Graduate School of Social Sciences
Master’s Urban and Regional Planning
Institutional Arrangements towards Sustainability in the
Extractive Industries in Suriname
Zooming in on Institutional Obstacles in the Bauxite Subsector and the EI
Student Name : Tanisha Y. Sardjoe Student Number : 11663111
Student e-mail : tanishasardjoe@gmail.com Main Supervisor : Dr. Mendel Giezen
Second Assessor : Dr. Aslan Zorlu
ii ABSTRACT
The extractive industries (EI) play an important role in the overall national income in Suriname. Despite having such a long history of mining culture, policy making and institutional capacity to manage and monitor this sector has been with limited success so far. The distribution of revenue shares between the State and, especially foreign, mining companies along with the current uncertain future of the bauxite sector paint a peculiar picture of the sustainability agenda and policy capacity of managing the extractive industries. Hence, the focus of this research is on mapping out institutional barriers in the industry by zooming in on the bauxite subsector used as a subset of the EI: the case study of Suralco exiting the country is used for figuring out institutional deficiencies in the bauxite subsector, correlating it to the EI. For this analysis, Ostrom’s Institutional Analysis and Development (IAD) framework was used as a guideline to analyze institutional management in the EI by describing the influence of external factors on relevant action arenas to determine overall barriers that impede policy outcomes. The research showed deficiencies on all levels of the IAD framework: bureaucratic culture, obstacles in biophysical conditions and weak rules in use, especially inadequate and insufficient EI relevant legislations. Political affiliation, lack of legislation, lack of authority, inadequate information sharing and transparency, lack of financial and knowledge capacity are obstacles in the development of institutional arrangements. Even though information sharing and cooperation between stakeholders are improving, no positive results in institutional management are noted. Lack of common ground on the political front results in poor national interest causing delay in the negotiation and mine closure process. This research serves as a push to change the governmental approach to include social aspects, such as information sharing, and not only technocratic models or legislative adjustments to influence policy making. This will stimulate actors’ competences and willingness to adequately do the job. This thesis serves as a preliminary research to provide a foundation of determining obstacles in institutional arrangements of the EI. Several recommendations are raised to further efficiently analyze EI management. Follow up research is required to further analyze the barriers in order to alter, optimize, and tailor-make institutions for designing a country specific sustainable EI model.
iii ACKNOWLEDGEMENTS
Firstly, I would like to thank my family in the Netherlands for providing me with great living and studying facilities to create the ideal home-away-from-home environment for me. Without their support it would be impossible for me to get a taste of the lifestyle on the other side of the Atlantic Ocean and to pursue my studies in the Netherlands.
I would also like to express my gratitude to my faculty supervisor Dr. Mendel Giezen for his valuable and constructive guidance throughout the development of this research. His insights were much appreciated, especially because my switch form beta to alpha sciences meant that I had to pick up new jargon, another way of analysis, a new way of thinking (abandoning my a+b=c mentality), as well as other research methods in one year. Thank you for your useful critiques and encouragement when I neglected to connect the dots in this research.
Additionally, I am grateful to the university teaching staff at the Graduate School of Social Science from the MURP department for their contribution to reassuring myself that it is possible to make a career switch and pass all classes and therefor the realization of this thesis. Special thanks to the university teaching staff and my former docents at the department of Geology and Mining from the Anton de Kom University of Suriname for their interest and recommendations on this project.
I wish to express my great appreciation and thanks to all informants, especially the interviewees for this research. I am grateful to you that my qualitative data gathering method in the field was successful because of your partaking in the interviews and therefor becoming the primary data source for this research.
Furthermore, I would like to thank Shiva for his continuously support and guidance in all my endeavors. Especially, throughout the transition phase of settling in the Netherlands, during my career switch and during the thesis writing process.
Last but not least, my deepest and heartfelt gratitude belong to: my parents, for being my first gurus, my best critics and advisors, and my support system in all my undertakings; and my brother for his advice.
iv PREFACE
Earning a MSc. degree in Urban and Regional Planning from the Graduate School of Social Sciences at the University of Amsterdam, requires successful completion of the programme by conducting a research project.
For me, the ideal topic for this project was one that would build a bridge between my mining and geology undergrad background and the planning related aspects. Hence, the umbrella theme of my research could be formulated as: “Institutional Arrangements towards a
Sustainable Attitude in the Mining Sector in Suriname”.
I gathered practical data by conducting qualitative interviews with various stakeholders in Suriname from mid-April to mid-May. Both before and after this period, desk research provided the theoretical background and valuable insights on the topic.
This research project has given me a glimpse of rules, regulations and policy making in the real world. Above all, this experience has made me even more aware of a planner’s role and I am looking forward to my endeavors as a future planner.
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TABLE OF CONTENTS
LIST OF FIGURES ... vi
LIST OF TABLES ... vi
LIST OF ABBREVIATIONS ... vii
1. INTRODUCTION ... 1
2. THEORETICAL OUTLOOK ... 4
2.1 Institutional Analysis and Development Framework ... 4
2.2 IAD framework: Institutional Analysis and Sustainable Management ... 7
2.3 Sustainability and Institutional Research in the Extractive Industries ... 9
2.4 Usage of the IAD Framework for the Extractive Industries ... 11
2.5 Concluding Remarks ... 13
3. METHODOLOGY ... 14
3.1 Conceptual Framework and Research Questions ... 14
3.2 Research Design ... 15
3.3 Methods of Data Acquisition ... 16
3.4 Data Analysis ... 17
3.5 Methodological Remarks and Quality of Data ... 18
3.6 Ethical Considerations, Limitations, Concluding Remarks ... 18
4.EXTRACTIVE INDUSTRIES GOVERNANCE IN SURINAME ... 20
4.1 Organogram of the Extractives Industry in Suriname ... 20
4.2 Laws and Regulations ... 21
4.3 The Bauxite Industry Affair in Suriname... 24
5. ANALYSIS: Trying to Find the Connection by using the IAD framework ... 28
5.1 Influence of Exogenous Factors ... 28
5.1.1. Biophysical Conditions... 29
5.1.2 Community Attributes ... 30
5.1.3 Rules in Use ... 32
5.2 Action Arena ... 33
5.3 Patterns of Interactions and Outcomes ... 37
6. CONCLUSIONS AND RECOMMENDATIONS ... 40
6.1 Conclusions ... 40
6.2 Recommendations... 41
REFERENCES ... 42
APPENDIX 1 - Definition of Key Terms ... 47
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APPENDIX 3 - Sample Interview Guide ... 49
APPENDIX 4 A - Findings in the Bauxite Subsector ... 50
APPENDIX 4 B - Findings in the Extractive Industries ... 51
APPENDIX 5 - Summaries of Interviews and Questionnaire ... 52
LIST OF FIGURES Figure 2.1 A Framework for Institutional Analysis and Development ... 8
Figure 2.2 Linking Levels of Analysis ... 6
Figure 2.3 Sustainable Development Principles from the Breaking New Ground Project...9
Figure 3.1 General link between RQ, Problem Statement and Effects ... 14
Figure 4.1 Organogram Extractive Industries Governance Suriname ... 21
LIST OF TABLES Table 2.1 General Classification of Goods ... 11
Table 5.1 Characteristics of Actors ... 35
Table 5.2 Action Situations Overview ... 36
vii LIST OF ABBREVIATIONS
ASM Artisanal and small-scale mining
BIS Bauxiet Instituut Suriname / Bauxite Institute Suriname CPR Common Pool Resource
DC District Commissaris / District Commissioner DNA De Nationale Assemblee / The National Assembly EI Extractive Industries
EITI Extractive Industries Transparency Initiative GDP Gross Domestic Product
GMD Geologische Mijnbouwkundige Dienst / Geological Mining Service IAD Institutional Analysis and Development
IGF Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development IIED International Institute for Environment and Development
IISD International Institute for Sustainable Development MMSD Mining, Minerals and Sustainable Development NCBI Negotiating Commission Bauxite Industry
NH Natuurlijke Hulpbronnen / Ministry of Natural Resources
NIMOS Nationaal Instituut voor Milieu en Ontwikkeling in Suriname / National Institute for Environment & Development in Suriname
OGS Ordening Goud Sector / Gold Sector Planning Commission RO Regionale Ontwikkeling / Ministry of Regional Developments SD Sustainable Development
1 1. INTRODUCTION
The extractive industries (EI) have an impact on the economic, social, environmental, political and employment processes in a country (Vintró et al., 2014). With the rise of developments in technological, environmental impact and social ecological protection awareness, concepts such as sustainable and circular mining have started to gain attention and are nowadays expected to be included in the corporate business strategy of the EI (ICMM, 2016; Vintró et al., 2014; Zhao et al., 2012). This corporate strategy should be accompanied by government initiatives to promote and manage such developments (Cameron and Stanley, 2017). But, studies showed that many countries still do not have a framework that converts mineral investments into sustainable development; this requires new and innovative governance structures of policy and law-making (ICMM, 2016; IIED and WBCSD, 2002).
Suriname, with its long history of mining culture (IGF, 2017), is expected to have developed such adequate framework, from institutional perspective, by now. The mined products have been responsible for around 30% of GDP and around 90% of exported products are from the EI (IGF, 2017; Matzko, 2017). This level of dependency means that there is high vulnerability to commodity prices volatility (IGF, 2017). Looking at the employees aspect, around 4000 to 5000 people earn a living by working in registered mining companies and another 20.000 to 30.000 work in the unofficial sector, usually small-scale and artisanal gold mining (Matzko, 2017; Heemskerk, 2002). These numbers depict a picture of the impact of the EI in Suriname. However, when it comes to the legal and policy environment and institutional capacity to manage and monitor this sector, the IGF (2017) reports that this has not been very successful so far.
Nowadays gold and crude oil, but in the recent past bauxite also, are the main large-scale mined products in Suriname (Matzko, 2017; Mobbs, 2016).
For a long time, bauxite mining was traditionally seen as the main engine of stimulating economic growth in the country (Republiek Suriname Overheid, n.d). Depletion of bauxite deposits and unprofitable operations led to the departure of international mining corporations from the country: in August 2009, BHP Billiton sold its stakes to Suralco L.L.C. (subsidiary of Alcoa Corp.) and in January 2017 Suralco L.L.C., being present for a century in Suriname, also announced to stop their operations in the country after gradually decreasing their activities since announcing their departure in June 2014 (Republiek Suriname Overheid, n.d; Alcoa Corporation, 2017).
Alcoa’s exit and corresponding developments have led to the fact that the subsector is now at crossroads with an uncertain future (IGF, 2017; Monsels, 2016). Revival of the sector through national capacity is questionable (IGF, 2017). At the time of writing this thesis, up to August 2018, negotiations between the government and Alcoa/Suralco regarding mine rehabilitation, the dismantling of existing infrastructure, and continuation of the bauxite industry are ongoing (Starnieuws, 2018; interview data, May 2018).
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Another general reproach towards institutional management of the EI is the distribution of revenue shares between the State and international multinational companies; for example, the 5% governmental equity interest in the agreement with IAMGOLD Rosebel Gold Mines N.V. (rosebelgoldmines.sr, n.d.; Mobbs, 2016) and a 25% governmental partnership with Newmont Suriname, LLC (Newmont Mining Corporation, 2016; Matzko, 2017). Furthermore, the government’s annual revenues from the mining industry have been only around 4,3% of the GDP since 2014, after a peak of 9.8% of the GDP in 2011, with a forecast of further reduction in upcoming years (Matzko, 2017).
Other lacking factors in EI management include the overall insufficient existing mining and environmental legislation and the underdeveloped social impact management (IGF, 2017; Republiek Suriname Overheid, 2016).
The above-mentioned developments, painting an incomplete and unsuccessful picture of the sustainability agenda and institutional capacity to manage the extractive industries in Suriname, form the basis for this research.
Because of the comprehensiveness of the institutional sphere in combination with sustainability in the EI, this research focusses on institutional obstacles in the management of the EI, which led to the following central research question:
“What are the main obstacles in institutional arrangements that impede sustainability in the
extractive industries in Suriname?”
This is researched by zooming in on the bauxite subsector, more specifically the case of Suralco/Alcoa leaving the country, making this an exploratory embedded case study. The bauxite subsector is handled as a subset of the extractive industries, whereby analysis of this case could be correlated to the entire extractive industries.
Following this approach, a few sub-questions were also formulated: What are the institutional
obstacles in the bauxite sub sector derived from the Suralco case study analysis?; What is the status quo of the institutional sphere in the extractive industries?; What are the conditions for relevant action arena(s) to function adequately?
In order to come up with answers, Ostrom’s well established Institutional Analysis and Development (IAD) framework was used to describe how rules-in-use, community attributes and biophysical conditions influence individuals their motivation, their behavior and eventually the results (Ostrom, 2010; Smajgl et al., 2003), making this an inductive qualitative research. The objective was to find the connection, with the focus on relevant barriers, between institutional arrangements and EI governance by analyzing how various stochastic variables (rules-in-use, community attributes, physical attributes) affected the action arenas (being the unit of analysis), leading to the interaction between relevant actors; in the case of Suralco the interaction between Suralco and the State leading to the outcome of uncertainty in the bauxite sector.
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This research aims at pointing out the effect of exogenous factors on action arenas, the structure and characteristics of action situations and actors, and the resulting patterns of interaction between stakeholders of the EI institutional management.
The scientific gap can be found in the fact that previous research and available literature do address governance responsibilities, key challenges in the EI, gaps and strengths in the policy framework, and determination of sustainability indicators, but there is no emphasis on social characteristics of, and information sharing between key participants in the institutional management, nor on their perceptions and competences. Obtaining first-hand information from relevant actors and analysis through the IAD framework can bridge this gap and provide new insights on how participant’s behavior and interaction influence the sustainability agenda in the extractive industries. In the end, institutions will be only effective and efficient if they result into sustainable benefits for humans.
The social relevance of this research project lies in realization of (re)evaluating the ratio between environmental, social, and economic gains or losses in the EI, with the emphasis on factors, from a social perspective, influence decision-making. The results can be used for further research to determine adequate planning strategies for dealing with rehabilitation and decommissioning practices to minimize environmental and social disruption.
Primary data was acquired by conducting eight semi-structured interviews with relevant actors (government officials, researchers, company representative, negotiation committee representative) in the management of the EI in Suriname so that their opinions and behavior could be analyzed by means of the IAD framework. Furthermore, content analysis was used on several legislative and other relevant documents related to the institutional management of the EI.
The thesis is structured in six chapters. The problem statement, research questions and the objectives of the study are covered in this chapter. Chapter 2 deals with the theoretical framework and available literature on institutional management. The IAD framework, institutional arrangements, and usage of this framework for this research are also explained in this chapter. The research design with its conceptual framework and used methods for data acquisition are covered in chapter 3. In Chapter 4, background information on governance of the EI in Suriname, relevant legislation, and an overview of the bauxite industry in Suriname are outlined. In the fifth chapter analyses and interpretations of the data using the IAD framework are presented. The overall conclusions and recommendations are given in chapter six.
4 2. THEORETICAL OUTLOOK
Generating a fair balance between economic progress, environmental awareness, social importance and effective governance is one of the main global challenges in the EI, like in any other industry (IIED and WBCSD, 2002). This integrative attitude forms the base for sustainable development (SD) in its broadest sense.
The focus in this research lies on the governance sphere of SD, more specifically the institutional management capacities and, as per the research question, the obstacles in institutional arrangements.
An overview of the IAD framework, used as the main framework for analyses in this research, is given in the first paragraph. The connection between the IAD framework and several institutional terminologies is also addressed. Furthermore, a literature review of sustainability in the mining industry is given, followed by further explanation of the (exogenous) variables of the IAD framework on how to use those for the EI in this research.
2.1 Institutional Analysis and Development Framework
The IAD framework (Ostrom et. al, 1994) is a well-established framework that assesses institutions in order to find out how those affect the decision-making attitude of individuals in a certain setting, and their resulting behavior (Ostrom, 2010; Koontz,2003).
The framework has widely been used in empirical settings to systematically analyze how variables, external to individuals, have an influence on the structure of circumstances that individuals have to deal with when making decisions (Smajgl et al.,2003).
These exogenous variables, (1) physical and material conditions, (2) community attributes, (3) rules in use, are assumed to have influence on the structure of a certain action arena (Ostrom, 2010) and on the resulting interactions between actors and outcomes of policy processes (Koontz, 2003). This is portrayed as a multi-layer conceptual map as seen in figure 2.1.
Figure 2.1: A Framework for Institutional Analysis and Development Source: Ostrom et al. (1994, p. 37).
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A general description of the variables in this framework is given below. Further explanation of these variables, based on how they could be used for the analysis in this research, is addressed in paragraph 2.4.
Action Arena, consisting of Action Situations and Actors: Identifying the structure of an action
arena forms the base of problem identification and further analysis include identifying factors that influence the action arena’s structure (Ostrom, 2010). It is assumed to be the place where the various actors reveal their intentions and plans are (re)shaped (Nigussie et al., 2017).
Action Situation: This is the social area where human interactions occur (Ostrom, 2010),
expressed as: “participants in positions who must decide among diverse actions in light of the information they possess about how actions are linked to the potential outcomes and the costs and benefits assigned to actions and outcomes”), for example a market, or a fishing ground (Ostrom et al., 1994, p.29).
Actors are those who participate in the situation, either an individual or group functioning as
a corporate actor (Ostrom, 2010).
Biophysical Characteristics: These are material and physical properties affecting outcomes
and action sets in a particular situation (Ostrom et al., 1994, p.44). The importance and influence that biophysical attributes have are dependent on the type of action situation, for example: the size and shape of a chessboard and its pieces have relatively no influence on the result of a chess game, whereas in another sport, e.g. football, the type of equipment, the conditions of a ball, and size of the field very much do affect the result of a match (Ostrom et al., 1994).
Attributes of the Community: These include norms and behavior that are generally accepted,
common comprehension and similar choice-making among members, and normative behavior under the veil of culture (Ostrom et al., 1994, p.45). These characteristics play an important role when individuals act, thus affecting the action arenas (Koontz, 2003).
Rules in use: These are declarations of which “actions (or outcomes) are required, prohibited,
or permitted, and the sanctions authorized if the rules are not followed” (Ostrom et al., 1994, p.38). Rules are human-made and usually created to find a solution for issues, often by changing existing rules to acquire improved results (Koontz, 2003). Rules can be either formal (e.g. laws, policies) or informal (e.g. values, social norms) (Ostrom et al., 1994). Geels (2004, p.905) adds that rules can be divided into three categories: (1) the regulative, the formal ones or ‘rules of the game’, which are legally sanctioned; (2) the normative, the informal ones or ‘how we do things’, which are morally governed; and (3) the cognitive rules, e.g. priorities or beliefs, which are culturally supported.
Similar to biophysical attributes, the importance and effect of rules are also dependent on the situation and so is the mutual importance between rules and material conditions, for example: rules in a legislature have relatively more importance on the outcome than rules in a football match; also, rules in a legislature have more consequences on the outcome than the physical attributes of how someone can vote (Ostrom et al., 1994).
Patterns of Interaction: Influence of the three exogenous attributes on the action situation
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outcomes leading to patterns such as market construction, information structures and political partaking (Nigussie et al., 2017).
Decision makers act at and from numerous different locations, both analytical level wise and geographical wise. That’s why three different levels of actions, seen in figure 2.2, that affect the proceeding and results in situations, are used in the multi-dimensional IAD framework (Koontz, 2003; Ostrom, et al., 1994, p.46): (1) the operational level: these are rules at the micro level which affect day-to-day decisions; (2) collective-choice level rules: these rules have an impact on operation level actions; and (3) constitutional-choice rules: these rules influence decision making on the collective-choice level.
Figure 2.2: Linking Levels of Analysis Source: Ostrom et al. (1994, p.47)
In principle, constitutional choice results influence collective choice decision-making, which, in turn, influences operational level activities (Koontz, 2003). Movement among the different levels is possible, when actors are trying to look for the best results within an existing set of rules or when trying to change collective or constitutional choice rules in their favor (Koontz, 2003). When using the IAD framework to identify an institutional problem, the operational tier or analytical level (operational, collective-choice, constitutional-choice) should be determined (Ostrom, 2010). However, challenges are usually not limited to one particular level, but occur at all three levels (Ostrom et al., 1994).
Moreover, the diverse analytical levels are challenging for institutional research, since it is a difficult task to share information and communicate between these three different levels (Ostrom, 2010).
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2.2 IAD framework: Institutional Analysis and Sustainable Management
In order to use the IAD framework better, it is helpful to define some terminology and review a few challenges that institutional related studies encounter. Benefits of the IAD framework in analyzing institutions are also addressed.
Firstly, a major challenge in the analysis of institutions is the invisibility of institutions.
Institutions in the IAD framework refer to “the rules, norms and strategies adopted by individuals used to structure patterns of interactions within and across organizations” and does not refer to an organizational entity (Ostrom, 2010, p.2). Because institutions are formulated in the minds of the users, the identification, recognition and measuring process becomes more difficult (Ostrom, 2010). This invisibility makes it difficult to comprehend which actions are defined as rules (Ostrom et al., 1994, p.38).
Also, the study of institutions requires a multidisciplinary approach, but the lack of a common
language between various stakeholders forms a hindrance when using the IAD framework
(Ostrom, 2010).
Another challenge is the difficulty of institutional studies due to the configural characteristic. Having a relationship between features, without assuming that one variable is kept constant, makes institutional analysis complicated (Ostrom, 2010). It is not so easy to use the “ceteris paribus” (Ostrom, 2010, p. 5) principle where all other variables can be held constant to conduct causal effective analysis between factors.
Smajgl et al. (2003) propose that the IAD framework is an adequate framework for analyzing
institutional arrangements. Imperial and Yandle (2005) approve of this by mentioning that the
IAD framework has successfully been used in understanding a wide range of institutional arrangements in several countries. Institutional arrangements are described as: processes for efficiently and effectively planning and managing a mission; or various formal and informal regimes and alliances of joint ventures ranging from public-private-partnerships (PPP), contract-based projects, organization structures to policy making settings (Geels, 2004). These processes are operated in governance systems, which are the totality of various manners of dealing with general matters by public and private actors (Smajgl et al., 2003). Institutional arrangements, in resource management programs, can have one of the following models of institutional design: (1) the bureaucratic design, regulated by the government; (2) market-based arrangements, where property rights are transferred from government to privatized end-users; (3) community-based arrangements, where self-regulation is the key management concept; and (4) co-management, a hybrid arrangement where the management is shared between government agencies and groups of end-users (Imperial and Yandle, 2005).
Continuing with the benefits of the IAD framework, the context specific application, the avoidance of standardized bias and usage towards maintaining sustainable stocks (Imperial and Yandle, 2005) all belong in the list. Furthermore, Ostrom (2010) mentions that many
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theories, such as transaction cost theory (Williamson, 2000) and economic theory, can be used with the IAD framework. The IAD framework is ideal for assessing overall institutional performance due to its involvement of efficiency-, equity-, accountability-, and adaptability-criteria in the framework (Imperial and Yandle, 2005).
Institutional arrangements, policy, and legislation are main ingredients for successfully governing and managing resources (CPR) (Ostrom, et al., 1994). These terms are interlinked within institutional analysis.
The difference between institutional analysis and other types of organizational analysis, is its emphasis on rules (Imperial and Yandle, 2005). Hence, the focus of institutional analysis is on researching issues that actors deal with and the link between these issues and rules.
When it comes to the link between institutional arrangements and policy outcomes, Imperial and Yandle (2005) conclude that this relationship is not related by direct nor indirect variation; this means that adequate institutional arrangements do not always have to result in successful policy outcomes, and on the other hand, poorly performed institutional arrangements could result in successful outcomes.
The IAD framework was inspired by Hardin’s “tragedy of the commons” essay (nowadays rephrased as “tragedy of open access regimes” (Daly and Farley, 2011)) in which he considers population growth as a problem that eventually cannot be solved technically: population growth would unnecessarily lead to overuse and collapse of common pool resources (CPR), which could not be solved by the users themselves, but only by enforced authority (Ostrom, 1990).
Sustainable management of the CPR’s is the driving force behind finding the best option to manage them; some researchers opted for a public approach where the State would oversee the management of CPR’s to prevent collapse, while others proposed privatization to solve the issues (Ostrom, 1990).
Ostrom and colleagues collected and analyzed empirical data of how communities manage CPR’s and determined a set of design principles to successfully do so, herby debunking Hardin’s theory (Ostrom et al., 1994). These principles are based on the following eight characteristics: “clearly-defined boundaries; rules are adapted to local conditions; users can participate in the decision-making process; effective monitoring by users who are part of or accountable to the appropriators; violations are punished with graduated sanctions; mechanisms of conflict resolution that are cheap and easy of access; higher-level authorities recognize the self-determination of the community; in the case of larger common-pool resources, rules are organized and enforced through multiple layers of nested enterprises” (Ostrom, 1990, p.90).
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2.3 Sustainability and Institutional Research in the Extractive Industries
An overview of SD research in the mining industry and the link with institutional research is addressed, followed by an explanation of how to possibly use the exogenous variables of the IAD framework for this research.
Sustainability in the mining industry has extensively been researched from the economic sphere, the social sphere, the environmental sphere, as well as the governance sphere, through the Mining, Minerals and Sustainable Development (MMSD) Breaking New Ground project (IIED and WBCSD, 2002), seen in figure 2.3. Governance and institutional challenges, guidelines as well as sustainability principles are also proposed in that project, whereby the multi stakeholder approach is used on how to have the ideal integration between economic interests while at the same time protect and promote environmental and social concerns.
Figure 2.3: Sustainable Development Principles from the Breaking New Ground Project Source: (IIED and WBCSD, 2002, p.xvi)
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Various scholars have also researched mining sustainability from various aspects:
Azapagic (2003) builds on the MMSD analysis through determining sustainability indicators for estimating the performance and to make progress in the sustainability approach;
The social sustainability aspect in the mining industry, in this case in Greenland, is addressed by Tiainen (2016), whereby the results of the research confirm that even with the sustainability notion, the social and environmental domains in mining operations still get less priority compared to the economic aspect;
Policy analyses tools in the article by Arango-Aramburo et al. (2017) serve as a good example on how mining policies could be implemented in developing countries. Regulatory and policy framework, causal loop diagramming and simulation methodology are used to illustrate the complexity yet usefulness of such tools.
Corporate social responsibility (CSR) plays a big role in the mining industry. The guidelines provided by Haalboom (2012) address the underdevelopment of the human and environmental aspect in governance structure of the sustainable mining agenda and what can be expected from CSR governance structures.
Zhao et al. (2012) discuss the model of circular economy in the mining industry, by pointing out various levels (enterprise, mine area, social wide circulation) of the circular economy in the mining industry and emphasizing the establishment of a reasonable and practical circular
economy model in the mining industry to stimulate an overall circular economy.
Transparency and accountability models in the EI, differences within the EI, variety of operations, policy dynamic, mining dynamics and value chains are extensively addressed in the Oil, Gas and Mining Sourcebook for Understanding the Extractive Industries book from the World Bank Group by Cameron and Stanley (2017).
Furthermore, various international platforms and programs such as EITI, ExtractivesHub, TSM (Towards Sustainable Mining) and others, aim at promoting and supporting decision making and sustainable governance in the extractive industries [EITI, n.d; ExtractivesHub, n.d.) All in all, policy and institutional management research in the EI is a well-known and highly researched topic. However, with all the information and data available, the journey towards sustainable development in the extractives industry is often underdeveloped because of the absence of adequate institutional capacity, lack of economic sources and insufficient political will (IIED and WBCSD, 2002).
Specifically, for this research, the Suriname Mining Policy Framework Assessment Report (IGF, 2017) gives an insight on already available data. The report addresses strengths, weaknesses and gaps in Suriname’s mining policy framework, while also proposing several recommendations on institutional domain regarding the mining policy framework standards of the IGF. More on this can be found in chapter 4, where relevant legislation and governance related the EI in Suriname is outlined.
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Ostrom’s IAD framework has frequently been used in studies for forest management (Suwarno et al., 2014; Koontz, 2003), soil and water conservation activities (Nigussie et al., 2017), water management regimes (Ebenhöh, 2007), and in general for common pool resources (Ostrom et al., 1994; Ostrom, 2010). The framework can be used to research how activities, in a certain setting, can become more appropriate, effective, and sustainable (Nigussie et al., 2017). Furthermore, analysist using the IAD framework use normative terms and definitions derived from Ostrom’s local self-governance principles, whereby three factors are commonly used: (1) the presence of social networks; (2) trust amongst the resource users; and (3) the existence of formal and informal rules (Ostrom et. al, 1994).
2.4 Usage of the IAD Framework for the Extractive Industries
Building on the contextual variables of the IAD framework, information on how to use and analyze these variables for this research is addressed. The actual usage in the extractives industry for this research is given in the chapters dealing with the research analysis.
1) Biophysical conditions
There are four types of goods, based on the attributes of excludability and rivalry (or subtractability): excludability relates to the level of restricting someone from benefitting from a good, and rivalry deals with the extent to which an individual’s consumption subtracts from the benefit of that good for another individual (Ostrom et al., 1994); see table 2.1.
The IAD framework deals with common pool resources (CPR), defined as: a domain with an open access problem that could result in congestion or overuse, due to its non-excludability, and a high rivalry leading to competitive situations where one person’s use of a resource system leads to less units of harvesting for another user (Suwarno et al., 2014; Ostrom et al., 1994).
Table 2.1. General Classification of Goods Source: Ostrom et al. (1994, p.7)
Ostrom (2008) mentions that CPR’s can be managed and governed by various institutional arrangements, depending on how the resource is grouped as a good (see also, models of institutional design in the previous paragraph).
Excludable Non-Excludable
High Subtractability (Rivalrous)
Private Goods
(cars, clothing, food)
Common Pool Resources
(fisheries, forests, mines)
Low Subtractability (Non-Rivalrous)
Club Good / Toll Goods
(private parks, cinemas)
Public Goods
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When it comes to analyzing the effectiveness in a setting, the used rules and the site-specific conditions, described as material and biophysical attributes, should be compatible (Imperial and Yandle, 2005). There is no one-size-fits-all rule, because of the substantial change in physical settings, resource and its management (Imperial and Yandle, 2005); for example: the same arrangements made for effective managing onshore oil reserve, may not be useful for managing offshore oil reserves (interview data, April 2018; IGF, 2017). Decentralized policy-making that fit the local characteristics can be realized by involving local stakeholders in the governance of the resource (Andersson and Ostrom, 2008).
2) Community Attributes
As described before, the “cultural” characteristics of a community play a role in, especially, conflicts of managing a resource (Imperial and Yandle, 2005), since cultural perceptions have influence on the mental models of actors (Suwarno et al., 2014); for example, a certain regulation software can be successful in a corporate setting, but less in a small business setting (Imperial and Yandle, 2005). According to Ostrom, the compliance with policy values versus bureaucratic culture, the degree of common understanding of a policy, and the similarity in priority and preference of a policy are valid attributes of a community to analyze (Suwarno et al., 2014).
3) Rules-in-use
When it comes to the institutional setting, analysists should take into consideration the fact that change of (existing) rules is a gradual process, which also means that participants first need to see successes before wanting to make huge investments (Imperial and Yandle, 2005). A policy change in the present will affect a future policy option either negatively or positively; besides, the longer a rule system is present, the more difficult it will become for policy makers to adjust that certain rules system (Imperial and Yandle, 2005). In order to analyze institutional change, one first needs to understand the working rules, the permissions and requirements that an actor would refer to if they would have to justify their actions to a colleague (Ostrom et al., 1994). In the IAD framework rules are classified in the following seven types: “position rules; membership rules; authority rules; aggregation rules; information rules; scope rules; and payoff rules” (Ostrom et al., 1994, p.41; Ostrom 2011, p.6). Explanation on these rules is found in paragraph 5.1.3.
4) Action Arena
The two components of the action arena, the actors and action situations, can be analyzed by looking at the following variables.
Ostrom et al. (1994, p.33) characterized actors by four features: “(1) the preference evaluations that actors assign to potential actions and outcomes; (2) the way actors acquire, process, retain, and use knowledge contingencies and information; (3) the selection criteria actors use for deciding upon a particular course of action; and (4) the resources that an actor brings to a situation”.
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The action situation includes the following “seven clusters of variables: (1) participants; (2) positions; (3) actions; (4) outcomes; (5) the control that participants exercise; (6) information; and (7) the costs and benefits assigned to outcomes” (Ostrom, 2010, p.7). 2.5 Concluding Remarks
Ostrom recognized that there is no one-size-fits-all model to sustainably manage natural resource systems (yet), whether state-governed or market- governed, proposing that the IAD framework is a helpful intellectual tool in analyzing competence and restrictions of institutional arrangements in, especially, self-governing settings to manage CPR’s (Ostrom, 1990). Differences between CPR’s, based on resource characteristics, socio-economic and cultural contexts and scales, lead to mixed results when it comes to successfully managing CPR’s (Ostrom et al., 1994). However, challenges in the management of CPR’s are not limited to the material-sphere but are also dependent on the skills and capacities of relevant actors (Adam et a., 2003).
Products form the extractive industries can be categorized as a CPR, according to the ‘exclusion’ and ‘subtractability’ criteria of the general classification of goods (see table 2.1) but, the management and governance depends on how the goods are treated in a particular setting.
As mentioned before, the IAD framework is a well-established and well researched framework without a shortage of articles where various sections of the framework and various applications are extensively investigated.
In this research, products of the EI are not self-governed or managed through community- based arrangements, meaning they might not completely fit Ostrom’s framework.
Therefore, the general ingredients of the IAD framework that are used as guidelines for analysis in this research are mentioned in paragraph 2.4.
14 3. METHODOLOGY
The conceptual framework, the chosen research design with the unit of analysis and the methods of data acquisition are addressed in this chapter. Furthermore, remarks on the quality of the data, the chosen methodology and overall limitation of the research are also mentioned.
3.1 Conceptual Framework and Research Questions
The relationship between the problem statement, the research question, and the result is illustrated in figure 3.1: the general idea was that inadequate institutional arrangements lead to poor governance in the extractive industries, which generates a poor sustainability agenda of that industry; this could be formulated as the hypothesis.
Figure 3.1: General link between RQ, Problem Statement and Effects
Conduct analysis around institutional arrangements, but with a focus on the human aspect was the starting point, since the success of well-engineered models are dependent on implementation and monitoring skills of humans.
When choosing a framework, the main criteria were institutional analysis, being applicable for natural resources, and focusing on human behavior, which led to the IAD framework.
The initial concept is elaborated and demarcated in this research by treating the bauxite subsector an its current uncertainty as the outcome of institutional (mis)management. To get a better idea of the relationship between the problem statement, the research question, and the result, the conceptual framework was made more case specific by using the IAD framework and filling in the variables based on this research.
The framework is used as a detection tool to find the connection between institutional arrangements and EI governance by analyzing how various stochastic variables (rules in use, community attributes, physical attributes) affected the action arenas, leading to the interaction between relevant actors (Alcoa and the State), which resulted in the current uncertain situation in the bauxite sector.
Inadequate Institutional Arrangements Poor Governance in Extractive Industries Poor Sustainability in Extractive Industries [Bauxite Industry Case] WHY?
What are the main Barriers?
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As a reminder, these were the research question and sub-questions:
R.Q.: What are the main barriers in the institutional arrangements that impede the
development of sustainable governance in the extractive industries?
SQ1: What are the institutional obstacles in the bauxite sub sector derived from the Suralco case study analysis?
SQ2: What is the status quo of the institutional sphere in the extractives industry?
SQ3: What are the conditions for relevant action arena(s) to function adequately?
Sub-question 1 deals with the Suralco case study. Even though the bauxite sector is a subsector in the extractives industry, it is still part of the EI and similar (overarching) institutional arrangements are needed. That’s why zooming in on the Suralco case does not mean that only the bauxite sub sector is being analyzed, it is rather fair to use this case study for institutional analysis in the whole EI.
This approach is taken because the Suralco case is ideal for identifying institutional obstacles due to its unconventional course of events, for example rehabilitation is part of the mining cycle but in this case negotiations regarding rehabilitation took place long after the company announced its departure or already left.
Furthermore, being the first international multinational mining company leaving the country (without selling its stakes to another company) and with a few still in the country it serves as an example to identify where institutional management is weak and what mistakes should be avoided in the future.
Linking findings in the bauxite industry back to the EI, sub-questions 2 and 3 will be assessed through interview data and content analysis. By reviewing the perspectives of key informants, an overview of challenges and improvements, leading to conditions, is formed.
3.2 Research Design
Research, development and data collection for this project were done by choosing the qualitative research strategy. On the nature of qualitative research, Bryman (2012) states that an epistemological approach is a tool to distinct between justified belief and opinion. In this research the concepts of extractive industries affecting economic, social, environmental and governance processes in a country is scientific knowledge and reality.
For this research, an exploratory case study design together with the qualitative interviewing method were used for empirical data collection in the field. The case study design was selected because the aim of a case study is “to illuminate a decision or set of decisions: why they were taken, how they were implemented, and with what result” (Yin, 2009, p.17).
The case of Suralco L.L.C. (further also called Alcoa or Suralco case study) stopping its mining operations serves as sub-case to identify current institutions and case specific institutional
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obstacles. Altogether, because of the subset character in this research design, it can be formulated as an embedded case study.
The research takes an inductive approach; gathering (unknown) data for understanding social processes and relationships, to identify patterns and eventually transform them into general rules (Bryman, 2012). This is done by using the Suralco case for accumulating new knowledge to contribute to the identification of obstacles in the EI in general. Whether the data is sufficient to form patterns that can eventually result in a “new” theory is not necessarily applicable or a must in this research.
Since the IAD framework is used in this research project, the action arena is the relevant unit of analysis and formed the source for acquiring primary data in this research. The idea is to identify barriers in the institutional arrangements, by identifying how the exogenous variables affect the action arena(s) that are involved in the mining governance activities.
3.3 Methods of Data Acquisition
As mentioned in the previous paragraph, the qualitative interviewing method was used to gather primary data from stakeholders (actors) who play their part in the governance of the EI. A total of eight interviews were conducted with informants from: the Geological Mining Service (GMD), the Bauxite Institute Suriname (BIS), the National Institute for Environment & Development in Suriname (NIMOS), the Gold Sector Planning Commission (OGS), the State Oil Company (Staatsolie Maatschappij Suriname N.V.), the Presidential Negotiation Committee with Alcoa (further called Negotiating Commission Bauxite Industry (NCBI)), the master’s programme Sustainable Management of Natural Resources at the University of Suriname (AdeKUS), and the Spatial Planners Association Suriname (SPASU). A questionnaire was also answered by Newmont Suriname, LLC (further addressed as Newmont).
These informants were chosen based on desk research on the stakeholders of EI governance in Suriname. Also, in order to link this research with the planning perspective and the scientific sphere, an informant from the Spatial Planners Association Suriname, who at the same time also teaches at the university was interviewed. Another scholar, who is also a member of parliament, was also interviewed. An overview of the interviewees and their role according to the IAD framework and EI governance in Suriname is given in paragraph 5.2 and Appendix 2. The interviews were mostly semi-structured, and the expert interviewing set up was used for most of the interviews which required necessary desk research. The questions were aimed at getting the informants’ perceptions and opinions on how rules, physical attributes, and community related aspects affect their tasks, their mutual interactions or with other relevant stakeholders, and ultimately the outcomes. Also, Suralco case specific information was asked, especially to the informants from BIS and the negotiation committee.
So, the first part, the introductory part of the questions covered the governance organogram of the EI, specific tasks of each institution, and concerned regulations. The second part aimed
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at covering variables derived from the IAD framework: the policy-making agenda, getting information regarding rules, other exogenous variables, monitoring and evaluation processes. Interaction and information sharing were also covered. The last part addressed improvements, changes, and any other remarks that the interviewees could add.
The semi-structured interview guides left room for probing and were tailored here and there depending on the informant, see Appendix 3 for a sample interview guide.
The interviews were recorded, with consent of the interviewees whereby they agreed to remain anonymous, and transcribed within two days after the interview. Two interviewees did not mind being named; however, no names were published in this thesis. Based on acquired info after one interview, the questions were sometimes altered, or new question were added for the next interview.
Throughout the research, content analysis of literature, policy manuals, mine legislation documents, mineral agreements, other relevant (policy) documents, and newspaper articles provided useful secondary data. These documents also gave structured guidance on the topic and support for the identification of barriers.
Also, informal conversations and meetings, for example with ministry employees or university lecturers and a public discussion organized by SPASU titled ‘Ruimtelijke Ordening en de Agrarische Industrie’, contributed to forming perceptions for this research.
3.4 Data Analysis
The interview data was first labeled and coded by means of relevant, most used and similar used terms to make a structured categorization. As mentioned before, the IAD framework was used as the main guideline for analysis, therefore the variables from the framework formed the categories for the (already) labelled terms. Ostrom’s instructions on how to use the framework considering the four variables external to individuals were used. Also, other research provided information on how the exogenous variables could be made more case specific.
In the case of Suralco, a brief overview of the bauxite industry is given followed by excerpts of newspaper articles to illustrate the vicissitudes in the sector and the negotiation process. An overview of legislation relevant to the EI provided information on the (formal) rules attributes for further analysis through the framework.
Other noteworthy items that did not fit the framework are also mentioned and, where possible, further analyzed or expressed in the recommendations.
The analysis led to an overall idea of the organization in the EI (e.g. community characteristics, industry structure), information on who makes decisions, rules regarding behavior, planning and mine-cycle regulations, but also information on the downsides of the organization. The table in Appendix 2, gives an overview of objectives (exogenous variables), their analyzed variables, the data collection method and data sources.
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3.5 Methodological Remarks and Quality of Data
Upon further examination of the IAD framework, it was noticed that self-governance of CPR’s through community-based arrangements was a key ingredient in this framework. However, there were also applications where these concepts were not explicitly mentioned. With the aim of this research in the back of the mind, especially the human factor, the decision was made to keep using the IAD framework and tailor it for this project; even though an appropriate framework is necessary when conceptualizing the study of society and people (Bryman, 2012) to make sure explanations result in valid knowledge, it is not uncommon to tailor a research design by using parts of a known framework based on the given reality. The research tends to set a foundation, by indicating obstacles, on how to alter and eventually optimize institutional arrangements for a governance structure that will result in sustainability of the EI. The results of the research are represented by a small sample (the interviewees) from which an as accurate as possible reflection of reality is intended to be given. To evaluate the quality of a research, one looks at the reliability and the validity (Bryman, 2012). Looking at the reliability, successful replication of the research will be possible because the researched phenomena were not coincidental (the Suralco case was not a random happening, interviews were conducted with relevant stakeholders); furthermore, the collected primary data can be verified, which contributes to the transparency of the research.
When it comes to validity, three types can be described: construct-, internal- and external validity (Bryman, 2012). The construct validity, dealing with whether the results do support the hypothesis, could be a challenge. However, by using the IAD framework correct effects are measured, as far as the scope of this research goes. The internal validity, dealing with causal relationships, could be threatened by plausible other explanations (Bryman, 2012); in this research the internal validity is guaranteed through the primary data of interviews with relevant stakeholders for finding the causal link between institutional arrangements and uncertainty in the bauxite industry. The external validity, concerning generalizability of results (Bryman, 2012), in this research is explained through the embedded case study approach. However, follow up research is necessary to eventually grade the causality and generalizability of the effects and results of his research.
3.6 Ethical Considerations, Limitations, Concluding Remarks
Procedural ethics and practical ethics (Bryman, 2012) were taken into consideration for this thesis to maintain ethical aspects of conducting research, data protection, and prevention of any form of harm to participants. The Amsterdam Institute for Social Science Research (AISSR) guidelines were used for this research together with practical considerations, such as: informing interviewees on the topic of the research, asking interviewees’ consent before recording, protection of privacy by anonymously addressing the informants throughout the thesis, and not conducting deceptive practices (Bryman, 2012).
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Limitations in this research can be found in the data acquisition features, availability of data, exclusion of parameters, and resource and time constraints. Looking at the data acquisition features, the fact that no interview could be conducted with an informant at the ministry of Natural Resources, which is the accountable ministry for EI governance, means that there is no first-hand primary data available on the perception of that important public actor. Also, no interview could be conducted at Grassalco or with a representative of Alcoa. Even though representatives of most stakeholders, according to the scope of this research, were approached and interviewed, the quantity and quality could have been more. Exclusion of certain parameters such as ESIA (environmental and social impact assessment), transaction cost analysis, and evaluative criteria could lessen the “complete picture” of this research. This could also be a result of the chosen methodology and makes room for further research on the topic.
Lack of adequate resources for mine site visits or being an independent researcher/student can also be forms of limitations. The time factor affected both the quality as well as the quantity aspects of this research. Furthermore, the presented data does not paint the whole picture and cannot provide a foolproof answer to the main research question
As a disclaimer, changes over time in the corporate structure or proprietorship types of multinational companies are not considered; for example, Alcoa’s corporate structure has changed, and the parent company has split into subsidiary companies over time (Alcoa Corporation, 2017). Furthermore, Alcoa and Suralco are used interchangeably throughout the thesis.
Also, forward-looking statements are made throughout the thesis, because negotiation processes between the State and Alcoa are ongoing during this research. This contributes to incompleteness of the bigger picture, whereby the final outcome of the negotiation process remains unknown for this thesis.
20 4.EXTRACTIVE INDUSTRIES GOVERNANCE IN SURINAME
An overview of general laws and regulations relevant to the extractive industries in Suriname is presented in this chapter. Also, a summary of the bauxite industry in Suriname is given, with a focus on the Brokopondo Overeenkomst (B.O.) agreement and vicissitudes, derived from newspaper articles, in the sector. But, first an organogram of the governance structure in the EI, constructed from interviewee data and desk research, is presented. Information derived from interviewees is coded with the letter I and 2 digits (see Appendix 2 for an overview of interviewees and relevant codes), and information from the questionnaire is coded with Q01.
4.1 Organogram of the Extractives Industry in Suriname
In order to get an initial idea of the stakeholders that are involved in the management of the EI in Suriname, the following can be listed; the Ministry of Natural Resources, the National Institute for Environment & Development in Suriname (NIMOS), the Geological Mining Service (GMD), the Bauxite Institute Suriname (BIS), the Gold Sector Planning Commission (OGS), the state-owned Grasshopper Aluminium Co (Grassalco) and the state-owned petroleum company Staatsolie Maatschappij Suriname N.V. play a monitoring and accountability role to a certain extent (Matzko, 2017; IGF, 2017). In 2014 the Negotiating Commission Bauxite
Industry (NCBI) was established to initiate and guide processes owing to Alcoa’s departure
(Suriname Herald, 2017; I06).
The ministry of Regional Development (RO) also plays a role in the governance, especially when it comes to community development; responsible for decentralization and development of the interior with the focus on creating better living conditions for the indigenous and the maroon people living in the interior (Republiek Suriname Overheid, n.d; Zichem, et al., 2016). Institutions dealing with taxes, public health, intelligence and security, employee interest, trade and industry, and other logistics departments also play a part in policy making around the management of the sector (Republiek Suriname Overheid, n.d; Q01).
Other agencies and organizations also involved in management of the EI are Suriname Environmental and Mining Foundation (SEMIF) and EITI (EITI, 2017; SEMIF, n.d.; I02, I03, I05). SEMIF is a non-profit organization stimulating sustainable development of natural resources in Suriname (SEMIF, n.d.); and receives and manages funding from IAMGOLD Rosebel Gold Mines N.V. , part of the company’s corporate social responsibility policy, for their projects (I01, I02, I03). Other non-profit organizations, NGO’s and (semi-)public organizations can be added to the list of involved actors in EI management, such as Conservation International Suriname (CIS), Suriname Conservation Foundation (SCF), UNEP, UNDP, indigenous and maroon organizations, the university.
Depending on the scope, more and more stakeholders can be added. For this research, an overview of the most direct involved actors of institutional management are presented in figure 4.1. Content analysis (Matzko, 2017; IGF, 2017) and interview data provided the info to create the organogram.
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Information on the tasks of the departments in the organogram can be found in Appendix 5, excluding the Ministry of NH, Ministry of RO, and Grassalco. No specific ministry is addressed in the Mining Decree (Decreet Mijnbouw, Article 3, p.2) and interviewees were not fully aware or did not have the information regarding the particular level that departments have in the organogram; for example, informants were not aware of other departments’ tasks, the level in the organogram, the type of actor or the role, whether semi-public, NGO or non-profit, having an advisory role or directly under the office of the president (I02, I03, I08).
Figure 4.1: Organogram Extractive Industries Governance Suriname Created from Matzko, 2017; IGF, 2017; and interviewee data
4.2 Laws and Regulations
Suriname has a varied system of property and land use rights that goes back a long way in the past (Republiek Suriname Overheid, n.d). For the extractive industries, the relevant property law is the domanial system, which means that “All minerals within the territory of the State of Suriname, including the territorial sea, its soil and subsoil as defined in the Act of April 14, 1978 (S.B. 1978 No. 26) belong to the State” (Decreet Mijnbouw, Article 2.2, p.2).
The Mining Decree of 1986 (“Decreet van 8 mei 1986”, “Decreet Mijnbouw, decreet E-58, SB1986, no 28”) forms the groundwork for mineral agreements and is still being used for mining related projects (IGF, 017; Matzko, 2017; DNA, n.d.). The Decree mentions that mining and mining related work should be executed according to international and updated standards, it mentions employee health and safety related aspects, the protection of ecological systems, and stimulation of local employment and purchase of local services and goods (IGF, 2017). Office of the President NH GMD BIS Staatsolie Grassalco RO OGS NIMOS NCBI
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However, these sections are very briefly addressed in this outdated and rather complex Decree, which focusses more on the types of mining permits or rights, the types of goods, their obtainment process, relevant regulations and financial, administrative, and other requirements (IGF, 2017). Permits are granted for five groups of resources: radio-active minerals and hydrocarbons (petroleum), bauxite, other minerals and building materials, whereby rights for radio-active minerals and hydrocarbons are exclusively granted to state owned companies (Decreet Mijnbouw, Article 7, p.4).
The Mining Decree also is the basis when making separate mineral agreements with multinational mining companies resulting from negotiations between the State and the companies, which then are to be proclaimed as laws (Matzko, 2017). This was the case since the Brokopondo Overeenkomst (B.O.) in 1958 (more on this in paragraph 4.3) between the State and Alcoa (Suriname was still a colony of the Netherlands then), but also the more recent mineral agreements with IAMGOLD Rosebel Goldmines N.V. and Newmont Suriname LLC (IGF, 2017; Matzko, 2017).
Other laws, apart from the Mining Decree, that are relevant for the EI include: the Constitution of the Republic of Suriname (1987), general Tax Codes, Mineral Agreements with companies, Petroleum law (1990), and Environmental Assessment Guidelines (IGF, 2017).
The SURINAME Mining Policy Framework Assessment (IGF, 2017) gives an overview of the mining policy framework in Suriname based on the six Mining Policy Framework (MPF) themes and guidelines of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF).
In practice, many statutory regulations of the Decree are not obeyed; for example, concessions are granted in living areas of indigenous or maroon communities without adequate information sessions regarding this decision and no compensation settlement for the victims (I04; Gomiam, n.d.). Another important point is the limited control and monitoring over existing regulations; there are no consequences if laws are violated and concessions are rarely withdrawn (I01, I02, I03, I08; Gomiam, nd.). This could be a result of the outdated Decree, political interest, lack of capacity and money, nepotism, influential position of some concession holders (I01, I02, I03, I04, I05, I06, I07, I08).
The public actor, namely the ministry of Natural Resources, recognized and agreed that the current Decree is outdated and does not comply to applicable international standards, therefor updating is utmost necessary (Republiek Suriname Overheid, 2016). Several attempts have had been made to update the Mining Decree, but none had been successful (IIGF, 2017). Interviewees mentioned that drafts have been made in the past, in 2004, submitted to parliament, but were not adopted (I01, I03, I05; IGF, 2017, Gomiam, n.d.); revision in 2012 was also unsuccessful (Republiek Suriname Overheid, 2016).
A commission was installed on 29 June 2016, Commission Review Mining Law and Mine-
Development Agreement, to review the earlier drafts so that the Decree could finally be
updated, initially in 2017 (I01, I03, I05; IGF, 2017; Republiek Suriname Overheid, 2016); I01 and I03 mentioned that the prognosis is that the updated Decree will be ready and adopted
