Why social impact assessments often fail to make an impact – and what to do about it

We’ve been studying the social impacts of mining for many years. A lot of our research has been conducted in Papua New Guinea, which is a rather complex socio-political setting for large-scale mining.

But it’s also a very good place to think through the issues for social impact assessment (SIA) in the global mining industry. Some of the fundamentals for SIA have been developed and honed around mining operations in this country, and almost every social impact that has been predicted in this national setting has come to pass.

In our new public course Social Impact Assessment in the Extractives: Critical Perspectives at the University of Queensland, we explore recurring issues and gaps in extractive sector SIAs and emerging practices that can help ensure SIAs have a greater impact.

This article summarises five of those critical issues and two emerging areas of practice.

Recurring issues in mining sector SIAs

1. Impacts and processes unique to mining

These issues are often complex and poorly understood, misrepresented, miscalculated, or overlooked because they are sometimes characterised as ‘indirect’ impacts. Companies and regulators often don’t want to take responsibility for managing them – so they are not studied. Examples include human displacement, in-migration, intergenerational community conflict, economic impacts like localised inflation, or gender-based issues in communities.

In addition to this, attention to the mine lifecycle and mine closure is almost always absent from SIAs conducted at the beginning of a project. This leaves a massive gap in everyone’s understanding: what will be the predicted legacy of the mine? And how can communities be expected to provide their approval or consent to a new mine when they cannot foresee potential closure legacies? 

2. The SIA process

The second set of recurring issues relate to the SIA process.

Let’s begin with a simple, but fundamental question, namely, ‘what is the purpose of SIA?’

Many things shape SIA today: regulatory requirements, industry standards, finance conditions, and so on. These might be termed ‘constraining factors’, and all have their place, but it’s essential to remember that the original purpose of SIA is to identify and provide a guide to minimising social risks and impacts – to avoid harm to people. 

Unfortunately, SIA is so frequently dominated by the constraining factors that there is little time to present an informed picture of what will happen to local communities. At worst, it can mean SIA becomes a tick-box exercise that contributes limited value either to the project or to local communities. Predictably, it results in studies that are under-scoped and under-resourced, and where the final reports are barely read, other than to check they cast the proposed project in a good light, and where the social management plans derived from them pass into history once operations have been approved. Most of us are likely to be familiar with this.

How all parties view the purpose of SIA can make a big difference. For example, communities often view SIA differently from developers or regulators. It makes a big difference whether the focus is on harm reduction or, alternatively, demonstrating the value or ‘net positive benefit’ of the mine. Above all, an SIA is likely to serve no-one well in the long run if it ‘dies’ as soon as permitting is achieved. It can only play a role in harm reduction if it is carried through to the operational phase of a project as a living document.

3. Scope

The conventional focus and scope for extractive sector SIAs is often geared towards impacts and consequences, overlooking root causes or source issues. A focus on source requires a far higher degree of interdisciplinarity than we currently see in SIA practice. So, for instance, on tailings management, assessors would need to interface with a tailings specialist to be able to understand a dam breach analysis and associated source issues and then figure out consequence and impact. Here we can see that SIA is not a single disciplinary lane.

Related to this is the question of how SIAs in mining are best scoped – should they take a generalist approach, should they incorporate specialist studies, or should specialist studies occur in parallel? For example, how do issues like in-migration, gender, climate change, resettlement or artisanal and small-scale mining feature in the SIA – as ‘chapters’ or separate specialist studies? How will the SIA relate to other impact studies, like health assessments and human rights impact assessments? How are the results of these studies to be integrated with the main assessment findings? There is no right answer to these questions, but they need to be considered and worked through each time an SIA is scoped to avoid knowledge gaps.

4. Corporate disconnect

We find a persistent disconnection between the SIA process and other activities like negotiation and agreement making. This is compounded by a lack of internal corporate readiness to receive and act on the findings of the SIA. The first issue has major implications for questions about achieving Free Prior and Informed Consent. The disconnection between these processes can mean that vital opportunities are missed to use the SIA to support meaningful engagement, and to ensure that impact mitigations are embedded as agreement obligations.

The second issue points to a wider problem caused by the decentralised nature of modern mining companies. Social performance management systems are needed that can not only identify and manage social risks and impacts at the local operation, but can also ensure that corporate executives are aware of sufficient detail so that course corrections can be made well before ‘show stopping’ problems are encountered.

5. Power asymmetries

Plain observation shows that mines may well be designed and built with the best intentions, but they repeatedly cause harm to local communities. A critical problem is that the institutional structures and processes used to plan, approve and manage mining projects typically give the upper hand to project proponents and state regulatory authorities, while giving a lesser voice to local communities and affected people.

Proponents usually draft the terms of reference or scoping documents for SIA and usually get to determine who undertakes the SIA and the methods used. This ultimately influences the type of information received by regulators and politicians when deciding whether or not to approve a project.

When agreements are negotiated between parties characterised by great power disparities that are not addressed in the SIA process, these agreements will simply enshrine this inequality. For example, when Australian companies work within Australia, First Nations groups will have access to legal representation, but when working extra-territorially Indigenous groups may well be in a precarious position and less likely to have their own legal representatives, creating an immediate power imbalance. In the long run it may mean that the social baseline hardly shifts and vital social development opportunities are missed.

Emerging practices and future directions

1. Community-led SIA

In appropriate contexts, Community-Controlled Impact Assessment (CC-IA) can redress the imbalances noted above. CC-IA places communities at the centre of the process and can also inform the negotiation of binding agreements that form the basis for the ongoing management of impacts and the distribution of benefits.

A community-controlled impact assessment is typically overseen by a community representative body, based on terms of reference endorsed by the community. It’s conducted by a team of SIA specialists selected by the community and involves local researchers and informants (a community SIA team). Research and communication are culturally appropriate, and sufficient time is provided to ensure community review and feedback cycles on the report.

A hybrid model is where community SIA and proponent SIA teams work on parallel tracks, co-ordinating their findings on a regular basis.

Either way, the primary objective is to enhance community participation and empowerment in the SIA process.

2. Developing a theory of change

All development projects are based on a theory of change. Mining projects are no different. Governments and developers might hold a theory of change that looks like this: building this mine will create jobs and services and boost economic growth. Local communities often have their own theory of change. Likewise, SIAs implicitly invoke a theory of change, through recommendations for a specific course of action to mitigate impacts or improve social wellbeing.

A simple adaption of theory of change thinking to SIA is that the latter should aim to be as explicit as possible about:

• the long-term sequence of project impacts that are expected
• which of the project impacts will have a positive benefit and why
• the context for both positive and negative impacts and other stakeholders active in it
• how and why the project’s strategy, activities and outputs will help to (a) stimulate outcomes that contribute to positive impacts and (b) mitigate negative impacts.

Inattention to underlying assumptions, and how specific outcomes will be achieved, and the relationship between these factors, can result in poor outcomes – stated objectives will simply not be met, and the SIA will add little value to the overall process.