Jeff Geipel is the Founder and Managing Director of Mining Shared Value, a non-profit initiative of Engineers Without Borders Canada.  Jeff founded the organization in 2012 and has since acted as Managing Director.  Before Mining Shared Value, Jeff was the founder and first executive director of Fair-Trade Vancouver, which became a model for municipal-based fair-trade organizations across Canada. Originally from Vancouver, Jeff holds a master’s degree in international development from the London School of Economics in the United Kingdom.  Jeff’s work and articles have been featured by the Guardian, Devex, the Globe and Mail, National Post, Next Billion, Mining Weekly and Hill Times Magazine. Jeff currently resides in London, England.

Question: We’ve heard about Engineers Without Borders, and we know your group is a spinoff.  Can you tell us how your group came about? What is the difference with Mining Shared Value?

Answer: Mining Shared Value is a program that I pitched to Engineers Without Borders Canada, and they supported and incubated the program. So now we’re kind of a spin-off project.  We’re still hosted by Engineers Without Borders Canada, in the legal sense, but we are autonomous.  Our focus is entirely on the mining sector.

Question: We hear about NGOs all the time and there appears to be no shortage of them. What is it about Mining Shared Value that gets you out of bed in the morning? 

Answer: Well, we’re succeeding a fair bit already in changing the mining sector in a more systemic way. We’re not really providing a service provision for projects on the ground near a mine site or something that may be considered temporary.  We are trying to lock-in better practices across the sector, for good, in a way in which we’re not even directly involved.  Engineers Without Borders Canada used to say, “If the change is attributed to us, we have failed”.  If the mining company thinks they’re doing it better because of Mining Shared Value, that’s not necessarily our goal.  Our goal is for the mining company to own the change themselves, and we are trying to do that for the mining sector across the board.

Question: How did the Mining Local Procurement Reporting Mechanism (LPRM) come about?

Answer: Our entire focus is to help the mining sector increase the local procurement of goods and services and that economic development benefits the host communities and host countries. We try to lock in best practices in a systemic way, around local procurement. That’s for the benefit of the governments, as well as the companies as well as each actor in the supply chain. Every actor must play a role in making local procurement work.

The LPRM is a reporting mechanism that is essentially an information-sharing framework. We’re trying to get all mine sites around the world to share the same set of information to help inform in a consistent manner.  This is to help improve management through reported data and information. We also want suppliers and host country governments informed by data on what mining companies are doing with their procurement and where they are buying.

We also want to prevent problematic practices. As an example, if we have more transparency in procurement of goods and services, we can deter child labor or reduce bribery through a better-informed process. The whole goal is if we can get more information out there on local procurement, it’s going to help better management of the issue for all stakeholders.

Question: I hadn’t really considered the aspect of improved reporting as an anti-corruption lever.

Answer: Corruption during procurement thrives when no one knows what the procurement process is. If no one knows who’s in charge of procurement, or who to contact, that is where problematic actors can step in and maybe pressure the company to buy from a family member, etc.  But if everyone in the community knows that the procurement manager’s name is this, and where to find the supplier portal, and these are the standards required… this process allows some agency for everyone to monitor anything that may not conform.

Question: As far as the strategy to get the word out about the benefits for using the Local Procurement Reporting Mechanism (LPRM), is there a plan?

Answer: We launched the LPRM in 2017 and we focused heavily at first on some of the big players that influence mining in general such as the ICMM and the International Finance Corporation as well as some of the actors that had a real influence at a systemic level. That’s gradually shifted down to focusing more on the individual companies and doing more outreach to specific companies.  We have eight mining companies who have adopted the LPRM including our first exploration company. Now we’re trying to build on that base companies to show other stakeholders the value of using the tool across the industry.

Question: It sounds like there is endorsement from the ICMM.  Is this an area the ICMM will take over or will they simply support Mining Shared Value to help you along?

Answer: We had a representative from the ICMM member on the global steering committee for the creation of the LPRM and now we have an ICMM representative on the Advisory Council for Mining Shared Value.  They are always providing input.  ICMM has been very good in helping us get the word out and present to their member companies.

Overall, groups like the ICMM are paying much more attention to local procurement as and supplier due diligence as issues.  Industry organizations like the ICMM play a big part in helping spread best practices.

Question: As far as locations for Mining Shared Value, you mentioned working with a few mining companies in developing countries.  Is there a specific geographic focus?

Answer: We are trying to change the mining sector at a systemic level and that means a lot of Standards. We typically work wherever the influence levers are.  ICMM is based in London and the Mining Association Canada is based in Ottawa.  We tend to work a lot at the systems level with the key organizations, and we do work on the ground advising companies directly or some research studies from Albania, and Mongolia to Namibia. Being a Canadian based NGO, we have also done work for Natural Resources Canada. We are working virtually anywhere mining takes place. We’re there to help.

Question: You mentioned Canada operations which makes me think of active, operating mines.  Is the LPRM applicable to active operating mines as well or are you just applying it for new projects and new markets?

Answer: Local procurement is an issue that affects everyone regardless of the phase there are in, from Exploration and Development to Production or Closure.  It’s all about creating more value for stakeholders and improving social license to operate. We are working with every kind of company along the mining life cycle who might want to use it.  Solaris Resources is the first company in the world to use the LPRM for an exploration project which we are really excited about.  Ivanhoe Mines has used the LPRM for development projects.

We are naturally seeing a lot of interest from countries where local procurement is a bigger issue politically.  We are seeing interest from Indigenous communities in Canada, wanting a better share of the benefits pie from mining, or an African country where there are local content regulations. Those are obviously the natural places where we see more desire to use a tool like this.

Question: What factors do you feel will contribute to the proliferation of the LPRM?

Answer: The Mining sector, like many industries, is being pressured to show more benefits for their activities. This justification is a “meta-factor” that is driving interest in procurement, and all companies are being pressured to show the benefits.  The LPRM provides a standard set of indicators of what is actions are being taken to create benefits on the procurement front.

The other side is this is the anti-corruption / supplier due diligence angle, and we are seeing an incredible amount of pressure on that front.  The EU is now in the process of creating both new supply chain due diligence regulations as well as an updated corporate sustainability reporting directive which will then replace the non-financial reporting directive (NFRD).  Companies are being pushed by regulations to demonstrate what they’re doing to prevent problematic supplier behavior, anti-corruption practices, all these kinds of things.  There is an economic development piece and then there’s also a due diligence.

Question: How are you going to measure the success of the LPRM? 

Answer: Our goal in the mining sector is for increasing local procurement and creating more benefits for host countries. Success is the LPRM being a big part of that.  Companies will be naturally and automatically doing a better job on local procurement because they are using the LPRM to guide their practices. The LPRM is creating information which is empowering host country stakeholders and suppliers to target the right supplying opportunities.  Our goal is a real virtuous feedback loop where we keep reinforcing better practices and local procurement becomes automatic.  That’s what success looks like for LPRM and our work in general.

Question: Do you envision that the LPRM will be simply reporting back to the local community, or will the investor community take interest as a financial ESG metric?

Answer: It is a huge part of demonstrating to the ESG rating agencies and investors that the company’s taking appropriate and responsible actions. So, if we look at the average ESG ratings agency, their questionnaires include questions such as. “What do you do to prevent problematic suppliers? What systems do you in place, such as a supplier code of conduct?” Those kinds of questions are being asked already.

One of our value propositions to the mining companies, again through this free publicly available tool, is that when they use the LPRM, the mining company will produce the better information than what is going to be requested by the ESG ratings agencies anyways. The LPRM is already at that stage.

Standards like IRMA, the Initiative for Responsible Mining Assurance, also in their guidance piece for assurance providers also has similar language to the LPRM, so we’re already at this stage that using the LPRM will satisfy information requests from investors.

Interview with John F. Gravel