As resource companies operate in ever more remote regions, the risk of their activities impacting on environmentally protected areas or other ‘biodiversity hotspots’ increases. What protected areas mean for resource extraction is often unclear in different jurisdictions. The majority of resource firms have come to accept the business case for minimizing negative impacts on biodiversity; this may be key to securing permits, protecting corporate reputation, and to raising capital. But when operating near ‘protected areas’ (however defined) projects may have to go beyond ‘doing no harm’. While keeping a close eye on the costs involved and the key role of governments in this area, demonstrating a net positive impact on conservation goals can be equally important for securing the overall ‘license to operate’.
This note highlights just a few patterns to watch out for when operating near protected areas, and additional strategies that may be helpful. It draws from our experience advising clients (using the LicenseSecure Navigate service and our database of 100+ projects). The list below is broad-brush, in contrast to the detailed strategies we develop for clients, and is intended simply to provide some food for thought.
- Companies can become the target of sustained NGO / international NGO campaigns, bringing media criticism, reputational damage and discouraging investors
- International environmental NGOs may provide support to local groups, fuelling opposition which may be partly rooted in local demands for more economic benefits
- Key approvals and permits may be delayed by government agencies until concerns are addressed
- Government agencies may respond to stakeholder pressure by halting project development temporarily or permanently
- SOCO targeted by UNESCO and WWF for securing exploration permit in a World Heritage Site (WHS) in DRC. SOCO commits to consulting with stakeholders before direct activity.
- Tata cancels plans for iron ore mining in Ivory Coast ‘Strict Nature Reserve’ and WHS after World Heritage Committee highlights legal concerns
- Petrobras withdraws from exploring in Yasuni National Park, Ecuador, after international fund is established to compensate Ecuadorian government for prohibiting oil exploration in the Amazon
Potential approaches – going beyond the basics*
- At the least, follow a ‘do no harm’ approach, conducting all necessary assessments, ensuring strong procedures to avoid HSE incidents & clarifying protected areas near operations – respecting ‘no-go’ areas if relevant
- Where possible demonstrate a net positive impact on conservation goals – a crucial factor near protected areas – and maximise stakeholder involvement in environmental planning and monitoring from the earliest possible stage. Consider:
- Partnerships with respected environmental organisations to leverage expertise, and investing in existing or facilitating new programs in the area
- Capacity building for state institutions responsible for management of nearby protected areas, and investment in the improvement of scientific understanding of environment & biodiversity
- Tackling other threats to the protected area, such as artisanal mining or deforestation, by providing alternative livelihood programmes for local people
- Antamina redesigned its project near a National Park & WHS in Peru in response to stakeholder concerns, providing capacity building for Park management
- The mining industry body ICMM requires all members to sign ‘no-go’ pledge on mining in WHS
- In Gabon, Shell partnered with the Smithsonian Institute to fund and train local people to conduct biodiversity research in nearby protected area
- Rio Tinto developed a group-wide approach to biodiversity covering all operations, with oversight from INGOs & an international advisory panel
- In biodiversity-rich Madagsacar, QMM engaged in extensive consultation on biodiversity issues and implemented conservation schemes with respected INGO partners, including IUCN and Kew Gardens
- In partnership with the IFC, Holcim in Vietnam invested in an alternative livelihoods scheme for local communities to tackle deforestation – a key threat to the nearby biosphere reserve
*Please note these points are illustrative, synthesised and do not reflect the complexity of the situations or management approaches used