Thursday, January 12, 2006

LUKE DANIELSON: “Humans don’t exist to serve mining. Mining exists to serve humans”

¨Published in AREAMINERA N°2, August 2005)

Raul F. Campusano, International Editor

“We come from many different cultures, and often face different pressures and priorities. But we are all consumers of minerals, and passengers on the same small blue planet. We share a common future.” With these words, Luke Danielson began his address to the Ministers responsible for Mining in the Asia pacific Region, last year in Antofagasta.

With this issue Areaminera begins a new section: “The World of Mining” whose aim is to present to our readers main actors of the mining activity from all over the world, stressing in this way that we are part of a wider and larger community.

Our first guest is Luke Danielson and it was not difficult to make this decision considering the long and relevant experience Luke has regarding some of the most relevant and interesting initiatives, debates and challenges related to the mining activities.

Luke Danielson is a lawyer by profession, a professor of environmental law by option and a main stakeholder of the world mining activity by the forces of nature and destiny. He is a leading authority on the legal structure and functioning of environmental impact assessment systems and environmental issues in the natural resource and energy industries. He was the Project Director of the largest worldwide research effort ever undertaken on how mining investment can support sustainable development, the Mining, Minerals and Sustainable Development Project, headquartered at the International Institute for Environment and Development (IIED) in London.

Danielson was the first Director of the Mining Policy Research Initiative, a project of the Canadian International Development Research Centre. As such, he was responsible for funding and conducting research on the links between mining and sustainable development in the 23 countries of Latin America and the Caribbean. Prior to that, he was Visiting Professor at the University of Chile, teaching environmental law in the Faculty of Law. He has also taught courses on environmental and natural resource management, environmental issues in the mining industry, and international mineral development at university faculties in the US and South America.

Luke has been a partner in several US law firms, specializing in environmental litigation. He has undertaken consulting projects for the Cuban Ministry of Science, Technology and the Environment, the Chilean Ministry of Mining, the Chilean national environmental agency, amongst others, and has advised a number of energy and natural resource corporations, NGOs and government agencies in South America on issues relating to the environment and to indigenous peoples. Luke has recently completed a major study of state mine reclamation programs in the United States and has a forthcoming comparative study of the legal aspects of mine reclamation programs in eight world mining countries. He has also written comparative studies of environmental impact assessment systems in several South American countries. He has served on numerous boards, committees and panels related to conservation, natural resources, mining and energy.

Mr. Danielson, you have a long experience in the international mining sector, but I understand that your expertise was originally environmental law. How did you get into the mining world?

I come from one of the world’s most important historic mining regions, the western United States. We have to remember that after all the talk about globalization and the internationalization of the mining industry; this is still a major mining region. Indeed, in 2004, there was more exploration money invested here than in Chile – almost as much as in Chile and Peru combined. So despite the talk of the death of the U.S. mining industry, there is still a lot of life in what some talk about as if it were a corpse.

For someone interested in environmental management in this part of the world, it is hard to avoid being drawn into discussions of mining. We have at this stage a history of almost 150 years of intensive mining, much of it conducted under the values and attitudes of the past, which is to say that its environmental consequences are very obvious, and generally not very good publicity for the industry. In my home state of Colorado alone we may have 25-30,000 abandoned mine sites. Perhaps ten percent of those have significant environmental problems. And perhaps ten percent of those – one percent of the total – are responsible for very serious forms of damage to the environment, on and off site.

Few of these sites are currently generating any revenues. So it is not clear where the funds can come from to deal with these environmental problems. We have made some progress, but have far to go. Most of all, however, I am interested in the problems of environmental management in the mining industry because they are very difficult challenges. Why should we work on easy problems?

You have been several times in Chile and even worked here. Could you tell us about your experience and activities in Chile?

I first came to Chile to explore the potential for cooperation on air pollution issues in the Metropolitan Region. Denver, the capital of my state, has a significant air quality problem. We had benefited by a cooperative agreement with Mexico City, which has similar problems. And we wanted to see if extending this to a three city agreement would have benefits. I believe it did.

I was fortunate enough to be invited to teach environmental law at the Faculty of Law of the University of Chile, and to receive a Fulbright fellowship to do that.

In my years in Chile I did consulting projects on a variety of issues with a number of government agencies, including CONAMA and the Ministry of Mining.

It was very exciting for me to be in Chile during the years of rapid development of environmental law, not least because Chile is a country that takes its legal system seriously, respects the role of law in regulating social processes, and takes protection of its natural patrimony seriously as well.

Personally, I will always feel that Chile has become part of my life, from its beautiful landscape to the intellectual dynamism of the country, and the close friendships I have formed there. And if you are interested in mining, Chile is part of your life.

You were the Director of the Mining Minerals and Sustainable Development Project (MMSD), perhaps the largest and more relevant international initiative related to mining and sustainable development ever. Could you elaborate about the scope and purpose of the MMSD and its projections now that the project is over?

It seems clear that this industry has the potential to bring investment and development to regions of the world where it is very difficult to attract most other kinds of economic activity. It is also clear, however, that in the absence of some set of government framework or understood rules, that investment does not necessarily lead to development, or does not lead to the kind of development that benefits the poor, or respects environmental limits. So there is an urgent need to develop some set of criteria for distinguishing between minerals investment that is supporting the process of sustainable development and that investment which is retarding that process by damaging the environment, imposing the cost of development on the poorest members of society, or undermining integrity in the organs of the state.

No one should have expected any single research project to have solved the problems of such a complex and varied industry. A reasonable expectation was that it would make significant progress in moving toward a set of understood expectations about what mining investment should – and should not – be expected to achieve.

This is much more complex that simply setting up a single environmental standard: the environmental issues in the Indonesian rainforest are very different from the desert of Mongolia. It is also much more difficult than setting up a single standard for health impacts of projects, or community development – the needs of communities in Australia and Zambia may be very different.

Fundamentally, it is not about a set on numerical standards or engineering criteria but about how decisions get made and who gets to participate in making them.
In my view, we are getting very close to a set of standards that will be used for certification of minerals products. Indeed, there is already a system in place for certification of diamonds. This may well spread quickly to gold. There are beginnings of this movement with other minerals, including copper.

MMSD is hardly the only process that has worked in this direction in recent years. There is the international code for the management of cyanide in the gold mining industry. There is the mining and metals sector supplement of the Global Reporting Initiative. There are the Equator Principles and the Safeguard Policies of the World Bank Group, and the Global Compact of the United Nations. And there is much more.

None of these is perfect, and none of these is an end in itself. But from all these efforts is emerging a set of norms. And already we can tell the difference between the people who are understanding, internalizing and applying these norms and the people who are not. And soon consumers, lenders, insurers, stockholders and others will very easily be able to tell the difference between those who comply and those who do not. And business will be easier and more profitable for those who adopt these principles and can prove it. If MMSD marks a milestone on the path to this new kind of industry, it served its purpose.

Do you think mining is a sustainable activity?

Humans don’t exist to serve mining. Mining exists to serve humans.

The question is therefore not whether mining is sustainable but whether mining can contribute to the sustainable societies we need to build. How good is mining at meeting human needs? We are far beyond the idea that “you need our products, and must therefore be prepared to accept the consequences, whatever they may be.”

The truth is that all societies have far more evolved and sophisticated expectations of what they want from this industry and how they want it to meet their needs. They may want iron, but they also want education. They may want copper, but they also want water. They may want coal, but they also want improved health.

Success today means managing to meet these expectations on at least three levels: International expectations for protection of reputation and responsible business practices as expressed by international codes of conduct, financial institutions and others; national expectations for development benefits as expressed in legislation and policies of government; and the expectations of the communities in which a company does business. One out of three or two out of three won’t do. A successful operation needs to be successful on all these levels.

While it is hard to imagine the human race doing without any mining, it is not hard to imagine that if the industry is seen as damaging to these other development objectives, we will have less of it, and it will be less profitable.

So no individual mine will stay open forever. But the industry can and should be part of a transition to societies that provide a better level of existence for the poor, with greater respect for ecological limits.

What can you tell us about the Post Mining Alliance?

One of the reasons that managing mining for sustainable development is such a challenge is the fact that it requires us to see and manage over very long time scales. Mining moves more material than any industry in the world. Moving material is its principal cost. Wherever we put it, it is likely to stay for a very long time.

So we have developed a concept of planning for mine closure, which has allowed us to make very great progress in reducing the environmental impacts of mining. But we are just starting to look at the idea of social conditions post closure, developing economic activities that can be sustained post-closure, and integrating the environmental, social, and economic factors to create really positive post-mining outcomes. I have no formal connection with the Post Mining Alliance, but I am an enthusiastic supporter.

The Post Mining Alliance is an exciting and positive step that may be able to get us beyond the government vs. industry or industry vs. environment paradigms to think about what each set of actors can contribute to finding more and more positive post mining results.

What are your current activities and plans?

I am enjoying consulting, writing, and trying to promote thoughtful discussion of the role of the minerals industries in what is after all our shared future.


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