The Impacts of Mining Industry : A review of socio-economics and political impacts
Abstract
This paper reviews socio-economic and political impacts of the extractive industry based on
a global literature review. It reveals 27 different impacts (23 socio-economics and 4 political)
associated with the industry. The socio-economic impacts found in literature are : income,
employment, livelihood, poverty, exports, training and skills development, community
development, service access, land and assets impacts, health, security, gender, safety and
accidents, education and literacy, culture, child labor, impacts on tribal people and
agriculture. The 4 political impacts are children rights, corruption, human rights and human
trafficking.
The lack of documented impact data for several operational mines is a crucial issue
highlighted in the review. Though it is a requirement for all mining companies to report data,
the review reveals that this requirement is hardly adhered to. Inadequate mining monitoring
is to be blamed for lack of data and documentation.
The paper concludes with the need for more research to evaluate net returns to mining
which should be used to determine the level of investment that should go back to the
community. The need for comprehensive monitoring and results documentation is also
recognised.
Key words: Mining industry; Socio-economics; Political; Beneficial and adverse impacts
The Impacts of Mining Industry : A review of socio-economics and political impacts
Electronic copy available at: https://ssrn.com/abstract=3423562
Anura Widana, PhD, Auckland, New Zealand
Introduction
The Wikipedia1
defines mining industry (MI) as the process of extraction of valuable minerals
or other geological materials from the earth, usually from an orebody, lode, vein, reef or
placer deposit. These deposits form a mineralised package that is of economic interest to
the miner. This suggests that the extractive industry consists of operations that remove
metals, mineral, liquid and aggregates from the earth. By nature of the industry, the resource
is non-renewable. Such examples are oil, gas, metals, industrial minerals, coal, gemstones,
rocks, clay, sand, lime, rock phosphate, etc. whilst mining process refers to activities such as
drilling, dredging and quarrying. The scale of extraction may range from traditional (artisanal
mining) to large-scale and global, the latter practised by multi-national companies. According
to the World Bank (2018), about 3.5 billion people live in countries rich in oil, gas, or
minerals. But, all too often, these resources have become a source of conflict and serious
and, give rise to human rights problems so serious that they can devastate vulnerable
communities rather than opportunity to benefit from. Mining produces raw materials which is
then processed to add value. The developed countries in view of the access to improved and
efficient technology, capital and other factors are in an advantageous position to add value
to materials extracted that leads to a massive increase in returns to the economy. On the
other hand, developing countries because the various services are not in order as well as
due to weak institutions, primarily depend on trading of raw materials extracted as the
source of revenue. Mining can add substantial amount to a country’s wealth. However,
sudden boom in revenue created by materials can generate socio-economic problems
including inflation harming other industries within the economy, corruption and bribes leading
to inequality and under development. This process is known as the “resource curse”. After
reaching a low point in 2002, the extractive industries globally have registered a remarkable
growth in the past few years. Since 2002, the prices of many mined commodities have risen
to record heights. The exponential growth of China economy is seen as one important factor
explaining this growth.
For many countries, the benefits from MI form a significant source of revenue to the
respective economies. The income and employment generated from extraction industry is
huge and shows a steady growth. The country revenue generated from natural resources in
2015 averaged at 5.69% of GDP which ranged from the highest of 46.44 % in Liberia to zero
income in Ant and Barb2
. Out of the 200 countries sited in the above source, 167 countries
have registered an income from natural resources. The natural resources included are oil,
gas, coal, minerals and forestry. The number of people employed in the sector can be as
much as 2% of the total workforce as in Canada. The above indicators tell us the value and
the role of extraction industry in both developed and developing countries alike. Extractive
industry businesses often are assumed to be interested mainly in maximizing returns for
their investments, implying that less-developed countries are vulnerable to powerful
corporations.
Although the mining sector generates a huge wealth to power economies of developed and
developing countries alike, the sector has inherent impacts. These impacts are both positive
and negative. The extent of positive and negative impacts are context-specific and vary from
extractive activity, location, economic environment, type of technology, quality and level of
training of its work force and quality of governance. These impacts can be influenced at any
level of the value chain by the local content policies adopted in host countries. Likewise,
1
https://en.wikipedia.org/wiki/Mining
2
TheGlobalEconomy.com
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apprehending these impacts and their dynamics are of critical importance in the design of
appropriate regulations and other measures to contain the potential damage it can cause to
the economy and society. However, there are obvious impacts generated by the sector that
should be managed carefully in order to uncover the wealth of the sector for development.
The identification of beneficial impacts as well as adverse impacts is critical for forward
planning within the industry. It helps to further multiply benefits whilst minimizing adverse
impacts. It is in the above background that this paper presents and document all impacts
associated with MI.
Types of impacts
The varied mining impacts can be classified in several ways as presented in the table below.
Table 1 : Classification of Mining Industry Impacts
Criteria Details
Functionality Environment, socio-economic, political
Time Duration Short-term, medium-term and long-term
Usefulness to Society Beneficial, Adverse, Neutral
Place of occurrence Extraction Site, Processing Plant, service
area or Down-stream
Nature Positive or Negative
Length of impact Temporary or Permanent
Source: Author’s construct
The above classification is not mutually exclusive. For example, impacts on the environment
can be short or long-term, or can be beneficial or adverse, may occur at different locations of
mining landscape and such impacts can be either positive or negative. However, the
classification is useful to determine whether a given impact is beneficial or adverse or to
pinpoint where the impact is seen with regard to mining landscape. The identification of
location of impact is important to determine control measures.
A schematic presentation of all mining impacts as revealed in literature is shown in the
Figure below.
Figure 1 : Mining Industry Impact Types
Serial
No.
Type of Impacts Nature of Impact
Socio-economic impacts
1 Income (+)
2 Employment (+)
3 Livelihood (+) or (-)
4 Poverty (+) or (-)
Impacts of Mining Industry
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5 Exports (+)
6 Training & skills development (+)
7 Education & literacy (+) or (-)
8 Community development (+)
9 Community access to services (+) or (-)
10 Water (scarcity and quality) (-)
11 Land impacts (-)
12 Assets impacts (-)
13 HIV/AIDS/STDs (-)
14 Security (-)
15 Gender (+) or (-)
16 Safety and accidents (-)
17 Violence, drug trade and money
laundering
(-)
18 Cultural pollution (-)
19 Child labour (-)
20 Social transformation (-)
21 Migration (-) or (+)
22 Impacts on indigenous and tribal people (-)
23 Impacts on agriculture (-)
Political Impacts
1 Human trafficking (-)
2 Children rights (-)
3 Bribery and corruption (-)
4 Human rights (-)
Note:
(+) sign indicates beneficial (or positive) impacts and (-) sign indicates adverse (or negative)
impacts
Source: Author’s analyses
The above information reveals the presence of 27 different types of impacts of MI namely,
23 socio-economic and 4 political impacts. Considering the number of impacts, the socioeconomic
impacts surpasses the political list.
The subsequent sections present details of each impact type drawing lessons from the
literature review. Under each impact type, five issues are presented namely, the nature of
impact, whether it is beneficial or adverse, the scale of impacts, global occurrence, and
whether each impact is short, medium or long-term, of course depending on data availability.
2 Socio-economic impacts
The 25 different socio-economic impacts are briefly discussed in this section.
2.1 Income
Income is the primary benefit of any type of extractive industry. It goes as saying that no
extraction activity would have taken place unless it generates income to the proponent. The
income generated from MI can be individual, companies (or organisations) or the country at
large.
Individual incomes take several forms such as wages and salaries for employees,
commission for contractors as well as income received by local community from sale of food
and non-food items to miners. On the other hand, the extractive income received by a
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company or country through trade (sale) in extracted items or providing associated services
is known as revenue.
The income received by employees of mining company is highly valued and heavily
beneficial to households. Individual income from mining activity can contribute to well over
90% of the entire household income. In many developing countries, the mining income is the
only source of income to some households which are not endowed with other assets. The
income earned by a gold miner in Kenya has been USD 140 per month (Barreto, 2018). The
same study points out that both men and women believe that miners income is several times
greater than the income generated by an agricultural worker. The study also found that 69%
of those engaged in mining do not wish to abandon their jobs in the mine, obviously because
of the high income.
It is normal that the local community receives income through selling food, beverages and
other items to miners, the mining business and to visitors. The sale can be between
individuals, businesses or across individual to business. The sale income is yet another
important cash source for local people.
The revenue of a mining company can take two forms namely, sale of extracted items either
in raw or value-added form or sale of power or other services such as gas or by-products to
local people, businesses and the region. The latter is the secondary source of revenue. On
the other hand, the government revenue from mining industry is substantial which forms a
significant portion of country’s income. Overall, the government revenue from natural
resources (gas, oil, coal, mineral and forest) is equivalent to about 5.68 % of gross domestic
product (GDP). It ranges from 46.44% in Liberia to a the lowest of 0.01% in Switzerland
(2015)3
.
According to global data (ibid), the revenue from oil as a percent of GDP range from 38.48%
in Kuwait to 0.01 % in Germany (2015). On the other hand, the government income from the
sale of gas ranged from 15.23 % in Turkmenistan to as low as 0.01 % in South Africa. The
country-specific data from Nigeria shows that the oil revenue in total government revenue
has steadily increased from about 25% in 1970 to a woefully high figure of 85% in 1985. Oil
and gas together constitute over 90% of Nigerian foreign exchange earnings. The data
suggests that the sale of minerals and other items forms an important source of government
revenue. For the above reasons, many governments rich in natural resources continue to
attract investments for exploitation of earth’s resource base.
The government revenue from the industry takes a variety of forms as highlighted in the
case of Tanzania (Table 2).
The government revenue from mining in Tanzania has been increasing steadily since 1998.
In 2005, the revenue stood at over $ 66 million. In tandem, overall foreign direct investment
(FDI) into Tanzania between 1992 and 2005 totalled $2.9 billion (of which $1.4 billion was
mineral related), compared to less than $2 million between 1986 and 1991. The years 1999
and 2000 experienced the highest levels of FDI inflows, primarily in connection with the
proliferation of mineral prospecting activities in the country. This investment works out to be
67% of FDI contribution that came from minerals in 1999. The rate for 2000 is still high at
69% of the FDI inflow generated from minerals.
Table 2 : Government Revenue from Mining Industry in Tanzania
3
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Source: Kweka (2009)
The above data reveals 12 different forms of government revenue. The royalty income
received by the government is the single most important component of which the range is
between 22-38% of total government revenue.
2.2 Employment
An increase of employment is one of the important benefits of MI. The industry requires
various types of workers such as unskilled, semi-skilled and professionals to conduct a
range of activities. Many unskilled and some semi-skilled workers are drawn from the local
labour force which is a primary benefit to the community. The skilled workers may come from
other parts of the country or some may come even from overseas, the latter in particular
from overseas. It is difficult to say the proportion of different types of workers engaged by
type of mining as it varies with the type of extraction, stage of extraction and type of
processing. A study that compares employment rates in three African countries has
established the following employment figures:
Table 3 : Employment Benefits of Extractive Industry
Country Direct Employment Spin-off
Employment
Total Population
Involved
Kenya >140,000 miners Multiplier of 3.8 Insufficient data
Rwanda 65,000- miners 190,000 jobs 1.1 Million (13% of RP
8.3 Million)
Uganda 300,000 miners 750,000 jobs 4.9 Million (15% of RP
32.7)
Source: East Africa Research Fund (January, 2018)
The above data reveals that the total number of employments generated from MI ranges
from 250,000 to as much as 1 million. The employment provided by mining industry does not
Category Rate (Percent)
PAYE 7-20
Payroll Levy 1 − 4
PAYE Gratuity 1 − 7
Withholding Tax 5 − 29
Skills dev Levy 2 − 6
National Social Security Fund 4 − 11
PAYE (local) 7 − 25
Stamp Duty 1
Donations 1 − 2
Road tall 1 − 4
Mining Lease 1 − 3
Royalty 22 − 38
Import Duty 2-9
Others 1-8
% of total govt revenue 2-4
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confine to mining activity only. There are probably more employment opportunities created in
various down-stream services such as value-added industry, transport, packing and
packaging, postage and courier, communication, workshop, freight, insurance, security, etc.
Total employments from mining in Tanzania jumped from 605 employees in 1998 to as many
as 5,320 in 2005. The correlation coefficient between output from gold mines and
employment was 0.79. Apart from the direct employment benefits, mining creates
employment more indirectly in the local community through infrastructure investments, in
particular in the water, health and roads sectors. For example, Placer Dome, which owns
Afrika Mashariki Gold Mines, has invested in improving rural infrastructure around the mining
communities, including health ($400,000), education ($550,000), water ($100,000), and
roads ($600,000).
2.3 Livelihood
The land, eco-system, forest area and various other habitats are important sources of
livelihood for tens and thousands of people around the world. The fact that MI eats up on
land and compromises on the sustained management of several other resource types
including water, the industry is likely to risk livelihoods of people. There is so much evidence
on the loss of livelihood exacerbated by the spread of mining. The impacts are both positive
and negative.
It has been estimated that small-scale mining provides a livelihood for approximately 13
million workers and their families worldwide, particularly in countries such as Bolivia, Brazil,
Burkina Faso, China, Colombia, the Democratic Republic of the Congo, Ghana, Ecuador,
India, Indonesia, Madagascar, Tanzania, and Thailand (Remy et. al 2002). The same study
suggests that large-scale mining provides direct employment and economic self-sufficiency
for some 2–3 million workers and their families worldwide. In addition, for every job created
directly by large mines, between 2 and 25 jobs are created with suppliers, vendors, and
contractors to the mine and to miners and their families, typically provided in the context of
small and microenterprise activity.
The negative livelihood impacts caused by mining’s influence are on food and water scarcity,
increased cost of living mainly due to competition, lack of other income sources and
unhealthy living environment. Adjei (2007) reports that the taking over of farmlands in Ghana
mine operations has impacted the reduction on farming activity itself and lower food
production affecting livelihoods in two-fronts. The reduced food production is also coming
from the increase in land degradation where crop productivity has declined due to loss of soil
fertility or dumping of tailings on previously cultivable land. There is also evidence that
mining has contributed to increased cost of living of communities living near the mine sites
(AbuYeboh, 2008). Most basic needs such as food, accommodation, water and other
necessities are expensive to purchase by ordinary people. Literature suggests two main
reasons for this situation. Firstly, the mining companies employ most of the strong and ablebodied
young men into the mining industry, taking them away from the farms. Secondly,
most of the farmlands in those communities are taken over by the mining companies. The
result is that there is always a reduction in food production in those areas and the need for
food to be brought from distant areas at exorbitant prices.
Some companies plan for the upliftment of livelihood together with the expansion of mining
activity. However, livelihood improvement, is simply not a priority for transnational
companies engaged in extractive industry, their national host governments or Western
consumers who remain ‘blissfully unaware’ of local conditions, needs and priorities. The
tendency for powerful companies to externalize costs and maximize profit margins is, of
course, not a new realization.
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2.4 Poverty
It is commonly believed that there is an inverse relationship between poverty and income
from the mining industry. This may be explained as follows: when income generated from
the extraction industry increases, it enriches government balance sheet, placing it in a better
position to invest in poverty reduction. This is however, true only in theory. Data4
from some
of the resource-rich (and high Natural Resource income) countries reveal that their poverty
levels are very high in spite of high-revenue from resources; in fact, poverty rate in resourcerich
countries is much higher than others with low-income from natural resources. This is
clearly evident in Figure 2 in that world’s highest poverty levels are reported in Democratic
Republic of Congo, Guinea Bissau and Burundi whose GDP contribution from natural
resources (mainly extraction) is well over 20%. On the other hand, countries with below 10%
GDP contribution from extractive industry (Chile, Angola, Algeria, Kyrgyzstan, Kazakhstan)
have half of the poverty level of resource-rich countries. This is in fact a huge concern as
country’s revenue from its natural resource base is not utilized for the improvement of living
standards of its inhabitants. As discussed later in this paper, there are issues such as high
rate of corruption that siphon off resource income, that explains higher income is associated
with higher poverty rate too.
Another way poverty is impacted results from mines closure which creates an upsurge in
local unemployment and income losses, which result in a myriad of livelihood problems
including a resurgence of poverty levels. In the late 1990s in Namibia, some foreign mining
investors closed their operations and withdrew without notice, leaving the government and
the local communities unprepared for the mine closure. In addition to the loss of employment
and income, sudden mine closure can deprive the local population of the most basic social
services and access to public goods, such as clean water, energy, or transport, provided
previously by the mining company. Lack of these services and goods affected vulnerable
groups more drastically than others.
4
https://www.theglobaleconomy.com/rankings/Natural_resources_income/
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Source: Author’s analysis based on global economy data on GDP and World Bank poverty
data (2015)
2.5 Exports
The mining sector of most countries’ is export-oriented. This follows the purpose of mining
which is primarily to produce commodities such as oil, gas, coal, minerals, etc. for external
trade. For a number of developing countries export of a single commodity accounts for a
large share of its total exports as shown below:
• In Chile, the share of copper exports in the total export of goods rose from an
average of 38% in 1991-2003 to 61% in 2006 (McMahon, 2014);
• Gold exports in Ghana rose threefold from 1990 to 2004 increasing its share in the
total exports of country from a quarter to 37% (ibid);
• Exports of copper and cobalt in Zambia were $3.2 Billion in 2006, about four-fifths of
country’s total exports (Barreto, 2018);
• In the Republic of Tanzania, from zero exports prior to 1990, gold exports rose to $
640 Million by 2005. This accounts for 43% of total export of the country (Kweka,
2014);
• Exports of metallic minerals in Peru accounted for 62% of total exports in 2006
(Bebbington, 2009).
The main message is that the contribution of mining towards country’s export earnings is
substantial.
2.6 Training and skills
The mining industry requires skills of various types to operate a range of activities from
extraction to processing and down-stream value-addition. Although many of the skilled
people are sourced from outside the mining area, such people require skills development to
suit the actual requirements of a particular industry. Of course, the workers recruited locally
need to upskill in areas where the company has a demand for. As the employment of a
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skilled labor force is sine quo non for the successful operation of any mining activity,
companies consider skills improvement and continued training of its staff an important
activity. Almost all extractive industries invest on training and skills development of the
workforce. In 1999, Minera Escondida in Chile established a training centre that helps
improve occupational skills required in various mining operations. In Botswana, Debswanaa
joint venture between the government and De Beers have established an intensive training
and apprenticeship program. It also offers both local and foreign scholarships for its
employees for further training. For some developing countries such as China, engineers
trained in sophisticated technologies by the extractive industries is particularly valuable as it
eliminates the need to hire expatriate engineers to do the job. The workers benefit from their
improved skills not only for the work at hand but also in the context of similar jobs elsewhere.
There is evidence that workers who have acquired skills from an employer have made use of
such skills for gainful employment elsewhere. For local people, their skills development is a
huge success story that they highly benefit from. This goes as saying that if not due to the
industry, the local work force remains unemployed. Hence, the extractive industries have a
significant impact on human resource development of the host country.
The issue is that evidence with hard-data on skills improvement and training provided by
extractive companies are largely not available. More so are the number of local workers who
have benefitted by way of employment in other companies or even in other trades as a result
of investment on training when they were company employees. Another area where
evidence is not reported is skills development and training received by women and evidence
on how the women work force has benefited from their improved skills set as well as other
social ramifications that this improvements have led to.
In the absence of evidence, summarised below are some salient issues with regard to
training and skills development by road construction companies in PNG (Department of
Works, PNG, 2017).
• About 2 % of local people in the work force has received training on such trades as
welding, tile laying, mechanics, carpentry and plumbing;
• The company provided written recommendation to trained local workers in their
attempts to seek employment elsewhere;
• A small number of trained workers have been employed in skilled jobs elsewhere
after the closure of construction activities;
• Training in skilled jobs is praised by local workers;
• Men workers have been the primary recipients of all skilled training. This outcome is
a result of both local customs as well as lack of awareness of potential women
applicants on such opportunities.
2.7 Education and literacy
This is yet another area where reported evidence associated with MI is lacking. There are
companies that invest on literacy development and education of the local community. More
so is investment in the local community is often a requirement for the company as stated in
the mining agreement with the host country. The education and literacy benefits to the
community are huge and is vastly praised by the local people especially women. More work
is needed in this area as the level of education and literacy among the local people in
developing countries is low. The adult literacy in Afghanistan is just 31% (NRVS, 2014).
Although literacy rates in mining areas of Tanzania have recorded an improvement from an
estimated 67% in 1999 to 84% in 2005, much remains to be done (United Republic of
Tanzania, 2005). Much of the evidence in this area has escaped from being documented
which could either be due to low level of achievement, weak mining monitoring or both.
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2.8 Community development
Besides the financing of a wide range of government activities, the mining industries help
improve community development through supporting a host of infrastructure works such as
roads, ports, power and gas supply, urban and rural development, schools, hospitals, etc.
Such investments are widely driven by the corporate social responsibility (CSR) agreements
between the mining company and the government. The need for companies to invest on
community development more often than not, are requirement stated in the law. Maconachie
et. al (2013) argues that community development initiatives trigger the potential for
disastrous disconnects to transpire where actual development needs as reflected in the
minds of local people are so different from what is implemented by mining companies. Such
outcome has resulted in further fragmentation and inequality of the community. On the other
hand, a World Bank study has provided evidence that among five countries studied, mining
companies have contributed significantly to regional or national infrastructure in just Chile
and Peru (McMahon and Moreia, 2014). Evidence suggests that several towns in Botswana
(Selebi-Phikwe, Orapa, Jwaneng, Letlhakane, Sowa) owe their existence exclusively or
mainly to nearby mining activities. These towns account for around 10% of Botswana’s
urban population. Wages paid to mining employees, and purchases by mining companies,
provide the basis for secondary economic activities in these locations. The mining sector has
also provided the impetus for the development of water and power supplies, and of road and
rail infrastructure.
The major mining companies (BCL and, especially, Debswana) have invested extensively in
health and education facilities in their communities. Companies operate hospitals which are
open to both company employees as well as the general public. Debswana has been active
in responding to HIV/AIDS, and was the first company to provide anti-retroviral therapy
(ART) to employees and family members, free of charge. Debswana’s hospitals at Jwaneng
and Orapa now have specialized Infections Diseases Care Centres, which provide ART and
related treatment in partnership with the Government of Botswana to local communities.
Other social initiatives undertaken by Debswana include the provision of significant urban
infrastructure, such as airstrips, roads, housing and water supplies; the funding and
management of primary and pre-primary schools; the establishment and management of
game parks; the establishment of the Harry Oppenheimer Okavango Research Centre in
partnership with the University of Botswana for the study and conservation of the wetland
ecosystem in the Okavango Delta; the funding of a venture capital fund (Peo) that provides
finance for the development of business projects owned by small and medium size
entrepreneurs; a donations fund providing over $1 million a year to deserving causes and
organizations.
There are other indirect benefits from the infrastructure built by mining company. In the
Republic of Tanzania, the investment on airports, hotels, roads and other services in the
Lake Victoria Gold fields have improved tourism in the northern part of the country.
The investment by mining transnational companies in Tanzania on community facilities such
as education, health, micro finance, water, roads, electricity, youth activities and HIV control
is huge. The total investment funds in above sectors have grown from $ 4.15 Million in 1998
to as much as $ 35.79 Million in 2005 (Kweka, 2009).
It is also to be noted that many companies have not contributed to local infrastructure
development works in contrary to agreements which is a burning issue for both the local
population as well as the government.
Mining closure also results in low maintenance levels of infrastructure whose upkeep
becomes burdensome for local authorities.
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2.9 Service access
The development of MI if accompanied by an investment boom in infrastructure, is likely to
improve access to public services. The previous paragraph has given several instances
where the expansion of MI has resulted in the development of infrastructure services both
locally and regionally. The building of infrastructure itself will not warrant safe and improved
access to such services especially by women and other vulnerable groups in the host
country. However, there is less evidence whether the improvement in infrastructure has in
fact enhanced people’s access to such services.
The low-access to services can be due to several reasons. First, the improved infrastructure
is built primarily for the workers in mines where local people may not have ready access to
such services. Second, although services have expanded, the influx of men workers may
restrict the movement of women and girls in the community (particularly in countries with
less freedom for women and girls), thus they cannot benefit from improved services. Third,
the services such as clinics, playgrounds and markets may be built near the mine which
normally are away from the centre of the village, making such services are less accessible to
residents. More studies and data are needed to demonstrate the relationship between the
expansion of EI and the improvement of service delivery.
2.10 Water
Globally, 2.1 billion (1.2 billion in developing countries) people lack safe drinking water at
home (WHO, 2017). Almost 2 in 3 people lack access to clean water. Impact on water
resources is a common and almost possible impact of MI. The water impacts are in volume
(quantity), quality and distribution. The scale of water consumption in extractive industry
operations can be substantial which depends on the type and scale of mining operation.
Water is drawn from existing sources such as reservoirs, rivers and streams or by drilling to
exploit ground water aquifers. In both cases, a mining operation uses a large volume of
water that sucks up most of the existing sources including underground aquifer. The overuse
of ground water can create loss of water in wells used by communities around the mine.
The excessive use of water creates a deficit of this important commodity thus compromising
water consumption by local people, animals, agriculture and other rural industries. Hence,
the demand for water by mining company creates a scarcity of water.
The mining industry influences water quality physically, chemically and biologically. The
heavy sediment loads resulting from riverine mining operations or discharge of sedimentladen
water back into streams and rivers cause water to pollute. This is a typical problem in
Papua New Guinea where water in most of perennial rivers is turbulent almost throughout
the year. This is a significant nuisance to down-stream users especially women. The
accumulation of tailings and the slow-release of various chemicals such as metals, sulphide,
minerals, dissolved solids and salts into water bodies creates chemically polluted water. The
discharge of mercury into rivers, streams and estuaries is a critical problem reported in many
countries engaged in MI, for instance in PNG’s Porgera Mines. Chemically polluted water
can negatively affect surface water quality , aquatic ecosystems, and groundwater quality.
Impacts on aquatic life can include increased mortality, health or reproductive problems, and
a reduction in the number of species present (Mining Facts, 2012). Moreover, the presence
of large numbers of mining staff causes water contamination with faecal material thus
affecting the biological quality of water.
The impact of water is long-term where cleaning of polluted rivers is a long-neglected activity
by mining companies. The dumping of tailing by OK TEDY mine in PNG is a case in point
where thousands of hectares of the Fly River has been the dumping ground which has never
been attempted to clean.
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2.11 Land impacts
The extraction industry creates land impacts in a variety of ways. These include the
expansion of excavation and exploitation sites, to build access roads, pipelines, work camps
to create stockpile area and processing plants and, dumping of excavated materials, waste
including tailings, redundant machinery, used machinery parts including tyres and
equipment. The impacts are both in quantity of land available as well as in the quality of
existing land and the question whether such land is able to continue food production after
being contaminated by mining waste including chemicals.
The land taken by the mining industry creates a greater competition for the remaining and
unmined land for production of food, fuel, grazing and other consumable items. Increased
competition for land is a huge issue in areas with higher productivity where the local people
use it for their living / production. Taking away of such land by the MI causes unforeseen
impacts on the local people including lack of food, fuel and pasture. Still in other cases,
tailings are dumped on riverine and other sensitive eco-systems where the land is held by
the state or tribal communities.
On the other hand, the mining company taking away of unproductive or unusable land in
return of compensation is an issue praised by the local community. However, such
compensation has always not been adequate and local people have suffered from the land
taken by the mining company. The non-payment of full compensation for land taken by the
Porgera mine and Kutubu Gas fields in PNG are long standing issues. It is to be noted that
there is a lack of reported evidence on land impacts caused by MI.
2.12 Assets impacts
Assets fixed to land are impacted causing severe hardships to local community. Such assets
include houses, sheds, irrigation structures, animal cages, trees, crops, drinking wells,
businesses, etc. that provide income, generate food or provide livelihood support. The law of
many countries requires that company pays compensation for the relocation of assets that
are fixed to the land. However, companies pay little attention to compensation payment
causing negative impact on people’s livelihood activities.
Literature on both assets impacted by mining as well as the impact of local people from the
loss of livelihood are scare.
Another issue relates to compensation is that funds received are improperly used by the
affected people. This is due to a number of reasons such as ignorance, lack of orientation of
people, absence of training and skills development and the absence of opportunities for
investment of compensation funds. People have been engaged in framing for generations
and it takes a lot of work to change their skills to re-orientate people to do work away from
farming. Given below are some cases that vividly show the plight of people affected by
resettlement even after payment of compensation (PNG Ports, 2014):
• Difficulty to purchase assets of the same quality;
• Tendency for the use of compensation money to purchase white-ware goods, motor
vehicles and other items that do not directly contribute to income generation or
livelihoods;
• Funds are used in consumption or welfare as the affected people are not provided
with adequate life skills training. In particular, rursl people have no prior experience
in handling large sums of money wher the tendency is to use in consumption;
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• Compensation funds are robbed or lost;
• Funds are invested where new investment collapsed due to lack of experience in
management.
As a result of one or several of above factors, the post-resettlement living standards of the
affected people tend to be lower compared to pre-settlement phase. For instance, the PNG
project has deteriorated quality if livelihood of xxx% impacted people compared to preresettlement.
This is a huge issue that many governments do not wish to admit.
2.13 Health, HIV/AIDS, STDs and other diseases
Historically mining was among the deadliest of occupations owing to ‘brown lung disease’,
fatal explosions and mine collapses. A large-scale study found that underground gold miners
in Australia, North America, South America and Africa suffered from ‘decreased life
expectancy; increased frequency of cancer of the trachea, bronchus, lung, stomach, and
liver, increased frequency of pulmonary tuberculosis (PTB), silicosis, and pleural diseases,
increased frequency of insect-borne diseases, such as malaria and dengue fever, noiseinduced
hearing loss, increased prevalence of certain bacterial and viral diseases and,
diseases of the blood, skin, and musculoskeletal system’ (Eisler 2003). Underground
explosions of methane and other gases trap and kill thousands of miners every year. Owing
to poor ventilation in underground shafts, miners are exposed to harmful gases, dust, toxins
and heat, leading to silicosis.
The literature provides a rich list of diseases associated with MI as listed below.
Lung disorders
• Occupational lung diseases
• Chronic obstructive pulmonary disease
• Dust diseases of the lungs
• Coal-workers pneumoconiosis
• Asbestosis
• Silicosis
• Byssinosis
• Asthma
• Respiratory conditions caused by toxic agents
Repetitive motion
• Carpal tunnel syndrome
• Tendonitis
• Disorders associated with repeated trauma
Other
• Neurotoxic disorders
• Noise-induced hearing loss
• Dermatologic conditions
• Psychological disorders
• Severe occupational traumatic injuries
• Reproduction disorders
• Poisoning
• Disorders caused by physical agents other than toxic agents
• Malignant pleural neoplasm
• Occupational cardiovascular diseases
• Lead toxicity
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• Pesticide and insecticide toxicity
• Hepatitis B
• Hepatitis C
• HIV/AIDS
Source: Scott and Grayson
In 1993, out of every 100,000 gold miners in South Africa, 113 died in accidents, 2,000
suffered a reportable injury, 1,100 developed active tuberculosis and of these 25 died; in
1990 about 500 were identified as having silicosis other lung diseases, heat stroke and
cancer. Large numbers of miners sharing limited underground air create conditions for
tuberculosis and other respiratory diseases (Ogola et al. 2002). Coal mining is considered an
occupation that causes extremely high mortality. Uranium miners face elevated levels of lung
cancer, silicosis and, together with the surrounding population, are exposed to radiation,
causing birth defects, immune impairment and cancer. Poorly maintained mines in the
former Soviet bloc are among the most dangerous in the world, with hundreds killed in
recent years owing to explosions and collapses (Birn et al. 2009). Despite increasing
mechanization and other methods to rectify issues, the problem continues. Loud noise, a
ubiquitous hazard across all sectors of the mining industry, can result in significant hearing
loss and hypertension (Driscoll 2007; Donoghue 2004). Exposure to vibration due to vehicles
and power tools is a risk factor for musculoskeletal conditions, especially lower back and
neck injuries (Driscoll 2007). Heat exhaustion can be caused by thermal stress related to
surface mines with hot ambient temperatures as well as underground mines with high
humidity, geothermal gradients in deep mines and liberation of heat by mining machinery
and equipment (Driscoll 2007; Donoghue et al. 2000). Toxic metals such as mercury are
commonly used by miners to amalgamate gold and other precious metals, often with bare
hands, leading to occupational exposures as well as environmental exposures once the
metals are discarded as waste. A number of studies have found very high levels of mercury
in edible fish stocks near mines, which pose particular risks to children (Eisler 2003).
Radioactive ores increase the risk of certain cancers (Driscoll 2007).
Mining communities are sometimes associated with a high risk of exposure to HIV/AIDS.
This is particularly the case when miners are migrant labourers, living temporarily in mining
locations while their families are elsewhere. Although this pattern characterized many mining
settlements in South Africa, it does not apply in Botswana, where permanent settlements
have been established around most mining operations, where miners live with their families.
Nevertheless, Botswana’s mining towns are associated with migration, mainly because they
offer more economic opportunities than surrounding rural areas, and there is some evidence
that rates of HIV infection are relatively high in mining areas. Adult HIV prevalence rates in
the three health districts which include significant mining settlements are shown in table 5.
Two of the mining areas have HIV prevalence rates higher than the national average, and
indeed Selebi-Phikwe has the highest rate in the country.
Table 5: HIV Prevalence Rates in Botswana, 2005
Health District HIV Prevalence Rate (%)
Selebi-Phikwe 46.5
Boteti (Orapa,
Letlhakane)
35.4
Jwaneng 30.3
Botswana 33.4
Source: Jefferis, 2009
The township or market segments that emerge from (or surround) the mining areas have
often been identified with high HIV/AIDS prevalence. Several factors are attributable to this
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trend where most commonly mentioned from the literature are lack of awareness, a carefree
attitude, widespread prostitution, and lack of access to quality health services (Kulindwa et
al., 2003). The study by George (2003) in Geita mining operations also found similar
problems that fuel the spread of HIV/ AIDS. The problem of HIV/AIDS cuts across all sectors
in the Tanzanian society and is not particularly tagged to the mining activities; however, such
activities often provide an environment conducive to the wider-spread of the pandemic.
2.14 Security
The relationship of extractive industry and security are twofold (Weber-Fahr et al, 2014).
First, the higher income obtained through mineral income can contribute to breeding of local
thugs who may pose against the security of innocent local people. This issue has a high
relevance in the context of Afghanistan which will be discussed in Section three of the report.
Second, some people may want to use the mineral wealth to finance political or military
conflicts. “Conflict diamonds” are a prime example. They have helped to fuel civil wars in
countries such as Sierra Leone and the Democratic Republic of the Congo and are used to
finance ongoing military conflicts in countries such as Angola. Political stability, democracy,
transparent revenue management processes, and a transparent legal regime for mineral
rights and for appropriate revenue sharing can help avert such conflicts.
There is yet another security issue raised in literature. It is the security of mining operation
itself or what is known as protection of their private business. Insecurity and conflicts evolve
around the highly contested question of who has legitimate access to resources, who shall
have access to land or who will finance to fix damages caused by the company. Local
community groups may demand the redistribution of company profits to them as a social
security for the loss of their land or other assets (Börzel, 2011).
2.15 Gender
The impact of resource extraction is typically greater for women and girls than men.
Whereas women traditionally occupy an integral position in indigenous communities,
resource extraction tends to promote men’s dominance. Companies, almost exclusively
recruit men as workers, tend to negotiate with local men and ignore women completely. The
few jobs available through mining are given to men only, and the influx of mining labour
tends to comprise men without families. Mining communities therefore tend to be excessively
patriarchal.
In PNG road construction projects, women workers comprise only a mere 2-4% of the entire
work force (Department of Works, 2017). Repeated requests by the project owner to the
contractor pushed the women employment rate slightly high yet not commensurate with
needs of local women. Overall, there is a predominance preference for men engagement
compared to women in the industry. A wider educational and awareness strategy is needed
to attract women into construction jobs including MI in PNG.
A study on salt mining in Uganda has shown that women are mostly disadvantaged in
mining activity (Hinten, J J, 2011). A World Bank study (2009) in four countries (Peru,
Poland, Tanzania and PNG) reveals a striking feature in the structure of the community
affected by mining. Men have most access to the benefits such as employment and income
whilst women and children who provide much support to the men are not benefitted. In
addition, the women and children are vulnerable to harmful social and environment impacts
of mining. Men and women have different priorities with regard to the spending of mining
income. Typically, men spend mostly on alcohol, gambling and smoke whilst women’s
priorities are on food, health and education of children. Hence, changes in income brought
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about by mining can significantly impact on household food, nutrition and education. The
study also points out that women have unique role in ASM which can create health and
safety risks on them.
EI’s impacts on men and women are different as summarised in the Table 6.
Table 6 : Gender Impacts of Extractive Industry
Criteria Effects Impacts
More men
compared to
women employed
by EI
Less cash in women hands leading to
low family nutrition, low investment on
child care, less investment on children
schooling and not able to take credit and
to repay loans taken already
Increased poverty and
families become
endangered
Discrimination in
hiring practices
Implications for EI companies such as
overlooking productive, efficient and
high-performing labour of women.
Implications for women are barriers to
private sector development ,
entrepreneurship and thereby economic
growth
Frustration among women,
increased women poverty
and reduced company
revenue
Safety at work Women respect work place safety and
environmental safeguards greater than
men
Less accidents and greater
public recognition of the
company
Heavy machine
and shovels
operated by
women
Low operational cost when women use it Increasing profits from
mining, enhanced life of
equipment, more wages in
women hands leading to
enhanced living standards
for women
More men
retrenched due to
restructure
Increased unemployment for men and
low cash for HH spending
More burden on women to
fuel household activities and
decline in living standards
Increased hiring
of women in
response to
gender concerns
Greater employment of women than men Increased social disruption
and conflicts in family in
societies where women
employment is customarily
not permitted. Women are
subject to harassment and
high risk of their safety at
home
Women work
condition and pay
Generally low and unsafe. May loose job
when pregnant
Impairment of women health
and work life
More work or
employment for
women in EI
Neglect of household work usually
carried out by women
More pressure on young
girls for HH work, less time
for girls in school, early
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drop-outs, poverty and
become vulnerable for
HIV/AIDS
Increased EI
income on men
Men prostitution, and greater risk of
HIV/STDs transmission to their wives
Negative impacts on
household nutrition, health
and education
Acquisition of
productive and
cultivable land
Women have to walk further away to
cultivate that takes more efforts, time and
more time is spent away from home
Impacts on HH activities;
risk of women exposure and
low performance as more
time is spent on travel
Water pollution Effects on women are greater as their
primary role is to collect and transport
water
Greater time spent on water
collection by women and
girls, using contaminated
water may lead to children
sickness and diseases
Loss of wood
resources
Women are severely disadvantaged as
this activity is mainly in their domain
Lessened household
activities and reduced living
standards
Air pollution Risk of women health especially
pregnant women, is higher
Increased still births; risk of
damaging of corporate
relationship with company
Source: Adapted from World Bank, 2009
In most cases, men employment in EI surpass that of their female counterpart. Men are
unlikely to pass on their wages to women whose priority is not on education, health, children
education and livelihoods. Rather, with increased access to cash, men instead frequently
spend more on luxury items, including alcohol, cigarettes, second wives, prostitution, and
activities such as gambling. Thus, since women are more likely to spend income on families,
hiring men over women of equal skills mean that families and dependents lose out in terms
of health, education, and nutrition. Where women cannot access jobs, it may put women in
a position of increased dependency on husbands and male family members. The situation is
often even more severe for the most vulnerable in the community, which generally includes
women in female headed households, for whom EI development can cause the loss of
traditional livelihoods and increased exclusion from decision-making. Another trajectory of
women employment in the extractive industry is in the wages where it is much less than the
wages received by their opposite counterparts. For instance the average women wages in
Porgera mine has been a third of men wages (Banks, 2009).
2.16 Safety and accidents
The activities of EI can impact safety and accidents not only on its work force but also on
nearby communities. Mining in general has been identified as the most hazardous industries.
However, the occupational safety and health implications vary significantly between different
mining activities and countries. Airborne contaminants, noise, vibrations and heat stress on
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surface of mines can create long-term health problems of workers exposed to risk factors
over long periods.
Historically, coal mining is considered to be prone to major safety risks related to slope
failure, collapse of underground mining roof, gas explosions and unhealthy air quality. In the
oil and gas industry, the frequency of accidents is lower than in many other industries.
However, because of the high combustible nature of products, accidents such as fires and
explosions are imminent. In July 1988, for example, 167 workers were killed when the Piper
Alpha North Sea rig of Occidental Petroleum in USA exploded after a gas leak. The
excavation and dumping of rocks are said to be a primary source of accidents, pollution of
riverine eco-system frequent flooding and loss of fish.
The open pits after mine closure is a huge safety risk for nearby families especially children.
In Uganda, the open pits have caused a number of deaths of children and women in their
attempt to collect rain water that filled into open and abandoned pits.
Air pollution resulting from EI causes several health hazards to mine workers. For instance,
a group of industrial respiratory diseases collectively known as pneumoconiosis is
attributable to mineral dusts. Among these, the general public is at risk due to crippling
asbestosis (crocidolite), white asbestos (tremolite) and a range of other fibrous silicate
minerals. Only slightly less notoriety is attached to silicosis due to exposure to silica dusts,
but almost all mineral dusts are potentially debilitating leading to chronic obstructive
pulmonary disease -COPD- (AFGHANITE, 2018).
Accidents involving vehicular traffic and heavy equipment is a common form across all
mining sites. The loss of lives of 29 people in the West Coast of New Zealand following the
Pyke River mine failure is a long-debated issue that has still not resolved.
2.17 Violence
The relationship between mining industry activities and violence is positive. The expansion
of extractive activities lead to more migrants and higher growth in population. This in turn
increases heterogeneity of the population and thereby a break-down in informal methods of
social control such as family, elders and local networks. The reasons for decline in social
control can be explained through the disruption of continuity of cultural traditions and
informal support systems, increasing uncertainty and perceptions of threat, and generating
culture conflict, thus leading to a rise in crime and violence.
Further, rapid industrial growth stimulated by mining boom tend to economically deprive
some people relative to others. Such people view as they are deprived and perceive the
situation as unjust. This perception may generate hostility and stimulate aggression toward
other people, resulting in violent crimes. The direction of aggression inward and may lead to
suicide.
Seydlitz et al, (June 1999) analysing data obtained in Arkansas and Louisiana have shown
that increased petroleum industry activity is associated with higher rates of lethal violence.
The price of oil was significantly related with suicide and lethal violence rates. The same
study has found that the rate of violence and suicide is significantly higher in communities
that are involved in the petroleum industry compared to other communities minimally
involved. This is explained by the fact that money income and work hours are greater in
involved communities compared to others with minimal involvement. The higher income is
associated with alcohol consumption whilst the increased work hours is associated with
greater degree of human stress. Both factors lead to aggression and higher suicide.
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2.18 Impact on culture
Mining often occurs in areas inhabited by rural people who have lived for generations. Many
of these people are recognised as indigenous and have a traditional way of living intimately
connected to their environment. With the continuing expansion of the mining industry, an
increasing number of such communities are coming into contact with mining companies.
Extractive industries review by WB in 2004 noted that the vast majority of human rights
abuses reported to international human rights organisations by indigenous groups stem from
the exploitation of natural resources on their lands.
The sudden influx of foreign workers into predominantly rural areas can be a huge social
challenge for local communities such as :
o Communities perceive expatriate workers as competitors for local resources
utilization, create crowding-out effects in services (housing, infrastructure, etc.) and
even lead to a reconfiguration of local social structures;
o Management of land (including its utilization for waste disposal). This issue is
particularly sensitive when extractive activities compete with other land uses like
farming, artisanal mining, or tourism activities and also when it is inhabited by
indigenous people for whom land usually represents their source of living and the
core of their collective identity and spirituality;
o Economic dependency and inequalities. Local economy can highly rely on meeting
mine or oil and gas exploitation needs, being vulnerable to boom and busts in
commodities prices or changes in levels of activity. Regarding economic inequalities,
they can be internal, between incomes and living conditions of members of a
community that work in the mine and the rest, and also external, between regions
receiving resource rents or royalties and those who do not.
2.19 Child labour
Despite the law against the use, many mining companies engage child labor in their
operations. Rates of child labour are high across Karamoja in Uganda (an estimated 20–
30% of the workforce), particularly in alluvial, subsistence ASM areas. This appears to be
even more pronounced for girls than for boys.
Kulindwa et al. (2003) reported employment of child labour in mining resulting from parents
forcing their children to work in mines due to high level of poverty. According to George
(2003), in small and large-scale mining operations in the Geita District, 12.5% of the
workforce were children. However, the same survey observed that “child labour is primarily a
concern for small-scale mining operations, and very infrequently in large-scale mines”
(George, 2003, p. 76). Children in this context are between the ages of 14 and 18, and their
willingness and acceptance to work in the mines is due less to child labour employment and
more to survival strategies arising from the lack of alternative employment or other incomeearning
opportunities. Children are heavily used in many mining activities in Afghanistan
(AREU, 2017; IWA, 2013)
2.20 Social transformation
The ability to generate wealth through natural resource rents also serves to weaken other
areas of the economy, which may be less vulnerable or valuable to rent seeking. This
syndrome is known as the Dutch disease: corrupt rulers focus on their own wealth creation
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through embezzling or capturing rents from point-source resource extraction and they show
little interest in developing other potential sectors of the economy, including agriculture (see
Hodges (2001) for a good example in Angola).
The Dutch disease not only accounts for poor economic growth outside EI but also has a
profound impact on inequality and social structure. In particular, the over-reliance on
resources, such as oil and gas, tends to diminish female participation in the labour market.
This in turn reduces the political influence of women, which may account for the fact that
major oil and mineral producing states are characterised by atypically strong patriarchal
institutions.
Summing up the multiple consequences of resource dependence in developing countries, a
report published by the World Rainforest Movement (2004) claimed:
“… the more that southern countries rely on exporting minerals, the worse their
standard of living is likely to be. Higher levels of mineral dependence are strongly
correlated with higher poverty and child malnutrition and mortality rates. They are
also associated with income inequality, low spending levels on health care, low
enrolment rates in primary and secondary schools, and low rates of adult literacy, as
well as higher vulnerability to economic shocks. Recent academic studies reveal that
overall living standards in mineral dependent states tend to suffer from high rates of
corruption, authoritarian government, government ineffectiveness, military spending,
and civil war. One good case in point is that although Angola is blessed with an
impressive resource base, it is Africa’s second largest exporter of oil and the third
largest exporter of diamonds. Unfortunately, the country has one of the highest levels
of poverty in the world. In cases where the consent of the indigenous people has not
been forthcoming, non-representative indigenous leaders have been created and
recognized by the National Commission on Indigenous Peoples and the mining
companies. The indigenous people view the selection of elders through procedures
that do not respect customary laws as invalid. According to them, consent obtained in
this manor should not and cannot be the basis of FPIC (Doyle 2007:28)”.
The recent opening of a large-scale mining operation in Australia is triggering significant
demographic changes which result in a structural and functional transformation of the local
social environment (Petrova, 2013). Two new phenomena, namely transiency and a
dependency culture are identified. Maintaining existing levels of social and economic capital
as well as mobilising the community’s resources to capitalise on the opportunities associated
with mining, are identified as key challenges for the settlement’s sustainability.
2.21 Migration
Many mining projects create a demand for labour which is not often found locally. The skilled
jobs are difficult to source from mine location as such companies resort to bring them from
outside. Either way, mining activity attracts workers from other parts of the country or even
from overseas.
Another form of migration associated with mining activity is in relocation of people who find it
hard to purchase land of the same quality locally. This forces people to move outside mining
areas in search of land or affordable housing. A Peruvian study (Bebbington, 2009) shows
that in 2003, 75% of households in the 44 communities that sold land to a mining company
between 1992 and 2000 had moved to neighbouring communities. Also, 17% of households
that sold parcels of land moved to the city. According to interviews in nine communities who
sold land to the mine, more than half were unable to purchase new lands equal to their
previous holdings due to price inflation, forcing them to migrate in search of housing and
new livelihoods.
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2.22 Impacts on tribal people
Most mining fields are located away from developed areas. Many mines are located in tribal
land populated by indigenous people. They have a strong and close association not only
with the land but also the entire eco-system in which they operate. The activities of MI can
create impacts on the tribal land and the eco-system jeopardising and threating the tribal
resource base. This can have significant implications on the tribal communities as briefed
below.
The OK Teddy copper and gold mine are located in the Star Mountain of PNG. Since the late
1980s, an area of about 2,000 km2
of downstream local rainforests has been flooded and
destroyed by tailings and waste rock from the mine. This has caused tremendous social and
environment harm to about 50,000 tribal people who live downstream. Their means of
subsistence and activities have been disrupted as a result of heavy loads of tailings, air and
soil contamination caused by the mining operations. Various tribal people m chronic
illnesses including rashes and sores caused by pollution. In 1994, 30,000 tribal land owners
brought a legal claim against the mining company where a negotiated settlement worth
approximately $500 Million in compensation and commitments to contained tailings was
reached in June 1996. It is reported that this may not have been entirely successful in
mitigating adverse impacts on the tribal communities. (World Investment report,
Transnational Corporations, Extractive Industries Developments (2007).
2.23 Impacts on agriculture
The final impact of MI is in the decline of agriculture due to the expansion of mining and
ancillary grounds. It is quite possible that area under agriculture declines by land taken over
for mining. The higher returns from extraction sector compared to agricultural sector is the
main driver for this decline. This evidence is reported in Soviet where a decline in agriculture
(in terms of grain production, beef or milk production and number of reindeer). The decline
has coincided with the mass scale expansion in the extractive industry in the North. Two
trends are related, competition for labor pool and through damage to the natural environment
that is related to the number of reindeer. (Rostankowski, 1983).
3. Political impacts
The literature reveals 4 types political impacts created by the mining industry that are
discussed below.
3.1 Children rights
Human rights apply to all age groups including children. However, the rights that specifically
apply to children due to their particular needs and vulnerabilities are to be differentiated from
human rights. The children rights are enshrined in the Convention on the Rights of the Child,
which spells out every child’s right to survival; to develop to the fullest; to protection from
harmful influences, abuse and exploitation; and to participate fully in family, cultural and
social life. The Convention elaborates the human rights of children, recognizing the
interdependence of their civil, political, economic, social and cultural rights. It also
recognizes that children may need particular accommodations or protection in order to fully
enjoy these rights.
Children are more vulnerable to the impacts of large-scale mining than adults, particularly
from birth through age 5, when they experience formative physical development. Exposure
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to chemical waste, for example, may be more serious for a child than an adult and may have
lifelong impacts.
Literature reveals mining industry’s impacts on children in five areas (UNICEF, 2015). The
impacts are severe in the context of children living in close proximity to mining operations.
The identified impacts are:
• On livelihoods and the ability to benefit from inheritance
• On their education and health services
• On their exposure to sexual harassment and economic exploitation
• Impacts from exposure to harmful waste materials, either through water they drink or
air they breed or eating contaminated food
• Impact on their living environment.
Research on and data corresponding to above areas are extremely lacking.
3.2 Human trafficking
In addition to the estimated 21.3 million refugees around the world, there are also an
estimated 40.3 million people who are currently being trafficked or enslaved. More than 14
Million people are being trafficked to supply labour for mining industries, construction and
manufacturing (Fisher, 2017).
By nature, MI relies heavily on low-cost labour supplied mainly by migrants, typically
acquired trough labour brokers. Very little attention has so far been paid to trafficking of men
into extractive industries or its connection with trafficked women in the region's mining hubs.
Recent reports suggest that labor-brokering practices foster human trafficking, both by
exposing migrant men to lack of pay and exploitative conditions and by creating male
migratory patterns that generate demand for sex workers and associated trafficking of
women and girls. While trafficking in persons violates human rights, and thus remains a
priority issue globally, there is little or no evidence of an effective political response to minerelated
trafficking in southern Africa.
Literature (US Department of State, 2017) reveals several alarming cases of human
trafficking for sex which are summarised below:
• Bolivian and Peruvian girls are subjected to sex trafficking in mining areas in Peru;
• Women and girls are subjected to sex trafficking near gold mines in Suriname and
Guyana;
• In Madagascar, the government and NGOs have reported increasing commercial
sexual exploitation of children related to mining sectors;
• In Colombia, organized criminal groups control sex trafficking in some mining areas;
• In Senegal, a gold rush resulted in rapid migration from across West Africa; some of
these migrants are women and children exploited in sex trafficking
• In the oil industry, individuals recruited with false promises of work opportunities are
exploited in commercial sex;
• Service providers in areas near camps surrounding large-scale oil extraction
facilities, such as the Bakken oil fields in North Dakota in the United States, have
reported that sex traffickers have exploited women in the area, including Native
American women.
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3.3 Impact on human rights
The natural resource extraction has become an increasingly contested and politicised form
of development. There is a link between human rights abuses and extractivism. The
application of human rights discourses can put pressure on governments, it has yielded
limited concrete results largely because the state as a guardian of human rights remains
fragile in Latin America and is willing to override their commitment to human and
environmental rights in the pursuit of development. Natural resource exploitation, and the
increasing number of large-scale and mega-development projects in the region, has made
Latin America one of the most dangerous places for human rights activists in the world. Even
progressive governments such as Ecuador have employed a zero-tolerance policy towards
anyone opposing natural resource extraction. Ecuadorian authorities have led a campaign to
vilify and stigmatise indigenous groups and social movements, labelling them ‘environmental
extremists’ or ‘terrorists’ in an attempt to build a framework of acceptance for curtailing
human rights in the name of development (Malayna Raftopoulos, 2017).
3.4 Corruption
In general, natural resources appear particularly prone to forms of corruption. However, the
link between state corruption and natural resources may be more profound than this.
Numerous studies have argued that those countries that are highly dependent on natural
resources for national wealth creation tend to suffer from high levels of corruption in general
and tend to have authoritarian systems of government (see for example Wantchekon 1999,
Leite & Weidmann 1999, Jensen and Wantchekon 2004). A collective finding of these
studies is that the type of natural resource is important: those classified as ‘point-source’
resources – such as oil, gas and certain minerals – are more problematic than resources
that are diffuse, or scattered geographically (see Ross 1999, 2001).
The corruption in EI takes three types namely, incidental, systematic and systemic
(Chikwanha, 2016). The features of three corruption types are summarised below.
Table 7 : Corruption Types and Features
Corruption Type Description Operational Scale
Incidental Mainly by small-scale operations in the
artisanal mining sector. It affects local
communities directly
Increased in the last
decade as a result of
penetration by
Chinese investors,
who are operating in
the artisanal mining
sector and forestry,
and collude with
local authorities for
permission
Systematic Feature of large investments with large
rewards taking place in the upper echelons
of the administrative system. This form is
more organised and involves a significant
Electronic copy available at: https://ssrn.com/abstract=3423562
portion of public officials.
Systemic most devastating form, as the entire
governance system becomes prone to
fraudulent tendencies. With systemic
corruption, the legal and regulatory systems
are open to manipulation, and particularism
defines the ‘laws and regulations to create
opportunities for rent-seeking and private
wealth accumulation
Widely spread in
Africa and Asia
Source: Adapted from Chikwanha (2016)
The presence of all these forms of corruption has contributed to the continued use of bribery
and extortion in investors’ extractive strategies and exporting decisions in the region. All
three conditions identified by Klitgaard (1988) that allow corruption to flourish are prevalent
in most African countries.
OECD estimates that 20% of bribery cases involve EI (quoted in Chikwanha).
The rentier state model explains the relationship between the wealth derived from natural
resources and the formation of centralised government that is secretive, aggressive,
paranoid and uninterested in public welfare. Where rulers are able to rely on natural
resource revenue as their primary source of income, this may encourage a detachment
between them and the majority of citizens. Political competition is driven by systems of
patronage and conflict, and public spending is therefore not directed towards the public good
but towards maintaining political hegemony. In this scenario, unproductive rent-seeking
behaviour is likely to predominate over rent-producing behaviour. There is likely to be a
concerted effort to weaken or compromise institutions that pose checks and balances, such
as the media, the criminal justice system, civil society and academia, and there is an
inclination to turn to militaristic methods of social control. This in turn encourages a noxious
relationship between rulers and the military, with the latter being kept loyal through a sharing
of the profits from resource exploitation.
The rent-seeking elites and public officials in underdeveloped resource-rich states are the
primary source of corruption within the mining industry. It is now well documented that large
foreign corporations active in the extractive industries have paid enormous bribes to corrupt
governments.
Conclusions
The extractive industry’s contribution to the global economy in undisputed. 167 countries
continue to be engaged in the industry because of the wealth it produces. The industry also
provides numerous other benefits to the local economy and society by way of employment
generation, income, infrastructure development, livelihoods and literacy and educational
improvement of the local population, among other benefits. It is equally important to
acknowledge the adverse impacts of the industry though solid evidence is not documented
in many cases as presented in the paper. The low-level of evidence on adverse impacts is
attributable to weak monitoring that is taking place across many of the developing countries
in particular. Even in the case of benefits, there is less evidence reported such as education
and literacy improvement and livelihood enhancement in predominantly mining areas. One
main reason for lack of reported evidence on both benefits and adverse impacts is the weak
level of monitoring even when the policy clearly states the need for monitoring. Many
countries have the legal framework for the implementation of monitoring and reporting but
Electronic copy available at: https://ssrn.com/abstract=3423562
the actual practice is different from what is expected. The question that is to be raised is the
net benefits for mining considering the long list of adverse impacts. An analysis of net
benefits to mining is vital as it provides sufficient evidence to determine the level of
investments that should go back into community development as the current level appears to
be inadequate. The study leads to two main recommendations: the need for comprehensive
monitoring and documentation of mining activities and the need for analysis of net returns to
the industry.
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