Mining Shared Value (MSV), a venture of Engineers Without Borders Canada, in collaboration with the German international development agency GIZ, last week launched the Mining Local Procurement Reporting Mechanism (LPRM). “The majority of natural resource-driven countries paradoxically experience less growth than those without high production of extractive industries resources. These ‘resource curse’ outcomes common in Sub-Saharan Africa and other developing regions, often result from the fact the majority of goods and services used in mining come from outside of the host economy.
The Mining LPRM seeks to build on the momentum of the Extractive Industries Transparency Initiative (EITI), the Global Reporting Initiative (GRI), and other systems that have increased transparency and improved management of mining for the benefit of host countries and communities. “If mining is to contribute to economic development in host countries, it cannot exist as an enclave disconnected from the rest of the economy” – Project Lead Jeff Geipel says. “However, we cannot manage what we do not measure, and so the Mining Local Procurement Reporting Mechanism helps the global mining industry work with host countries to increase local procurement to create more economic development.”
Procurement of goods and services is in most cases the single largest potential economic impact for host countries during the mining life cycle, yet to date there has been commonly accepted set of disclosures to guide industry management of this important lever for economic and social development. “The Mining LPRM provides a common language for the global mining sector to use to improve management and empower host country stakeholders, and ultimately keep more of the benefits of mineral extraction in the countries that host it.”
Based on extensive consultation with the mining industry, host governments, suppliers, and other stakeholders, the LPRM is a set of disclosures to guide the reporting of mine sites. It has three main three main goals:
- Improved management to increase local procurement;
- Empowerment of local communities affected by mining activity, and;
- Increased transparency in the mining and extractives sector.
Emily Nickerson from Engineers Without Borders Canada adds, “In addition to helping mining companies work with suppliers to increase local procurement, the Mining Local Procurement Reporting Mechanism also helps increase transparency around what is usually the single largest payment type a mining operation will make during the mining life cycle.” Presented at the London School of Economics on Monday, and on Wednesday in Bonn at Germany’s Federal Ministry for Economic Cooperation and Development, the Mining LPRM is available at http://miningsharedvalue.org/mininglprm