Mining sector needs greater transparency and accountability
28 October 2014
Extractive industries play an increasing role in the UK economy but more must be done to improve the social and environmental performance, transparency and reputation of UK-registered mining companies, says the Business, Innovation and Skills (BIS) Select Committee in a report published today. To encourage companies to act responsibly, the Committee calls on the Government to enable investors to look into and rank mining companies according to factors such as governance ethics, community relations, and the management of climate change.
- Report: Extractive industries
- Report: Extractive industries (PDF 962 KB)
- Inquiry: Extractive industries sector
- Business, Innovation and Skills Committee
Adrian Bailey, Chair BIS, said
'Extractive companies contribute to the UK in a number of ways, through taxes, dividends, licenses and the employment of British workers. But, reports of poor practice around the world are a cause for concern and give extractive industries a bad name.
To improve the performance and accountability of mining firms, a tough Social Responsibility Index needs to be developed in the UK which features all extractive companies listing here. This could build on existing schemes such as the FTSE4GOOD or the Government could establish a new index. We saw this working, first-hand, with the SRI index at the Johannesburg Stock Exchange. While the Extractive Industries Transparency Initiative (EITI) and forthcoming EU Directives will help in this area, the Government needs to ensure the UK is as strong on Environmental and Social Governance as it is on Financial.
The UK should lead the world in corporate transparency and social responsibility. A rigorous index would help achieve this goal, assist responsible investors and provide an incentive for all extractive companies to conduct themselves in a socially and environmentally responsible way.'
The Committee expressed concern at the depletion of domestic mining skills, threatening the long-term future of the UK as a centre for extractive industries' skills. The Committee found evidence of industry skills shortages caused by the ageing profile of qualified individuals . The Committee also learned that there had been a ‘massive contraction' in the number of universities offering degree courses in mining engineering over the last 20 years – dropping “from seven down to one”. To excite the next generation of extractive workers, the Committee urges Government to work with industry and educational institutions to encourage more students to study STEM-related subjects at university and promote mining as a rewarding and exciting career.
Developments and investment in the extractive sector, and the positive work of UKTI in promoting the UK as a base for extractive companies, give grounds for optimism about the industry's future. However, to assist the enlargement of the UK mining sector, the Committee recommends the Government set out the details of its support in a domestic extractives plan. To improve accountability and provide improved leadership for the mining industry, the Committee also recommends a BIS Minister is given clear responsibility for overarching domestic extractive policies.
Adrian Bailey MP, Chair
'There is currently a lack of clear Government leadership for the extractives sector, with the industry cutting across a host of departments including DCLG, DEFRA, DECC and BIS. During our inquiry it became clear to us that this is not to the benefit of mining companies. The Government needs to get its act together to provide coherent support for the extractives sector and ensure a single BIS Minister has clear responsibility for domestic extractive policies'.