Community
Engagement Guide

Investors are increasingly looking at social and environmental risks when evaluating companies in the exploration and mining industry. The ability to demonstrate that your company has a good relationship with local stakeholders can help improve investor confidence in your project. Many major financial institutions now apply the Equator Principles to their investment decisions, which assess projects’ environmental and social risks.

Prior to purchasing an exploration project, mining companies conduct above-ground assessments as part of their due diligence process, evaluating risks such as community opposition to the project. As such, an exploration company’s success in building a positive relationship with local communities and managing above- ground risks can increase the project’s attractiveness to investors or prevent the value of the project from being discounted.

The time and energy required to establish a healthy company-community relationship is minimal in comparison to the resources required to repair a relationship once it is damaged. By engaging communities early, and opening the lines of communication, you are better able to identify and address issues before they become serious problems. This helps reduce the likelihood of project delays caused by community opposition, which can cost your company money. 

A recent report by the SHIFT project quantified the cost of social conflict for a world- class mining project (with capital expenditures of between $3 and $5 billion) at around $20 million per week in terms of delayed production.4 Proactively sharing information with communities also ensures you don’t leave a vacuum to be filled by misinformation about the project, which could create obstacles for you and your company in the future.

Exploration and mining companies have the opportunity to be part of the larger socio-economic development process at the community level. Engaging with local communities helps companies understand local socio-economic development goals and identify how they can contribute to sustainable growth in the community. And, obviously, it is much more enjoyable to work with others rather than to have to work around or against them.

Don’t make assumptions about what people think, need or feel. Let them tell you in their own words and at their own pace. Try to understand any underlying concerns, hopes and desires they may have. One way to encourage people to share these underlying interests is by asking follow-up questions like “Why do you say that?”

You can do this through your body language (looking people in the eyes if culturally appropriate, nodding, not looking at your watch or fidgeting during long comments or meetings) but also by summarizing the point the other person has made and asking if you understood correctly.

If you only meet with stakeholders when there is a problem or when you need something from them you will not establish a positive relationship.

Determine which stakeholders you simply want to inform, which stakeholders you want to give a greater say in decision-making, or whom you may look to for advice. Ensure that you are on the same page with these stakeholders about their expectations of involvement; if people expect to be involved in decision-making but you only inform them - no matter how well you inform them - the predictable result will be tension in your relationship.

1. Take, and be seen to take, responsibility for project impacts, be they environmental, social, health-related, and so on.
2. Distribute benefits (jobs, contracts, community projects) transparently so your efforts are perceived as fair.
3. Demonstrate respect for local stakeholders and their concerns.

High level principles like fairness, transparency, responsibility, and respect can mean different things to different stakeholders in different contexts. It is critical that companies ask questions of local stakeholders to understand how companies can demonstrate these principles through their actions, in the specific context of your project.