Managing resettlement

Mines can only be built in areas where mineral resources are sufficiently concentrated. When these resources are found beneath farmland, homesteads, or whole communities, it may be necessary to physically relocate people. This process is called resettlement.

While resettlement can only be undertaken with the explicit approval of national or local governments, and subject to a raft of rules and regulations, it nonetheless presents significant risks to those affected, as well as to the companies involved.

Mining with principles means making every effort to avoid the resettlement of people – but, where this is not possible, steps should be taken to ensure sensitive engagement with affected communities, and the delivery of resettlement plans that mitigate negative impacts on the wellbeing and livelihoods of a community.

ICMM’s Land acquisition and resettlement: lessons learned document offers practical guidance on how resettlement can be done well – through:

  • planning
  • engaging with stakeholders
  • compensating for loss of land
  • restoring livelihoods
  • addressing the needs of vulnerable people
  • monitoring impacts.

Principle 3 of the ICMM Sustainable Development Framework commits our members to “respect human rights and the interests, cultures, customs and values of employees and communities affected by our activities.” This would include minimising involuntary resettlement and compensating fairly for adverse effects on people where it can’t be avoided.

Responding with respect
ICMM member company Rio Tinto provides a strong example of how resettlement activities can be managed well – reducing the extent to which mining operations affect local communities – via its Oyu Tolgoi copper and gold mine in Mongolia.

After decades of exploration and drilling, the first major discoveries at Oyu Tolgoi were made in 2001, leading to several years of further exploration which revealed the impressive scale of the deposit. While exploration continues, even with the reserves currently identified, Oyu Tolgoi is a major development that is expected to operate for over 50 years.

The sheer scale of the extractive operation has meant that the mine requires a large amount of land – which necessitated moving local herder communities elsewhere. Pre-empting such scenarios, the company’s Communities and Social Performance standard outlines the ways in which the company’s exploration and mining projects must engage with communities, gather information, and formulate plans and programmes to manage social impacts.

In particular, the standard deals with land acquisition and other impacts related to resettlement of communities, legally-binding agreements with communities, and compensation payments. As a result, Rio Tinto instigated a Resettlement Action Plan (RAP) that included a formalised relocation programme.

“I take great pride in the positive impacts we make on our community every day, investing in sustainable development, supporting national and local businesses, health and education”.

– Baigalmaa Shurka, General Manager, Oyu Tolgoi

Developed in accordance with the International Finance Corporation’s Performance Standard on Land Acquisition and Involuntary Resettlement, the programme included identification of compensation and livelihood restoration measures, as well as cost estimates and procedures for implementation, management, and monitoring. It also involved the construction of a replacement winter shelter for affected families, district authorities and their neighbours. In addition, the relocation programme offered a series of training opportunities to support the wellbeing of resettled households.

Benefits of the project – which saw a partnership approach to sustainable development between Rio Tinto, local communities and government – included:

  • the town being connected to a permanent supply of power
  • US$5m being allocated per year for community development
  • funding for new educational and healthcare facilities
  • improvements to infrastructure, including the resurfacing of roads
  • environmental initiatives to preserve biodiversity
  • employment opportunities, with over 95% per cent of the workforce being Mongolian
  • programmes to help improve social conditions
  • further education scholarships for hundreds of young Mongolians
  • vocational training centres being built in seven Mongolian towns and cities
  • support for the training of 1,200 vocational teachers
  • the construction of a new bulk water supply system and waste management facilities.

In a survey undertaken after resettlement, local people overwhelmingly described improvements in their standards of living since the implementation of the programme.

Preventing potentially negative impacts
The potential for both physical and economic hardship as a result of resettlement can be significant. Yet mining and metals companies – working in partnership with local government, civil society, and host communities – can both effectively mitigate many, if not all, negative impacts, and, instead, make lasting contributions towards improving living standards.

We encourage all mining companies to avoid resettlement, but – where this proves impossible – to search for ways to work with local stakeholders to mitigate any potential negative impacts.