Mining for Development (M4D) Initiative

The Australian Aid Program’s $127 million Mining for Development (M4D) Initiative promotes the idea of sustainable mining in resource rich countries in the Global South and presents mining as the silver bullet solution for development.

Evidence is scant that mining has had a positive impact either socially or economically. To the contrary, evidence abounds demonstrating the ‘resource curse’ where development indicators tend to be lower than in countries without significant large scale exploitation of their mineral resources

The M4D Initiative is based on the idea that mining can reduce poverty by increasing economic growth, as long as the mining sector is well-managed and the government enforces strong regulations to ensure that the benefits of mining are shared and environmental impacts are minimised.

Australia has failed to implement a mining tax, there are examples of Australian mining companies operating overseas perpetrating human rights and environmental abuses with impunity, and evidence demonstrating that the ‘resource curse’ has affected Australia.

Furthermore, the seriousness of the Australian aid program to honestly combat the ongoing causes of injustice and poverty is drawn into question with climate and environmental aid programs been slashed and investment in “promoting” mining overseas maintained.

What do we think?

AID/WATCH supports the right of peoples to decide for themselves how to pursue economic and social development. This decision-making requires a frank discussion of possible development pathways, and the economic, political and ecological implications of each. The suggestion that mining is or can be sustainable must be questioned in order to facilitate this discussion.

Previous attempts to convert mining revenues into positive development outcomes had limited success. If AusAID were serious about benefitting poor and disadvantaged people, they would do better to help explore alternative means of development and livelihood to stop mining from becoming the inevitable and only option for countries that are resource-rich.

“If AusAID is committed to sustainable development, these initiatives and explorations into alternatives need to be supported, whether it’s sustainable agriculture, sustaining local subsistence economies, exploring recycling mined resources, or working to shift away from fossil fuels and towards renewable energy. All of these alternatives already exist and ought to be nurtured instead of imposing mining as the first and sole option.

AID/WATCH contests Australia’s role as a global example of mining for development, as there are numerous ways in which both Australia, and Australian mining companies are not the glowing picture of success that they present. For example, the Australian government seems to be mishandling its own mining industry: its failure to implement a mining tax, reports of Australian mining companies operating overseas with impunity, and evidence demonstrating that the ‘resource curse’ has affected the country.

Debunking mining for development myths

What is the M4D?

In 2011, the Australian government launched its Mining for Development Initiative (M4D). $127 million to promote mining in resource-rich countries and support Australian mining companies in accessing these ‘emerging markets’ through:

  • Education and training through the International Mining for Development Centre
  • Financing scholarships for people from target, resource-rich countries to study mining-relevant courses in Australian universities
  • Promotion and marketing support for Australian mining companies through projects such as the ‘African Mining Vision’
  • Lopsided research demonstrating the benefits or inevitability of mining
  • Mining conferences to facilitate networking of government officials and mining company executives

The new government has made it clear that it will even further integrate Australia’s ‘national interest’ into the aid program, privileging Australian business and political priorities over those of aid program beneficiaries.

Debunking M4D

The M4D is premised on the idea that Australia is an expert in mining – ensuring that the wealth created is distributed evenly across Australian society through the use of effective economic infrastructure such as taxes. The M4D also sells Australian miners as being the model for respect of the rights of indigenous people over their land, for responsiveness to opposition to mining, and for a clear distinction between the state and mining companies.

The M4D is premised on the idea that Australia is an expert in mining

Australian mining companies are upheld through M4D as an example of the best mining companies in the world who uphold the highest environmental standards and the right of free, prior and informed consent both in Australia and where they operate abroad.

This isn’t the case. Australian aid money should not be used to sell mining that benefits Australian companies at the expense of people and the environment abroad.

Australia an expert?

Expert in living with the resource curse

Unfortunately, Australia itself is suffering from the resource curse. There is a wealth of evidence that the mining boom in Australia has limited growth in other industries. Mining in Australia has a history of serious local ecological damage, as well as making Australia one of the world’s largest contributors to climate change. The social implications have also been devastating for many. Wealth inequality in Australia is rapidly increasing, at the same time as inflation surges. The cost of living for those not benefitting from the mining boom is quickly becoming unbearable.

Expert in ignoring FPIC in Australia

One of the key elements of the supposedly ‘sustainable’ approach to mining advocated by the M4D is ‘free prior and informed consent’ (FPIC). FPIC is a globally recognised norm with respect to the rights of local communities regarding development, and has particular relevance for relations with indigenous peoples. It is often invoked in relation to infrastructure development and mining.

Australia has a poor track record when it comes to applying FPIC at home, making it unqualified to present as an expert on this matter elsewhere. The Australian government has a long history of intervening in indigenous affairs without consultation. Although existing land rights laws nominally provide for ‘free prior and informed consent’, real-world experience does not meet this standard. For example, the 2012 Northern Territory Stronger Futures laws have been roundly criticised for failing to consult and properly engage with local communities. A 2013 Oxfam-CAER report explains how FPIC is ignored by Australian mining companies both at home and abroad.

Expert in failing to share mineral wealth

In acknowledging the prevalence of the resource curse worldwide, M4D suggests that what is needed is an adequate financial infrastructure to ensure that the wealth created through mining filters through to those who need it the most. What isn’t included in the M4D material is Australia’s failure to implement a mining tax that would bring significant returns to the country’s coffers. Futhermore, the astonishing public debate produced as a result of a protracted and misleading campaign funded by Australia’s big mining companies and the subsequent need for the Australian government to then engage in its own advertising blitz. This resulted in an alarming situation where the then Prime Minister of Australia, Kevin Rudd met directly with mining companies to negotiate a compromise leading to the ousting of the Prime Minister. Negotiations with mining companies – Rio Tinto, BHP, and Xstrata then resumed… to nut out a way to tax them for the super profits they were and continue to make from Australia’s mineral wealth.

The result was a concession to reimburse the mining companies for the royalties they pay the states – big mining in Australia managed to not only overthrow a policy that would result in the development of essential services in Australia, they also axed the tax that they were already paying resulting in a $60 billion revenue loss over a decade.

Expert in corporate welfare for mining companies

The M4D provides direct financial and regulatory support to Australian mining companies by assisting those companies to access ‘emerging markets’ in the extractives sector by flying government officials from abroad to partake in study tours with the Mining for Development Centre in Queensland, which often include tours of BHP and Rio Tinto mines as examples of best practice.

In addition, the project provides indirect financial and in-kind support to those companies through ‘green-washing’ and presenting mining and the companies who engage in the industry as ‘sustainable’.

The most blatant example of providing corporate welfare has been directly granting 9 mining companies to date with Australian aid funding to subsidise their corporate social responsibility programs abroad in order to create a social license to operate. The involvement of the Africa Australia Mining Industry Group (AAMIG) in facilitating this relationship between the Australian Government and mining companies is indicative of this problematic relationship.

Expert in imposing the resource curse elsewhere

Australian mining companies have a long history of undermining the livelihoods and natural environments of many countries that are targets of the M4D, such as Papua New Guinea (PNG). Australian mining companies have been operating in PNG for decades and have established themselves as bad actors. BHP’s Ok Tedi mine and Rio Tinto’s operations in Bougainville are two examples.

The Australian government plays a significant role in pursuing the commercial interests of Australian mining companies under the guise of the aid agenda which has resulted in terrible outcomes.

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