Community disapproval can cost hundreds of millions of dollars in delays or the complete abandonment of a mining project. A new science-based solution that provides deep social insights aims to elevate the industry’s social performance to the same measurable rigour as other aspects of business. EMILY LEHMANN reports
Community conflict can be costly
A paper published in the Proceedings of the National Academy of Sciences in 2014, found that delays as a result of community conflict cost companies US$20 million per week on major mining projects worth US$3 to $5 billion.
At the same time, it was reported that community opposition caused five mining projects to be abandoned globally between 2006 and 2013. This includes a coal mining project in Australia’s Hunter Valley.
Community expectations have grown and evolved over time, which means a sophisticated approach is needed to properly address community issues and the potential negative impacts of mining.
Involving communities in the conversation
CSIRO’s Dr Kieren Moffat says a social licence to operate is about communities having a way to shape the development trajectory of industry.
“If the community doesn’t have a constructive way to have a voice and speak to issues, they will find creative ways to influence developments.
“Traditional ways of engagement and investment in community relationships are often mismatched with the expectations of the community. Relationships are nuanced and dynamic, and therefore need an approach that factors that in.”
Through his team’s earlier research, Dr Moffat found that the social performance function within mining companies didn’t have the same level of quantitative characterisation of the issues and risk they were trying to manage as other aspects of their business.
“We started to explore quantitative ways to understand a social licence to operate – what it is, how you obtain it and hold it, and combined it with social science methodologies.”
A pathway to a social licence to operate
After testing their methodologies in a five year project with Santos GLNG, Dr Moffat’s team published a groundbreaking integrative model to explain community acceptance of mining. The model shows that building trust is key.
It was applied at the Waihi gold mine by Newmont Mining who were seeking to make a potentially controversial extension to their existing underground operation directly beneath homes in the town. Applying CSIRO’s model during the extensive consultation and negotiation with the community, led to the complex proposal proceeding without legal challenge – the first of the four extensions to do so.
Building on this model, Dr Moffat’s team has created an innovative commercial solution to improve social performance, called Reflexivity, that has drawn the attention of global mining executives. The solution provides deep social insights in three steps – surveys, sophisticated modelling of data and insight delivery.
“What we’ve come up with is a way for companies to understand their social performance across time and across sites, in the same way that companies would for, say, safety,” says Dr Moffat.
“What’s different about Reflexivity is that we regularly collect data so that a company can engage directly with a much broader set of people within the community — not just via committees or representatives, but one-on-one with individuals in near real time, in an ongoing way.
“Reflexivity doesn’t just tell you what people in the community think, but why they think a certain way. This tells you where to focus your energy in your engagement activity to improve the relationship, enabling a company to focus on the issues that matter most to the community.”
The team’s social science expertise comes to the fore in helping the company distil the data into meaningful messages and a set of actions that they can communicate internally and to the community.
It allows community engagement functions to lobby for resources to focus on those issues that matter most to communities and represent the best return on investment for the company.
Understanding community issues across time and locations
In 2014/15, Reflexivity was piloted by Anglo American at scale across four sites in South Africa and one in Australia where issues relating to trust and acceptance were tracked in each community, every month for a year.
Anglo’s headquarters in London, along with operation managers on the ground at mine sites, had access to the rich data at the same time, allowing them to understand the issues at that moment, plan what to do next and track the effectiveness of those interventions in terms of their engagement with the community.
“We saw the level of trust in the company at their most challenging site improve from quite low to the same solid level as the other three sites – it was an amazing turnaround.”
Engaged by Rio Tinto in the Pilbara
Now, Rio Tinto has engaged CSIRO in a three-year project to roll out the Reflexivity solution in the towns surrounding its iron ore operations in the Pilbara. The project is called Local Voices and launched in July 2017. Since then, the first round of survey data has been collected and shared with the community.
“We want our host communities across the Pilbara to have a voice and to know that we are listening to what they have to say,” Rio Tinto’s general manager communities and communication, Linda Dawson, says.
“Whilst we have conducted community perception surveys in the past, we wanted to take a longer-term view. We are keen to understand what people think about Rio Tinto on a range of issues, our role in the community and why they hold those views.”
An important aspect of the Reflexivity solution is that all the data is collected, owned and managed independently by CSIRO.
“Partnering with a credible organisation like CSIRO was important to us. We wanted our host communities to have confidence in who they shared their views with, so that together we can build stronger and more trusting relationships,” Ms Dawson says.
“When CSIRO shares the data gathered, the community sees what we see, and I really like that transparency.
“Over time we hope to better understand the priorities and concerns of the communities and what we might need to do differently. We know the data will better inform how we engage, develop and invest in the Pilbara.”