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Mining Royalties
various transparency and governance initiatives. At the local level, NGOs and civil society are concerned principally with the distribution of revenues and benefit streams. The local communities in and around the mining operation complain that they bear the cost of negative environmental and social disturbances caused by the mining operations and yet receive little, or nothing, in terms of taxes and revenues. Companies generally maintain, quite correctly, that the decision about what portion, if any, of the taxes and fees to be paid or retained at the local level is not theirs to make. Nonetheless, companies often bear the brunt of the recriminations and have difficulty in explaining their true contribution to the local community. Involvement of civil society and NGOs brings a level of sophistication to the debate that requires more substance than the traditional company or government public relations information. Increasingly, civil society does not want to be spoon-fed information on the benefit and revenue streams, but it does want to participate with the company and government in the design of the methods to collect and monitor the benefits and revenue streams on a continual basis. Moreover, once the monitoring and evaluation system is designed and operational, certain members of civil society would like it to identify benchmarks against which a company’s or government’s performance can be evaluated. This can substantially raise the stakes for companies and governments because it could imply a set of targets that may or may not be within the company’s or the government’s sole competence to achieve. This watchdog function can be useful, although it is sometimes not recognized as such by companies and governments. NGOs can also help by training local communities in understanding benefit and revenue streams and the fundamentals of the industry, and these groups often have more credibility than company or government representatives.
Costs and Challenges Associated with Compliance Since the late 1980s, some governments have introduced national mineral policies and resources rent strategies that, in many cases, were fundamentally different from what those states had before. Because the policies were so significantly different from the past, it became necessary to replace old legislation with new legal frameworks for mineral development, taxation, and the collection of royalties. In addition, new stakeholders, for instance, NGOs and local communities, have become more interested in the reporting of the sector. The result of the new legislation and interest