Why Mining Firms Care: Determining Corporate Rationales for Negotiating Impact and Benefit Agreements

Mining firms in Canada are increasingly incorporating the social and environmental interests of their stakeholders into their projects in an effort to become more sustainable. Such initiatives have included negotiating Impact and Benefit Agreements (IBAs) directly with would-be impacted, often aboriginal, communities near resource developments in the Canadian north. Why does a mining firm take on this extra time-and cost-intensive initiative when governments and regulatory measures are in place to address social and environmental issues? Past research has paid little attention to the corporate rationales for IBAs. Based on document review and interviews with mining executives, this study investigates the rationales of mining firms that ?over-comply? with legislative requirements by negotiating IBAs or similar types of agreements with communities. The results indicate that mining firms increasingly recognize IBAs as an intrinsic part of the permitting process. When queried, executives regularly identified the negotiation of agreements as ?the right thing to do?. While this response could be read in ethical terms, a commercial rationale is also clearly present. By building strong relationships with nearby communities, addressing community concerns, and directing benefits to local people, all of which are explicitly achieved with an IBA, mining firms are maintaining their long-term financial viability, thus their sustainability, within an evolving industry.