7. Changing Rules of the Game in a Sustainable World
A sustainable world is not a Utopia – it is reality, with challenges and diverse and competing interests. However, it is an interactive and more informed world. Globalization has not been scaled back, and mining and metals companies, governments and civil society work closely together. To understand the dynamics of the roles and responsibilities of the mining and metals sector in such a world, and how they align with those of government and civil society, this section looks at policy and regulation, as well as partnerships.
Policy and Regulation
In a sustainable world, the mining and metals sector operates within a common set of policies and regulations at the local, national and global level.
Policies are crafted to promote shared value for industry, governments and civil society. The sector adopts global, overarching frameworks that are predictable and consistent. Regional and local policies are established that align with the global framework, but also account for local culture and sociopolitical environments. Each framework articulates a set of standards specifying what responsibility means for mining and metals companies. These standards serve as a benchmark for companies and governments to assess performance, resulting in robust policies that cover a wide range of principles including community relations, stakeholder engagement, climate change, tax avoidance, transfer pricing and resource-rent allocation.
Regulation is less formal in a sustainable world. Traditional regulatory frameworks were phased out after the 2008 global financial crisis, when industry and governments reached a consensus that those frameworks were too cumbersome to sufficiently reflect rapidly evolving, globally integrated marketplaces. Instead, certain minimum thresholds exist for safety, environmental performance, human rights protections and ethical financial behaviour. Beyond that, the market is self-regulating based on true value. The market value of every company is holistic.
Social media has lowered the cost and effort of collaboration, allowing governing institutions to respond quickly to evolving socio-economic requirements. Consumers, empowered by social media, have taken on new roles as citizen regulators. As a result, companies are subject to much greater scrutiny. Social media and other new information and communication technologies support greater interaction and collaboration across the value chain, ensuring that policies and regulations reflect the interests of all stakeholders. Improved communication channels, and a commitment to transparency reinforced by true value, ensure that mining and metals companies operate within a sustainable world’s covenants.
No government, country, corporation or state-based institution controls global resources. Multistakeholder networks – comprising government, civil society, industry, customers and financial institutions – govern global resources. Rather than simply regulating, governments improve industry behaviour by encouraging transparency and boosting civic engagement. This collaborative, trust-based governance model fosters legitimacy, inclusiveness and consensus-oriented stakeholder decisions.
Mining and metals companies need to be prepared for flexible and dynamic policy and regulation that more accurately reflects the interests of the wider stakeholder community.
To operate in a sustainable world, mining and metals companies depend on partnerships. All successful companies have strong relationships with governments, investors, communities, civil society, academic institutions and other stakeholders. A greater understanding across governments and civil society about the opportunities and challenges of the mining and metals sector also helps governments and companies to agree on appropriate roles and responsibilities for sustainable business models.
Partnerships are diverse, but they are all built on trust, thriving on strong leadership from all partners and rewarding collaboration. Every partnership is unique, based on each partner’s objectives and context. Keeping partnerships simple and focused improves their success. Consequently, being open to multiple rather than exclusive partnership models is important. Partnerships allow governments, companies, investors and civil society to focus on their specialities, and to rely on improved collaboration networks and knowledge-sharing facilities to fill any gaps. In a sustainable world, partnerships serve to maintain and manage shared-value opportunities rather than to focus on development.
The mining and metals sector uses a collaboration and engagement platform to identify, maintain and improve partnerships in a sustainable world. This platform has four key attributes:
- Partner definition: Document the stakeholder landscape to identify potential partnerships, list existing partnerships and highlight potential roles and responsibilities in partnership arrangements, and thereby build a foundation for the sector to engage in a strategic dialogue with relevant organizations
- Shared value: Define shared value to ensure partnerships are mutually beneficial and engaging
- Performance catalogue: Compile a repository of historical and existing engagement processes (e.g. Whitehorse Mining Initiative, Devonshire Initiative, Extractive Industry Transparency Initiative) and alliances (e.g. Barrick Gold, IAMGOLD, Tiffany & Co.); identify and document the key success factors of each initiative to guide future programmes and partnerships
- Digital interaction: Use digital technology and networking platforms to enable low-cost, flexible and highly responsive interactive and informed partnership models
Successful partnerships enable mining and metals companies to develop stable relationships with investors, suppliers, customers, governments and civil society, and to thus transcend the role of commodity provider and instead position themselves as stakeholders committed to shared value. The companies that maximize shared value will secure the strongest market position.