Community Benefits Sharing
Executive Summary
April 2013

Although natural resources are often regarded as belonging to all citizens,
overlooking the needs of local communities is counterproductive. The development
of a mine results in substantial economic, social and environmental changes that
need to be carefully managed in partnership with the local communities affected.
This management is now often channeled through Community Development
Agreements (CDA), which are meant to (i) improve relationships with local
communities and (ii) promote equitable and sustainable benefits to these
communities.
Communities are varied and complex. The following rough framework provides
some guidance on how community characteristics influence the development of a
CDA:
    Cohesive communities with robust local government (model A)
    Traditional communities lacking strong formal local government (model B)
    No strong formal legal or traditional authority; divided community (model C)
Whether CDAs are voluntary or mandated by law, flexibility is paramount. To be
successful, agreements must be able to respond to the specific needs of each
community, to provide clear procedures for amendments, and to emerge through a
process of dialogue. The negotiation process itself provides valuable benefits such
as building skills, trust and respect, and is as important as the final agreement.

A standard framework including a list of issues to be addressed but leaving specifics
to be negotiated is recommended. Although each agreement should reflect specific
circumstances, the following issues should be covered:

Parties to the agreement should include at a minimum representatives from the
local government, the mining company, civil society, and communities affected by
the project. Identifying affected communities is a difficult process, but is probably
the most crucial factor to determine the success of the CDA. Among the many
elements that should be considered, self-identification is regarded as best practice,
as it provides an opportunity for people to explain project impacts that may
otherwise not have been identified. Assessment, monitoring and re-evaluation of
risks and impacts should also be part of the exercise.

Communication via community representatives should be initiated during or
before exploration, and provide information about negotiation and implementation
of the CDA. A process to select representatives and methods of ongoing
communication must be established.

Roles and responsibilities of each party to the CDA must be clearly outlined.

Capacity building may be required to ensure that all parties have equitable
capacity to negotiate, participate and perform their commitments under the CDA.

Adequate funding is to be provided by the mining company and the government to
support capacity building for parties to the agreement and to implement the
agreement.

Grievance and dispute resolution mechanisms should be established. Proper
communication, regular consultations, equitable benefits, a flexible CDA, good local
knowledge, and proper inclusion of marginalized communities are essential.

Governance. The way CDAs are to be managed and enforced are part of the CDA
negotiations, and examples of governance mechanisms include:
    Foundations, trusts and funds administered by community representatives
    Financial management, accountability and transparency mechanisms to track
       funding allocation and disbursements
    Closure planning