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Monica_55905 Apr 29

Transparency in the mining sector

ARTICLE ORIGINALLY PUBLISHED BY OUR MEDIA PARTNERS VIA MINERA. CÉSAR REYNA UGARRIZA EXPLAINS US WHY THE NEED FOR TRANSPARENCY IN THE MINING INDUSTRY, AS WELL AS THE BENEFITS OF A MORE TRANSPARENT SYSTEM.
In this column we propose that the transparency of mining companies, such as that of the government sector in charge of regulating it, is a matter of duty and necessity at the same time. It is because the activities of companies have to gain some support or legitimacy in the social environments where they operate. In other words, a need linked to the nature and peculiarities of the business. But at the same time it is a must because legal procedures establish it in many ways. In the areas in which companies must be transparent, it is mainly in the timely disclosure of environmental information related to the impacts generated by mining activity. So the more transparent they are in this regard, both the authorities and the public will be able to have a better knowledge of the potential effects of the projects before they start operations.

This helps a lot to build an image of responsibility in the industry because it allows to prevent impacts more effectively. On the other hand, it is necessary for companies to be equally transparent in the information regarding their income, tax payments, royalties and other contributions to the treasury. It is extremely important that the operators effectively demonstrate the operating or production costs and the income obtained. This helps to clarify the important economic resources generated by the activity. In that vein, as more companies adhere to mechanisms such as the EITI, the Extractive Industry Transparency Initiative, a program aimed at increasing transparency about payments made by private companies in the extractive sector in countries where operate, the responsible management of mining resources will be strengthened.

Likewise, it is necessary to promote transparency in the generation of direct and indirect employment in the different phases of the mining activity, as well as in the hiring of local suppliers to promote greater confidence in the sector as a generator of collective well-being in labor and economic matters. . This would improve the perception of companies since through the employment requested and the development of value chains (suppliers), a large part of the income generated by mining is redistributed locally.

We must not forget that the disclosure of information must be understandable (in the local language) and through appropriate channels or means, otherwise it would not fulfill its main purpose. This implies the use of social networks, in addition to traditional media, to reach a vast public eager to learn about the immediate and future plans of the projects. Many are interested, for example, in learning about the conditions or standards for hiring mining companies to become suppliers of goods and services. Others, on the other hand, receive or access relevant information of an environmental nature to carry out an effective follow-up or monitoring of operations, especially in the case of the population located in the areas of influence.

Transparency, as a necessity and duty, must push companies towards an open-door policy towards the society that receives or welcomes them. This generally implies assuming a series of commitments that in the long run become habitual practices that help to dispel fears, misinformation, controversies, inaccuracies, uncertainty or any type of doubt regarding the different areas in which mining operations are commonly carried out.

(*) César Reyna Ugarriza, economist and consultant on economic and social issues. He is currently developing an intercultural negotiation model to generate agreements between communities, mining companies and the State.