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According to the World Bank, sustainable mining development takes place in an environmentally and socially responsible manner, providing lasting benefits to communities where mineral development, production and transportation are occurring.
Mining companies are increasingly accepting the business case for sustainable community investment (SCI), as it can help companies secure their social license to operate, add value to shareholders, and engage communities and stakeholders who are affected by the company's operations.
If done well (that is, if it does not promote community and government dependency on company funding and is targeted to citizens' and government's visions and needs) effective community investment can be considered a key indicator of the project's success. However, mining projects are occurring in many countries where active decentralization policies are taking place and indeed, there has been a global trend towards government decentralization in the past 20 to 30 years..
In developing countries in particular, mining companies need to be aware of the issues and challenges related to decentralization and local government planning, and the implications for sustainable community investment initiatives.
Recognised as a basic dimension of democratic governance and a process that often spans decades, decentralization involves the transfer of authority and responsibility, resources, and personnel from the national to sub-national governments.
In theory, decentralization can promote more efficient provision of public goods and services while considering local citizens' preferences and needs more closely. By serving as a focal point for public participation, local governments can help strengthen democratic and transparent decision-making processes.
This is relevant to the mining sector since responsibilities that affect the sector are often transferred from central to local government, including powers to promote and develop regulations that may influence the costs and operations for mining business.
Indonesia is an example of a country undergoing decentralization. Since 1998, increased autonomy and responsibility for decisions have been devolved to the regency, district, and village governments. New structures of government have been put into place including direct elections of local government representatives, accountability of these...