Community Development Requirements: Laws, Best Practices, and Community Development Agreements Database

Investments in extractive industries, agriculture and forestry often include processes for sharing benefits with, or fostering development of, project-affected communities.

These benefit-sharing arrangements are often governed by agreements between the investor and project-affected communities. In some contexts—especially for mining and forestry projects—governments are increasingly imposing legal requirements on companies to deliver benefits to local communities. Such requirements can take many forms, from loosely expressed obligations to provide benefits to local communities, through to more concrete obligations to establish community development plans, community development funds, and Community Development Agreements (CDAs). In other cases, companies and communities negotiate CDAs or other benefit sharing arrangements voluntarily (i.e., in the absence of legal requirements).

CCSI has a growing portfolio of activities regarding community development requirements and CDAs that includes:

• Mapping domestic legal requirements for community development in the context of mining projects;

• Policy and research on best practices around CDAs and benefit sharing for extractive, agricultural, and forestry projects; and

• OpenCommunityContracts.org, a repository of publicly available CDAs and other community-investor contracts concluded in the context of agriculture, forestry, extractives, renewables, and other natural resource projects.

Domestic Legal Requirements for Community Development

Source: Dupuy, Kendra E. 2014. “Community Development Requirements in Mining Laws”.
The Extractive Industries and Society, 1(2): 200-215

Requirements for community development in mining laws

This Matrix summarizes the requirements for community development in domestic mining laws throughout the world as of February 2017.

Best Practices and Case Studies

CDAs can be helpful in formalizing relations between a local community and an investor, and establishing a mechanism by which local communities can receive social and economic benefits from large-scale investment projects. Such agreements have been negotiated for projects in industries including the extractive industries, renewable energy, agriculture, and forestry. Such benefits can include fiscal revenues from the project, employment creation, construction of local infrastructure, or capacity building, among others. CDAs, also known as Community Benefit Agreements (CBAs) or Impact Benefit Agreements (IBAs), amongst other terms, can be entered into voluntarily; or can be required by host government legislation.

Emerging practices in Community Development Agreements
This briefing note highlights leading practices in the negotiation and implementation of CDAs. The note reviews existing research, as well as the text from available agreements from the extractive sector in Australia, Canada, Ghana, Greenland, Laos, and Papua New Guinea to highlight these leading practices.

A slightly revised version of the briefing note was also published in the Journal of Sustainable Development Law and Policy.

Annex to the briefing note: Review of available CDAs
CCSI has closely reviewed available CDAs from Australia, Canada, Ghana, Greenland, Laos, and Papua New Guinea. A summary of the key provisions in these CDAs is available here.

Community-Investor Negotiation Guides
Deciding whether or not to allow an investor to use community lands and natural resources is one of the most important decisions a community can make. CCSI partnered with Namati, a legal empowerment organization, to produce two guides aimed at supporting communities and their advisors in their interactions with land-based investors. The guides are designed to apply to agriculture and forestry projects, although may have some applicability to agreements reached in other contexts, such as around mining or renewable energy projects.

Guide 1 sets out practical guidance to help communities and their advisors to prepare before potential investors arrive, and after an investor has approached a community. Guide 2 provides practical guidance on the issues to consider when a community has decided to negotiate a contract with an investor.

Recommendations on how to maximize the benefits of local development funding in the Guinean context
As part of a broader advisory project on integrated community development based at a mine site in Siguiri, Guinea, CCSI produced a report (en français) that makes recommendations as to how the Government, mining companies, civil society, and communities can work together to maximize the benefits of local development funding in the Guinean context. The report analyzes the legal framework that has been in place in Guinea to date, focusing in particular on the experiences of the stakeholders around the Société AngloGold Ashanti de Guinée mine in Siguiri, assesses the improvements and remaining weaknesses in the draft regulations (as compared to the previous legal framework) and provides a comparative analysis of models and good practices of community development agreements and local development funds globally.

CDAs and Multi-stakeholder Institutions: Seeking Meaningful Community Participation at Newmont’s Ahafo Gold Mine in Ghana

CCSI participated in a research consortium that studied the Newmont Ahafo Mine in Ghana, focusing on three benefit agreements aimed at governing company-community relations, ensuring local job creation, and sharing the benefits of the company’s mining operations. The consortium found that:

• While the agreements were celebrated for their attempts to include all stakeholders in decision-making, challenges remain around representation, consultation, and participation.
• New entities established to facilitate multi-stakeholder decision-making have led to the replication of existing power imbalances.
• Despite many improvements, the agreements have not fully stabilized company-community relations; tensions and grievances remain concerning employment, compensation, and resettlement, among other issues.

The report (summary available in Twi) made research-informed recommendations for the communities, Newmont Ghana, and other stakeholders in the lead-up to the renegotiation of the agreements.

Directory of Community Guidance on Agreements Relating to Agriculture or Forestry Investments

CCSI has created a detailed directory of resources that can assist communities and their advocates in their interactions with investors over land—from negotiating better agreements with investors, to monitoring whether investors fulfill the terms of their agreements. In some cases it draws on guides from the extractive industries, highlighting the sections that may be relevant to approaching investor-community contracts for agricultural or forestry investments.

Open Community Contracts Repository

CCSI recently published OpenCommunityContracts.org, a repository of publicly available community-investor agreements concluded in the context of agriculture, forestry, mining, oil and gas extraction, renewable energy, and other natural resource projects from around the world.