IRMA Standard for Responsible Mining (Draft 2.0)
Chapter 2.12 Resettlement

This chapter has been flagged. Your input is welcome on any portion of the Standard. However, we have flagged certain sections where there is either a difference in opinion between stakeholder perspectives and/or a complex topic on which the broader world community is also struggling with no clear resolution. The IRMA Steering Committee would appreciate receiving solutions-based stakeholder input on these issues. Jump to Flagged Section.

 

Background

There are well-documented economic, social and environmental risks related to resettlement. People may be economically displaced from their livelihoods as well as physically displaced from their lands, homes, communities, and social and cultural ties. If planned or executed poorly, resettlement may lead to increased impoverishment of affected households.

Resettlement is considered involuntarily when people do not wish to move but do not have the legal right to refuse land acquisition that results in their displacement.[1]  The International Finance Corporation’s (IFC) Performance Standard 5 on Land Acquisition and Involuntary Resettlement states that involuntary resettlement should be avoided where possible. The IFC encourages its clients to use negotiated settlements, even if they have the legal means to acquire land without the seller’s consent.[2]  Negotiated settlements typically give affected persons a greater role in planning the resettlement, help avoid expropriation and eliminate the need to use governmental authority to remove people forcibly.[3]

When deemed unavoidable, involuntary resettlement, like other evictions, must only be carried out under exceptional circumstances and in accordance with international human rights law.[4]

Objectives/Intent of this Chapter

To avoid resettlement, and when that is not possible, equitably compensate affected persons and improve their living standards and livelihoods over pre-resettlement levels.

Scope of Application

Chapter Relevance:  This chapter applies if mining-related activities could result or have resulted in the physical or economic displacement and involuntary resettlement of people.

This chapter does not apply to voluntary resettlement (i.e., market transactions in which the seller is not obliged to sell and the buyer cannot resort to expropriation or other compulsory procedures sanctioned by the legal system of the host country if negotiations fail).  As with involuntary resettlement, however, there are risks such as impoverishment that accompany voluntary resettlement. IRMA therefore encourages companies to implement measures to maximize benefits for any household resettled as a result of project activities.

New vs. Existing Mines:  New mines shall meet the requirements in this chapter. At existing mines, where resettlement occurred in the past, operating companies are not required to demonstrate compliance with all of the requirements in this chapter, however, it is possible, even years after a resettlement program occurs, to evaluate the outcomes of resettlement projects and, if necessary, take steps to restore or improve the living conditions and livelihoods of those affected. Therefore, IRMA expects that any mine applying for IRMA certification that carried out a resettlement project after June 1, 1990 [5] that posed a risk of significant social impacts will have carried out a completion audit or evaluation (See 2.12.7.3.b) prior to applying for IRMA certification.

If the evaluation demonstrates that the objectives of this chapter have not been met, the company is expected to develop and implement mitigation strategies in collaboration with the affected peoples until the objectives have been met.  Mines that are in the mitigation development/implementation phase are eligible for certification.

For mines that involved resettlement prior to 1990, IRMA will not require evidence of such evaluations. It should be noted, however, that if there are human-rights-related impacts related to historic resettlement programs that have not been mitigated or remediated, they will need to be addressed as per Chapter 2.4; and other unremediated impacts may be raised by stakeholders and addressed through the operational-level grievance mechanism as per Chapter 2.13. (See the table “Cross Reference to Other Chapters” in the Notes Section of this Chapter for more information.)

Additionally, all mines shall apply the requirements of this chapter if there are proposed significant changes to mining-related activities, or if direct impacts become significantly adverse, such that communities or individuals have no alternative other than physical and/or economic displacement. In such cases, requirements of this chapter shall apply even where no initial project-related land acquisition or resettlement was involved.

NOTES TO READERS ON MAJOR CHANGES TO THIS CHAPTER:

  • The 2014 version of this chapter explicitly mentioned various IFC Performance Standard 5 (PS 5) requirements. IFC PS 5 contained many requirements that reiterated information from previous requirements, and so to streamline the IRMA chapter we rewrote the IFC requirements in our own words, with the intention of providing added clarity on IRMA’s expectations, and reducing duplicative requirements and extraneous information. The chapter still aligns strongly with IFC PS 5. To more closely align with IFC, we have clarified that this chapter only applies to involuntary resettlement. Companies are encouraged, however, to apply objectives of this chapter to all resettlement, involuntary or voluntary. Where this chapter used or draws from IFC requirements, the specific IFC paragraph of PS 5 will be cited in IRMA Guidance for this chapter.
  • The requirements related to community engagement have been grouped together in a single criteria 2.12.2. (now includes requirements previously under the criteria headings Grievance Mechanism, and Access to Independent Experts).
  • The requirements previously under Consent of Resettled Communities have been moved to 2.12.6.  Resettlement and Livelihood Restoration Planning and Implementation.
  • Clarified that existing mines that resettled people prior after 1990 are not required to demonstrate compliance with this chapter, except for the completion audit/evaluation. Such an evaluation is necessary to demonstrate to IRMA that major resettlement activities have been carried out in a manner that meets the objectives of this chapter.
  • Flagged requirement 2.12.6.2 for global stakeholder comment.
  • The means of verification (MOV) have been removed from this version of the draft IRMA Standard. If you would prefer to review and comment on a version of the draft Standard that has the means of verification, you can download a pdf version of the Standard with MOV.
     

Resettlement Requirements

2.12.1.  Risk and Impact Assessment

2.12.1.1.  If there is the potential that a new mine or expansion of an existing mine may require land acquisition that could result in the involuntary resettlement of people, during the early stages of project planning the operating company shall undertake an assessment process to evaluate the potential direct and indirect risks and impacts related to the physical and/or economic displacement of people.

2.12.1.2.  The assessment shall include:

a. Identification of alternative project designs to avoid or minimize the displacement of people;

b. Identification and analysis of social, cultural, human rights, conflict, environmental and economic risks and impacts to displaced persons and host communities for each project design alternative, paying particular attention to potential impacts on women, the poor and vulnerable groups; and

c. Identification of risk and impact prevention and mitigation measures, and estimated costs of implementing the measures.

2.12.1.3.  The assessment shall be undertaken by, or with the assistance of qualified external experts with experience in resettlement related to large-scale development projects.

2.12.1.4.  The operating company shall document decision-making regarding alternative project design and efforts to minimize resettlement.

2.12.1.5.  The assessment shall be made public, or, at minimum, be made available to potentially affected people and their advisors.

2.12.2.  Community Engagement

2.12.2.1.  The operating company shall disclose relevant information and consult with potentially affected persons and communities, including host communities, during:

a. The assessment of displacement and resettlement risks and impacts, including the consideration of alternative project designs to avoid or minimize resettlement;

b. The development of a Resettlement Action Plan and/or Livelihood Restoration Plan;

c. The development of resettlement options;

d. Resettlement implementation; and

e. The monitoring and evaluation of compensation payments, livelihood restoration activities, and resettlement.

2.12.2.2.  The operating company shall facilitate access, if desired by potentially affected persons and communities, including host communities, to independent legal or other expert advice from the earliest stages of project design and assessment, through monitoring and evaluation of the resettlement process.[6]

2.12.2.3.  Persons from affected communities, including host communities, shall have access to a mechanism to raise and seek recourse for concerns or grievances related to displacement and resettlement.[7] 

2.12.3.  Resettlement and Livelihood Restoration Planning and Preparation

2.12.3.1.  When project-related displacement is unavoidable, a census shall be carried out to collect appropriate socio-economic baseline data to identify the persons who will be physically or economically displaced by the project and determine who will be eligible for compensation and assistance.

2.12.3.2.  In the absence of host government procedures, the operating company shall establish compensation eligibility criteria and a cut-off date for eligibility. Information regarding the cut-off date shall be well documented, and disseminated along with eligibility information throughout the mining project area.

2.12.3.3.  In the case of physical displacement, the operating company shall develop a Resettlement Action Plan. If the project involves economic displacement only, a Livelihood Restoration Plan shall be developed. In either case, these plans shall, at a minimum: 

a. Describe how affected persons will be involved in an ongoing process of consultation throughout the resettlement/livelihood restoration planning, implementation and monitoring phases;

b. Describe the strategies to be undertaken to mitigate the negative impacts of displacement and improve or restore livelihoods and standards of living of displaced persons, paying particular attention to the needs of women, the poor and the vulnerable;

c. Describe development-related opportunities and benefits for affected persons and communities;

d. Describe the methods used for valuing land and other assets;

e. Establish the entitlements and rates of compensation for all categories of affected persons (including host communities) in a transparent, consistent, and equitable manner;

f. Include a budget and implementation schedule; and

g. Be publicly available.

2.12.4.  Mitigation Measures Related to Physical Displacement

2.12.4.1.  In all cases, when people living in the mining project area are physically displaced:

a. The operating company shall provide relocation assistance that is suited to the needs of each group of displaced persons and is sufficient for them to restore their standard of living at an alternative site;

b. New resettlement sites built for displaced persons shall offer improved living conditions; and

c. Displaced persons’ preferences with respect to relocating in pre-existing communities and groups shall be taken into consideration and existing social and cultural institutions of the displaced persons and any host communities shall be respected.

2.12.4.2.  In cases where physically displaced persons have formal legal rights to the land or assets they occupy or use, or do not have formal legal rights but have a claim to land that is recognized or recognizable under national law:

a. The operating company shall offer the choice of replacement property (land and assets) of at least equal value and characteristics, security of tenure, and advantages of location.

b. If cash compensation is appropriate and preferred by the affected persons, compensation shall be sufficient to replace lost land and other assets at full replacement cost in local markets.[8]

2.12.4.3.  In cases where physically displaced persons have no recognizable legal right or claim to the land or assets they occupy or use, the operating company shall:

a. Offer options for adequate housing with security of tenure; and

b. Compensate for the loss of assets other than land at full replacement cost, provided that the persons had been occupying the project area prior to the cut-off date for eligibility.

2.12.5.  Mitigation Measures Related to Economic Displacement

2.12.5.1.  If project-related land acquisition or restrictions on land use result in economic displacement, regardless of whether or not the affected people are physically displaced, the operating company shall apply the following measures:

a. When commercial structures are affected, the business owners shall be compensated for the cost of re-establishing commercial activities elsewhere, for lost net income during the period of transition, and for the costs of the transfer and reinstallation of the plant, machinery, or other equipment, and the employees shall be compensated for lost income;

b. When affected persons have legal rights or claims to land that are recognized or recognizable under national law, replacement property of equal or greater value shall be provided, or, where appropriate, cash compensation at full replacement cost; and

c. Economically displaced persons who are without legally recognizable claims to land shall be compensated for lost assets other than land at full replacement cost.

2.12.5.2.  Economically displaced persons whose livelihoods or income levels are adversely affected shall be provided opportunities to improve, or at least restore, their means of income-earning capacity, production levels, and standards of living as follows:

a. Transitional support shall be provided based on a reasonable estimate of the time required to restore their income-earning capacity, production levels, and standards of living;

b. For persons whose livelihoods are land-based, replacement land that has a combination of productive potential, locational advantages, and other factors at least equivalent to that being lost shall be offered as a matter of priority;

c. For persons whose livelihoods are natural resource-based and where project-related restrictions on access apply, continued access to affected resources or access to alternative resources with at least equivalent livelihood-earning potential and accessibility shall be provided; and

d. If circumstances prevent the operating company from providing land or similar resources as described above, alternative income earning opportunities shall be provided to restore livelihoods.[9]

2.12.6.  Resettlement and Livelihood Restoration Implementation

2.12.6.1.  The operating company shall make a good faith effort to negotiate agreements with all households that will be physically or economically displaced by the project, even if the company has the legal means to acquire land or restrict land use without their consent.

2.12.6.2.  Issue in brief:
The first draft of the IRMA Standard required “consent” from 80% of affected households of non-indigenous peoples. We have reworded this requirement to require signed agreements because it was unclear how consent would be demonstrated otherwise. We recognize that this approach may be viewed as unsatisfactory to some affected communities and NGOs (who pose questions such as what if the remaining 20% are the most vulnerable?) as well as some in the mining industry (who believe this requirement goes beyond current best practice).

It is widely agreed that involuntary resettlement should be avoided whenever possible because of its high potential to impact human rights and create or exacerbate impoverishment. One possible indicator of the likelihood that resettlement will have positive outcomes is if a significant portion of affected households are willing to negotiate and sign compensation and relocation agreements.  Conversely, a significant display of opposition and refusal to sign agreements may heighten the risk of forced evictions and potential for infringements of human rights.

The UN Basic Principles and Guidelines on Development-Based Evictions and Displacement states that, ”The right of affected persons, groups and communities to full and prior informed consent regarding relocation must be guaranteed.”[10]   As of yet, however, there is no international consensus for requiring consent for resettlement from non-indigenous communities. 

This draft of the IRMA standard retains the 80% “agreement from affected households” threshold. This percentage is based on the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, which India promulgated in 2013. That law required the consent of 80% of landowners affected by private projects such as mines.[11]  A year later, however, the government created an ordinance that exempted a range of projects, including mining, from the consent and other provisions of the law.[12]

IRMA is also considering a lower “threshold of agreement,” e.g., 50%, for resettlement programs that affect only a small number of households (e.g., 10 or less).

We welcome stakeholder input on these issues.

2.12.6.2.  If the resettlement affects non-indigenous peoples, the operating company shall seek to obtain agreements with all affected households, but at minimum shall obtain signed agreements with at least 80% of affected households that would be physically or economically displaced in order to proceed with the planned resettlement.

2.12.6.3.  If a project requires the displacement of indigenous peoples, the operating company shall not proceed with the planned resettlement unless it obtains the free, prior and informed consent (FPIC) of affected indigenous communities as per IRMA Chapter 2.10.

2.12.6.4.  Prior to negotiating with affected people, the operating company shall provide them with information on what to expect at various stages of the resettlement or livelihood restoration process (e.g., when an offer will be made to them, how long they will have to respond, how to access the grievance mechanism if they wish to appeal property or asset valuations, legal procedures to be followed if negotiations fail).

2.12.6.5.  The operating company shall take possession of acquired land and related assets only after compensation has been made available, and, where applicable, resettlement sites and moving allowances have been provided to the displaced persons.

2.12.6.6.  The operating company shall document all transactions to acquire land rights, as well as compensation measures and relocation activities.

2.12.6.7.  In cases where affected persons reject compensation offers that meet the requirements of this chapter and, as a result, expropriation or other legal procedures are initiated, the operating company:

a. Shall explore opportunities to collaborate with the responsible government agency, and, if permitted by the agency, play an active role in resettlement planning, implementation, and monitoring to mitigate the risk of impoverishment of those affected persons; and

b. Shall not tolerate the use of forced evictions, and shall take steps to ensure that evictions only occur in accordance with international human rights law[13]  and the requirements of this chapter.

2.12.7.  Resettlement and Livelihood Restoration Monitoring and Evaluation

2.12.7.1.  The operating company shall establish and implement procedures to monitor and evaluate the implementation of a Resettlement Action Plan (RAP) or Livelihood Restoration Plan (LRP), and take corrective action as necessary until the provisions of the RAP/LRP and the objectives of this chapter have been met.

2.12.7.2.  Periodically, the operating company shall report to affected stakeholders on progress made toward full implementation of the Resettlement Action Plan or Livelihood Restoration Plan.

2.12.7.3.  Where resettlement is deemed to pose a risk of significant adverse social impacts the operating company:

a. Shall retain competent professionals to verify the operating company’s monitoring information and provide advice on additional steps needed to achieve compliance with the requirements of this chapter; and

b. Shall commission a completion audit that:

i. Occurs after the company deems that its Resettlement Action Plan/Livelihood Restoration Plan has been fully and successfully implemented;

ii. Is carried out by external resettlement experts;

iii. Includes, at a minimum, a review of the mitigation measures implemented by the operating company, a comparison of implementation outcomes against the requirements of this chapter, and a determination as to whether the commitments made in the Resettlement Action Plan/Livelihood Plan have been delivered and the monitoring process can therefore be terminated; and

iv. Is made available to affected stakeholders and their advisors.

2.12.8.  Private Sector Responsibilities Under Government-Managed Resettlement

2.12.8.1.  Where land acquisition and resettlement are the responsibility of the government, the operating company shall collaborate with the responsible government agency, to the extent permitted by the agency, to achieve outcomes that are consistent with this chapter. In addition, where government capacity is limited, the operating company shall identify government resettlement and compensation measures.  If these measures do not meet the relevant requirements of this chapter, the operating company shall prepare a supplemental plan that, together with the documents prepared by the responsible government agency, shall address the relevant requirements of this chapter. The operating company shall include in its supplemental plan, at a minimum:

a. Identification of affected people and impacts;

b. A description of regulated activities, including the entitlements of physically and economically displaced persons provided under applicable national laws and regulations;

c. The supplemental measures to achieve the requirements of this chapter as described in criteria 2.12.4 and 2.12.5 in a manner that is permitted by the responsible agency and implementation time schedule; and

d. The financial and implementation responsibilities of the operating company in the execution of its supplemental plan.

Notes

This chapter uses, as its basis, the International Finance Corporation’s (IFC) Performance Standard 5 (PS 5) Land Acquisition and Involuntary Resettlement, which applies to physical displacement and/or economic displacement resulting when land rights or land use rights are acquired by the operating company:  through expropriation or other compulsory procedures in accordance with the legal system of the host country; or through negotiated settlements with property owners or those with legal rights to the land if failure to reach settlement would have resulted in expropriation or other compulsory procedures.

Where the IFC Performance Standard was used to inform an IRMA requirement, the specific IFC paragraph of PS 5 is cited in IRMA Guidance for this chapter.

Cross Reference to Other Chapters

 Chapter

 Issues

1.1—Legal Compliance As addressed in 2.12.8.1, in some jurisdictions governments may run resettlement projects. As per Chapter 1.1, if there are host country laws that pertain specifically to land acquisition and resettlement, a company is required to abide by those laws. If IRMA requirements are more stringent than host country law, the company is required to also meet the IRMA requirements, as long as complying with them would not require the operating company to break the host country law.
2.4—Human Rights Due Diligence and Compliance If the timing works, the resettlement risk assessment required in 2.12.2.1 may be done in coordination with or as part of the Human Rights Impact Assessment in Chapter 2.4, rather than as a stand-alone assessment. If the infringement of human rights is predicted, or actually occurs as a result of a resettlement program, a company will be expected to prevent, mitigate and remediate the impacts as per Chapter 2.4.  This includes the mitigation or remediation of human-rights-related impacts from past resettlement programs at existing mines. 
2.8—Community and Stakeholder Engagement Engagement with stakeholders (including rights holders such as indigenous peoples) regarding resettlement shall conform to the requirements in Chapter 2.8. In particular, criterion 2.8.3 is important to ensure that stakeholders have the capacity to fully understand their rights and collaborate effectively in the resettlement assessment and the development of prevention/mitigation plans and monitoring processes. Also, 2.8.4 ensures that communications and information are in culturally appropriate formats and languages that are accessible and understandable to affected stakeholders, and are provided in a timely manner.
2.10—Free, Prior and Informed Consent Resettlement of indigenous peoples shall only occur if the requirements of Chapter 2.10 Free, Prior and Informed Consent have been followed.
2.13—Grievance Mechanism and Access to Other Remedies 2.12.2.3 requires that a mechanism be available for affected persons to raise grievances related to resettlement.  If appropriate and available, grievances or concerns during resettlement may be addressed through the operational-level grievance mechanism as outlined in Chapter 2.13. If a grievance mechanism is developed for the specific purpose of resettlement, it shall conform to the requirements of Chapter 2.13. There may be impacts related to past resettlement programs that have not been remediated.  Complaints or grievances related to unremediated or unsatisfactory mitigation of impacts may be addressed through the operational-level grievance mechanism as per Chapter 2.13.

 

Endnotes

1. According to the International Finance Corporation, "This occurs in cases of (i) lawful expropriation or temporary or permanent restrictions on land use and (ii) negotiated settlements in which the buyer can resort to expropriation or impose legal restrictions on land use if negotiations with the seller fail." (IFC. 2012. IFC Performance Standards on Environmental and Social Sustainability. Performance Standard 5: Land Acquisition and Involuntary Resettlement. Para. 1)  

2. IFC Performance Standard 5. Para. 3

3. European Bank for Reconstruction and Development. 2014. Environmental and Social Policy. Performance Requirement 5. Land Acquisition, Involuntary Resettlement and Economic Displacement. p. 30.

4. See Kothari, M. 2007. Basic Principles and Guidelines on Development-based Evictions and Displacement. A/HRC/4/18.

5. These types of post-resettlement evaluations have been required for World Bank projects since 1990.  (See: World Bank Operational Manual. Operational Directive OD 4.30. June 1, 1990). 

6. This may involve providing funding to enable affected people to select and consult with experts; work with government agencies and/or non-governmental organizations to provide free legal and other services to affected people; or other means.

7. The operational-level grievance mechanism developed as per Chapter 2.13 may be used as a mechanism to receive and address resettlement related grievances, or a mechanism may be created to handle only resettlement-related concerns. If a separate mechanism is developed, it shall be done in a manner that is consistent with IRMA Chapter 2.13.

8. According to IFC Performance Standard 5, footnote 21, “Payment of cash compensation for lost assets may be appropriate where (i) livelihoods are not land-based; (ii) livelihoods are land-based but the land taken for the project is a small fraction of the affected asset and the residual land is economically viable; or (iii) active markets for land, housing, and labor exist, displaced persons use such markets, and there is sufficient supply of land and housing.”

9. E.g., Such as credit facilities, training, cash, or employment opportunities.

10. Kothari, M.(UN Special Rapporteur on Adequate Housing). 2007. UN Basic Principles and Guidelines on Development-Based Evictions and Displacement. A/HRC/4/18. p. 12. Para. 56(e).

11. 2013. Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act.  Also, click here for updates on the progress of the legislation.

12. Oxfam India. 2015. “Land Acquisition Ordinance 2014: Dismissing Democracy, Displacing Safeguards?

13. See: UN Committee on Economic, Social and Cultural Rights (CESCR). 1997. General Comment No. 7: The right to adequate housing (Art. 11.1): forced evictions. Paragraph 15.

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