Extractives
Industry Analysis
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Overview
Extractive companies have the potential to bring positive changes to children’s lives through their investments in the communities in which they operate as part of infrastructure- and social development including roads, water and sanitation, education, healthcare and by providing employment opportunities. On a wider scale, the tax revenue available to states when extractive companies pay their due taxes can significantly increase governments’ spending on public education, healthcare and other services for children.
However, the industry can have long lasting negative impacts on children who are more vulnerable than adults because of their continuous physical, social and emotional development. Often operating in remote and disadvantaged areas of the world, extractive companies can negatively impact the lives of children through their operations and supply chain.
The majority (70%) of oil and gas is produced onshore. This means that not only large-scale mining but also oil and gas operations are directly impacting the human rights of communities, including children. New technologies, including hydraulic fracturing (fracking) and drilling in shallow water, have been met with increasing concern over environmental degradation, impacting the lives of children in surrounding communities.
Approximately 90% of global oil reserves and 73% of production are controlled by state owned / national oil companies, which are increasingly partnering with international companies. Businesses partnering with national oil companies on extractive projects face the risk of association with human rights violations committed by national and private security forces, as well as with land rights violations.
Workplace
While large-scale mining and the oil and gas industry have limited direct impact on children’s rights in the workplace, working conditions of parents and carers impact children’s rights indirectly – mostly through the potential negative impacts on family life of working hours, night shifts, long commutes and fly-in-fly-out (FIFO) arrangements. By not paying a living wage and providing adequate housing, companies may contribute to or further exacerbate child poverty and household stress. Sub-contractors might allow child labour in their supply chains, especially in countries where the minimum working age does not meet the ILO Minimum Age Convention.
Marketplace
Extractive companies will have very limited exposure to marketplace impacts as they do not sell or advertise their products or services directly to children.
Community and Environment
The industry’s direct impacts on children’s rights appear predominantly in the communities and the environment where children live. Firstly, through land-use and acquisition which may result in the resettlement of local communities; secondly, through environmental impacts from mining and drilling; and thirdly, through project-induced in-migration of labourers and economic migrants and their families.
When companies manage the potential impacts of resettlement and in-migration well, they can positively affect the lives of children by contributing to safe and healthy communities, where children have access to school, health care and other basic services, and where good income generating opportunities are created or exist for parents, carers and young adults. However, if these processes are not managed well, companies risk causing or contributing to children’s rights violations or being indirectly linked to these, including through forced resettlement, loss of land and family income, change in families’ socio-economic environment and the lack of community cohesion and protection systems. These impacts can include poverty, limited access to education and health care facilities, exposure to environmental hazards and pollution, child labour, spread of diseases and negative social pathologies, including substance addiction, and child sexual exploitation and abuse.
Due Diligence
The Equator Principles and the International Finance Corporation's Performance Standards are the key international principles to ensure that large investment projects, including extractives, respect and engage the communities and the environment in which they operate. These standards include stakeholder engagement at all stages of projects to ensure that affected communities are consulted and given free, prior and informed consent before exploration and operations and that the local population is benefiting.
Children’s specific needs and vulnerabilities are not explicitly addressed in these guidelines. UNICEF has developed a stakeholder engagement tool Engaging Stakeholders on Children’s Rights, which offers guidance to companies on engaging stakeholders on children’s rights as part of enhancing their standards and practices at both the corporate and site levels.
For the mining (and wider extractive) industry in specific, UNICEF has developed the Child Rights and Mining Toolkit to assist mining companies in integrating child rights into their management systems, strategies and performance indicators. The Toolkit is aligned with and further builds on IFC performance standards and covers the following issues: (i) impact assessments, (ii) stakeholder engagement, (iii) the environment, (iv) security, (v) resettlement, (vi) in-migration, (vii) health and safety, (viii) working conditions, (ix) protecting children from sexual violence and lastly (x) social investment. For each issue, the individual tools outline the risk to business, the recommended strategies and actions that business should take, the existing international standards as well as case studies. The tool provides a clear overview of how to manage the impact, and how to best prevent and remediate potential negative impacts.
Key Risks
This section focuses on the issues that are most likely to pose risks of child rights infringements for the industry. This is not an exhaustive list but only a selection of the key risks. For an overview of risks and recommended remedies, please refer to the documents listed under tools and guidance, especially UNICEF’s Child Rights and Mining Toolkit.
Workplace
Migrant workers
In-migration causing employment conflicts between the local population and migrant labourers: Throughout the life cycle of a mine or well, in-migration can lead to disputes around employment opportunities between migrants and the original population. These new opportunities might require language and technical skills that the local, indigenous population does not have. Companies should collaborate with local authorities and education providers to train the local population, especially youth, in skills that are needed for jobs on site and try to employ the local population before recruiting from elsewhere to ensure the local population benefits from the presence of the mine. For an overview of risks and recommended remedies, please refer to the In-Migration chapter of UNICEF’s Child Rights and Mining Toolkit.
Decent working conditions
Potential negative impacts of working hours, night shifts, long commutes and FIFO arrangements on family life: Jobs in the extractive industry are generally well-paid, but they are associated with high levels of stress and fatigue, caused by long hours, night shifts and working far away from family and loved ones. Stress and fatigue can lead to intra-household tension and violence, increased likelihood of work-related accidents and, ultimately, this might lead to employees’ discontent and increase workforce turnover. For an overview of risks and recommended remedies, please refer to the In-Migration chapter of UNICEF’s Child Rights and Mining Toolkit.
Marketplace
Extractive companies will have very limited exposure to marketplace impacts as they do not sell or advertise their products or services directly to children.
Community and Environment
Resettlement
Large scale extractives projects may result on the displacement and resettlement of local communities. A number of adverse effects have been identified in relation to this process:
- Inadequate consideration of children’s needs: Development activities of a mine or well have the most significant impact on local populations when they are required to resettle to another location. Children are more vulnerable than adults to the negative impacts of resettlement, including leaving schools, friends and extended families and communities behind. Not taking into consideration the specific issues children face and need, including their protection and psychological needs, their economic dependencies on local informal work, specific needs of vulnerable children (child-headed households, orphans, children living and working on the streets), might result in violations of children’s rights. Access to education, health care and other public services in resettlement villages might be limited or still in a developmental phase when families move, potentially resulting in disruption of educational progress, immunization schemes and, where mothers’ lives are affected by stress, this can impact breastfed babies and children.
- Insufficient compensation for the loss of agricultural and grazing lands: While families should get compensation for the loss of their land, this might not sufficiently replace what has been lost and might not take place at all. In addition, land titles might be communal or might not be officially recognised, especially in remote areas in developing countries, which can contribute to disputes over land and compensation rights. Single mothers or child-headed households are even more unlikely to have land titles, which is something businesses need to be aware of during resettlement processes.
- Land loss and in-migration leading to decreased nutritional intake by children: Families losing their land during resettlement will be forced to (at least temporarily) purchase food on the market, which is more expensive, especially following in-migration of labourers and their families. This can result in decreased nutritional intake affecting growth and development, especially of younger children. For an overview of risks and recommended remedies, please refer to the Resettlement chapter of UNICEF’s Child Rights and Mining Toolkit.
- Case Study: Resettlement engagement at Rio Tinto’s Murowa diamond mine in Zimbabwe
As described in the company’s report: “In 2000, negotiations began between Rio Tinto, the government, NGOs and affected communities to establish mutual understanding and develop a co-managed approach for the resettlement programme. Special attention was paid to women and children, ensuring equal opportunities for all community members to participate in the consultation process. The process was approved by all affected parties. Negotiations were mediated by an external moderator and the community elected a representative committee, including representatives for women and youths.”
Environmental degradation and pollution
Children are more vulnerable than adults to environmental hazards including harmful chemicals and toxics; water, soil and air pollution are more dangerous for children because of children’s incomplete development and growth. They are also more exposed because of their hand-to-mouth behaviour and inability to read warning and hazard signs both off and on-site. Pollution risks do not only exist at an operational level but also further down the value chain, during processing stages as well as during mine closure, when toxic waste needs to be safely removed. For an overview of risks and recommended remedies, please refer to the Environment chapter of UNICEF’s Child Rights and Mining Toolkit.
Security
Companies can be directly or indirectly responsible for, or complicit in, violations of children's rights through their approach to managing security on the mining site and around it. Understanding the context of operations, assessing risks and managing them appropriately will lower the likelihood of mining-related risks to children, as well as protect the company’s social licence to operate, reputation and business continuity.
- Security personnel in the extractive industry is most likely to interact with children as part of protests, theft, trespassing, vandalism and artisanal mining. Moreover, children may be recruited and used as public or private security or fall victim of child sexual abuse. The Voluntary Principles on Security and Human Rights guide the extractive industry in ensuring that security and safety procedures incorporate respect for human rights and fundamental freedoms. The Voluntary Principles do not identify step to protect vulnerable populations including children. In 2016, UNICEF, together with Barrick and the Government of Canada, developed the Child Rights and Security Checklist, which considers child rights criteria in salient areas of company and government security and human rights programmes.
- Violations by security forces against communities: Large extractive projects in volatile areas are often protected by state or private security forces, with no or little training on children’s rights. This can lead to violations of children’s rights, including sexual exploitation and abuse, as well as violence against children. In addition, security managers can arrest and detain parents for trespassing or participation in violent strikes and other potential violations, which might leave children unprotected in areas where they have no family or other caretakers.
- Children at risk of being recruited into armed groups and state / private security forces: Especially in countries where the minimum age for recruitment into the armed forces is younger than 18, companies face the risk of children being recruited into state and private security groups that are guarding their operations.
- Artisanal mining can sometimes be led and owned by violent groups who recruit children into their armed groups to protect their assets and mines. Conflict between rivalling groups over ownership of mines can result in death or permanent injuries to children involved with armed groups. Large-scale mining companies that source minerals from ASM should conduct extensive due diligence on working conditions and child labour. For an overview of risks and recommended remedies, please refer to the Security chapter of UNICEF’s Child Rights and Mining Toolkit.
Sexual violence
Risk factors for sexual violence against children can increase around large extractive projects. This can be caused by changing social environments and difficult economic contexts, including increased levels of poverty, high population density due to in-migration. However, low levels of basic child protection and rule of law combined with lack of knowledge about sexual violence against children also contribute to an environment in which sexual exploitation and abuse can take place. Throughout the life cycle of a mine or oil well, the labour force is predominantly male and often live without their families. Also because of the increased transport of goods, truck drivers are driving in and out, who again are predominantly male and without their families. These factors combined increase the risk to children of sexual abuse and exploitation surrounding operations of extractive businesses. For an overview of risks and recommended remedies, please refer to the Protecting Children from Sexual Violence chapter of UNICEF’s Child Rights and Mining Toolkit.
In-migration
In-migration can lead to limited access to education and healthcare for children and family members: Children migrating with parents are most vulnerable to disruptions in family livelihoods, and changes in their society and environment caused by rapidly increasing populations combined with a lack of community protection mechanisms. Parents migrating to look for work and seeking economic opportunities in booming mining towns, might find education and healthcare facilities unable to cope with the high demand, leaving children out of school and missing out on regular health checks and services. Also, growing towns around new extractive sites offer children whose parents are working limited protection, leaving children vulnerable in rapidly changing environments, with little community cohesion, child protection facilities or a social network families can rely on. For an overview of risks and recommended remedies, please refer to the In-Migration chapter of UNICEF’s Child Rights and Mining Toolkit.
Tools and Guidance
Tools
UNICEF, 2013. Children's Rights in Impact Assessments. Available at: https://www.unicef.org/csr/assessments.htm
UNICEF, 2017. Child Rights and Mining Toolkit: Best Practices for Addressing Children’s Issues in Large-Scale Mining. Available at: https://www.unicef.org/csr/files/FINAL_Child_Rights_and_Mining_Toolkit_060217.pdf
UNICEF, 2017. Child Rights and Security Checklist. Available at: https://www.unicef.org/csr/files/Child_rights_and_Security_Checklist_ENG.pdf
Guidance
Devonshire Initiative, 2015. Beyond Zero Harm Framework. Available at: https://www.devonshireinitiative.org/_files/ugd/420f7e_ad2b0c15a0cb4267aae5c54ca75b26ce.pdf
Equator Principles, 2013. Equator Principles. Available at: http://www.equator-principles.com/
IFC Performance Standards, 2013. International Financial Corporation. Available at: http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/policies-standards/performance-standards
Rio Tinto Limited and Rio Tinto, 2013. Rio Tinto, Why Human Rights Matter: A Resource Guide for Integrating Human Rights into Communities and Social Performance Work at Rio Tinto. Available at: https://www.riotinto.com/-/media/Content/Documents/Sustainability/Corporate-policies/RT-Why-human-rights-matter-EN.pdf?rev=ff7b1377899441a9b4deadaaac6a48f3
UNICEF, 2015. Children’s Rights and the Mining Sector: UNICEF’s Extractive Pilot. Available at: https://www.unicef.org/csr/files/UNICEF_REPORT_ON_CHILD_RIGHTS_AND_THE_MINING_SECTOR_APRIL_27.pdf
UNICEF, 2017. Mining-Related In-Migration and the Impact on Children in Mongolia. Available at: https://www.unicef.org/mongolia/media/826/file/Mining-related%20in-migration%20and%20the%20impact%20on%20children%20in%20Mongolia.pdf
Voluntary Principles on Security and Human Rights, 2000. Voluntary Principles on Security and Human Rights. Available at: http://www.voluntaryprinciples.org