Alfonso Caso
Founding Partner
AOS
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Vaccinating Projects Against Social Discontent

Wed, 10/16/2019 - 18:24

Q: Why did Anaf Energy and Overflod Social decide to merge?
A: Anaf Energy and Overflod Social were two companies working on social projects across several industries, including infrastructure and mining. We collaborated on several projects regarding indigenous consultation and realized that merging into a new company would be a win-win for both. From 2019 onward, all our projects will be carried out by AOSocial (AOS). Our combined years of experience working with the mining industry will allow us to serve our clients better.
Q: Why is AOS’s expertise in social issues an advantage in the mining industry?
A: A revision to the Mining Law is highly likely in the coming months so leveraging our expertise in social matters is especially crucial. There are many details to take care of when approaching communities and making promises to them. For example, it is vital to establish a communication channel with no leaks. It is rare to have the exploration company ramp up projects into production. This means the commitments made by one side are often not delivered by the operator that buys the project later on, so the community ends up with unfulfilled promises.
I am convinced that the social impact study for mining projects is as important as the pre-feasibility study. We already have had a case of a great ore reserve project with no social feasibility. My advice for companies is that just as they do a diagnosis for all the technical aspects of projects, such as water and electricity sources and available infrastructure, they must perform a social counterpart. Maybe the community to be impacted is 100km away but the only road to get to the mine crosses it, while another community just 3km away is separated by an abyss so there is no issue for the mine.
Q: What is AOS’ methodology for approaching community matters in mining?
A: Approaching community matters is not about talking but about listening, which is the most important thing. If you listen well, you will understand community concerns related to everything from water and traditions to flora and fauna. It is about building agreements, not buying territory. Community relationships require time and understanding. The first step to turning opposition to a mining project into support from its surrounding community is to share the idea that the community can do better with the project than without it. In this case, the benefits it will yield must be communicated by an external actor that is perceived as trustworthy by the community. The company needs to create valid interlocutors. Our work is to identify strategic stakeholders that will develop an understanding relationship with the company's goals and commitments.
Today, we must understand that social and environmental matters are the premise of mine operations and not a condition. Those companies trying to minimize their social and environmental responsibilities are wrong, as these are an inherent part of modern mineral production. AOS’ message to the industry is that operators cannot avoid CSR. Rather, if they address it properly, they will thrive.
Q: How can operators create shared value from mine operations and why is this crucial?
A: A sense of social justice is key to a good feasibility study. This is what I call vaccinating the project against social distrust. When wealth starts to blossom from the land, social issues arise but if a community has the same level of wealth, issues are scarce. When a company rents a piece of land and pays one owner and others are left with nothing, social inequalities appear. These are the details that need to be taken care of.
It is important to create opportunities for all members of the community in order to distribute in the best way possible. In this scenario, local content is a key element. Companies must seek to buy some percent of the project’s inputs from the community. This may be a marginal expense for the company but has a great impact on the community. Also, the local content implementation serves to shield the project because if the mine does well, the community will do well.