Institutional & Policy (3)
The notion of “social license” has become so embedded in the extractive industry lexicon in the past 15 years that it is frequently invoked in CEO speeches, and used to title sustainability reports and industry conferences. And in the past 24 hours it (or rather the lack thereof) has been used as a red flag in the negotiations between Rand Gold and AnglogoldAshanti as they try to formulate a joint venture to re-ignite the Obuasi Mine in Ghana.
Obuasi Gold Mine is located near Obuasi in the Ashanti Region and it started operating in 1897. It was acquired through the merger of between Anglo Gold and Ashanti Goldfields in 2003, which resulted in the formation of AnglogoldAshanti in 2004. Obuasi is well-known for its destructive environmental legacy, labour problems and problems related to illegal ASM activities on its property. A large section of the mine is currently under care and maintenance while its owners seek solutions, one being a possible joint venture with Rand Gold.
Obuasi’s lack of social licence to operate highlights the business case for having social license. Social license in its traditional meaning refers to approval by local communities and stakeholders for a company or a project to operate in the area. Often people will link it only to a specific activity or industry, e.g. a mine, or the extractive industry, but just as often, if not more often now with the availability of the internet, with a specific company. Social license can range for reluctant acceptance of the project to a relationship based on high levels of mutual trust. Perceptions of the company and its employees’ conduct play a big role in whether social licence will be achieved.
What is lacking in this somewhat “narrow” view, is that we consider “society” to be outside and removed from the company or the project or the operation. “Society” is viewed as the affected communities, and other stakeholders, which includes government, NGOs and if one is lucky, the local economy. Very seldom do we actively consider and include the labour force, the workers and the contract staff as part of the society from which we should gain license to operate. Many clients have pointed out to me that human resource issues should be separated from that of the community, forcing a separation between the human resource department and the community relations department, building silos without any real bridges.
At Obuasi the lack of social license to operate is closely linked with labour issues at the mine. In South Africa, there is currently an application for a silicosis class action law suit being brought in front of the courts. It relates to millions of gold mine workers dying from silicosis and the gold mining companies refusing to take care of them, leaving the expenses for the care on the shoulders of impoverished communities. At Marikana, in August 2012, workers protested working conditions and died, and a few months later, in Ghana, the Tarkwa and Damang gold mines had an unprecedented combined strike. These incidents have all significantly reduced or completely removed the respective companies’ social license to operate. The silicosis case is managing to reduce the social license of gold mining to an all-time low.
Isn’t it time for us to include labour in our “society” when we seek a social license to operate?
Climate change has become a very familiar part of our lexicon, and is no longer just one of many environmental and regulatory concerns, but in reality has become “the major overriding environmental issue of our time and the single greatest challenge facing environmental regulators”, according to the Secretary-General of the United Nations, Mr Ban Ki-Moon.
References to climate change are all around us: in newspapers, on the radio, on TV, in conversations with friends. These references become more prevalent every time there is an unexpected weather phenomenon, but once those weather events subside, we stop talking about it and continue with our daily lives until the next time. One thing is for sure though, going forward, our lives and that of our children will never be the same as we are used to. The Intergovernmental Panel on Climate Change (IPCC) warns that extreme weather events will become more frequent.
But what is climate change? Global climate change is driven primarily by the rise of greenhouse gas concentrations in the atmosphere. These gasses are the result of the burning of fossil fuels, deforestation and the conversion of undeveloped land to agriculture. Once these gasses are released into the atmosphere, they absorb heat emitted from the earth’s surface and so warm the atmosphere. The result of this phenomenon is that the earth is now warmer than at any time during the past thousand years and this is evidenced in the retreat of glaciers everywhere, rising temperatures, increased number of storms and a constant rate of sea level rise. The current level of carbon dioxide (CO2) in the atmosphere is the highest it has been in the past 650,000 years.
The IPCC has also reported that globally each of the last three decades was increasingly warmer than any preceding decade since 1850. In the northern hemisphere 1983-2012 was possibly the warmest 30-year period of the last 1400 years. There are reports that May 2014 was the hottest globally since records began in 1880.
The reality is that the dangers of climate change have moved from being a distant threat to present-day danger, with none of us left unscathed. It is very important that CO2 levels in the atmosphere stabilize and then start to drop significantly by 2100 – essentially we have a few decades from now to come to grips with CO2 emissions and haul them back down to levels of previous centuries. To achieve this goal, we need to use the next 35 years to replace most fossil fuels with renewables. Realistically this is nearly an impossible goal to achieve, especially in fast developing countries.
The link between climate change and biodiversity has long been established. The current rapid changes in the climate, plus other human actions, are affecting ecosystems and species’ ability to adapt and thus biodiversity losses increase. These losses are projected to become a progressively more significant threat in the coming decades. In addition, more frequent extreme weather events and changing patterns of rainfall and drought can be expected to have further significant impacts on biodiversity.
Scientists have found that oceans are able to absorb some of the excess CO2 released by human activity. This has helped to keep the planet cooler than it otherwise would have been had these gases remained in the atmosphere. Good news, yes, except that the additional excess CO2 in the oceans produces a weak acid called carbonic acid, which is now changing the sea water chemistry. Sea water is currently some 30% more acidic than pre-industrial times, depleting carbonate ions, which are the building blocks for many marine organisms. Concentrations of carbonate ions are now lower than at any time during the last 800,000 years. Other related problems include more oceanic dead zones and the decline of important coastal plants and forests, such as mangrove forests that play an important role in carbon absorption. Dead zones are areas where there is too little oxygen in the sea to support life. Scientists warn that we are entering an unknown territory of marine ecosystem change.
Even our lizards are at risk. Lizards are very susceptible to climate change extinction as many species now live right at the edge of their thermal limits. Why? Rising temperatures leave lizards unable to spend sufficient time foraging for food because they need to rest frequently to regulate their body temperature.
You might read this and wonder why you should worry about something as ‘insignificant’ as a lizard’s survival. The reality is that the continuing loss of biodiversity and degradation of ecosystems weaken the ecosystems’ ability to provide essential services that we in turn need to survive. What we don’t think about is, how without conserving nature, our lives will change in the future. Resources such as water, wood and food become less available when we don’t protect our planet. As these become less available, and the weather becomes completely unpredictable, we are all at risk of wars over resources, as well as risk of starving or dying in floods. By conserving nature and restoring ecosystems we reduce our own vulnerability and increase resilience. Nature conservation and restoration is a major, cost-efficient ally in our fight to adapt in a time of climate change.
Our human cultural heritage is also at great risk. UNESCO cultural heritage sites, such as Venice, will be lost to submersion in high sea waters. Ben Marzeion and Anders Levermann indicate that 136 out of 700 listed cultural monuments around the world will be affected in the long term. They further warn us that if climate change remains unchecked and global temperatures rise by 30C, twelve countries around the world could lose more than half of their present land area; and island states in the Pacific and the Caribbean, as well as theMaldives and the Seychelles will be particularly threatened. “A majority of their populations will eventually need to leave their home islands in the long-term, so most of their culture will be entirely lost sooner or later if the warming trend is not stopped”. They also highlight that seven percent of the world population today lives in regions that, without massive protection, will eventually be below sea level if temperatures rise by 30C. Should we not limit climate change, future archaeologists and paleoanthropologists will have to search for major parts of our cultural heritage in the oceans.
But the questions we have to ask ourselves are: How can we survive without learning to adapt to climate change and its consequences? And why are we not actively talking about climate change adaptation?
As we have seen above, the impacts of climate change are wide reaching. Erratic temperatures and rainfall can affect our farms, crops and our livelihoods directly. Not only are floods and drought a risk, but also complementary problems such as pests that flourish in adverse weather. These unpredictable changes affect yields and quality, lead to increased production costs, which in turn leads to drastic reductions of income, and higher food prices. Most vulnerable are the poor households, but these factors will eventually affect us all in one way or the other.
Finding ways to adapt to these climate-induced changes has now become profoundly important and urgent, and yet building our resilience is the most significant challenge. Since ecosystem services are the benefits that people receive and often rely upon from well-functioning ecological systems, it has become vital that extractive due diligence highlights the interdependencies between community, societal, economic, and ecological systems. The reality that natural systems provide key infrastructure to people from relatively predictable climate and water availability, through natural recharging of underground aquifers, renewing of soil productivity, controlling insect borne disease vectors (through natural dynamics of insect control), among many other societal benefits, must be acknowledged by industry. The extractive industry should find effective ways to integrate climate change resilience as part of their corporate social responsibility community development projects, and just as importantly, find ways to effectively and efficiently assess corporate impacts on ecosystem services.