Southern African Development Community adopted a start of the sample period of the previous occurrence of an event, correcting for framework for the ‘‘Harmonisation of Mining Policies, Standards, Legislative and temporally dependent observations (Beck et al., 1998). This approach views binary Regulatory Framework in Southern Africa’’, which recommends that member states time series cross sectional data as grouped duration data. Using a grouped duration ‘‘link the granting and renewing of exploration and mining licenses to social model for a binary dependent variable is easier to estimate and interpret than a Cox obligations’’ and to work to reduce the adverse environmental impacts of mining on proportional hazards model with time-varying covariates, but is an equivalent community livelihoods. approach. 206 K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 Table 2 Logistic regression models results. Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 * GDP 0.387 0.353 0.400 0.244 18.065 0.408 0.464 (0.828) (0.896) (0.843) (0.715) (7.687) (0.818) (0.840) Democracy 0.089 0.078 0.089 0.176 0.597 0.093 0.069 (0.074) (0.078) (0.074) (0.091) (0.471) (0.078) (0.073) Foreign aid 1.028* 0.917* 1.027* 1.248 9.980** 1.013* 1.047* (0.459) (0.443) (0.462) (0.675) (3.736) (0.466) (0.477) FDI 0.643*** 0.567*** 0.639*** 0.478** 0.098 0.656*** 0.553*** (0.179) (0.164) (0.179) (0.177) (1.211) (0.190) (0.163) % Regional adopters 0.224*** 0.213** 0.222*** 0.369*** 1.797** 0.223*** 0.215** (0.066) (0.072) (0.067) (0.101) (0.546) (0.065) (0.066) EITI member 19.974*** 20.036*** 17.705*** 49.372*** 19.002*** 18.232*** (1.783) (1.753) (1.440) (11.767) (1.825) (1.795) NGO members 0.0001 0.0002 0.0001 0.0009 0.005 0.0001 0.00003 (0.001) (0.001) (0.001) (0.001) (0.004) (0.001) (0.001) IGO members 0.013 (0.028) Elections 0.173 (0.659) Ethnic fractionalization 0.986 (2.669) Corruption 4.276* (1.935) Conflict 0.299 (0.868) Mineral prices 0.005 (0.004) N 548 482 548 535 256 548 548 Log likelihood 41.928 39.446 41.902 32.076 7.123 41.861 40.897 AIC 111.857 104.893 113.804 94.153 40.247 113.723 111.795 Logit coefficients are reported. Robust standard errors (clustered by country) are in parentheses. Duration-dependent dummy variables are not presented in order to save space. * p < 0.05. ** p < 0.01. *** p < 0.001. Data on numbers of INGOs with member offices in a given data comes from the National Elections Across Democracy and country comes from the Union of International Association’s Autocracy dataset (Hyde and Marinov, 2012). Finally, I include a Yearbook of International Organizations; this data covers the variable for ethnic fractionalization, as politicians might adopt years 1993–2007. Data on the number of IGO memberships per community development in mining laws to appease citizens of state come from the Correlates of War Project. Membership in particular ethnic groups living in mining areas. This variable is mining-focused soft law initiatives is a binary variable that calculated as the probability that two randomly selected individ- measures country membership in the Extractives Industry uals from a population belong to different ethnic groups (Alesina Transparency Initiative. Finally, I measure the proportion of et al., 2003). states with mining sectors in a region per year that have If countries adopt community development in mining laws to adopted community development requirements into their signal the quality of a country’s investment climate and thus mining laws. attract foreign direct investment, there are two possible reasons I test for a number of other variables that might affect the that countries might be worried about their reputation as an timing of the adoption of community development in mining laws. investment destination: corruption and conflict. Natural resource I control for domestic economic and political factors, particularly extraction is often characterized by corruption, such as the bribing those that shape the relationship between politicians and citizens. of government officials, and it has also been linked to the onset and Poor countries might be more likely to adopt community duration of armed conflict. I measure corruption using Transpar- development in mining laws as a way to overcome limitations ency International perceptions of corruption measure, which in providing vital public goods; I test for economic development ranges from 0 (high corruption) to 10 (low corruption). I include a levels using data on per capita GDP from the World Bank’s World binary measure for the presence of armed conflict, based on data Development Indicators. I measure the effect of regime type using from the Uppsala/PRIO dataset on armed conflict (version 4-2012). the twenty-point Polity 2 democracy index score, as politicians in Finally, I include measures to control for characteristics of the democratic regimes might be more likely to adopt community mining sector. Countries with larger mining sectors might development in mining laws for three reasons: to satisfy their decide to adopt community development in mining laws to supporters; because democracies tend to redistribute more; and capture the developmental benefits. I measure the size of the because democracies generally have stronger civil societies that mining sector as mineral rents as a percentage of GDP; this data pressure politicians to uphold human rights. comes from the World Bank’s World Development Indicators. I I also include a binary measure of whether or not a national also control for the price of key minerals26, in U.S. dollars; when election for the legislative, parliamentary, the executive, or the constituent assembly took place in a given year, as politicians 26 This is an aggregate measure of the export price per year on international might promise to adopt community development into the mining markets of diamonds, gold, iron, aluminum, copper, uranium, zinc, tin, nickel, and laws of their country in order to drum up electoral support. This silver.  K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 207 Fig. 2. Substantive effects are based on simulations from Model 1, varying the key independent variables from their minimum to maximum and holding all other variables constant at their means. The graphs depict the predicted probabilities of adopting community development in mining laws, with 95% confidence intervals. prices rise, countries might decide to adopt community community development in mining laws: FDI, foreign aid, EITI development in mining laws in order to reap higher amounts membership, and the proportion of states in a region per year that of revenue and other benefits from the mining sector. Data on have adopted community development requirements (‘‘regional mineral prices comes from Bazzi and Blattman (2014) and cover adopters’’) into their mining laws. Fig. 2 shows that the findings the years 1993–2009. for FDI, EITI membership, and regional adopters are also I present the results in Table 2. Model 1 is the baseline substantively significant; the finding for foreign aid is, however, model; the measures for FDI inflows, the proportion of countries not substantively significant.27 Fig. 2 also shows an interesting in a region with community development in mining laws, EITI interaction between EITI membership and regional adoption: membership, and foreign aid are positive and statistically when a given country’s neighbors are not EITI members, regional significant. As an alternative specification, I replace the FDI adopters have a much stronger effect on the probability of a variable with the trade variable, but trade is not a statistically country in the region adopting new community development significant predictor of the adoption of community develop- requirements into its mining laws than when neighboring ment in mining laws, nor is World Bank financial assistance, countries are EITI members. Thus, regional adopters have a numbers of IGO memberships, or numbers of INGO member strong role to play in encouraging neighboring states to adopt offices (Model 2). community development in mining laws in regions where EITI The remaining models (3 through 7) test alternative domes- has not yet gained a strong foothold, such as in Central and South tic-level explanations: the influence of elections, ethnic frac- America. tionalization, corruption, conflict, and mineral prices – none of The results presented in Table 2 for Model 1 have the following which influence the adoption of community development in effects on the probability of countries adopting community mining laws. The size of the mining sector also has no effect on development in mining laws. For a one-unit increase (in this case, the likelihood of adoption. Only Model 5, which tests for the 1%) in FDI as a percentage of GDP, the odds of adopting a effect of corruption, changes the consistent results of the other community development in mining law increase by a factor of models; in this model, FDI is no longer a significant predictor of 1.47.28 Referring to Fig. 2, this translates into an increase in the the passage of community development in mining laws. likelihood of adoption from 0.02 when a state receives low However, the results of this model should be interpreted with caution, as the measure of corruption has a large number of 27 I do not provide a visualization of the substantive significance of foreign aid, but missing observations. can do so upon request. With the exception of Model 5, the following variables are 28 This interpretation is based on the odds ratio for each variable in Model 1, which positive and statistically significant predictors of the adoption of is not presented in Table 2. 208 K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 amounts of FDI to 0.15 when the state receives high amounts of FDI the adoption of community development in mining laws – more than a threefold increase in the probability of adoption.29 because the process of adoption there has been well- For a one-unit increase (1%) in the number of regional adopters, the documented by civil society organizations, foreign aid donors, odds of a non-adopter country adopting a community develop- and the media.31 ment in mining law increase by a factor of 1.25. From Fig. 2, this In 2001, the Sierra Leonean government adopted the Diamond translates into an increase in the probability of adoption from Area Community Development Fund (DACDF) policy, which nearly 0 when only 10% of other states in the region have adopted returns a percentage of diamond revenues back to diamondifer- these laws to 0.85 when half a state’s neighbors have adopted these ous local communities.32 As the policy’s name suggests, these laws – an enormous effect. EITI has a similarly powerful effect on revenues are to be used for development projects, with priority the likelihood that a state will adopt a community development in given to building community infrastructure. Moreover, the policy mining law, increasing the likelihood from a factor of nearly 0 aims to increase community participation in, and decision- when a country is not an EITI member to 0.9 when the country is a making about, the use of revenues from diamonds (Maconachie, member of EITI. As mentioned earlier, however, the effect of EITI 2009, 2010, 2012). The policy emerged out of the 1999 Lome´ membership seems to be reduced when a country that plans to peace negotiations that helped to end the country’s 11-year civil adopt a new community development in mining law is already an war, and was designed to increase state mining revenues by EITI member. providing incentives to mine legally and thus to put a halt to the These findings support Hypotheses 1, 4, and 6, and my rampant amount of diamond smuggling that had fueled the argument that international factors, rather than domestic ones, outbreak of the war and kept it going (see Binningsbø and Dupuy, best explain why countries adopt community development in 2009; Dupuy and Binningsbø, 2010; Fanthorpe and Gabelle, mining laws. Attracting foreign investment and adhering to strong 2013). Despite its positive aims and the increased revenues that international norms as expressed through soft law initiatives like have been returned to diamondiferous communities, the DACDF the EITI are motivating progressive regulatory reform in the mining suffers from two limitations. First, it pertains to only one resource sectors of countries around the world. while the country is endowed with a number of valuable minerals, such as iron ore, gold, and rutile. Second, the policy 7. Regulatory reform in Sierra Leone has faced a number of challenges in actually generating meaningful participation in the local management of diamond The previous section provided evidence of an association over revenues due to the amount of control that local elites exert over time and space between international influences and the adoption the management of DACDF funds (Maconachie, 2009, 2010, of community development in domestic mining laws. However, 2012). this analysis does not show the way in which FDI, EITI In 2009, the Sierra Leonean Parliament adopted the Mines and membership, and regional pressures influence the adoption of Minerals Act (MMA), a central element in the country’s new community development in mining laws and the relative mining legal framework. The remainder of this article focuses on importance of these factors the adoption of these laws. What the MMA, as it covers the entire mining sector and represents a specific pressures do politicians face, and what calculations do they major legislative overhaul in the governance of Sierra Leone’s make, when deciding whether to adopt community development mineral resources. The MMA requires mining companies to in mining laws? In order to fill this knowledge gap, I outline the negotiate and enter into formal Community Development process of regulatory reform in Sierra Leone, where community Agreements (CDAs) with host communities33, and to spend 1% development requirements have been incorporated into the of 1% of their gross revenue on implementing the CDA.34 The CDA mining laws there. requirement stipulates the obligations of mining companies to This case study is based on data I collected between July and implement projects designed to improve the collective welfare of December 2013 on the adoption of Sierra Leone’s Mines and host communities, the responsibility of host communities to Minerals Act (MMA). I conducted a total of 58 interviews both respect mining firms’ investments, and the monitoring and inside and outside of Sierra Leone on the adoption, design, and enforcement mechanisms for these agreements. In terms of implementation of the MMA. Interviewees included representa- projects that should be implemented in mining-affected tives of the Government of Sierra Leone, large and small-scale communities under CDAs, these are public goods such as mining companies, development partners such as donor agencies, educational assistance, employment opportunities, infrastruc- local and international non-governmental organizations, local and tural development for community services, assistance for small international experts and consultants, and mining-affected local businesses, agricultural product marketing, and support for local communities. Relevant documents were also collected and governance. reviewed. 30 7.1. Community development requirements in Sierra Leone’s mining legislation 31 An added advantage of examining the case of Sierra Leone is that I have prior experience researching mining in Sierra Leone, and thus I have been able to collect Sierra Leone is a unique case among the countries that have information over time on the evolution of the country’s legal regime governing the adopted community development in mining laws, in that it mining sector. 32 The exact formula is 25% of the 3% tax on diamond exports (about 0.75% of total has two such laws on the books and it was an early adopter export value). of these laws. Sierra Leone is also an informative case study of 33 The MMA outlines certain mineral and waste production requirements that mining companies must meet in order to be legally compelled to enter into CDAs. 29 34 I also run a model with a one-year lag of FDI to address the question of whether This requirement has been heavily debated by the key stakeholders involved FDI flows influence the adoption of the laws, or whether the laws influence the with the Sierra Leonean mining sector because it is so low. Some of the individuals flows of FDI. In the lagged model, FDI remains a positive and significant predictor of and organizations I interviewed viewed the requirement as a mistake, and that it the adoption of community development in mining laws, as does EITI membership should read ‘‘1% of gross revenue’’; others believe that the requirement was and the percentage of regional adopters. intentional. Some of the mining companies have plans to go beyond the 1% of 1% 30 Written ethics approval to carry out these interviews was received from the requirement, and will allocate a full 1% of their revenues toward community University of Washington Human Subjects Division on 27 June 2013, study number development, while other mining companies plan to fulfill the law exactly as it is 45365. written.  K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 209 7.2. ‘‘Sierra Leone is open for business’’ – the influence of foreign Prior to the Act’s formulation and adoption, mining companies investment – the foreign investors that the government hoped to attract with the new law – had expressed concerns about the risks that Sierra Mining sector legal reforms in Sierra Leone began after the end Leone’s weak and outdated mining regulatory framework posed of the civil war under the Law Reform Commission (established in for their investments, including the ability to control costs, do 2004), but the reform process achieved real momentum during business, and access foreign exchange (Boakye et al., 2012). In the current President Ernest Koroma’s election campaign and subse- aftermath of the Act’s passage, they have welcomed the new quent government with his focus on attracting foreign investment legislation as an important signal about the quality of the in the mining sector (Fanthorpe and Gabelle, 2013; NACE, 2011). investment climate in Sierra Leone. At the time of the MMA’s After assuming office in 2007, President Koroma established a task adoption, mining companies did not push back against the force to review the terms of all existing mining agreements and inclusion of extensive community development requirements into licenses as well as the state of the country’s mining legislation the MMA. One mining company representative stated that this was (Boakye et al., 2012; Fanthorpe and Gabelle, 2013; NACE, 2011). because ‘‘in the past, mining companies have not had incentives to Among other things, this task force recommended the adoption of come together to pressure the government since it was better to new mining legislation that more closely adhered to international negotiate the terms of mining contracts individually. At the time of and regional standards (such as the ECOWAS Harmonization the MMA’s adoption, we had no form of collective representation Directive and African Mining Vision) and that would also provide like an active Chamber of Mines to lobby against the CDA more secure investment terms for mining companies (NACE, 2011; requirement’’.39 Despite the initial ambivalence of mining Government of Sierra Leone, 2008). Technical assistance and companies toward the CDA requirement, many of the mining pressure from key development partners, including the World companies actively operating in the country now view the CDA Bank, GIZ, UNDP, and DFID, helped to push legislative reforms requirement as a critical mechanism to help protect mining forward by funding international consultants to draft the MMA and companies’ investments via the structured distribution of benefits key pieces of legislation (Fanthorpe and Gabelle, 2013). to host communities. It is, as multiple interviewees stressed, a Attracting foreign investment into the mining sector was a mechanism to help mining firms better manage risk, to ensure the primary reason that the MMA (and its community development quality of their community development projects, and thus to requirements) was adopted. As one foreign donor agency improve their relationships with local communities and thereby representative put it, at the time of the MMA’s adoption, ‘‘there secure a social license to operate. was a desire to have a clean investment environment in order to encourage investors, given the country’s history of violence and 7.3. Regional pressures corruption in the mining sector and generally poor governance over its natural resources’’.35 A civil society representative While Sierra Leone may be a unique country and a most-likely concurred with this view, arguing that ‘‘the government was case of the adoption of a community development in mining law, it interested in reforming the mining laws because it wanted to is not alone in the African region in having adopted such laws. attract investment into the country and it knew that the Nigeria was the first country in West Africa to adopt a community management of the mining sector was poor’’.36 Including the development agreement requirement in its mining law in 2007, CDA requirement in the MMA sent an important signal to mining while such provisions were also in place in Ghana (1986), South firms, who ‘‘want a friendly investment environment, and want to Africa (2002), Mozambique (2002), the Democratic Republic of reduce risk to their huge investments’’, as one government Congo (2002), Equatorial Guinea (2006), and Niger (2006) at the representative put it.37 Reducing the risks associated with time of the MMA’s adoption (see Appendix A). Moreover, the first community dissatisfaction is an important economic motivation set of voluntary community development agreements were for mining companies to favor the adoption of a community implemented in Ghana in 2008 between Newmont Ghana Gold development in mining law, given the high costs of halting Limited and local communities in that company’s catchment area. operations. The CDA requirement in Sierra Leone’s MMA mirrors much of the As multiple interviewees and documents confirmed, the language and requirements of the Nigerian MMA requirement, promise of foreign investment triggered the ultimate passage of while the Newmont agreements encouraged civil society orga- the MMA in November 2009, right before a major investment nizations to lobby for the inclusion of a community development conference for Sierra Leone took place in London, the Sierra requirement into the MMA and have further served as a source of Leone Trade and Investment Forum. A civil society representa- inspiration for the development of a CDA template in Sierra tive emphasized the importance of this conference for the Leone.40 MMA’s adoption, stating that the MMA was adopted because Additional pressure for progressive regulatory reform in the ‘‘there was the pending conference in London, and government mining sector of African countries – including Sierra Leone – has wanted a strong signal to send to investors that Sierra Leone is also come from regional intergovernmental organizations. As open for business’’.38 Almost immediately after Parliament outlined earlier in this article, the 2008 ECOWAS Harmonization approved the MMA, the government signed a mining agreement Directive and 2009 African Mining Vision stipulate that ECOWAS with London Mining to exploit a huge iron ore concession in the and AU member states should better connect mineral exploitation Lunsar area (NACE, 2011). This was followed in August 2010 by to the fulfillment of national socio-economic development goals the adoption of a mining agreement with African Minerals, and should include community development requirements into another large multinational iron ore mining company, and by their harmonized mining laws. The task force appointed by the signing of agreements with a number of other mining President Koroma in 2007 recommended that new mining companies. legislation be adopted to reflect these regional standards. 35 Interview with donor agency representative, 10 September 2013, Freetown. 36 Telephone interview with civil society representative, 31 July 2013. 37 Interview with representative of Government of Sierra Leone, 9 September 39 2013, Freetown. Interview with mining company representative, 1 October 2013, Freetown. 38 40 Interview with civil society representative, 12 September 2013, Freetown. Interview with civil society representative, 9 September 2013, Freetown. 210 K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 7.4. EITI membership Consequently, extractives-focused CSOs operating in Sierra Leone called for the establishment of structured mechanisms to The EITI Principles stress that member states’ natural resource distribute benefits back to mining-affected communities, such as a wealth should contribute to sustainable economic growth and rutile area community development fund (NACE, 2009). CSOs benefit citizens. Sierra Leone signed onto the EITI in 2007 and became aware of the use of Community Development Agreements became a candidate country in 2008, and since 2006, its in Ghana in particular through their involvement with regional implementation has been overseen at the cabinet level.41 One advocacy networks like the African Initiative on Mining, Environ- donor agency representative felt that overall, the government had ment and Society, and as a result they lobbied the government adopted the MMA as part of a larger push ‘‘to comply with heavily for a community development requirement to be included international standards of democracy and good governance, as in the MMA.44 well as with the EITI’’. But the EITI was not mentioned by other However, although civil society organizations lobbied hard for interviewees, or in the relevant documentation, as a motivation for the inclusion of community development requirements into the inclusion of community development requirements into the Sierra Leone’s mining laws, it must be recognized that the actual MMA. EITI membership thus likely served as an additional process of Parliament’s consideration and approval of the MMA contributing factor to the passage of the MMA, but it did not on was not very consultative. There was limited interaction between its own provide sufficient incentive to adopt the MMA. government, civil society, and citizens about the proposed law’s contents in the run-up to its adoption. This is likely because the 7.5. The role of civil society law was written by international technical consultants (Adam Smith International) and was hastily put up for consideration by Although not a significant predictor of the cross-national Parliament on the eve of the London investment conference. Civil adoption of community development in mining laws in the large- society did, however, help to prepare the opposition political n analysis presented earlier in this paper, it should be recognized party (the Sierra Leone People’s Party) to debate and ultimately that the group of domestic and international civil society boycott the bill’s adoption once the bill was made available to organizations (CSOs) working on extractives in Sierra Leone Parliamentarians (NMJD, 2009; NREJP, 2012). But this debate played a very strong role in the adoption of community occurred only once the bill had come up for a vote, and had no development requirements into the country’s mining legislation. effect on its adoption given that the SLPP could not muster These groups – mostly falling under the National Advocacy sufficient votes to block the bill’s passage.45 Thus, civil society had Coalition on Extractives umbrella – have, since the end of the a hand in influencing the content, but not the timing, of the MMA’s country’s civil war in 2001, consistently pressured the Sierra adoption. Leonean government for the return of an increased share of benefits to mining-affected communities (Fanthorpe and Gabelle, 2013; DanWatch, 2011; NACE, 2009, 2011; see also 8. Conclusion AJME, 2009–2013, and NMJD, 2009, 2010a, 2010b, and 2012). As one long-serving civil society representative stated, ‘‘after the Community development in mining laws is spreading as a war ended, civil society organization blossomed in the country. result of international pressures. Strong regional, organizational, This led to more agitation by these organizations to raise and economic pressures are providing material and normative awareness of mineral wealth and how it has not translated into incentives for states to adopt these laws. As both cross-national benefits. People see a lack of infrastructure and services despite data and the case of Sierra Leone demonstrate, states are seeking resource wealth, and they are demanding accountability and to attract foreign investment into their mining sectors by community empowerment’’.42 imposing higher regulatory standards, and they are using Significant inter-organizational mobilization occurred around community development legal provisions to communicate the the findings of a government investigative report into the fatal security of their investment environment to potential investors. community protests of 2007 in the country’s major diamond This challenges the conventional wisdom that globalization mining region in the east, Kono (NACE, 2009; NMJD, 2010a). The necessarily leads to regulatory races to the bottom, including in Kono protests highlighted the sometimes contentious relation- the mining sector. Rather, international diffusion can actually ships that exist between local communities and mining compa- help improve the situation of mining-affected communities. nies and the lack of adequate benefits flowing back to mining- However, given that many community development in mining affected communities from both government and mining firms. laws have been adopted in countries that are amongst the poorest One civil society representative underscored the importance of in the world, the real test of their effects will be in examining their the Kono riots to the push by civil society organizations for implementation. legislative reform: ‘‘After the Kono riots, civil society said something needed to be done for local communities in mining Acknowledgements areas. . .The DACDF was not adequate, not properly done or monitored, and it was only for diamond mining communities. Plus I thank Stephan Hamberg, Aseem Prakash, and Mary Kay there were new mining companies coming in, and we wanted to Gugerty for their valuable feedback on this article, the University of prevent what had happened in Kono from occurring again, but Washington Department of Political Science for financial support also to help the local communities since they are so affected by to carry out fieldwork in West Africa for this study, and the mining’s impacts but Government had not made any special individuals and organizations that provided data and support for consideration for them’’.43 this project. I also thank two anonymous reviewers for their valuable comments. I assume full responsibility for any errors contained in this paper, and welcome questions, comments, and 41 feedback on this research. A cabinet-level EITI Steering Committee was established in 2006, and currently the President’s Chief of Staff helps to oversee the implementation of the EITI (acting 44 as the ‘‘champion’’ of SLEITI; see www.sleiti.gov.sl/ and Maconachie, 2009). Interview with civil society representative, 9 September 2013, Freetown. 42 45 Interview with civil society representative, 25 September 2013, Koidu Town. Two separate interviews with civil society representatives, 9 September 2013, 43 Interview with civil society representative, 9 September 2013, Freetown. Freetown.  K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 211 Appendix A Community development requirements in mining laws (organized by year of adoption), and laws pending adoption46 Country Law or policy and year of adoption Summary of community development requirements China Mineral Resources Law (1986, amended When mining occurs in national autonomous areas, the state should make arrangements in 1997) favorable to the areas’ economic development and to the well-being of the local minority nationalities. Ghana Mineral Royalties Regulations (1986); Stipulates that 10% of mineral royalties are to be paid back to the communities on whose land CSR guidelines (2010) mining takes place; money is to be used for development projects. Papua New Guinea Mining Act (1992) Requires consultation with affected parties, and compensation for use of land – firms sign compensation agreements with local communities. The Development Forum requirement has lead to the signing of Memoranda of Agreement between landowners and governments regarding provision of infrastructure, breakdown of royalty payments, funding commitments, etc. Mining Development Contracts are signed between firms and government and outline provisions for infrastructure development, facilities and roads essential to operations and the community, as well as local business, employment, and procurement obligations, environmental and closure conditions. Development Levy is shared among public and private landowners. Colombia Law 141 (1994) Establishes a National Royalty Fund for the distribution and use of royalties received from mining concessions; it receives the revenues from royalties not assigned to specific regions and uses the money to promote mining activities, preserve the environment, and finance regional investment projects. Furthermore, businesses are required to develop activities without harming the cultural, social, and economic values of the communities and ethnic groups occupying the area of concessions, such as indigenous peoples. Philippines Mining Act (1995) and Revised Chapter 3 requires that indigenous communities must be consulted before mining operations Implementing Rules and Regulations of start, and royalties must be paid out into a trust fund for these communities for their socio- RA 7942 (1996) economic development. Chapter 10 requires contractors to assist in the development of its mining community, the promotion of the general welfare of its inhabitants, and the development of science and mining technology. Outlines activities that can be carried out. 1996 Rules state that royalty payments for small-scale mining shall be put into a Trust Fund for the socio-economic development of the local community, that 1% of gross output should be paid to indigenous communities, and that the contractor/permit holder shall assist in the development of the host and neighboring communities to promote their general welfare and allot 1% of mining costs to this. Section 135 of 1996 Rules outline acceptable activities for enhancing development of mining and neighboring communities (establishment and maintenance of community schools, hospitals, churches, and recreational facilities open to the public, construction and maintenance of community access roads, bridges, piers and wharves, communication, waterworks, sewerage and electrical power systems, housing, training facilities and livelihood industries, and creating self-sustaining income generating activities). Nicaragua Mining Law (2001): Special Law for the Part of the royalties from mining (3%) must be directed toward a Mining Development Fund. Exploration and Exploitation of Mines (Law 387) and its bylaws in Decree No. 119-2001 Canada Yukon Oil and Gas Act (YOGA, 2002); YOGA calls for signing of benefit agreements: must outline how Yukon residents will obtain Canada Oil and Gas Operations Act employment and training and how to supply goods and services for the licensee. (COGOA, 1985); NW Territories Section 5.2 of the Canada Oil and Gas Operations Act repeats the prohibition on carrying out legislation (1985); also, land title work before the approval of a benefits plan. The section defines ‘‘benefits plan’’ to mean ‘‘. . . a recognition for First Nations peoples plan for the employment of Canadians and for providing Canadian manufacturers, also empowers them to negotiate consultants, contractors and service companies with a full and fair opportunity to participate community development benefits and on a competitive basis in the supply of goods and services used in any proposed work or impact/benefit agreements with firms activity referred to in the benefits plan.’’ The section also addresses the matter of preferential treatment of certain categories of Canadians as follows: ‘‘The Minister may require that any benefits plan submitted . . . include provisions to ensure that disadvantaged individuals or groups have access to training and employment opportunities and to enable such individuals or groups or corporations owned or cooperatives operated by them to participate in the supply of goods and services used in any proposed work or activity referred to in the benefits plan.’’ Democratic Republic of Congo Mining Law (Law 007 of 2002) Requires exploitation permit applications to include a report on how the project will contribute to the local community’s development. Mining royalties paid to local government are to be used for the construction of basic infrastructure in the community’s interest. Mozambique Mining Law 14 (2002) Article 28 states that ‘‘Production tax is based on the value of mining products resulting from mining activity undertaken in the national territory, of which a percentage shall be destined to local services where the undertaking is carried out in accordance with the terms to be defined through regulations, with the aim of influencing local development.’’ South Africa Mineral and Petroleum Resources Section 23 states that firms must provide social and labor plans that outline plans for the Development Act (Act No. 28 of 2002) social development of mining-affected communities (local socio-economic development plan). 2013 amendment states that the government can direct the holder of a mining right to address the socio-economic challenges or needs of a particular area or community (amendment of section 23). Also, local communities have preferent rights over land, giving them the ability to negotiate with firms for benefits. Mining-affected communities are paid mining royalties because they were landowners. Mines closure plan must outline how the mining company will carry out socio-economic activities to provide an alternative livelihood to local communities beyond the mine life. 46 The data presented in this Appendix A can also be found on the author’s website at http://kendradupuy.weebly.com. 212 K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 Appendix A (Continued ) Country Law or policy and year of adoption Summary of community development requirements Peru General Mining Law (Supreme Decree Article 57 of 1992 law requires distribution of mining taxes to local governments for No. 014-92-EM of 1992), updated in investment and development in their areas. Supreme Decree law No. 015-2004-PGM passed 2011; Supreme Decree law No. 015- in 2004 (the legal framework for decentralization) was established to use revenues from 2004-PGM (2004 – the legal framework mineral production to maximize the well-being of local communities through economic for decentralization); Supreme Decree- growth, environmental protection, and social development in a sustainable way. 2006 Decree law No. 066-2005-EM (May 2006 – legal established to administer the CSR program in the mining sector. framework for creation of the Direccion de Gestion Social) Equatorial Guinea Mining Law (2006) Article 54 requires that the Contractor perform social works in the township district, neighborhood community, or municipality in the jurisdiction where the Contractor conducts its operations. Fiji Mining Act (1978; revised in 1985 and Communities adversely affected by mining laws should be compensated, and firms should 1997, and amended in 2010); Mineral contribute to a Mine Closure and Rehabilitation Fund. 2006 Bill outlines specific reasons for Exploration and Exploitation Bill (2006) compensation, and says that royalties should be paid into a Trust Fund for compensation. Under category 2 for compensation (‘‘cultural disruption’’) holder of mining lease must establish a community development plan that includes provisions for enhancement of the economic climate of the communities, provision of opportunities to obtain employment etc., mitigation of adverse social and cultural impacts, establishing a community development committee, etc. Mongolia Minerals Law (2006) States that an Investment Agreement can be undertaken with firms that invest not less than $50 million during the first five years of a mining project; this agreement would outline plans to develop the region and create more employment. Niger Mining Code (1993), updated in 1999 2006 amendment to the 1993 Mining Code (law 2006-26 of 9 August 2006, amending and 2006 ordinance 93-16 of 1993) says that the state will redistribute 15% of mining revenue back to mining-affected areas. Nigeria Minerals and Mining Act (2007) Section 116 requires the holder of a mining lease, small-scale mining lease or quarry lease to conclude with host community of any activity within lease area a Community Development Agreement, prior to starting any activity. This agreement will ensure the transfer of social and economic benefits to the community; these contributions will contribute to the sustainability of the affected community. Must address all or some of the following issues for the host community: educational scholarships, training, and employment opportunities; financial or other forms of contributory support for infrastructural development and maintenance, including education, health, community services, roads, water, power; assistance with the creation and development of small scale and micro enterprises; agricultural product marketing; methods and procedures for environment and socio-economic management and local governance enhancement. CDA is subject to review every 5 years, and has binding effect; it shall specify appropriate consultative and monitoring frameworks and for how the community will participate in the planning, training, etc. of activities carried out under the Agreement. Laos Mining (or Minerals) Law (Act) (2008) Investors must contribute to Community Development Funds. and implementing decree Central African Law No. 09-005 (Mining Code of 2009) Article 33 requires that permit for industrial exploitation of large or small mine is be Republic accompanied by a plan for a community development program. Ecuador Mining Law (2009) Article 40 states that in cases where mining firms and government enter into a service contract, that government will use the economic resources from 3% of the sales of exploited minerals for sustainable local development projects through municipal governments and parish boards and indigenous community governance structures. Community must be consulted about operations and the firm’s social and environmental management. It is mandatory for indigenous communities to be consulted. Article 93 states that of the 5% royalty to be collected by the government, 60% shall be used for sustainable local development projects through the sectoral governments and parish boards, and 50% of that goes to indigenous community governments. Priority must be given to addressing the needs of communities directly affected by mining activities. Indonesia Mining Law No. 4 (Mineral and Coal Article 108 requires companies to have development and empowerment programs in place to Mining Law) (2009, implemented by benefit surrounding community and that are developed in consultation with Government Government Regulations 78 and 22 of and local communities. Firms are responsible for executing these plans. 2010) Sierra Leone Diamond Area Community DACDF redistributes a percentage of diamond tax revenue back to diamondiferous Development Fund policy (2001); communities for development purposes. Mines and Minerals Act (2009) 2009 law requires holder of small-scale or large-scale mining license to assist in the development of mining communities affected by operations to promote sustainable development; must have a Community Development Agreement with primary host community if mining firm only if has output of more than 1 million cubic meters per year from alluvial deposits, or for underground mining operations where combined run-of-mine ore and waste production is more than 100,000 tons per year + other requirements. Company must spend no less than 1% of 1% of gross revenue amount earned by mining operations in previous year. Terms of the CDA must be negotiated with the community, and should address: social and economic contributions that the projects will make to the sustainability of the community; assistance in creating self-sustaining, income-generating activities such as production of goods and services needed by the mine and community; consultation with the community re mine closure. CDA must outline how it will be monitored, and how community will participate in planning and monitoring etc. of the agreement. Other issues that should be addressed include educational, financial support, support to small business, agriculture, and environmental and socio-economic management and local governance enhancement. CDAs cannot provide cars, additional rents/fees, or provision of payments to individual families.  K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 213 Appendix A (Continued ) Country Law or policy and year of adoption Summary of community development requirements Ethiopia Mining Proclamation 678 (2010) Article 60 states that mining firms are required to participate in the community development plan of the peoples in their license area, and allocate money for such expenses. Also, the Ministry of Mines has an Environment and Community Development Directorate, as established in 2007 by Article 14 of Environmental Protection Organs Establishment Proclamation 295/2002. This entity reviews Environmental Impact Assessment reports, and coordinates, approves, monitors, and evaluates community development projects. Afghanistan Minerals Law and Mining Regulations Environmental Management Plan must show how the firm will ensure benefits to local (2010) communities. To get an exploration license or quarry exploitation authorization, a development plan must be submitted that shows proposed investments and any socio- economic contributions for the communities. Government can establish additional obligations relating to the socio-economic development of affected communities. Government may require development plan to be included in the exploitation bid. Regulations stipulate that the license holder will contribute to the development of the host and neighboring communities of the mining area. Regulations define Development plan as: ‘‘A Development Plan which shall establish appropriate sustainable development and social protection programs and structures, taking into account international best practice. A Development Plan should propose approaches for ensuring adequate housing, sanitation, roads, medical facilities, power and water supply, educational facilities, religious facilities and recreational opportunities. A Development Plan should also address economic development, employment and job creation in local communities, taking into account employment requirements established under the Minerals Law. Finally, a Development Plan must establish funding and implementation commitments.’’ Kazakhstan Law on subsoil use (2010) Bids are required to have information on the costs for social and economic development of a mining region and the development of its infrastructure; contracts must also contain this information, plus info on training. Contracts must contain a commitment to the size and terms of spending on social and economic development of the region and develop its infrastructure for the local content, size of expenditure allocated to education and training of workers; must have local content in goods and services. Vietnam Mineral Law (2010) State will appropriate revenue from mining in localities in which mined to assist with socio- economic development. Firms are required for building welfare works for local inhabitants and compensating for damage. Yemen Law of Mines and Quarries (2002 – Law Mining license holders for large-scale projects must have a community development No. 24; revised in 2007) – updated in agreement in place. 2010 as the Law 22 Concerning Mines and Quarries Zimbabwe Indigenization and Economic President Robert Mugabe set up community share trust funds in 2012 as a result of the 2010 Empowerment Act (2007) and Statutory regulation and 2011 instrument. Communities whose natural resources are being exploited Instrument 114 of 2011 to implement by any ‘‘qualifying business’’ must be guaranteed shareholding in such business. Mugabe it; Community Share Ownership Trusts launched the trust funds as mechanisms for benefiting. were established in terms of Section 14B of the Economic Empowerment (General) Regulations of 2010 Guinea Law 2011/006 (Mining Code of 2011) Chapter 3, Articles 130–131 of the Mining Code specifically addresses the relationships between mining companies and local communities. Holders of mining titles must conclude a Convention of Development with the local community residing near a mining concession. The state will be involved in the development of these agreements; these agreements are designed to create conditions conducive to the management of effective and transparent development contributions paid by the firm, taking into account the capacity of local communities in terms of planning and implementing a community development program. The agreement must contain provisions to train local populations, protect the environment and health of populations, and development of social projects. Local Development Funds must be established. Mining title holders must contribute 0.5–1% of the company’s turnover to the local community (% depends on the mineral). India Mines and Minerals (Development and Section 26.3 requires that ‘‘Without prejudice to the generality of the provisions of the mining Regulation) Act (2011) plan, there shall be attached to the mining plan in respect of all major minerals, a corporate social responsibility document, comprising of a scheme for annual expenditure by the lessee on socioeconomic activities in and around the mine area for the benefit of the host population in the panchayats adjoining the lease area and for enabling and facilitating self employment opportunities, for such population, and the lease holder shall, at the end of each financial year, publish in his annual report and display on the website, the activities undertaken during the year and the expenditure incurred thereon’’. Mali Law 2012-015 (Mining Code of 2012); Mining firms must file a Community Development Plan together with exploitation permit Decree No. 2012-311/P-RM application, which is developed in consultation with the interested local communities as well as local authorities. Community Development Plan must be updated every two years, and the government Mines authority is tasked with setting up a Technical Committee on Local and Community Development to approve and implement the Community Development Plan. Kyrgyzstan Subsoil Law (redrafted in 2012) Calls for program of social investments into local communities through the production phase. (‘‘Regulation on the Procedure for Section 105 states that ‘‘subsoil users who have received the subsoil license, except for non- Licensing and Subsoil Use Rights’’) metallic mineral deposits and water, are required to submit to the authorized state body for the implementation of the state policy on subsoil use social package – an investment program to create the conditions for the local community development (training, employment of local people and infrastructure construction), approved by authorized representative body of local self-government, with regard to solution of contentious problems of the local community in whose territory the subject is located.’’ South Sudan Mining Bill (2012) Requires signing of Community Development Agreements to secure mining licenses, and also requires CSR (guided by ISO 26000). 214 K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 Appendix A ( Continued ) Laws pending adoption Country Law/policy being amended or adopted Details Ghana New law: Minerals Policy Act, and The draft Minerals Policy Act would encourage mining firms to carry out community Mineral Development Fund Bill development. The Mineral Development Fund Bill would give a stronger legal framework to an already existing fund from which royalty payments and development funds of mining companies are put; this money will be used by local development committees for infrastructure projects in mining communities and for enhancing the mining industry. It also says mining firms should participate in community development initiatives. Burkina Faso Revision of Mining Code (Law No. 031- Mining code is currently being revised, and will include community development provisions, 2003/AN (2003)) though exact nature of these provisions has not yet been announced. Kenya New: Geology, Minerals and Mining Bill, Under this new law, local communities will receive 5% of total revenue from mining activities. first proposed in 2012 For large scale mining operations, companies shall ‘‘where applicable and necessary facilitate and carry out social responsibility to the local communities’’. Law also establishes a sovereign wealth fund for mining revenues to the state. Mongolia Updating of 2006 Minerals Law Section 86.2 of proposed law forces mining companies to get local community permission to operate, and also requires signing of Local Development Agreement with local self-governing authorities/governments that requires mining/processing license holder to improve local public infrastructure, local social services, provide jobs, support local businesses, and improve the environment. Mozambique New law: Mining law In new draft law, the government is supposed to spend a percentage of the revenue that the state earns from mining on developing local communities, with the percentage to be specified each year in the state budget. Guatemala Reform of Mining Law (Decree 48-97 of 1997) Proposed new law would establish a mining fund to distribute royalties including 35% to the community where the mine is located. Myanmar New law: Mining Law New mining law will compel government to put a proportion of profits from mining sector into a reserve development fund so local communities can benefit from mining projects. These funds would go toward CSR projects and mine closure programs. Government also wants to amend constitution to introduce provisions on sharing of natural resources with region and state government so those living near mining projects enjoy a share of the profits. South Africa Mineral and Petroleum Resources Changes to the social and labor plan requirement: see above under 2002 law. Development Act (MPRDA) Amendment Bill is under consideration Togo Reform of Law 96-005/PR (Mining Amendments include requirement to promote local and regional development, and Code) requirement for mining companies to contribute financially to this development and to achieve socio-economic and community work in the prefecture concerned from operations. The financial contribution shall be paid annually at the end of each operating year. References Dupuy, K., Helga, B., 2010. The Diamond Area Community Development Fund: implementing a wealth sharing policy in Sierra Leone. In: Presented at the 2010 Abbott, K.W., Snidal, D., 2000. Hard and soft law in international governance. Int. Annual Conference of the International Studies Association, New Orleans. Organ. 54 (3), 421–453. Dupuy, K., Ron, J., Prakash, A., 2013. Reclaiming Political Terrain: the regulatory Africa Progress Panel, 2013. Equity in extractives: stewarding Africa’s natural crackdown on overseas funding for NGOs. In: SSRN working paper. http:// resources for oil. In: Annual report. Africa Progress Panel, Geneva. papers.ssrn.com/sol3/papers.cfm?abstract_id=2165634 (accessed 27.04.13). Alesina, A., Devleeschauwer, A., Easterly, W., Kurlat, S., Wacziarg, R., 2003. Frac- Environmental Resources Management, 2010. Mining community development tionalization. J. Econ. Growth 8, 155–194. agreements – practical experiences and field studies. In: Report written for Anyanwu, J.C., 2012. Why does foreign direct investment go where it goes? New The World Bank. Environmental Resources Management, Washington, DC. evidence from African Countries. Ann. Econ. Fin. 13 (2), 425–462. Eweje, G., 2006. The role of MNEs in community development initiatives in Association of Journalists on Mining and Extractives (AJME), 2009–2013. Mining developing countries: corporate social responsibility at work in Nigeria and watch magazin. Multiple volumes reviewed. South Africa. Bus. Soc. 45 (2), 93–129. Bazzi, S., Blattman, C., 2014. Economic shocks and conflict: evidence from com- Fanthorpe, R., Gabelle, C., 2013. Political economy of extractives governance in modity prices. Am. Econ. J. Macroecon. (forthcoming). Sierra Leone. In: Report prepared for the World Bank. Beck, N., Katz, J.N., Tucker, R., 1998. Taking time seriously: time-series-cross-section Godfrey, M., Sophal, C., Kato, T., Piseth, L.V., Dorina, P., Saravy, T., Savora, T., Sovannar- analysis with a binary dependent variable. Am. J. Pol. Sci. 42 (4), 1260–1288. ith, S., 2002. Technical Assistance and Capacity Development in an Aid-Dependent Besada, H., Martin, P., 2013. Mining codes in Africa: emergence of a ‘fourth’ Economy: The Experience of Cambodia. World Dev. 30 (3), 355–373. generation? In: Report for the North South Institute. North-South Institute, Government of Sierra Leone Ministry of Mineral Resources, 2008. Newsletter: Ottawa. ‘‘Sierra Leone – yours to discover. Binningsbø, H., Dupuy, K., 2009. Using power-sharing to win a war: implementation Grant, J.A., Taylor, I., 2004. Global governance and conflict diamonds: the Kimberley of the Lome´ Agreement in Sierra Leone. Afr. Spectr. 44 (3), 87–107. process and the quest for clean gems. Round Table 93 (375), 385–401. Boakye, D., et al., 2012. Investing mineral wealth in development assets: Ghana, Greenhill, B., 2010. The company you keep: international socialization and the Liberia, and Sierra Leone. In: World Bank policy research working paper 6089. diffusion of human rights norms. Int. Stud. Q. 54, 127–145. World Bank Africa Region Poverty Reduction and Economic Management Unit. Greenhill, B., Mosley, L., Prakash, A., 2009. Trade-based diffusion of labor rights: a Box-Steffensmeier, J.M., Jones, B.S., 1997. Time is of the essence: event history panel study, 1986–2002. APSR 103 (4), 669–690. models in political science. Am. J. Pol. Sci. 41 (4), 1414–1461. Hafner-Burton, E., 2005. Trading human rights: how preferential trade agreements Box-Steffensmeier, J.M., Jones, B.S., 2004. Event History Modeling: A Guide for Social influence government repression. Int. Organ. 59 (3), 593–629. Sciences. Cambridge University Press, Cambridge. Hafner-Burton, E.M., 2008. Sticks and stones: naming and shaming the human Bridge, G., 2004. Mapping the Bonanza: geographies of mining investment in an era rights enforcement problem. Int. Organ. 62 (4), 689–690. of neoliberal reform. Prof. Geogr. 56 (3), 406–421. Hamann, R., 2003. Mining companies’ role in sustainable development: the ‘why’ Busse, M., Hefeker, C., 2007. Political risk, institutions, and foreign direct invest- and ‘how’ of corporate social responsibility from a business perspective. Dev. S. ment. Eur. J. Pol. Econ. 23 (2), 338–359. Afr. 20 (2), 237–254. Bo¨rzel, T.A., Risse, T., 2010. Governance without a state: can it work? Regul. Govern. Hamberg, S., 2013. Transnational advocacy networks, rebel groups, and demobili- 4, 113–134. zation of child soldiers in Sudan. In: Checkel, J.T. (Ed.), Transnational Dynamics Campbell, B. (Ed.), 2009. Mining in Africa: Regulation and Development. Pluto of Civil War. Cambridge University Press, Cambridge. Press, New York. Haufler, V., 2009. The Kimberley process, club goods, and public enforcement of a Campbell, B., 2010. Revisiting the reform process of African mining regimes. Can. J. private regime. In: Potoski, M., Prakash, A. (Eds.), Voluntary Programs: A Club Dev. Stud. 30 (1–2), 197–217. Theory Perspective. Massachusetts Institute of Technology, Boston. DanWatch, 2011. Not sharing the loot: an investigation of tax payments and Hilson, G., 2012. Corporate social responsibility in the extractive industries: experi- corporate structures in the mining industry of Sierra Leone. ences from developing countries. Resour. Policy 37 (2), 131–137. Davis, G.A., Tilton, J.E., 2005. The resource curse. Nat. Res. Forum 29 (3), 233–242. Hyde, S., Marinov, N., 2012. Which elections can be lost? Pol. Anal. 20 (2), 191–210.  K.E. Dupuy / The Extractive Industries and Society 1 (2014) 200–215 215 International Council on Mining and Metals (ICMM), 2012a. The role of mining in NMJD, 2009. Civil Society Review/Critique of the Sierra Leone Mines and Minerals national economies, In: https://www.icmm.com/the-role-of-mining-in-nation- Bill. NMJD, Freetown. al-economies (accessed 17.02.14). Network Movement for Justice and Development (NMJD), 2010a. Diamonds, Blood ICMM, 2012b. Community Development Toolkit. International Council on Mining and Tears: The Relationship between Koidu Holdings, Ltd. and the Affected and Metals, London. Property Owners of Kono. NMJD, Freetown. Jenkins, H., 2004. Corporate social responsibility and the mining industry: conflicts NMJD, 2010b. Mining Revenue Streams and Their Developmental Impact on Com- and constructs. Corp. Soc. Responsib. Environ. Manage. 11 (23–24), 1–12. munities Affected by Mining. NMJD, Freetown. Kapelus, P., 2002. Mining, corporate social responsibility and the ‘community’: the NMJD, 2012. A Framework for the Implementation of the Community Development case of Rio Tinto, Richards Bay minerals and the Mbonambi. J. Bus. Ethics 39, Agreement (Fund) Based on Community Consultation Outcomes. NMJD, 275–296. Freetown. Keck, M., Sikkink, K., 1998. Activists Beyond Borders: Advocacy Networks in Newell, P., 2005. Citizenship, accountability and community: the limits of the CSR International Politics. Cornell University Press, Ithaca. agenda. Int. Aff. 81 (3), 541–557. Kemp, D., 2009. Mining and community development: problems and possibilities of O’Faircheallaigh, C., 2012. Community development agreements in the mining local-level practice. Community Dev. J. 45 (2), 198–218. industry: an emerging global phenomenon. Community Dev. 1, 1–17. Kemp, D., 2010. Community relations in the global mining industry: exploring the Otto, J.M., 2013. Resource Nationalism and Regulatory Reform. In: Paper Presented internal dimensions of externally oriented work. Corp. Soc. Responsib. Environ. at the IBA/RMMLF Special Institute on International Mining and Oil & Gas, Manage. 17, 1–14. Cartagena de Indias, Colombia, 22–23 April, 2013. Kemp, D., Owen, J.R., 2013. Community relations and mining: core to business but Perla, C., 2012. Extracting from the extractors: the politics of private welfare in the not ‘core business’. Resour. Policy 38, 523–531. Peruvian Mining Industry. (PhD dissertation)Brown University, Department of Keohane, R.O., 1998. When does international law come home? Houst. Law Rev. 35 Political Science. (3), 699–713. Perry, A., 2000. Effective legal systems and foreign direct investment: in search of Labonne, B., 1999. The mining industry and the community: joining forces for the evidence. Int. Comp. Law Q. 49 (4), 779–799. sustainable social development. Nat. Resour. Forum 23, 315–322. Prakash, A., Potoski, M., 2006. Racing to the bottom? Trade, environmental gover- Maconachie, R., 2009. Diamonds, governance, and ‘local’ development in post- nance, and ISO 14001. Am. J. Pol. Sci. 50 (2), 350–364. conflict Sierra Leone: lessons for artisanal and small-scale mining in sub- Ross, M.L., 1999. The political economy of the resource curse. World Pol. 51 (2), Saharan Africa? Resour. Policy 34, 71–79. 297–322. Maconachie, R., 2010. ‘New spaces’ for change? Diamond governance reforms and Rosser, A., 2006. The political economy of the resource curse: a literature survey. In: the micro-politics of participation in post-war Sierra Leone. Public Adm. Dev. Working paper 268. University of Sussex, Institute of Development Studies. 30 (3), 191–202. Ruggie, J.G., 2007. Business and human rights: the evolving international agenda. Maconachie, R., 2012. The Diamond Area Community Development Fund: micro- Am. J. Int. Law 101 (4), 819–840. politics and community-led development in post-war Sierra Leone. In: Lujala, Simmons, B.A., Elkins, Z., 2004. The globalization of liberalization: policy P., Rustad, S.A. (Eds.), High-Value Natural Resources and Peacebuilding. Earth- diffusion in the international political economy. Am. Pol. Sci. Rev. 98 (1), scan, London. 171–189. Maconachie, R., Hilson, G., 2013. Editorial introduction: the extractive industries, Veiga, M.M., Scoble, M., McAllister, M.L., 2001. Mining with communities. Nat. community development, and livelihood change in developing countries. Com- Resour. Forum 25, 191–202. munity Dev. J. 48 (3), 347–359. Vogel, D., 1995. Trading Up: Consumer and Environmental Regulation in a Global McNab, K., Keenan, J., Brereton, D., Kim, J., Kunanayagam, R., Blathwayt, T., 2012. Economy. Harvard University Press, Boston. Beyond voluntarism: the changing role of corporate social investment in the Vogel, D., Kagan, R.A., 2004. Dynamics of Regulatory Change: How Globalization extractives sector. In: Centre for Social Responsibility in Mining. Brisbane, The Affects National Regulatory Policies. University of California Press, Berkeley, CA. University of Queensland. World Bank, 2012. Mining Community Development Agreements Source Book. The National Advocacy Coalition on Extractives (NACE), 2009. Sierra Leone at the World Bank, Washington, DC. Crossroads: Seizing the Chance to Benefit from Mining. NACE, Freetown. Yakovleva, N., 2005. Corporate Social Responsibility in the Mining Industries. NACE, 2011. Still at the Crossroads: An Updated on Sierra Leone’s Chance to Benefit Ashgate Publishing Company, Burlington, VT. from Mining. NACE, Freetown. Zillman, D.N., Lucas, A.R., Pring, G., 2002. Human Rights in Natural Resource Natural Resource and Economic Justice Platform (NREJP), 2012. CSOs Further Development: Public Participation in the Sustainable Development of Mining Analysis and Critique of the Two Draft Minerals Regulations. NREJP, Freetown. and Energy Resources. Oxford University Press, Oxford.