Social licensing and Stakeholder Communication in Uranium ...

Social licensing and Stakeholder Communication in Uranium Exploration and Mining W. Eberhard Falck1, Julian Hilton2, Henry Schnell3, Harikrishna Tulsidas4 1

CEARC-OVSQ, Université de Versailles St. Quentin-en-Yvelines, France Aleff-Group, London, UK 3 HA Schnell Consulting Inc., Eagle Bay BC, Canada 4 International Atomic Energy Agency, Vienna, Austria 2

Abstract. Recognising how fundamental the ‘social licence to operate’ is to any uranium mining project, in 2012 the IAEA initiated a series of training courses and workshops on stakeholder engagement and social licensing issues. While the social licence has different features in each country, and is negotiated in different ways, without one, a project’s chances of success are significantly compromised. This paper summarises the findings from a workshop held in Istanbul, Turkey, in February 2014, and offers some perspectives on likely future developments.

Introduction Uranium production is currently taking place in some 15 countries and more than 40 further countries are engaged in exploration projects at various stages of development. Uranium is the main raw material for nuclear energy systems that will remain an essential constituent of the world energy matrix. But uranium mining and processing is widely misunderstood and feared. These concerns must be addressed, and the mineral itself must be mined and processed in an environmentally safe and socially responsible manner if its use as a fuel source for nuclear power plants is to remain assured. The picture the public has of mining in general and uranium mining in particular has been shaped by the past. Mining companies have been at best nonchalant and at worst criminally negligent in their attitudes towards the societies and the environmets in which they have operated. Historically these behaviours were often

2 W. Eberhard Falck1, Julian Hilton2, Henry Schnell3, Harikrishna Tulsidas4 grounded in the overriding priorities of national security, as mining for peaceful uses and for nuclear weapons were not at all or not clearly separated. This resulted in large number of abandoned and costly legacy sites (IAEA 1997) the public and environmental health impact of which remains severe, and the remediation of which continues to require considerable (public) resources. The social discourse about uranium mining is also embedded in the wider social discourse about nuclear energy use and radioactive waste management. Hence, uranium mining continues to be accompanied by significant on-going and emerging conflicts. Obtaining support for, or at least acceptance of, any uranium mining operation, “the social license to operate” (Thomson and Boutilier 2001), is increasingly difficult anywhere in the world. A prerequisite for this social license are not only operations that strive to reduce and minimise environmental impacts, but that also aim to “enhance the participation of stakeholders […] to play an active role in minerals, metals and mining development throughout the life cycles of mining operations, including after closure for rehabilitation purposes” (UN 2002). Fortunately, in the past ten years the mining industry itself has sought to address the issue from within. Starting with the seminal report “Breaking New Ground” (2002) and now central to many mining company mission statements, the ‘social licence to operate’ has become the sine qua non of responsible mining. Leading consulting firms now include social licensing in their assessment of key business risks, citing the need for a ‘community investment dividend’ in any successful project. In parallel, the Extractive Industries Transparency Initiative (EITI, http://eiti.org/) has successfully put in place measures for reporting the extent to which natural resources are managed in a fair, sustainable and socially inclusive manner.

Framing the Social Processes Obtaining a social license first of all requires that the mine operators engage with the different stakeholders, be they local, regional, national, or even international. It has been noted that a stakeholder is any person or group who claims to have an interest in a project (IAEA 2006). It is important to be ‘inclusive’ in order to establish trust between the various stakeholders, though this can be challenging. At the level of individual projects the social license is rooted in the beliefs, perceptions and opinions held by the local stakeholders about a project. As trust legitimises the various decision finding processes, it is also the basis for good governance (Braithwaite and Levi 1998). It takes both time and effort to create trust. True trust comes from shared experiences. The challenge for the operator is to go beyond transactions with the community and create opportunities to collaborate, work together and generate the shared experiences within which trust can grow. Social legitimacy is based on the established norms the community, that may be legal, social and cultural and both formal and informal in nature. Companies must understand the norms of the community and be able to work with them as

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they represent the local ‘rules of the game’. Failure to do so risks rejection. In practice, the initial basis for social legitimacy comes from engagement with all members of the community and providing information on the project, the company, and what may happen in the future, and then answering any and all questions. The capacity to be credible is largely created by consistently providing true and clear information and by complying with any and all commitments made to the community. Credibility is often best established and maintained through the application of formal agreements where the rules, roles and responsibilities of the company and the community are negotiated, defined and consolidated. Such a framework helps manage expectations and reduces the risk losing credibility by being perceived as in breach of promises made. The social license may be defined as granted when a project has ongoing approval from the local and other stakeholders. It is has tangible and intangible value: effort must be made, case by case, to measure these beliefs, opinions and perceptions. It is dynamic and non-permanent: beliefs, opinions and perceptions are subject to change as new information is acquired. Hence the social license has to be earned and then to be maintained.

IAEA Activities in Social Licensing for Uranium Mining The IAEA rationale and vision for the peaceful uses of nuclear energy defines that: “Any use of nuclear energy should be beneficial, responsible and sustainable, with due regard to the protection of people and the environment, non-proliferation, and security” (IAEA 2008). The basic principles on which nuclear energy systems should be based to help meet growing global energy needs include uses that are: (1) beneficial; (2) responsible and (3) sustainable. IAEA further has defined the criteria necessary to satisfy these basic principles when applied to the use of uranium resources. In particular, the criterion of transparency, is an essential precondition for meeting the requirement of beneficial use. Transparency is achieved by: “Information on natural uranium technologies, good practices across the uranium production cycle, and on the associated risks and benefits is distributed and discussed, engaging stakeholders and the general public” (IAEA 2013). Recognising the importance of social licensing of uranium mining projects, in 2012 the IAEA initiated a range of training and information exchange activities that address the direct ‘technical’ stakeholders, namely mine operators as well as regulators and their technical agencies. IAEA believed it was essential to all future uranium mining and processing projects that these direct stakeholders understand the importance of social licensing and subscribe to the principles of transparent governance that are a prerequisite for the successful negotiation of this licence. The workshop held in Istanbul, Turkey, in February 2014 provided an opportunity to review how successful the IAEA initiative has been and to what extent the tenets of social licensing had been absorbed in the uranium mining culture.

4 W. Eberhard Falck1, Julian Hilton2, Henry Schnell3, Harikrishna Tulsidas4 The event brought together more than 60 participants from 34 countries, representing a broad cross-section of cultures and socio-economic conditions. The authors of this paper acted as ‘facilitators’, seeding the discussions. The main conclusion of the workshop was that the concept of a ‘social licence’, however understood, is now fundamental to mining projects around the world. Integral to the achievement and maintenance of a social licence is the generation of social capital. In some communities, creating social capital may focus on infrastructure, roads, schools, hospitals, and communications. In others, the emphasis is on technology and knowledge transfer, through training and capacity-building. In others, such as nomadic communities, the key objective for the community concerned is to preserve and enhance its traditional way of life. In every situation, the objective is to find a new, sustainable point of equilibrium of interest and benefit between shareholders and stakeholders that has as its outcome a true sense of partnership and complementary values. The extent to which this has now been absorbed into the business model of responsible mining may be measured by the central place given by business accountants to the ‘community investment dividend’ as the key to sustaining the social licence (KPMG, 2013). In discussing how to achieve this sustainable equilibrium, the participants focused inter alia on:  Introduction and transparent explanation of mining proposals to indigenous communities from the moment the first exploration geologist is on the ground;  Building an open, transparent and locally grounded narrative for explaining and justifying sustainable uranium exploration, mining and processing;  Realistic management of expectations: mining companies have a right and an obligation to return profit to their investors, and not to be held hostage by communities demanding too much for the social licence; communities have the right to share in the benefits of such projects throughout the life-cycle of the mine, including its eventual closure and remediation;  Periodic social and environmental impact assessments as tools to address the impact and mitigation of social and environmental issues. Of these the issues of tailings and waste management are among the most significant and arriving at ‘zero waste’ is a guiding principle;  Comprehensive communications and education strategies to provide the community with sufficient understanding of the issues associated with uranium mining to enable informed decision-making and empowered consent;  Partnering and corporate social responsibility programmes, including initiatives in local employment and sourcing, supply-chain transparency, and stimulus to local small and medium enterprises (SMEs);  Participation in the Extractive Industries Transparency Initiative (EITI);  Communicating health, safety and environmental (HSE) aspects of uranium mining and processing within a culture of safety; and  Sharing of good practices, experiences and approaches for in-depth understanding of social licensing and stakeholder communications.

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Uranium Mining in a Sustainable Development Context In order to meet the criteria for sustainable development (UN 2002), uranium mining projects must meet the Triple Bottom Line (TBL) requirements. The TBL requirements were proposed by Elkington (1994) as a direct response to the sustainability agenda (Brundtland 1987). In order for an undertaking to be sustainable it must not only meet economic and financial criteria, but also social and environmental ones. The philosophy behind this is to create a win-win situation (Nash 1950) for all three areas. It also requires a full life-cycle approach to nuclear energy systems (Fig. 1), defined by seven key stages.

Fig. 1. The life-cycle management approach to nuclear energy systems (IAEA, 2006).

The social licence life-cycle encompasses three phases, a beginning, a middle and the end:  Investment (beginning): what are we trying to do?  Local needs and culture (middle): what are we doing? Are we doing what we said we’d do? Better or worse?  Outcomes (during and after, the end): what have we done? Did we do what we said we’d do? What have we left behind, what are the stewardship needs? The investment should result in increased, self-sustaining social capital. This is achieved by capacity building based on partnership, and may be manifest in such phenomena as technology transfer and technology spill-over. There has to be adequate investment throughout the life-cycle of the uranium mine. This requires financial as well as human resources. The investment also has to maintain adequate health and safety standards, complying with codes of good practice. The tangible local benefits in the short and longer term should reflect stakeholder needs and cultures. They should contribute to the social capital and infrastructure, resulting in a multiplication of the benefits through education. As mines operate in a national context, the developments have to be aligned to national and local sustainable development needs and policies. The outcome first of all should avoid the generation of ‘resource curses’, i.e. the unilateral dependency on the exploitation of single natural resources. This exploitation should not result in debts and dependencies, and should not create ‘orphan’ legacies. Local communities should enjoy equitable benefit from the profits. Operators should work towards good governance, and resist corruption. Operating licences should be issued on the basis of consistent, internationally recognised regulations and standards, and their consistent application.

6 W. Eberhard Falck1, Julian Hilton2, Henry Schnell3, Harikrishna Tulsidas4

Social Interactions and Narratives in Uranium Mining Projects Arnstein (1969) noted that public participation without divesting (some of) the power is meaningless, “... that participation without redistribution of power is an empty and frustrating process for the powerless“. However, it has puzzled social scientists and decision-makers ever since, how to actually bring about participation. For a variety of reasons, including frustration over not being able to influence or for ideological reasons, stakeholders may absolutely refuse to engage in any dialogue. The underlying reasons may be knowledge gaps (refusal to accept new/ superior knowledge or passive aggression) and ignorance (unconscious lack of knowledge). Therefore, capacity building and otherwise reducing the knowledge gaps (Falck et al., this volume) can be ways to facilitate a constructive and equitable dialogue. A challenge for all stakeholders is to ‘step in the counterpart’s shoes’ and to try to think as the counterpart. Thus capacity building must not only address public stakeholders (and perhaps authorities), but also the industry. As noted above, trust between the various stakeholders is a prerequisite for a social license. In turn, the basis for building trust is a consistent and sustained narrative put forward by the initiators of a uranium mining project. The engagement narrative will begin at the very first stages of any project, exploration and feasibility studies. As soon as a mining company sets foot in a region, questions, and expectations, will be raised. Stakeholder messages have to be timely, consistent between different actors (i.e. the mining company and government authorities), and realistic. The role of the government can be ambivalent. It may promote mining with economic objectives in mind (in Malawi for example a single mine increased GDP by 10%); but it also has the duty to manage the expectations of the community and to protect stakeholders from adverse environmental and socio-economic impacts. The open dialogue referred to should make the role and position of the government transparent. The government may also need to mediate between different development and land-use interests. The role and responsibilities of the various ‘institutional’ stakeholders has to be made clear, as even government authorities may have a vested interest in uranium mining projects. It is important that thought is given to a full life-cycle management plan from the outset (Fig. 1). This includes provision (planning, financial, etc.) for the longterm stewardship of mining residues. Stakeholders have to be part of the legacy management (IAEA 2006) and they need to be part of the ‘vision’ for the development of the uranium-mining region. While they are being informed through the narrative about the vision of the operators and the government, they will also be given the opportunity to shape the narrative in the sense of the Triple Bottom Line that goes well beyond the life-time of the actual mining operation. Stakeholders, particularly those interested in economic development, also have to understand that the mining operation can only go ahead if the investors are satisfied that nontechnical risks are sufficiently low. A major non-technical risk factor is whether a

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social license has been obtained or not. Therefore, undertaking the necessary steps towards the social license is an important element of the business-risk management for the operator. Another non-technical risk is the legal environment that has to be stable, which would be the responsibility of the government.

Key Findings of the Workshop Capacity building was one of the overarching themes of the various discussion groups. It is clear, that trust can only be built, if the stakeholders can communicate at the same ‘eye height’. Deliberative, ‘good’ governance should aid this process. Information about the risks associated with uranium mining projects are at the top of the agenda. It was noted that risk perception correlates to gender. Women and men place different weights on particular issues. Participants thought that communities would benefit from formal induction and training courses about the projects affecting them, aligned to project milestones across the whole life-cycle. Mentoring and knowledge and expertise transmission programmes would help to empower stakeholders. Site development beyond the active life of the mine clearly is important to stakeholders. ‘End of Life’ (EoL) plans for the transition from active mining to the post-mining time need to be developed and provisions made for retaining the related institutional and cultural memory. Stakeholders wish to be able to judge for themselves and on a well-informed basis, whether or not the proposed mine developments follow the best practices available at the time, includeing site remediation and long-term management. The participants noted the need for formalised reference material, a communication and training toolkit. This toolkit should contain resources on case studies, including successes, failures, lessons learned, and on conflict prevention, management and resolution. The toolkit would need to be tailored to different cultural and gender requirements, including different media for different communication channels (printed, broadcasts, Internet). Instruments to measure and gauge success or otherwise of the engagement strategy should also be part of the toolkit.

Conclusions A social license is an indispensible precondition for any mining operation, but particularly so for uranium mining and processing operations. The social license is built on trust between the different stakeholders. A stakeholder is any person or group that has voiced an interest in or concern about the operation. Trust in turn is built on a shared knowledge-base and on a mutual understanding of each other’s motives and values, but these do not have to be necessarily shared. In building and

8 W. Eberhard Falck1, Julian Hilton2, Henry Schnell3, Harikrishna Tulsidas4 retaining trust, communication and capacity-building are key activities enabling all parties to the licence to ne at the same ‘eye height’ and be equally empowered. Many stakeholders are concerned about the environmental and socio-economic impacts of uranium mining project well beyond the active time of the mine. A comprehensive life-cycle management approach is needed in order to ensure the sustainability of the project. Given how central to the mining industry the social licence has become in the past decade, there will be increasing pressure in future to formalise it as a legal requirement rather than a looser social accord. The problem this raises is that the fuzzy nature of the negotiation procedure by which a licence is first agreed, then modified and adapted as a project’s life-cycle unfolds, may be its key strength. In which case, formalisation will risk causing the process to become rigid, and hence inherently conflicted – exactly the outcome that is least desired.

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