Vivian Danielson is a former editor of the Northern Miner and a co-author of “Gold Today, Gone Tomorrow: Anatomy of the Bre-X Swindle (1997). The following speech was given at the Mineral Economics Society 11th Symposium on January 25, 1999.
Ten years on, Ms. Danielson’s speech is still a very thought provoking analysis of industry strengths and weaknesses and many of the issues she raises continue to haunt the mining sector.
Please note that I added the term “Ugly Canadians” to the title for Google search terms. Stan Sudol
Vivian Danielson
The mining industry entered the 20th century like a lion, welcomed for its power and strength in building this nation’s economy. Many believe it will leave this century like a lamb, perhaps even a sacrificial one, laid to rest at the altar of changing public values and perceptions.
Some tough questions were asked about mining’s future during the CIM’s 100th anniversary celebration in Montreal last May. Would there be a 200th anniversary celebration? And could mining become the buggy whip industry of the 21st century, something to be studied by bright young MBA students on how not to manage an industry? Noranda’s David Goldman, the man who asked those questions, warned delegates that the industry may have lost the patience and good-will of the public, and that, for many, miners are no longer welcome in the modern world.
The industry can argue otherwise and point to parts of this country where mining remains an economic and social cornerstone. Mining is indeed welcome in Val d’Or, Sudbury, Timmins and Thompson, and in hundreds of other mining towns across this land. It is welcome in these communities because their citizens know the industry, and the people who work in it, first-hand. Knowledge leads to understanding, and understanding leads to acceptance.
But these knowledgeable, understanding and accepting people are outnumbered by urban Canadians, the great masses who live in cities near the border with our American neighbours. In our cities can be found the people who marvel at animals and vegetables because they are alive and renewable, yet who react negatively to nature’s third kingdom, minerals. They react this way because they have separated minerals, and themselves, from the rest of nature.
With little or no direct exposure to mining, urban Canadians see our industry second-hand, through a media filter, or through the jaundiced eye of some environmentalist knocking at their door. And the pictures brought before them are not pretty.
In the past few years, media coverage of mining has been little more than a litany of disaster. We’ve all read the heart-rending reports of impoverished communities devastated by tailings spills in the Philippines and Guyana, and seen the powerful images of dead fish and crops damaged by a tailings spill in Spain.
We’ve read stories about panicked villagers fleeing a cyanide spill in the former Soviet Union, and reports of human rights violations at a mine site in Irian Jaya. We’ve had questions asked about the industry’s technical competences in the wake of the Bre-X Minerals salting swindle.
And just when life gets quiet again, the media dusts off the Windfall scandal of the 1960s, as it is now doing in preparation for a national television documentary about yesteryear’s Queen Bee of Mining, Viola MacMillan. The negative images from these reports are so powerful that it hardly matters that most of them contain egregious errors in fact and demonstrate a poor understanding of even basic science.
Controversy Sells Newspapers
The industry must wonder at times why so much emphasis is placed on even the smallest of its sins, and why little or no attention is paid to companies doing things right or to companies with outstanding environmental records. The answer is simple: controversy sells newspapers. And mining, by its very nature, is controversial. It is an industry which digs holes, builds mills and smelters, and exploits resources for profit. So one small mistake will not only get far more ink than a thousand things done right; one small mistake will obliterate a thousand things done right.
Some environmentalists have tried to make hay with some of these incidents, arguing that miners should be drummed out of business. While some media may have bought into this message and tried to propagate it, most Canadians are smart enough to know that this is an extremist view. They understand that mining has a place in society , provided it operates to the highest engineering and environmental standards, whether at home or abroad.
The industry still has a goodwill window, thanks to a long track record of accomplishment, and it still enjoys some positive news coverage about its colorful characters, remarkable discoveries and scientific breakthroughs. But the industry can’t afford to get comfortable or complacent, because a more subtle anti-mining campaign is being waged by a new army of foot-soldiers under the guise of social justice.
Ugly Canadians
A recent newspaper article entitled “Mining a Bad Reputation” went beyond the well-publicized environmental disasters to examine social and ethical issues involved in resource development abroad. It concluded that Canadian mining companies have cozied up to dubious regimes, dodged bullets, and generally gained a reputation as “buccaneers at best and Ugly Canadians at worst.” Even pension funds and institutional investors came under fire for giving “implicit support to the industry’s buccaneering tendencies.”
Last year, a national business magazine featured several mining companies in a lengthy expose of multi-nationals and the global economy. The author argued that these companies are redesigning the planet and its economic system by implementing an enormous transfer of power from government – that is, from citizens – to corporations. And a corporation, the author explained, is not a citizen, or anything even vaguely resembling a multifaceted and complex entity. “The corporation is strictly one-dimensional, personifying only the narrowest of characteristics: greed,” the story continued.
It is not hard to snicker and wonder where this fellow was when the Iron Curtain came down. But he does the industry a favour by foretelling what may well become the major challenge of the next century – corporate responsibility in a global economy.
In the future, companies will not only have to convince the media, investors and the public of their environmental track record; they will have to pay more attention to the ethical and social dimensions of project development, particularly in foreign lands. All the while keeping an eye on the bottom line.
If mining companies think they are already spending more and more time and money on accommodating stakeholders and non-traditional values than on the technical aspects of their projects, they probably “ain’t seen nothin’yet.”
The media has cottoned on to the fact that , in many foreign lands, governments can not be trusted to implement and enforce environmental guidelines, or to ensure benefits flow to local communities and the nation. Rightly or wrongly, they will hold mining companies accountable when things go wrong. For example, Freeport-McMoran Copper & Gold takes more heat for human-rights abuses near its Grasberg mine in Indonesia than the government forces who perpetrated them.
The media continue to accuse the company of riding roughshod over local landowners. Yet when the mine was developed, only a few hundred people lived nearby. The thousands who flocked to the region in the past decade came for economic opportunity; they came because of the mine.
Corporate Responsibility
As the debate about resource development moves from the technical and environmental spheres to social and ethical ones, the waters get muddy – because corporate responsibility runs headlong into political ideology and the great divide between the right and left. If you though this debate came to an end with the collapse of the Berlin Wall, think again. Take a fresh look at how often the word “greed” comes up in media reports involving mining companies.
I’ve counted dozens in the past few months, even in the business section of the daily newspapers. The Inuvialuit up north are greedy and putting caribou at risk because they want to drill the Darnley Bay anomaly. Inco is greedy for thinking it owns Voisey’s Bay. The diamond companies in Angola are greedy and care more about profits than human rights. The entire industry is greedy for building mines in poor countries for profit and so on.
This message is finding plenty of converts in the media, which has gone through changes of its own. In the past, journalists were trained to be unbiased chroniclers of events; today, they are increasingly awarded for their ability to “comfort the afflicted and afflict the comfortable.”
So how is the mining industry to counter changing perceptions? It must get its house in order, starting with environmental concerns. Thankfully, that effort is already under way. Research programs are in place to find ways to prevent and mitigate acid mine drainage, and build better and stronger tailings dams. And steps have been taken to bring about better industry practices and a fairer marketplace.
These initiatives show that the industry is starting to seek out and address public concerns, rather than downplay them. However, from a media perspective, the industry is still too inward-looking, too focused on preaching to the converted. While it has some public campaigns in education, and professional organizations a re becoming more involved in land-use debates and the like, it has yet to reach out to the public in any meaningful way.
Canadian Chemical Industry
One solution is to take a look at what other industries have done to improve their public image. One example is the Canadian chemical industry and its Responsible Care program, which began in the late 1970s in response to a progressive erosion of public trust.
Based on the ethic of openness and knowledge-sharing, this program has helped improve the environmental and safety performance of chemical companies around the globe. It was formally adopted by the Canadian Chemical Producers Association in 1985, and has now been embraced by the chemical industries of 42 nations, which together produce more than 80% of the world’s chemical products. It has its own newsletter, its own conferences, a presence on the Internet, and the support of the United Nations. The program does more than list goals which the companies should strive toward; it spells out clear principles and codes of conduct.
A key focus is the relationship between companies and the communities in which they operate. For example, rather than maintain a low profile, companies are encouraged to reach out to their communities and to adopt and implement certain codes of practice. And independent team – typically composed of two industry experts, a non-industry person and a member of the local community – then goes out to verify that the company has complied with the codes. The company is then required to discuss the results of the lengthy and arduous verification process with members of the community.
The Responsible Care program has produced constructive results. Since 1991, industry members have voluntarily reduced emissions of all substances except carbon dioxide by 51% – an achievement the chemical industry claims is a milestone, not a destination. Responsible Care also has a formal, national citizens advisory board made up of environmentalists, teachers, farmers, and other citizens, which sets the program apart from most others.
The pulp and paper industry is reversing its image through public awareness campaigns that stress environmental protection, while the steel industry has, by means of two campaigns, countered its image as a smoke-stack industry in decline. You may have seen television advertisements featuring the slogan “The New Steel: Feel its Strength,” and which stress safety and protection. The other initiative, which focuses on steel’s usefulness in reducing the weight of an automobile frame, stresses environmental and cost benefits.
British Columbia’s forestry industry took action when it found its voice almost drowned out by Greenpeace and the Friends of Every Forest. It formed the Forest Alliance of B.C. and hired Patrick Moore, a co-founder of Greenpeace, as its director. When Greenpeace launched its recent boycott campaign in the United States, Moore publicly challenged the environmental organization to get back to the negotiating table and work with local communities, companies and native groups to bring about balanced land-use policies. He isn’t afraid to chastise environmental groups for always changing the goalposts on forestry practices, or to speak out against unfair or manipulative tactics.
What Can the Mining Sector Do?
The mining industry should examine these campaigns and develop its own public communication strategy. It is generally best to avoid public relations firms because they lack credibility with the media and the public. One option is to have all existing mining organizations represented by one umbrella association focused on public awareness.
Another is to form alliances with other resource developers, while yet another is to have one big tent that welcomes developers, labour unions, aboriginal corporations, end-users of metals, service and equipment companies, and the like. A big-tent organization of this type could comment on government policy, welcome and encourage debate and dialogue on a range of public issues, and generally reinforce the message of sustainable development.
An organization such as this could compile a lit of experts on topics a diverse as global warming, recycling, wildlife protection and corporate responsibilities in developing nations. The industry already has experts in all these disciplines. They should be mobilized so that public debate becomes more balanced, thereby giving the public more information on which to make reasoned, rather than emotional, decisions.
An umbrella organization of this type could monitor media reports about resource development, challenge overtly biased reposts and correct inaccurate ones. Responsible news organizations take complaints seriously; in recent years, the media have come under scrutiny for unsavory practices such as fabricating quotes and sources in order to make the facts fit a story. Recent polls show that the media’s public acceptance rating is only slightly higher than that of a politician or an industry captain, which shows that they, too, have work to do in order to maintain public trust.
Media scrutiny should be aimed more at providing information than criticizing reporters. Environmental groups routinely request meetings with the editorial boards of large news organizations, and get them.
Industry organizations and companies should request the same courtesy when events warrant. Mining companies working in small communities should pay a visit to their local newspaper, if for no other reason than to build a communication bridge they might have to cross one day.
The mining industry should make winning public support a top priority in the next century. This means acting proactively, rather than always reacting to crises. It means monitoring trends and looking ahead to where public perception is going before it gets there.
Club of Rome
In the 1970s, depletion of the earth’s resources was the motivating factor behind the environmental movement. The Club of Rome warned the world that oil and gas reserves would be exhausted within decades, and that entire nations faced starvation because the earth no longer had the capacity to feed the exploding population. The media picked up the cry, politicians called for rationing and conservation measures, and we all paid the price at the gas pump.
The new rallying cry, of course, is global warming tied to climate change. The media have embraced it uncritically (remember, most reporters are artists, not scientists), and yet public reaction has been surprisingly muted. This is probably because the public has been fed a diet of doomsday scenarios and junk science for too long, involving everything from giant meteorites to plagues of mad cow disease. Public ambivalence also may have something to do with the sneaking suspicion that there is a price to pay for the privilege of staying alive, keeping cars and heated homes, and consuming resources.
It is starting to become obvious that some of the measures being advocated to arrest global warming have more to do with the leftist struggle to re-distribute wealth than to save the environment. For proof of this, one need look no further than the environmental and social reforms proposed at the recent Earth Summits, ostensibly to bring about a greener and fairer world.
Critics argue that these programs would slow or halt growth in developed countries in the name of an uncertain science, thereby redistributing wealth on a massive scale to the Third World. These programs are strongly endorsed by some members of the United Nations for that very reason.
Since the collapse of the former Soviet Union, many socialists have turned to the environmental movement for its potential to bring about social justice. This provides them a forum to point to problems in the areas of resource depletion and exploitation, environmental degradation, and the threat of technology to employment and overpopulation – problems which the socialists and environmentalists say require global intervention and draconian solutions. They argue that a global central planning authority is necessary to combat these alleged global problems, even through statistics show that local governments, not national ones, are responsible for most public spending on pollution abatement and control.
Earth Summits
The Earth Summits have taken this to the next step, and laid out an action plan that calls for regulation and redistribution on a grand scale. A national business magazine estimated that the price tag for such a plan would be a stunning US$600 billion per year.
Already we have the farcical concept of North American corporations buying emission credits – including that newly diagnosed pollutant, carbon dioxide – from underdeveloped nations so that they can stay in business at home. If the Earth Summits were really about protecting the earth, they would stop focusing on buying and selling greenhouse gases and tackle issues people can do something about, such as the pressing but non-glamorous issues of waste management, and improving sanitation and cleaning up polluted water, which kills more people and spreads more disease than anything else. They would focus on cleaning up pollution at its source, rather than attempting to play God and control a climate which, if the last ice age was any indication, is beyond our control.
The labour unions are starting to worry about the Earth Summit initiatives, because they see the writing on the wall for their membership. The labor movement is caught in the crosshairs of the left-right struggle, yet they hesitate to form alliances with their traditional adversary, their employers, and remain reluctant to break their ties with their socialist allies, the environmental groups. Industry may have to make the first move here.
Some experts predict that in the century to come, environmentalism is likely to replace communism as an agent of economic redistribution. But like communism, environmentalism taken to an extreme is a potential tyranny. Its lofty goals can only be achieved if the surface of society is covered with a network of small complicated rules through which the strongest of companies and the most energetic of characters could not penetrate or rise above the crowd. This network of small complicated rules has already taken hold of campuses, in the form of political correctness, in the study of literature and history, in the form of wholesale re-writing of textbooks. Taken to an exteme, it could sap the vitality of a nation’s economy.
If al this sounds far-fetched, look closely at the policies being advocated by the Social Democrat-Green alliance that recently took power in Germany. Some of its leaders argue that with the challenge of globalization, governments will need more, not less, control. They are advocating ecological tax reform, raising energy prices and using that revenue to raise the incomes of the less well-off. In his book “Earth in the Balance,” American Vice-President Al Gore described American society as “dysfunctional” because of its heavy reliance on fossil fuels, and called for “wrenching changes” in the way we live and work.
The concern that these kinds of initiatives might undermine Western economies is a real one. Narrow, self-serving groups such as the ones advocating these draconian measures have an inherent advantage over broad ones that worry about the well-being of society as a whole.
As environmental groups and lobbyists know all too well, collective action pays dividends. For example, it is relatively easy to induce five car companies to form a lobbying group, since each company would reap a fifth of any gain from price increases or government subsidies. But trying to organize a million car-purchasers to fight back is far more difficult, because no single person has much to gain by joining the group.
How does the industry fight these well-meaning but short-sighted initiatives? For starters, it shouldn’t make the mistake of polarizing the debate by advocating extremist counter-measures. Extremists of any stripe get plenty of media attention, but it’s all negative attention, which can be counter-productive.
Mining Sector Must be Proactive
The mining industry should stake the middle ground in its struggle for public acceptance, because this is the common ground most of the world walks on. Bill Clinton, Tony Blair and Jean Chretien all won elections this way. The industry should direct its message to the mainstream, welcome debate with critics when warranted, and leave the lunatic fringe to its lunacy. At the same time, it shouldn’t ignore misinformation, appease critics seeking unrealistic demands, or otherwise become aiders and abettors to its own demise.
Being proactive means accepting new realities and new ideas if they make sense. It means welcoming the contributions made by environmentalists and labour leaders to a better society, and accepting the fact the governments have an important role in creating and maintaining the institutions necessary for a fair marketplace, and in protecting citizens and the environment from those who do not take their responsibilities seriously.
But the assumptions that profit is a dirty word, that it is somehow noble to leave the world’s poor to their poverty, and that governments know best how to manage the economy should be challenged at every turn. The mining industry has a worthwhile role to play in helping nations develop their economies and it should be praised, rather than maligned, for taking on the challenge of bringing a better life to people whose governments have failed them.
This is a message that Canadians will understand and accept because they know that private-sector wealth is the foundation on which our high standard of living is built. If forced to think about it, environmentalists will have to admit that the privately owned businesses have done a better job protecting the environment than state-owned enterprises. If they don’t believe it now, a short trip to the former Soviet Union should convince them. And even those fighting for social justice must admit that if no wealth is being produced, there will be no wealth to distribute.
The public knows that capitalism, while not perfect, is a far better economic system than any of the alternatives. The industry can win some public support by continuing to stress its economic contribution. People vote from their pocketbooks, as well as from their hearts, because they know individual freedom go hand-in-hand.
Finally, permit me to state the obvious. Here we have an industry full of natural-born promoters, who spend part of each working day putting the best possible spin on their exploration projects, or their new mine, or their growth strategy. Here we have an industry that has always blown its own horn to an audience of investors and shareholders. I see no reason why it can not succeed in promoting itself as a progressive, socially and environmentally responsible corporate citizen.
END
Vivian Danielson, former editor of the Northern Miner