WATER, MINING

AND COMMUNITIES:
Creating Shared Value through
Sustainable Water Management

DISCUSSION PAPER
May 2014

This document was prepared by Rebecca Darling and

Veronica Nyhan Jones (IFC); Jelena Lukic (World Bank);
and Laura Read (Tufts University). The document is
based on IFCs experience with clients, information
exchanged during three years of water and mining
industry roundtables, discussions with key informants,
and a literature search.
Special thanks to Raymi Beltran and Neil Moloney (IFC).
Key informants, contributors, and peer reviewers include
Bertus Bierman, Laila Ellis, Richard Garner, and Norman
Gridley (Anglo American); Mike Lelliot (Aquaterra);
Melissa Whellams and Christina Sabater (Avanzar); Ben
Wither (Barrick); Maria Figueroa Kupcu (Brunswick);
Oyunbileg Baasanjav and Jan Sheltinga (Canadian
Government, Department of Foreign Affairs, Trade and
Development); Marielle Canter Weikel (Conservation
International); James Dobbin (Dobbin International);
Jeff Jeter and David Williamson (European Bank for
Reconstruction and Development); Krista Hendry (Fund for
Peace); Patrick Gorman (Gorman Consulting); Anne-Marie
Fleury and Gemma James (ICMM); Craig Ford (Inmet);
Anton van Elteren (Netherlands Development Finance
Company); Nick Cotts and Scott Lewis (Newmont); Chris
Jochnick (Oxfam); Nicol Gagstetter, Mark Newby, and
Houston Spencer (Oyu Tolgoi); Chris Anderson and Bruce
Harvey (Rio Tinto); Sharon Flynn, Edgard Salazar, Omar
Aguilar, Dirk Arts (All of Rio Tinto Mining Peru); Amar

Inamdar (Shell); Nyamdorj Barnuud, Susan Giles, and John

Miragliotta (Sustainability East Asia LLC); Channa Pelpola
(Teck); Anders Berntell (Water Resources Group); David
Atkins (Watershed Environmental); Jorge Villegas, and
Marcus Wijnen (World Bank); Gillian Davidson (World
Economic Forum); Stuart Orr (World Wildlife Federation);
Arjun Bhalla, Richard Colback, Adriana Eftimie, Jennifer
Hruza, Brian McNamara, John Middleton, Patricia Miller,
Patrick Mullen, Roman Novozhilov, Rosa Orleana, Sunrita
Sarkar, Mohandas Seneviratne, Josef Skoldeberg, Dan
Vardim, and Robin Weisman (all of IFC), and many others.
The publication was edited by Anna Vanessa Karlo,
Deborah Horan, and Diane Stamm, with design and
layout by Think Tank Creative and Station 10 Creative.
Feedback on this publication is welcomed and should
be sent to Veronica Nyhan Jones at vnyhanjones@ifc.
org, Rebecca Darling at rdarling@ifc.org, and Jelena
Lukic at jlukic@worldbank.org.
An electronic version of this publication is available at
www.commdev.org.
NOTE: The findings, interpretations, views, and
conclusions expressed herein are those of the authors
and do not necessarily reflect the views of the Executive
Directors of the International Finance Corporation or of
the World Bank or the governments they represent.

Photo Credits: Cover, participatorylearning.net (top right), World Bank Photo Collection; This page, iStockPhoto; Page2, Raymi Beltran; Page
5, Sh_Ganbaatar; Page 7, Ted Pollett; Page 10, World Bank Photo Collection; Page 11, Rio Tinto Participatory Water Monitoring; Page 13,
polepole-tochan/ThinkStockPhotos; Page 16, Raymi Beltran; Page 18, Rebecca Darling; Page 19, Ted Pollett; Page 20, Graeme Hancock; Page
22, Ted Pollett; Page 23, Ted Pollett; Page 24, Teck Resources (top), Anglo American (bottom); Page 25, Ted Pollett; Page 26, World Bank Photo
Collection; Page 27, Shahin Shahablou/Eyes on Rights Humanitarian Photography (top), participatorylearning.net (bottom); Page 28, Teck
Resources; Page 29, Jaume Juncadella Olivares/ThinkStockPhotos; Page 30, Rio Tinto; Page 31, Rio Tinto; Page 32, Anglo American (top and
bottom); Page 34, Arjun Bhalla/World Bank; Page 35, Arjun Bhalla/World Bank; Page 36, Sh_Ganbaatar

TABLE OF CONTENTS

Strategic Context

Tracing Water Through the Mining Life Cycle

12

Water as a Lightning Rod for Conflict

14

Creating Value through Effective Water Management

17

Laying the Groundwork: Sound Technical Systems and Stakeholder Engagement

21

Water, Mining, and Communities: A 3D Approach to Shared Water Management

DIMENSION 1: Internal Alignment across Company Functions
DIMENSION 2: Multidirectional Communications Building Trust and Empathy
DIMENSION 3: Co-Managing Knowledge and Resources

33

Integrating the Three Dimensions: A Shared Value Approach to Water Management

36

Collaboration for a Sustainable Future

37

Bibliography

STRATEGIC CONTEXT

WATER IS A SHARED RESOURCE. It is necessary

to sustain life and access to it is a human right.
Communities, governments, and companies around
the globe are increasingly worried about water
quality and availability. According to Morgan Stanley,
mining uses 5% of water globally, but the industry
often receives the majority of the blame for negative
impacts, even when other sectors are drawing on and
impacting this resource.2 For example, in Peru, mining
consumes 1.46% of water used but receives the most
criticism for poor management (See figure 1).3 Such
criticism is based on both fact and perception and
is increasingly impacting business and community/
government relationships.
1

can be established using existing methodologies, but

the environmental, social, and cultural value of water is
more difficult to calculate because its value is perceived
differently by different stakeholders.
Mining companies face growing water risks related
to operations, regulations, reputation, and investor
expectations. At the 2014 national convention of the
Society of Mining, Metallurgy, and Exploration, Luke
Russell, the Vice President for External Affairs at Hecla
Mining, told attendees that water quality and quantity
issues are the fastest growing economic and social
challenge to mining projects today.5 The availability

For the mining industry, for which water is crucial,

water management is more than just a technical
and economic challenge. The World Bank Groups
Compliance Advisor Ombudsman (CAO), an
independent recourse mechanism that responds to
complaints from project-affected communities, shows
that water can be a catalyst for conflict. Since 2000,
water has been implicated in 47% of CAO cases, and
68% of mining-related complaints include water issues.4
The social and environmental dimensions of water
have a profound impact on the cost of developing new
projects, expanding existing ones, and most recently,
closing old mines. Some old mines require water
treatment into perpetuity. The economic value of water

FIGURE 1. Peru: Water Consumption by Sector

Source: ANA, April 2012

United Nations General Assembly, Human Rights Council, Fifteenth Session,

15/9 Human rights and access to safe drinking water and sanitation,
October 6, 2010, http://www.right2water.eu/sites/water/files/UNHRC%20
Resolution%2015-9.pdf.
2 Morgan Stanley Research. 2013. S&R Valuation Framework: Spotlight on
Mining. Morgan Stanley Research Europe, London.
3 National Authority of Water, Government of Peru. 2012. Recursos Hdricos del
Per en cifras 2012 II. Boletn Tcnico 2012 II Trimestre. P. 46. https://www.
ana.gob.pe/publicaciones/publicaciones-2012/recursos-hidricos-del-peru-encifras-2012-ii.aspx.
4 Compliance Advisor Ombudsman (CAO), Caseload Data FY0014, status as of
April 30, 2014.

85.84%
Agriculture

1.03%
Industrial

1.46%
Mining

11.67%
Human

Kosich, Dorothy. 2014. True Cost of Water Beyond Minings Ability to

Calculate. Mineweb. http://www.mineweb.com/mineweb/content/en/
mineweb-sustainable-mining?oid=230465&sn=Detail.

 Without trust, facts dont matter.

Gillian Davidson, Director, Head of Mining and Metals Industry, World Economic Forum

of water can affect the viability of extracting and

developing a mineral resource. In the exploration
and feasibility stages of a project, asset valuation
may not include full water supply and management
costs through postclosure. Often in these early stages,
companies primary concern with relation to water is to
find a supply sufficient for mine operations. Long-term
costs associated with gaining consistent access to water
may be overlooked, such as obtaining government
permits, building necessary infrastructure, securing
stakeholder acceptance of water use, and observance
of dynamic environmental issues. International
regulatory trends toward steeper water pricing
may dramatically increase operational costs in many
jurisdictions. Meanwhile, water use data are often

not projected into the future and are just starting to

be tracked consistently, though not by all companies
in all countries. Compliance with new, more rigorous
environmental legislation and lender requirements is
causing mining companies to reevaluate water and to
design corporate-level strategies to address water issues
for the first time. Many in the industry are embracing
new water efficiency and recycling methods, driven
by the necessity to cut or better predict costs. This is
happening with new vigor inside the fence of mining
operations. But with many mining licenses and other
economic activities such as agriculture and energy
production drawing on the same watersheds, a more
coordinated and cumulative approach is required.

ICMM LAUNCHED THEIR WATER STEWARDSHIP FRAMEWORK IN APRIL 2014

The goal of the Water Stewardship Framework is to outline a common industry approach for what
is a complex and locally-defined issue. The Framework emphasizes that water stewardship requires
a management approach based on finding solutions that work for businesses and other water users.
The Framework is intended to provide a clear water-related objective for the industry, defining water
stewardship in a meaningful way for the industry through four key elements: be transparent; adopt a
catchment-based approach; effectively manage water resources; and engage pro-actively and inclusively.6
6

International Council on Mining and Metals. 2014. Water Stewardship Framework. International Council on Mining and Metals. London.
http://www.icmm.com/document/7024.

DRIVING SUSTAINABLE GROWTH through the monetization of risks, Veolia created the True Cost
of Water tool. The tool provides decision-makers with a pragmatic metric to drive revenue resilience and
license to grow. The True Cost of Water monetizes the financial impacts of water risks so that return on
investment and pay-back period are no longer based on current direct costs alone, but also include riskbased costs. The framework enables companies to prioritize and more effectively manage investments in
sustainable solutions aiming at building resilience and ensuring long-term profitability.

CALCULATING THE COSTS OF WATER

IFCs Financial Valuation Tool assists firms to plan, prioritize, measure, and scale site-level sustainability
investments. It is designed to supplement a companys traditional discounted cash flow valuation model.
The FV Tool calculates a probable range for the net present value (NPV) back to the company from a
portfolio of sustainability investments, including value protected through risks mitigated and value created
through productivity gains. The tool compares two different sustainability investment scenarios based on
the risks and opportunities (such as social license for water access) faced by an operation, such as a mine
or pipeline, to help managers decide which scenario is likely to yield the most value for the company by
creating positive impact for surroundings communities via spending on irrigation, sanitation, recycling, etc.

Too often, the social factors related to water are given

little attention early in the planning and operations
stages, when stakeholders are less active and critical
engineering choices are made. This is changing,
however. Numerous companies and consultant
studies7 report that failure to earn social license a
communitys tacit approval of a project is one of the
greatest risks facing mining companies. Several mining
companies have had projects shut down because of
community-led protests, many sparked by concerns
over a mines use of water. Guatemalas Marlin gold
mine became front-page news in January 2005 after a
referendum in which 43% of voting-age residents voted
to reject mining in the area. Distrust is still rife despite
massive post-crisis ameliorative efforts on all fronts. In
Peru, there was public outcry over Yanacochas plans
to convert four natural lakes into reservoirs. Some
feel that opponents of the plan used the project as
a political platform after the company had obtained
the required permits. In Peru and globally, civil society
organizations continue to voice concerns about miningrelated issues, such as water management, community
development, and environmental stewardship.
Although water is only one of many issues that concern
local stakeholders, it is highly emotional and galvanizes
people into action.
In addition to these social complexities, climate change,
industrial competition, population growth, and food
insecurity are adding to global anxiety around water
that often plays out locally. The industry is aware of this
risk. Fortunately, there are a growing number of tools
available to help companies understand the risks and
opportunities around water, including:

Ernst & Young. 2012. Business Risks Facing Mining and Metals 20122013.
Ernst & Young, London.

Ceres Aqua Gauge, GEMI Local Water Tool

UN CEO Water Mandate Disclosure Guidelines and
Water Action Hub
World Business Council for Sustainable Development
Global Water Tool
Water Footprint Network Water Footprint
Assessment Tool
World Resources Institute WRI Aqueduct
World Wildlife Fund Water Risk Filter
Some of these tools can be used to understand early
potential sensitivities around water quantity and
quality, and watershed ecosystems. Unfortunately there
does not seem to be a similar abundance of tools to
help local communities understand and manage water.
This may be adding to the distrust between companies
and local stakeholders who cannot access information
to help them collaborate with companies from an
informed position.
The Carbon Disclosure Projects (CDP) 2013 report
analyses the critical implications of water for the
mining and metals sector based on data collected
from 36 companies in 2012. It highlights how these
companies have already been affected by waterrelated issues and how they are accounting for and
valuing water in order to build both short- and longterm resilience strategies. Of the companies the CDP
surveyed, 90% report exposure to substantive water
risk over the next five years. The CDP also states that
mining companies that take the initiative to mitigate

IN RESPONSE TO IFC INVESTMENT EXPERIENCE, the new IFC Performance Standards on

Environmental and Social Sustainability (2012) emphasize water conservation plus identification and
mitigation of water resource impacts within the wider ecosystem services context. For more guidance,
see the following Performance Standards (PS) and accompanying Guidance Notes:
PS 1. Assessment and Management of Environmental and Social Risks and Impacts
PS 2. Labor and Working Conditions
PS 3. Resource Efficiency and Pollution Prevention
PS 4. Community Health, Safety and Security
PS 5. Land Acquisition and Involuntary Resettlement
PS 6. Biodiversity Conservation and Sustainable Management of Living Natural Resources
PS 7. Indigenous Peoples
PS 8. Cultural Heritage

http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/ IFC_External_Corporate_Site/IFC+Sustainability/
Sustainability+Framework/Sustainability+Framework+-+2012/ Performance+Standards+and+Guidance+Notes+2012/

For these companies, no water means

no business.

Carbon Disclosure Project, Metals and Mining: A Sector under Water Pressure

water risks report better financial performance.8

Investment firms now recognize the long-term impact
of water management on the financial outlook of
mining companies. Morgan Stanley has developed
an Investing With Impact Framework9 to evaluate
companies based on their attention to and investment
in reduced water consumption and risk.
The International Council on Mining and Metals
(ICMM) produced a series of water management
case studies to highlight innovative ways the mining
industry has responded to water challenges. These
case studies are available at www.icmm.com/www.
icmm.com/water-case-studies.
IFC is seeing technically sound investment projects
face complaints or closures because of water-related
issues. As a financial institution, IFC is motivated to
understand the causes of these conflicts and to work to
identify solutions to support clients in improving water
management practices (see page 7). For the last three
years, IFC has been convening the mining industry and
related stakeholders to explore concerns and good
practices around inclusive water management. Drawing
from the experiences of IFC, industry partners, civil
society, academics, and government, this discussion
paper emphasizes social water risks that mining
companies and their host communities face and
presents a three-dimensional approach for beyond-thefence water management supported by robust technical
assessment and conservation practices.

Carbon Disclosure Project. 2013. Metals and Mining: A Sector under Water
Pressure. Analysis for Institutional Investors of Critical Issues Facing the
Industry, Carbon Disclosure Project. London. https://www.cdp.net/Docs/
investor/Metals-Mining-sector-under-water-pressure.pdf.
Morgan Stanley. 2012. Investing With Impact: Creating Financial, Social and
Environmental Value. London. http://www.morganstanley.com/globalcitizen/
pdf/investing-with-impact.pdf?v=07112013.

The rest of this discussion paper is organized as follows:

Section 2 traces water through the mining life
cycle highlighting multiple realities experienced
by various stakeholders. Section 3 discusses water
as a source of conflict spurred by facts and/or
rumors. Section 4 focuses on creating shared value
and growing opportunity for all through effective
water management. Section 5 details laying the
foundation using sound technical systems integrated
with stakeholder engagement. Section 6 presents
the three-dimensional water management approach,
which includes a) internal alignment across company
functions; b) multidirectional communications
building trust and empathy; and c) co-managing
knowledge and resources with other decision-makers.
Included in Section 6 are brief case studies illustrating
engagement with diverse stakeholders throughout the
mine life cycle for sustainable water solutions. Section
7 discusses integrating the three dimensions for a
shared approach to water management based on a
current case from Mongolia. Section 8 concludes with
a discussion of collaboration for a sustainable future
where more practice sharing is needed.

TRACING WATER
THROUGH THE
MINING LIFE CYCLE
ALL MINES MUST ACCESS and manage water
to construct, operate, and close a project. Total water
consumption depends on the type of mineral or metal
being extracted and on company practices. The physical
location of the mine can make access to water more or
less problematic because access to groundwater, surface
water, and desalination sources are all site-specific.
Companies generally track the water used by individual
projects, but aggregated data are limited. A 2010 Teck
Sustainability Report10 revealed 125 million cubic meters

of water withdrawals (groundwater, surface, other),

with a recycling/reuse rate of 90%. Anglo American
wants to achieve water-neutral mines by 2030 where
80% is recycled and 20% is cleaned to standard. But
such goals and statistics are not publically available for
the vast majority of mining companies. Achieving high
recycling and reuse rates demonstrates commitment to
water conservation, quality standards, and investment
in appropriate technology. Table 1 graphically displays
water use during a project life cycle.

10 Teck, Sustainability Report, 2010, http://www.teck.com/DocumentViewer.

aspx?elementId=198097&portalName=tc.

TABLE 1. Water Use during Project Life Cycle

EXPLORATION

Wide range of water use

during drilling

Risk of contamination from

drilling additives and sumps;
stormwater management

Affected communitys perception

of uncontrolled water extraction

PLANNING AND CONSTRUCTION

Runoff, spills, sediment,

settling ponds

Possible chemical contamination,

monitoring needed

Develop process to account for

water use and related costs/risks

OPERATIONS

Demand during mineral processing, dust

suppression, and evaporation losses

Manage wastewater discharge,

seepage, groundwater from mine pit
dewatering, and runoff

Account for water in all operation cycles

incorporating data from all prior phases

CLOSURE AND POSTCLOSURE

Long-term contamination risk,

potential need for water during
postclosure land use

Rigorous monitoring needed

Water plan and program legacy

Water conflict is about peopleits not just

an environmental issueand needs more
than a technical fix.
CAO Office, World Bank Group Ombudsman

WATER AVAILABILITY
Industry concern around access to water is exacerbated
by the fact that mineral deposits are increasingly located
in regions where water is scarce or governance of
water resources is weak. Just as mining in water-scarce
regions is on the rise, so too is the competition for water
within the mining industry (for example, multiple water
concessions for mining companies drawing from the
same source) and across industries, including commercial
agriculture, subsistence farming, livestock herding
and fisheries, tourism, logistics, and manufacturing.
Population influx tied to resource development and
related infrastructure results in even greater water use.
These factors, plus the uncertainty of climate change,
may drive companies or governments to monopolize
water supplies as legislation allows. In many contexts, no
single entity, including the government, has sufficient
information to make sound judgments regarding who
has which water rights and with what impact. This
makes coordination of data and water use across a
watershed even more critical. A new focus on cumulative
environmental impacts of multiple industry projects
can help promote understanding of common risks and
opportunities for shared value across one region. In
most contexts, local stakeholders do not have sufficient
knowledge about the water cycle and its users to form
and voice opinions about policies and practices.

WATER QUALITY
Companies are more stringently and responsibly
managing water after experiencing myriad legal
challenges, costly fines, and damaged reputations
caused by water mistreatment and contamination
problems. Various participatory water monitoring
efforts have helped to manage quality while also
building trust and credibility across diverse stakeholder
groups. For example, bringing community leaders to

10

a reservoir to catch, cook, and eat local fish together

with company managers can be a constructive
complement to showing technical lab test results
processed in another country. Engaging locals can
also yield valuable understanding and insight into
watershed practices and management.
However, not all current water risks have clear
responsible parties. Pinpointing specific liability
upstream or downstream can be difficult and politics
can influence this process. Legacy issues involving water
contamination or ongoing water impacts by inactive
sites translate into financial and reputational costs for
the whole industry. Communities living with negative
impacts from a project long discarded are motivated to
fiercely guard against any further damage. In countries
with little regulatory oversight and minimal data
collection or disclosure, societal anxiety related to water
can quickly lead to action against a project. In some
cases this can be driven more by fear than by fact.

RIO TINTO, IN COOPERATION WITH LOCAL COMMUNITIES, implements its Participatory

Environmental Monitoring and Evaluation Program at several of its projects. Oyu Tolgoi LLC, a copper
mine operated by Rio Tinto in Mongolia, provides local herders with monitoring equipment, including
GPS locators, cameras, tape measures, measuring tables, and recording manuals that are used to carry out
water monitoring. Below is an excerpt from an interview with N.Munkhbayar, Participatory Environmental
Monitoring and Evaluation Program Officer of Oyu Tolgoi LLC, talking about the program.
We have a lot to learn and study from Mongolian herders and we are gaining skills in this process.
Traditional Mongolian herding methods are based on observation of the natural environment
and seasonal phenomena. Herders are used to monitoring and observing water. All their lives,
herders observe water well levels, pastureland, wild life movement and they notice changes. Up
until now those observations have been informal and not scientifically recorded.
By implementing the participatory monitoring program, we are able to identify causes of changes
in water levels, numbers of animals, and pastureland yields. The Participatory Environmental
Monitoring and Evaluation Program, cooperating with herders, is a long-term project to be
implemented for many years. Herders are formally recording changes to pastureland, water levels,
and fauna populations caused by the natural environment, climate, and human factors. Water
levels are measured before and after watering the animals. The measurement data is consolidated
on a quarterly basis and the Oyu Tolgoi project water specialists compare the herders data with
our own data, analyze it, and deliver the findings to the herders.
Together we are able to create basic data and information for herders and miners to plan
effective pasture use and environmental protection.
Source: http://ot.mn/en/node/2786

11

WATER AS A
LIGHTNING ROD
FOR CONFLICT
CONFLICTS AROUND WATER can bring
reputational, operational, legal, humanitarian, and
financial risks to a project. Triggers for conflict include
water scarcity, lack of access, unclear rights, water
excess, impacts on water quality, unequal voice,
and a general lack of trust. Ineffective regulatory
environments may incorrectly signal to traditional
water users that mining companies can take what they
want at the expense of others and without oversight.
The threat and consequences of water pollution can
cause conflict, particularly when a potentially impacted
community relies on the water source for livelihoods,
such as agriculture, fishing, or animal husbandry.
Perceptions of high water use or potential for water
contamination by a new entrant are often sufficient

to trigger tensions and even conflict. Such perceptions

may be founded on scientific or unscientific data and
stem from the individual frames of reference, which are
formed by the information people have, the degree to
which they understand the information, the trust they
have in the individuals involved, and experiences they
have had in similar situations.
This tension is exacerbated by a lack of inclusive
decision-making processes and knowledge imbalances.
There is a growing list of companies whose
experience with water and conflict indicate that it
is more expensive to recover from conflict than to
prevent it. Broken trust takes longer to repair than a
concentrator or pipeline.

Water becomes the issue when there

is a vacuum of trust.

Chris Anderson, US Director, Communities and Social Performance, Rio Tinto, USA

12

13

CREATING VALUE
THROUGH EFFECTIVE
WATER MANAGEMENT
A SHARED VALUE APPROACH to water
management can turn risks into opportunities for both
companies and communities. For instance, companies
benefit from a water management approach that
results in the accurate assessment of asset value and
compliance with international financial institution
lending requirements. Companies can also increase the
value of a project by implementing leading social and
technical water management practices that expedite
permitting processes, facilitate mine expansion, and
secure water access. Managing impacts on ecosystem
services related to water (such as provisioning,
regulating, cultural respect, and preservation) provides
opportunities for ensuring the sustainability of the
business and improving relationships with local

communities. Veolia, an environmental services firm,

developed an innovative and sustainable solution for
a mining client where through the reverse osmosis
process, the dirty water left over during the purifying
process is used as a resource in the downstream mining
operations. Hundreds of tons of sulfate and sodium
chloride are saved each year as a result of this process,
decreasing operational costs and reducing the overall
carbon footprint by 600 tons CO2 equivalent per year,
both of which help to reduce pressure on stocks.11
Ensuring energy, water, food, and mineral/metal
security for an ever-growing population in the face

11 Veolia, information provided to IFC, May 2014, http://www.veoliaes.com/en.html.

TABLE 2. Energy Water Food Nexus: The Business Case

REDUCED RISK. Resilience planning that includes longer-term, more stable agreements among participants in the
supply chain will help reduce exposure to price volatility and help companies value chains react to unforeseen risks.

IMPROVED PRODUCTIVITY. Better insights into resource requirements and improvement of process
efficiencies with partners can generate successes in reducing or eliminating waste.

SHORT-TERM ROI SUCCESS AND LONG-TERM INVESTMENT PLANNING. By creating pilot initiatives
that utilize new technologies and/or resilience planning, companies will be better prepared to make longer term
investments and inform product innovation and potential industrial and social transformations.

ENHANCED BRAND AND REPUTATION. Companies with ambitious corporate social responsibility targets
can help their partners improve their social license to operate.

FULL COST ACCOUNTING OF RESOURCES AND IMPROVED ACCESS TO CAPITAL. In addition to

better cash flows and stronger credit ratings, members can access new financing models that provide leverage
from chain partners. A full cost-accounting structure that takes into account both todays prices and the prices of
increasingly scarce natural resources is adjusted according to their value to the business and society.
Source: http://www.conservation.org/global/celb/Documents/BSC_Resources_vol2.pdf.

14

FIGURE 2. Overview of Value Drivers

Optimally
Integrated
Livelihoods

Social
Cohesion

Enhanced
Capacity for
Environmental
Stewardship

R THE COMM
FO
UN
E
I
LU

TY

VA

Local Business
Development

Long-term
Water
Availability

Efficient and
Transparent
Water
Governance

LU

SHARED
VALUE

EF

OR THE CO M

N
PA

Equitable
Water
Pricing
High-Quality
Data
and Spatial
Planning

of climate change is an urgent challenge commonly

referred to as the Energy Water Food Nexus.
Conservation International articulates the business case
for focusing on the Nexus in a report produced by its
Business and Sustainability Council (See Table 2).
This can only be addressed with leading innovation,
inclusion of important local knowledge, improved social
license, and enhanced reputation. Communities stand
to gain from improved local capacity for environmental
stewardship, enhanced voice, and expanded economic
opportunities. In addition, taking a co-management and
monitoring approach to water through collaboration
with other industrial actors and communities can
smooth operations, increase efficiency, help companies
calculate and anticipate costs, and create more enduring
investment agreements. Effective benefit sharing
requires sophisticated water management practices that
optimize tradeoffs and cooperation while minimizing
conflict. These benefits will likely be realized during
the life of the current project and can also carry over to

Social
and
Political
License

Consistent
Industry
Practice

future endeavors via expansion, winning new licenses,

and replicating efficient practices. Obtaining and
sustaining social license to operate, specifically around
water and a companys stewardship of it, can play a
direct role in a governments decision to grant additional
exploration or mining licenses and necessary water use
permits. Developing water efficiency technologies for
one operation can often be replicated at other projects
in similar environments, creating more value for the
company. In recognition of this need to mobilize a critical
mass of private sector leaders, the United Nations CEO
Water Mandate calls for the business sector to recognize
the need to manage water resources more sustainably
and to collaborate with a wide range of stakeholders.12
Figure 2 graphically presents value drivers for a variety
of stakeholders.

12 United Nations, CEO Water Mandate, http://ceowatermandate.org.

15

16

LAYING THE GROUNDWORK:

SOUND TECHNICAL SYSTEMS
AND STAKEHOLDER ENGAGEMENT
WHEN STAKEHOLDERS EXPERIENCE OR
PERCEIVE A PROBLEM during exploration,
development, or mining operations, it generally
becomes a real problem for the company, irrespective
of whether there is evidence of company impacts.
When there is a relationship built on trust between
the company and the community, dialogue and
meaningful participation can assuage fears, suspicions,
and anxieties. For these reasons, it is imperative
to include stakeholders early and regularly in the

planning process. Educating the community about the

technical aspects of mining and water, understanding
traditional beliefs and the communitys use of water,
incorporating those values and uses into water
management, and providing opportunities for
stakeholders to participate in the development and
monitoring of water plans can reduce misconceptions.
Table 3 details important aspects when training local
stakeholders on the technical aspects of water.

TABLE 3. Water Trainings: Building a Common Foundation of Knowledge Across Stakeholders

1. Identify a trusted expert to provide the information and training. For example, engage with local communities about who
they trust: universities, environmental NGOs, research organizations, government, churches, etc.
2. Provide an overview of the mining process describe the life of a mine, the potential sources of contamination at each
phase of operation, and the estimated water usage. Include a visit to a mine if possible.
3. Map out the communitys understanding of the watershed (sources of water, locations upstream and downstream of
project, tributaries).
4. Identify water uses and volumes across actors to determine what should be tracked and what national and international
standards are applicable.
5. Explain what the baseline quality of the water is before the arrival of the project/mine and the different potential sources of
contamination (e.g. industrial, agriculture, human, animal, domestic). This includes an explanation of the different types of
contamination, such as microbiological vs. heavy metals, and related symptoms.
6. Engage the community in the selection of the laboratory (national or international) within limits. Explain the need for a
certified laboratory and its capabilities.
7. Train on testing protocols (e.g. use of gloves, testing downstream before upstream). Employ experiential training by
involving community in sampling activities.
8. Explain what will be tested. For example, what is a pH level, and why does it need to be tested?
9. Build capacity to interpret results and explain the need to sometimes triangulate results.
10. Work with community members to deepen understanding of what can impact water beyond mining activities and
how these impacts might show up in water monitoring results. Identifying potential sources of water contamination is
important so community members can work with the relevant government authorities (e.g. municipality, mining ministry,
health ministry, etc.) to address the problem.
11. Make the overall training program as hands-on and practical as possible.
Source: AVANZAR, avanzar.biz

17

Small technical teams, such as geologists undertaking

exploration who might have the first contact
with communities, often do not understand the
downstream social implications of their activities. Yet
they are the ones who set the tone for a companys
future engagement with a community. Therefore,
these early engagers need appropriate training and
support before and during fieldwork. Strategies for
developing trust need to be part of the toolkit of all
personnel from geologists and consultants to senior
managers. Some companies have policies that stipulate
that any manager who visits a site can engage with
workers at any level or with community members
about local activities. This interaction helps engender a
sense of ongoing company interest in the wellbeing of
the community and breaks down hierarchy.
Identifying stakeholders and understanding their
concerns can help in the development of a water
management plan that effectively integrates social
and technical priorities. Acknowledging multiple
realities, including that of the company and those
of the community and other affected parties, can
help bridge differences. Awareness of gender-specific
impacts is important; women may be more negatively
affected if water collection requires additional time
and effort, for example. However, they may prefer a
community-level water collection process to one that
offers individual access. It is important to ask their
preferences. In addition, although women usually
support decisions that result in greater sustainability
and improvements in household welfare, they are
often left out of decisions regarding extractive
industries and the environment. Companies need to
be aware of the many diverse groups that make up a
community and their diverse concerns and views, and
to include them in the much wider process of water
management. In short, the company should respect

18

the views of all members of the community. When a

positive tone is set early on in the process, it can often
carry throughout the project.
Table 4 compares the company and community views of
this reality.
To understand the communitys perspective on water,
begin with a project impact assessment. Include local
context analysis, and obtain a comprehensive picture
of the stakeholders and the opportunities and risks
that the project brings to them. This has to start at the
beginning of field exploration, regardless of whether
the company expects minimal ongoing impacts. Review,
and adjust if necessary, company policies to ensure
that they include conflict mitigation and trust-building
measures, with specific attention to issues related to
water. These can be project-specific policies.
High personnel turnover rates across the project
cycle will impact the timeline and continuity of this
investment relationship. It is common for concessions
to be held by different companies throughout the life
cycle of a project. Even larger companies that have
exploration divisions will have staff turnover in a
project as it moves from early exploration and advances
to construction and into operations. It can be difficult
to build relationships, trust, and continuity of policies
and practices with so many human resource changes.
Management systems, robust documentation, and
transition plans can help alleviate the potential for
problems associated with staff turnover.
Reducing water use is a key method for mitigating
social and financial risks, and best practices for
reducing the amount of water used should be
incorporated into operations starting with the design

TABLE 4. Two Realities: Reality of Community must be Reality for Company

COMPANY VIEW

PHASE

Dont understand mining process:

risks or opportunities

Small footprint
Dont want to raise expectations
Likelihood of project is low

Exploration

Negative legacy from previous exploration

Locals should be grateful

for infrastructure
Sometimes construction and social
engagement are on different schedules

COMMUNITY VIEW

Hope mine will bring jobs/services

Anxiety due to lack of information
Defensive due to previous bad experience
with other companies

Fear traditional ways or livelihoods will be lost

because mine will deplete or pollute water

Planning and
Construction

Weak rule of law erodes trust in companys

investment agreement
Think water comes from mountains
Concerns of policy capture
Fear that all water is polluted

Providing treated water to locals

Undertaking consistent, robust
environmental monitoring
Going beyond regulatory compliance

Operations

Lack of access to data or technical capacity

to analyze and understand the quantity and
quality of water
Distrust in companys findings

Politically opportunistic actors create distrust

regardless of facts

Lack of recourse: no way to be heard by

company or government except by
blocking roads

Blamed for potential pollution

Loss of access to clean water that company

provided during operations

May have to pay for others damage

Compliant with the local laws but
people still angry

Closure and
Postclosure

Concern with whom to hold

accountable for postclosure water
quality/quantity problems

19

phase and continuing throughout operations.13 The

integration of new technologies (for example, filtered
and paste tailings), treatment of discharge for reuse
in the mining process, and water audits of existing
operations to determine inefficiencies in the use of
water, are three best practices to be considered.14
It is equally important to formulate solutions that
address specific issues. Companies must bring technical
knowledge, but also consider local values surrounding
water when solving problems.

13 More guidance is provided in IFC PS 3: Resource Efficiency and Pollution

Prevention, and PS 6: Biodiversity Conservation and Sustainable
Management of Living Natural resources; http://www.ifc.org/wps/wcm/
connect/5aebfd004d5e3818b83cfa2389a1bab4/PS_Objectives_English.
pdf?MOD=AJPERES.
14 Tailings are the waste derived from mining. Tailing dams are where this
waste is stored.

In addition to comprehensive stakeholder engagement,

good technical practices must underpin any robust
water management strategy. Accurate water baselines
must be established and environmental and social
impact assessments conducted so that companies have
a solid understanding of surface and groundwater
resources and their overlap with community needs
and expectations not only adjacent to the project,
but possibly hundreds of kilometers away. Developing
and using a rigorous Environmental and Social
Management System will enable a cascading risk
management approach based on the application of
avoidance, management, mitigation, and continuous
improvement measures.

We spend millions of dollars on technical

water fixes only to find out that sometimes
the problem was really social.

Nick Cotts, Group Executive for Environmental and Social Responsibility, Newmont
Mining Corporation

20

WATER, MINING AND

COMMUNITIES: A 3D APPROACH
TO SHARED WATER MANAGEMENT
WITH A STRONG TECHNICAL BASE
ESTABLISHED and an understanding of perceptions
and company and community realities, the following
three-dimensional (3D) approach is recommended:
(1) create internal alignment across company
functions; (2) employ multidirectional communications
strategies that build trust and empathy within
companies and across stakeholder groups; and (3) find
ways to co-manage water with other stakeholders. It
is critical to integrate these social water management
approaches with the activities and timelines of
the technical teams. These three dimensions are
interventions along a spectrum of a companys control
over actions and outcomes. Internal alignment is fully
within a companys control, while co-management
requires shared control and decision-making with

other stakeholders. Multidirectional communications

involves listening, outreach, and managing
perceptions, so it falls in the middle of the spectrum.
Following a discussion of these three dimensions, this
paper suggests a comprehensive approach for mining
companies addressing water use issues.
Throughout the co-management process, it is vital
to appropriately align 3D efforts with the technical
aspects of the mines development. Figure 3 presents a
hypothetical example of how the social and technical
stages of the mine should dovetail. This will look
slightly different for every project, but having a shared
roadmap across company functions will help keep
activities on schedule while presenting a consistent
face to the community.

FIGURE 3. Social and Technical Integration

SHARED RISK, LEADERSHIP, ACCOUNTABILITY, AND VALUE

Geospatial Planning

Watershed Data Sharing

Multistakeholder Partnerships

Advanced Treatment Technology

Participatory Water Monitoring

Water Conservation in Mine Life Cycle

Grievance Mechanism

External Water Quality/Quantity Audits

Information Sharing Transparency

Tailings Dam Audits

Project Impact, Stakeholder

Engagement, and Context Analysis

Environmental and Social Impact

Assessment, Baseline Data,
Geo-Hydrological Assessments

21

DIMENSION 1: Internal Alignment

across Company Functions
An integrated approach to water management
requires alignment across functions within a company,
including management, technical, human resources,
and communications roles. This should be completely
within the companys control, unlike some other
aspects of water management. To achieve shared
goals, it is necessary to have consistent behavior and
incentives across the companys operational functions.
Companies, such as Rio Tinto and Newmont Mining
Corporation, each define a holistic water vision and
foster co-ownership across departments and will likely
outcompete their rivals in efficiency and resiliency. The
following are recommended to achieve cross-functional
alignment and a reputation for stewardship:
1.

2.

Develop a shared vision for a companywide water strategy owned by

multifunctional teams (operations,
environment, community relations, risk,
human resources, legal, and security).
Solicit input from all levels on priorities, risks,
opportunities, and stakeholder engagement and
access. Ensure that decisions are informed by
field staff who can provide ongoing field data.
Develop Key Performance Indicators for tracking
water-related duties and outcomes. A successful
model to follow is that of the Safety First culture
that permeates the mining sector in which every
employee and contractor in all departments must
understand and adhere to rigorous safety measures
in all functions.

Invest in internal collaboration to

overcome silos and promote ownership.
Train multiple business functions (operations,
finance, legal, communications, human resources,
and so forth) in the technical and cultural aspects
of water management. To bring the concept
of collaboration to tangible experience, have
managers from each department attend a
water sampling. Provide them with resources to
approach water management from the outset
of fieldwork and to make it relevant to their
own departments. The finance department
can quantify potential water savings through
improved management practices. Human
resources can create awareness among staff
of the importance of protection of local water
sources and what to do if they see potential
contamination. Lead by example senior
management should have a focus on water
as part of their field visits and reporting
requirements. Reward collaboration across

22

functions with incentive structures that include

recognition, bonuses, and promotion.

3.

Use language that executive-level staff

understands. Training can bolster multilingual
teams able to translate the business case for
community engagement around water into
financial language that senior management
and technical staff understand. Techniques are
readily available to assist staff in quantifying and
calculating the potential value lost or preserved
through social and environmental actions, for
example IFCs Financial Valuation Tool and Morgan
Stanleys Investing with Impact Framework.

4.

Reconcile time frames (technical

deadlines vs. stakeholder horizons).
The time that community relations staff needs to
address community concerns before an activity
can proceed is often different than the time that
construction or operations staff need to complete
technical or financial objectives. By working out a

shared time horizon, many community concerns can

be addressed and potential conflicts prevented. This
requires forethought, sensitization, and planning.
5.

Create a shared internal database to track

engagement and progress. Keeping track of
documents and correspondence with stakeholders
in a centralized, accessible database can help

measure progress on how interdepartmental

cooperation, shared community engagement, and
trust have changed over time. This accountability
can be useful in reflecting on successes and failures.
The two case studies explain how two companies
implemented the approaches described above.

23

CASE STUDY 1:
TECK RESOURCES SOCIAL MANAGEMENT AND RESPONSIBILITY TOOLKIT (SMART)
Teck Resources, a diversified resources company with
13 mines in the Americas and active exploration across
the globe, began developing the SMART kit after
recognizing that social concerns are a major risk in
project communities and can affect operations if conflict
arises. Teck also saw the value in professionalizing the
management of social or community-related issues to
better understand and manage those risks and consider
possible opportunities.
SMART is a practical toolkit that reflects best practices
relating to social risk and performance management,

engagement, impact management, and sustainable

benefits throughout each stage of exploration. SMART
training targets all company exploration groups,
projects, and operations teams. Teck is investing
in its employees by offering dialogue training to
improve community engagement, creating an internal
Community of Practice intranet for sharing information,
lessons learned, and successes, and seeking support
among colleagues. SMART also includes plans to
incorporate a sophisticated centralized database to
track internal activities and progress on all projects.

CASE STUDY 2:
ANGLO AMERICANS TECHNICAL AND
SOCIAL MANAGEMENT TOOLS
Recently, Anglo American publicly updated its internal
water management strategy with the launch of two
tools one that focuses on tracking and improving
water efficiency, and one that identifies and helps
manage various issues of concern, including water.

that require both social and technical solutions.

Anglo Americans Water Efficiency Target Tool (WETT)

was developed to track water use and savings across
projects, encouraging innovations in water reclamation,
reuse, and conservation. The Socio-Economic
Assessment Toolbox (SEAT) focuses on establishing
a deeper understanding of the socioeconomic
environment, identifying potential project impacts,
and developing an appropriate management plan.
Combined, the two instruments represent a cohesive
effort to address water as a risk to mining operations

Anglo American conducted a pilot implementation of

WETT in Rustenburg, South Africa, in 2011. AngloPlats
mine in the region and the local municipality agreed
to build a water treatment plant to improve treated
sewage effluent quality, and also to reuse a portion of
a treated effluent in mine operations. This process is in
ongoing negotiations between the company and the
community, and highlights how monitoring through
a tool such as WETT can facilitate new innovations in
technology and social engagement.

24

DIMENSION 2: Multidirectional
Communications: Building Trust
and Empathy

2.

a crisis has occurred to design response scenarios.

However appropriate, a response to a crisis can
still come too late to recover damaged relations
with the community. Be proactive in setting up a
communications infrastructure with continual
but manageable information flows. Crisis
response should be a part of a broader proactive
toolkit. A robust grievance mechanism provides
essential early warnings for risk management and
relationship building.

Multidirectional communication (receiving and sending

information) is critical to building relationships and
avoiding conflict. Identifying key stakeholders and
incorporating their concerns early on in a culturally
appropriate and inclusive manner is crucial to obtaining
social license. Sharing information openly can build
trust, help demystify natural and technical water
processes, and minimize rumors related to mining.
The following actions are recommended:
1.

3.

Form a multidisciplinary communications

team; go beyond media relations.
This team should focus on listening to and
understanding stakeholders first, then articulating
thoughtful responses and follow-up. A diverse
but tight-knit communications group, which
may include men and women with social media,
community outreach, political, engineering, and
investor relations skills, can serve as a nerve center
to engage with internal and external parties to
foster two-way communications. Understanding
and reconciling multiple perspectives can
create cohesion within the company as well
as between the company and government
or community groups. To begin building this
cohesion, the communications team could initially
engage stakeholders and ask what their main
environmental and social concerns regarding the
project are; how they would best like to receive
communications; in what language; how often; and
in what format (video, comics, photos, etc.).

Use communication and engagement as a

form of risk management. Do not wait until

Communicate throughout the mine

life cycle. Communities are more receptive
to collaboration if they are a part of a process
where communication is open and feedback
is incorporated into planning and practice.
Exploration, construction, operation, and even
closure involve multiple parties. Transferring
information between project stages across
staff and to the community is often overlooked.
Using the consultation suggested in action
1, set up protocols for receiving and relaying
information (through, among other things, town
hall meetings, notice boards, and radio) to the
community throughout the mine life cycle to
ensure continuity in relationships. Empower local
counterparts with information and understanding
of technical processes.

4.

Use local languages and networks

to ensure messages are heard and
understood. Translate technical work
and documents into culturally appropriate
communications materials using local languages
and non-technical terms. For example, train locals
to test water quality instead of showing them

25

foreign studies whose findings state that the water

is not impacted by the project. Information and
awareness raising can be supported by community
relations teams, noticeboards, local newspapers,
community meetings, womens networks, social
media platforms, and municipal and community
leaders. Use digital dialogue or short message
service programs from local staff to update the
community on new programs and initiatives.
Information from any trusted source can be much
more persuasive than scientific facts from strangers.
5.

Share communications practices to build

trust and bolster industry cooperation.
If local people do not trust one mining company,
this lack of trust can negatively affect other
companies. Establishing higher standards of
transparency and frequent communication
can improve the communitys overall view of
the industry. By enhancing the populations
knowledge of water and mining, there may be
significant economies of scope for companies to
capture. Mining companies across countries are
demonstrating the desire to learn from one another
and collaborate more, but they are also hesitant to
raise potential fears of collusion.

The following case studies explain how two companies

harness multidirectional communications.

26

CASE STUDY 3:
NEWMONT YANACOCHA MINE, CAJAMARCA, PERU
The experience of the Yanacocha mine in Peru
illustrates how the company has engaged the full
spectrum of multidirectional communications, including
stakeholder engagement, to reach cooperative
solutions, rebuild relationships, and reduce social
conflict. As one of South Americas largest and
most storied gold mines, Yanacocha has alternated
between periods of social peace and conflict with the
communities in which it operates.
In 2000, a contractor working at the mine caused an
accidental mercury spill that affected the health of
several hundred people. In 2012, clashes between police
and protesters demonstrating against mining practices
led to five deaths. The twelve years in between these
two incidents were marked by relative calm: only two
grievances against the mine were filed with the World
Bank Group CAO for concerns directly linked to water.
In response to these complaints, Yanacocha recognized
the need for internal changes regarding water quality
monitoring, information sharing, and responsible
environmental management.

conducted by the Centre for Social Responsibility in

Mining in 2012 found that many stakeholders believe
the mine is responsible for environmental damage and
has disregarded cultural sensitivities. In an effort to
convey a sincere commitment to change, the company
made several dramatic shifts beginning with moving
company headquarters from Lima to Cajamarca to
build closer relationships with host communities.
The company also sponsors a radio station providing
relevant information on a variety of topics to local
listeners and is encouraging staff to participate in
local organizations, boards, and schools, among other
outreach efforts. This cultural shift embraces respect,
listening, and relationship-building in a proactive
attempt to rebuild trust and rapport with local
stakeholders. Rebuilding trust is arduous, and it is still
to be determined whether the measures implemented
by Yanacocha will successfully change perceptions and
help obtain informal, but necessary, approval from the
regional government and local stakeholders.

A group called Mesa de Dilogo y Consenso,

established in part with the CAO, worked for more
than four years to create a space for public and private
entities to convene and engage in mediation and
community capacity-building workshops. Through
this forum, a participatory water monitoring program
was established to address ongoing concerns over
protecting water quality, and to conduct a series of
information-sharing workshops aimed at addressing
water availability issues with the community irrigation
canals. More recently, a groundbreaking Listening
Study sponsored by Yanacocha and independently

27

CASE STUDY 4:
TECK RESOURCES, CARMEN DE
ANDACOLLO (CDA) MINE, CHILE
When Teck Resources acquired the CdA Mine, they also
inherited a water conflict because the previous owner
had not adequately communicated to the community a
change in plans that impacted the communitys water
supply. This resulted in protests and legal actions that
affected operations as well as Tecks public image.
Teck realized that there would be no quick fix to
this problem, and that higher-level changes in the
companys action plan would be needed.
In an effort to resolve the conflict, Teck implemented
a set of strategies to engage communities of interest
including:
Conducting further hydrogeology field surveys and
sharing findings with interested groups
Creating a participatory water-monitoring group, coowned by Teck and local stakeholders, to hold open
discussions and conduct field testing of water quality
Formally committing to improve quality and quantity
of drinking water by signing an agreement with the
community to provide higher quality water and a
backup supply in cases of extreme shortage.

28

Through ongoing dialogue and collaboration, there is

now recognition that water is a finite, shared resource,
says Mauricio Gmez, CdA Mines Superintendent of
External Relations. Continual investment and dialogue
about water sustainability will be necessary to ensure
both CdAs and the communitys long-term viability.
Since Teck began implementing new strategies, protests
have stopped and the local attitude has shifted to
promote company-community partnerships. Teck has
committed to maintaining a community of interest
water group, participating in co-monitoring programs,
and collaborating with local stakeholders on water
planning as part of a greater effort to foster open
communication and transparency.

DIMENSION 3: Co-Managing Knowledge

and Resources
Water is a shared resource at the catchment level,
seeping beyond any project gates or dams that human
beings can build. As such, long-term management
strategies to optimize the productivity and accessibility
of water can only be defined and supervised by
multistakeholder partnerships. Co-management of
resources in this context can mean collaboration
between company and community; company and
government; or among industry, government, and
community. In regions where mining activity is
concentrated, cumulative impacts require even
more multistakeholder cooperation. Companies are
also seeing the benefit of collaborating with each
other as well as with the government and affected
communities on water management strategies.

The following actions are recommended:

1.

Build a platform to share knowledge

with local partners. Examples of this range
from an external water board that oversees joint
fact-finding and coordinates information sharing,
to selecting several members of the project team to
meet regularly with a broad cross-section of people
within the community. These meetings are an
opportunity to share company information about
water use, but also to hear from communities on
issues such as changing water patterns, concerns
about water quality and availability, and to gauge
local knowledge on how to improve water use.

2.

Diversify sources of expertise and

data. Academic researchers, activist groups,
non-governmental organizations, elected officials,

ADVANTAGES TO A SECTOR-WIDE APPROACH

A sector-wide approach to delivering accurate information consistently in a culturally appropriate way
helps build capacity and trust across a region. It strengthens relationships across companies, enabling
coordinated approaches to challenges and opportunities with communities. Shared management
between the industry and the impacted communities eases tensions and facilitates joint solutions finding.
An analysis of projects within Australias mining sector found that collective efforts across sectors were
able to successfully address cumulative environmental impacts. The majority of the collaborations
involved diverse stakeholders, including the government, although most were nonbinding efforts.15
Industry experience shows that successful multistakeholder collaborations include the following steps:
selecting an independent chairperson to facilitate, adopting a committee- or board-style structure, using
media for public transparency and communicating updates, and holding occasional workshops to engage
with local communities and train them.
ICMMs new water strategy emphasizes such opportunities for sector-level collaboration.

15 Centre for Social Responsibility in Mining & Centre for Water in the Minerals Industry, Sustainable Minerals Institute, 2010. Franks, DM, Brereton,
D, Moran, CJ, Sarker, T and T, Cohen. Cumulative Impacts A Good Practice Guide for the Australian Coal Mining Industry. The University of
Queensland. Australian Coal Association Research Program. Brisbane.

29

and local citizens potentially have the capacity and

will to collect water quality data related to mining
projects. Increasing the breadth of expertise can
improve data quality and validity in the publics eye.
Engage with communities first to determine which
non-governmental organizations or universities are
most credible to them. Then work with other parties,
including civil society, community members, local
government, academics, media, donors, companies,
and other sectors to provide a credible, trusted,
third-party analysis to interested stakeholders.
3.

Establish a common, transparent starting

point. Use data from detailed public baseline
studies. This information can be used to reach
agreement on shared goals and objectives, establish
roles and responsibilities, and chart progress over
time. This is also an opportunity to collect data on
community perceptions around water and mining.
The data from these surveys can inform alignment,
communications, and co-management strategies. It
is also important to update these data at regular
intervals throughout the mine life cycle and adjust
management strategies accordingly.

4.

Design a participatory monitoring

program to build awareness, skills, and
trust among diverse parties, including
local communities. This program can be
designed and managed through a third party, or
through the company with an external board,
and should have formal rules for collecting and
reporting data. Most important is to follow
internationally-recognized scientific guidelines
for water sampling, analysis, and reporting of

30

data. Local stakeholders must have influence over

what indicators are tracked. The company and
local stakeholders should agree on what points to
monitor, what parameters will be tested (with the
guidance of a technical expert), how often samples
should be taken, who should take the samples,
what labs should be used, how results can be best
communicated back to the community, and what
national and/or international standards will be
used to analyze the results. Long-term commitment
by the company and other sponsors to provide
resources (human and financial) is key to ensuring
continuity over time.
5.

Capitalize on new technologies. Satellites,

cell phones, and spatial mapping make it possible to
establish a common comprehensive geo-database of
important water information in a country, region, or
community. Today, many different sources of data
can be triangulated to improve water management
strategies. Implementing new research into
desalination, reuse, and treatment methods can
engage diverse actors and build new platforms of
cooperation and trust. Increasingly sophisticated
tools are available to simulate water management
scenarios, including multistakeholder negotiations
and resource-sharing plans.

The following two case studies provide examples of

how to co-manage knowledge and resources.

CASE STUDY 5:
RIO TINTO LA GRANJA COPPER PROJECT PERU
Rio Tinto Mining Peru (RTMP) is developing the La
Granja project located in the district of Querocoto,
Cajamarca. Over 80% of residents of this district are
small-scale farmers with low productivity. Despite
the regions abundant water resources, inadequate
management, distribution and use of water limit
agricultural production. Rio Tinto has initiated an
innovative integrated water management approach with
local farmers to mitigate conflicts around mining projects
related to competition between farming and mining for
access to water resources.
This strategy, which Rio Tinto is implementing at an
early stage of development, aims to lay the foundation
for trusting relationships with farmers of the
Querocoto district, and to facilitate expansion to the
lower basin districts, where agriculture is also the main
economic activity.
Managing water in an integrated way is a great
challenge due to the presence of several stakeholders
who rely on the same water resource but have different
points of view. RTMP worked together with the
communities in the district to diagnose the situation
in a participative way in order to identify all direct and
indirect water users and the problems associated with
water management. Through this diagnosis RTMP found
that there was a lack of formalized oversight of water
resources by the government, a lack of organization
among the farmers, and inadequate use of agricultural
technologies available to the farmers. To address these
issues, RTMP has supported farmers in establishing and
formalizing water user committees that will help build
knowledge about how much water is available, how it is
distributed, and for what purposes.

RTMP also found that community elders were seen as

experts in water management. RTMP approached them
about assisting in forming the user committees. The
companys strategy was to communicate its willingness
to support the farmers in obtaining water use permits.
RTMP also sought to deepen stakeholders understanding
of the La Granja project, so during the participatory
diagnosis and the water user committee meetings, the
company explained the status, timelines, technical, and
economic aspects of the project, and fielded questions
from community members. Through the diagnosis,
connecting with community elders, forming the water
users committees, and, finally, in the ongoing process
of supporting the farmers pursuit of water permits,
RTMP has built trust not only with the farmers, but
with the wider community as well, and has increased
the involvement of the local and national government
on water management. By allowing the community to
participate in monitoring procedures and in interpreting
results, the company has been able to build trust because
the community understands how water in mining can be
controlled and kept clean without generating negative
impact in the valley.
As a water stakeholder in the area, RTMP is committed
to the sustainability and success of water management
in Querocoto. Together with key government and
community leaders, the company is part of a working
group called the Integrated Management of Water
Resources of the District of Querocoto. The group is
preparing a water resource management plan that will
consider the needs of all water users.

31

CASE STUDY 6:
ANGLO AMERICAN, QUELLAVECO PROJECT, PERU
In 2013, representatives of Anglo Americans Quellaveco
project in Peru negotiated 26 specific agreements with
community and government representatives using
a mechanism called a dialogue table designed to
allow a mining company, local authorities, and local
communities to agree in advance on the companys
roles and responsibilities vis-a-vis the community.
In Quellavecos case, the process required 18 months
and 22 meetings that produced agreements covering
major areas of concern, including the use of water
resources, mining environmental impact issues, and the
social investment in the community that the mining
company plans to make.
Proponents of the dialogue table say it can build trust
between a mining company and the community in

32

which it operates, but caution that a successful dialogue

table must include stakeholders that truly represent
everyone involved. All sides in negotiations must clearly
understand the agreements reached and their potential
impact to reduce the possibility of future conflict.
The parties must agree that any agreements made at
the dialogue table are binding and that monitoring
mechanisms are employed for compliance only not to
reopen issues already decided. There also needs to be a
mechanism to communicate the agreements reached to
the larger community.
If done well, a dialogue table can help reduce tensions
between a mining company and the community, and build
trust over the long term. In the case of the Quellaveco
project, agreements reached will govern construction and
operation of the mine for an estimated 32 years.

INTEGRATING THE THREE DIMENSIONS:

A SHARED VALUE APPROACH TO
WATER MANAGEMENT
THE MOST COMPREHENSIVE AND
EFFECTIVE STRATEGY for managing water issues
incorporates all three previously discussed dimensions,
supported by implementation of best industry practices
in water conservation during the project cycle. Proper
alignment of internal functions allows mining companies
to maximize risk and opportunity assessment, create
accountability, anticipate problems before they occur,
and resolve issues that arise in a timely fashion with
a harmonized voice. By creating a multidirectional
communication strategy, companies can transparently
engage with stakeholders. Finally, fostering a comanagement environment with other parties (companies,
local stakeholders, and/or government) in an affected
region ultimately benefits the sector as a whole.

A THREE-DIMENSIONAL APPROACH
Consider and integrate water management issues
from the very beginning of the project.
Adopt a company-wide strategy that coordinates
and rewards the efforts of senior management,

technical, communications, and communityrelations staff.

Invest in a multidirectional communications plan
throughout the mine life cycle. Listen to the
expectations of the community and consistently
make information available and accessible.
Work toward shared responsibility and local capacity
building. Demystifying the technical side of how
companies manage water in their operations
through a water management curriculum (possibly
delivered by a neutral third party) can help establish
common vocabulary and build trust for dialogue and
shared decision-making.
Partner with other companies, including those not
directly involved in mining, active in the region to
share best practices and build trust.
The following case study describes a water management
approach for shared value.

33

CASE STUDY 8:
A SECTOR-WIDE, MULTISTAKEHOLDER WATER MANAGEMENT INITIATIVE IN MONGOLIA
More than 13 mining and exploration companies
operate in or are exploring South Gobi Desert in
Mongolia, an arid region that is home to a primarily
nomadic population of 56,000 people. Limited
consultation about water use between these
companies, surrounding communities, and government
has contributed to fears that increased water demands
for mining could dry up crucial water systems,
deteriorate pastureland, and negatively impact culture
and livelihoods. As a result, in 2013, the local citizens
representative council in the South Gobi province
passed a resolution banning the use of groundwater
for mining operations. While the council decision
was later voided by the national government, which
ruled that water use decisions were beyond the scope
of the citizens council, the resolution demonstrated
the negative local sentiment toward the mining
sector and its water use in the region. The mining
sector, meanwhile, failed to publicly recognize water
as a shared risk, leading to even greater anxiety for
locals, spawning mistrust, and inviting conflict. This
apprehension has been stoked by misinformation, little
public data, and insufficient communication.
Mining companies realized they needed a platform
to identify shared challenges, successes, and common
ground for collaboration on the social and technical
management of water in the South Gobi. In response,
IFC, along with several mining companies and donors
(Canada DFATD, EBRD, FMO, WB, WRG), started
convening the mining sector for a series of roundtable
discussions. Through these quarterly roundtables,
participating companies developed short- and mediumterm action plans to improve internal alignment
and use multidirectional communications on water

34

management. The roundtables are held in two parallel

tracks: one for decision-makers of the participating
companies to ensure the activities continue in line
with the overall business objectives; the other supports
technical staff charged with integrating best practices
into their work programs. In longer workshops, the
technical teams from the water, environment, social,
and community-relations staff exchange ideas, successes,
and challenges through facilitated sessions and group
work, some of which they lead collaboratively. In this
way, the boots on the ground staff builds relationships
across functions within their own organizations and
with their peers from other companies operating in the
same region. They also develop professional skills by
focusing on improving water management practices.
The internal alignment of technical, environmental,
and social staff within companies and across
the industry involves raising awareness of the
responsibilities, realities, and risks of water
management across business functions. Mechanisms
to do this include company presentations on water
management, mine site visits for peer-to-peer learning,
and training that integrates both the technical and
social aspects of water management. In addition, the
roundtable companies are collaborating across the
sector to develop symmetric standards and policies,
increase public information-sharing, and engage
communities in participatory monitoring.
Recognizing that deliberate and factual information
outreach can aid in demystifying water in mining
and facilitate shared responsibility, the companies
helped develop a training module for Integrated
Water Resource Management (also the new regulatory

goal of the Government of Mongolia). The aim is to

offer this module to broader stakeholder groups
government, civil society, communities, academia,
and media building knowledge for informed and
increased co-management of water. To help track
impact and drive future interventions, the companies
participating in the roundtables helped design a
baseline survey to determine population perceptions
of the impact of mining activities on water resources.
Among other key findings, the survey found that
residing in a mining-impacted district is the most
important factor leading people to perceive that
mining impacts the quantity and quality of water
for both household and work purposes. Survey
respondents said the most significant factors affecting
the quantity of cooking and drinking water (from
most significant to least) are: 1) mining; 2) weather;
3) grazing; 4) informal mining. In fact, grazing and
agriculture are the most water intensive sectors in
the country. Finally, important for the companies to
consider as they work to improve multidirectional
communications around water management,
respondents main sources of information were
in order of importance television, community
meetings, government meetings, and rumor. The data
will be made public to inform and align company
water management activities with stakeholder
perceptions and government priorities.
The efforts are expected to reduce social tensions,
minimize information asymmetry on water resources,
and encourage company-community-government
collaboration on water management.

35

COLLABORATION FOR
A SUSTAINABLE FUTURE

ALL WATER ISSUES ARE LOCAL. To effectively

manage risks associated with water access and use,
companies must engage stakeholders from the very
beginning of a project. A concerted, coordinated
approach, incorporating all levels and all functions
within the sponsor company, is essential as a
foundation for success. Sustainable water management
creates significant opportunities for companies that are
proactively finding ways to use water more efficiently
and manage it more collaboratively.
Companies can prevent or mitigate conflicts over water
by investing in internal alignment, multidirectional
communications, and co-management with local
stakeholders, including communities, governments,
and other industry players. Critical to this 3D approach
is the collaboration of technical and nontechnical staff,

36

which may be vital for starting or continuing economic

activity in a region where communities and the private
sector depend on water for livelihoods and operations.
The case studies presented in this discussion paper can
serve as a catalyst for companies to review internal
policies, create innovative strategies, and explore
new partnerships for managing water. Incorporating
social elements through the methods suggested in
this discussion paper can lead to establishing trust,
open communication, environmental monitoring, and
shared value all factors that have been shown to
reduce conflict.
Engaging in co-management among parties who clearly
understand watersheds and water cycles moves the
debate away from a competitive zero-sum game to a
negotiated and sustainable sharing of resources.

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