4. Towards a Mining Strategy of Well-being for the Region of Antofagasta
This chapter presents the rationale and building blocks for the Mining Strategy of Well-being for the Region of Antofagasta 2023-2050, which aims to address mining-specific challenges and opportunities in the region and support higher well-being standards for all people living in the Antofagasta region. The chapter first outlines the relevance of developing a regional mining strategy, especially with the ongoing decentralisation process in Chile. Second, it summarises the process of developing this strategy, its objectives and the timeframe of strategic projects. Finally, it provides guidance on a governance mechanism for the long-term continuity and monitoring of the strategy and describes the allocation of roles for regional stakeholders and funding sources.
Assessment
Mining development has generated important wealth for Antofagasta and the country but these benefits have not been equally distributed across the region, leaving many communities behind across a wide range of well-being indicators (see Chapters 2 and 3). Despite public and private initiatives to better translate mining wealth into benefits for the communities, the region has lacked an integrated co-ordination mechanism to align efforts and policies among levels of governments and companies and produce long-lasting changes in well-being standards. This has negatively impacted the region’s attractiveness for businesses and people raising families.
The ongoing decentralisation process in Chile provides a new opportunity for the region to attain a more sustainable and inclusive future. For the first time, the region benefits from a newly elected regional governor with new administrative and planning tools, whose responsibilities and mandate are to support the interests and aspirations of citizens from the region. In parallel, Indigenous and non-Indigenous communities in the region have strengthened their voices and governance for more decision-making power and accountability. Against this backdrop, the mining sector is increasingly under international and local pressure to adapt to societal demands and global climate agreements to reduce its impact on the environment and improve local outcomes.
A long-term plan with formal co-ordination and monitoring is needed to ensure that the region can materialise future investments in minerals and energy in a sustainable manner while ensuring greater well-being standards along social and environmental dimensions. The Mining Strategy of Well-being for the Region of Antofagasta 2023-2050 (hereafter the Mining Strategy) embodies this coherent long-term plan. For its elaboration, different parts of society were involved to reach common agreements and identify strategic objectives and projects. A multi-stakeholder governance mechanism is warranted to help monitor the implementation of this strategy and ensure its continuity beyond political cycles. Likewise, the national government and its national agencies in the region need to support the institutional capacity to implement this strategy successfully, in alignment with the national mining strategy and the sustainable development of Chile.
Takeaways
The recommendations below provide the building blocks of the Mining Strategy, with suggested long-term objectives and governance mechanisms. The construction of the strategy benefitted from more than 80 meetings with stakeholders in the region, including representatives from the private and public sectors, civil society and Indigenous communities, academia and local businesses, who provided their development priorities and feedback on the objectives, structure and governance of the Mining Strategy for the region of Antofagasta.
To improve the economic, social and environmental well-being standards in Antofagasta while promoting a more competitive and environmentally responsible mining sector, the regional government of Antofagasta needs to:
Formalise and implement the Mining Strategy with concrete objectives and a timeframe of strategic projects that involve and consider the needs of different regional stakeholders. To this end, the regional government should:
Recognise in the Mining Strategy the need for a new pact among communities and the private sector in the region of Antofagasta, to rebuild trust within the region and reach common agreements for improved development. This new pact would benefit from the recognition that more needs to be done to improve well-being standards in the communities where mining takes place but also that the mining sector plays a strategic role in the development of the region of Antofagasta.
Ensure the Mining Strategy is a regional government strategy with a long-term vision, common objectives and a clear timeframe for strategic projects. All of these elements should be based on the priorities provided by regional stakeholders. This involves:
Adopting a vision that sets the long-term and aspirational goal for the region with the aim of increasing well-being standards in economic, social and environmental dimensions. The vision can be accompanied by common agreements to reach compromises and align regional efforts.
Setting strategic objectives to address the main priorities identified across the region and reach the vision for the region in 2050. These objectives could be set across the five following areas:
Implement short- and medium/long-term strategic projects to attain each of the objectives of the strategy. Several strategic projects have been identified throughout different multi-stakeholder meetings in the region.
Establish a governance mechanism to monitor progress and ensure the sustainability of the Mining Strategy over the long run and beyond government cycles. This mechanism could benefit from the following elements:
A formal public official in the government co-ordinating the strategy and ensuring its implementation and continuity, with a defined budget and a team for operation and co-ordination.
A steering committee in charge of prioritising projects, rendering accounts of monitoring and evaluation, and proposing new orientations to the strategy. It should be composed of representatives of relevant actors in the region (private and public sector, civil society and Indigenous communities), with periodic rotation to expand possibilities of participation and representation (e.g. two years) and a consensus-based decision process.
A technical committee in charge of overseeing the projects, providing updates on the progress of the project and budget, and responding to other requests from the steering committee. This technical committee is made up of an executive secretary and a team of professionals in collaboration with personnel from academia and the private sector.
Ensure the Mining Strategy upholds Indigenous peoples’ rights and promotes meaningful participation in decision making and prior and informed consent in designing and implementing relevant strategic projects for these communities.
Define a monitoring framework with impact indicators to monitor the long-term policy impact of the Mining Strategy as well as outcome indicators to measure the attainment of objectives and output indicators to measure the implementation. This monitoring framework could also include horizontal performance indicators that can account for complementarity effects to co-ordinate actions across different parts of the regional government and national agencies in the region.
Ensure a formal channel of communication and involvement of regional stakeholders on the construction, progress and changes of the Mining Strategy. This involves:
Including on the Mining Strategy webpage a summary of the process with different parts of society, agreed-upon objectives and strategic projects, with clear visualisation tools to show the progress of these projects.
Mapping and publicly reporting concrete information on the different environmental, social and corporate governance (ESG) initiatives of mining companies in the region to improve transparency and co-ordination.
Establishing annual public reports on the progress of the strategy via social media or public gatherings to reach the entire population.
Support the institutional modernisation and capacity of the national agencies operating at the regional level. The national government is crucial to help ensure the successful implementation of the regional Mining Strategy and maintain a competitive and sustainable mining sector that keeps contributing to national fiscal income and growth and helps attain national climate goals. To this end, the national government should:
Co-ordinate with the regional government of Antofagasta to identify institutional needs in the region and define methods to increase the capacity and upgrade the Regional Ministerial Secretaries (SEREMIs) – especially the SEREMI of the Environment and the SEREMI of National Goods – and the Superintendence of the Environment.
As depicted in the previous chapters, Antofagasta is a global player in the mining industry, especially in copper and lithium. Its traditional know-how in mining operations, presence of rich geological resources, a mature mining ecosystem composed of leading mining companies, suppliers, universities with mining expertise, organised civil society actors and a recently strengthened regulatory framework with greater regional decentralisation make Antofagasta highly attractive for ongoing and future mining activities.
The mining sector contributes to the bulk of Antofagasta’s gross domestic product (GDP, 72% in 2022), representing 90% of its exports. This sector has contributed to placing Antofagasta as the second Chilean region with the highest income per capita and highest foreign direct investment. The region is also a significant contributor to the national economy, accounting for 39.4% of Chile’s total exports and contributing to 8.8% of the national GDP despite its population representing only 2.2%.
This prosperity, however, has not reached everybody in the region and has not fully translated into greater quality of life for its inhabitants. There are a number of challenges that remain across various dimensions of well-being (Table 4.1).
The region of Antofagasta is currently undergoing a number of transitions that can reshape the effect of mining on regional development. First, the region is on the verge of a significant flow and interest of investment to modernise and expand existing mining operations, mainly copper, and to increase exploration and production of non-traditional minerals, such as lithium. Second, mining companies are increasingly adapting to the green and digital transitions, with projects to increase the use of renewable energy sources (solar and wind), desalinated water and automation for mining operations. Finally, the ongoing decentralisation process in Chile has allowed, for the first time in history, the democratic election of a regional governor with new administrative and strategic capabilities.
These transitions can bring new opportunities for local businesses and workers to participate and benefit from a more sustainable value chain. Nevertheless, without proactive planning, new developments and green mining initiatives can lead to few benefits locally, creating additional challenges, for example, in the co-ordination of water desalination plans and land use for solar and wind energy projects.
A long-term plan with formal co-ordination and monitoring is needed to ensure that the investments in the minerals and energy mining sector can materialise in a sustainable manner while ensuring greater well-being standards along social and environmental dimensions. This chapter presents the rationale and the building blocks for the development of that long-term plan set up by the regional government, namely the Mining Strategy of Well-being for the Region of Antofagasta 2023-2050 (hereafter the Mining Strategy).
Across other OECD mining regions, mining strategies are developed to meet multiple objectives, which go beyond improving the competitiveness of the mining sector itself and also look at improving the liveability of people in the region.
The region of Antofagasta has a particular opportunity to mobilise its mineral wealth and industrial base to benefit from the increasing global demand for minerals and support the development of renewable energy technologies in the next decades.
However, the expected development of the mining sector driven by the global demand for minerals in the coming years must ensure more sustained benefits to the people and economy in the region. This requires a different way of governing mining, with a guiding framework that supports the competitiveness of the regional mining sector but also ensures that the wealth of this industry generates jobs and new local businesses and – above all – improves the attractiveness of living in the communities of Antofagasta.
The Mining Strategy can be the roadmap to mobilise the regional assets and improve the competitiveness of the mining sector to make the most of the digital and green trasitions with the aim to deliver greater well-being standards to its inhabitants. With this in mind, the following are the main reasons for developing a mining strategy for the region of Antofagasta.
Making the most of global megatrends and transformations affecting the mining sector
Global megatrends, including demographic change, climate change and the transition to a low-carbon economy, as well as digitalisation and automation, are bringing new challenges and opportunities to the development of mining regions (Table 4.2). For example, technological change and digitalisation can increase productivity and sustainability in mining activities but might also affect demand for local workforce.
In this context, the mining sector itself is also undergoing transformations. On the one hand, the industry is under increased pressure to reduce its impact on the environment and GHG emissions to meet global climate agreements. On the other, mining companies face a context of increasing competition with decreasing qualities of ore that are more difficult to access. Facing both transitions requires mining companies to invest in new technologies and processes and collaborate with governments to agree on environmental plans.
Automation is advancing significantly in the region. For example, Antofagasta Minerals operates a mining pit at the Centinela mine with almost an entire fleet of autonomous trucks (11), for which it trained about 100 workers (e.g. former drivers) in tasks needed for the autonomous operation, including monitoring and maintenance of the trucks or Global Positioning System (GPS) site mapping. Likewise, BHP currently has 6 drilling rigs and 4 autonomous trucks in operation and expects to gradually incorporate 52 trucks with autonomous technology by 2025.
Antofagasta is uniquely positioned to emerge as a global leader in responsibly sourced minerals, crucial for a low-carbon future. The region benefits from abundant geological resources, with some of the critical minerals for the green transition such as copper and lithium, and a well-established mining ecosystem comprising top mining companies, knowledgeable suppliers, mining-focused universities and a young workforce.
While the demand for minerals like copper and lithium is set to skyrocket, consumers, civil society, governments and international organisations are increasingly asking for mineral production that is carried out in a more climate-responsible manner. Antofagasta can leverage its renewable energy potential and advance the infrastructure of water desalination to play a pivotal role in showing a more sustainable way to mine. This future, in turn, will contribute to Antofagasta’s continued development by creating long-term demand for its mining products, technology and services.
However, the mining sector is facing increasing challenges in maintaining competitiveness and ensuring smooth operations. These challenges include:
Productivity and diminishing ore grades: Mining productivity in Chile and Antofagasta has been in decline, with mining becoming the largest drag on productivity at the national level for the past 20 years (Chapter 3).
Availability of skills: In mining-specific skills, there is a significant deficit both in terms of employees and competencies needed. For the period 2021-30, a 25 000-employee gap is foreseen due to the compound effects of the retirement of current workers and the expected creation of new jobs resulting from the increased sophistication of mining operations and processes (Chapter 3).
Complex and centralised land management system: An excessively centralised public land administration and management system and widespread mining property speculation make land scarce and difficult to obtain, for example to put to useful purposes downstream activities in mining processes.
Environmental matters: Concerns and doubt about the long-term effect of mining on the local environment are persistent and few coherent and systematic strategies have been put in place to clarify such concerns. These concerns include doubts about the long-term effects of marine water capture and desalinisation, the region’s significant carbon footprint derived from a combination of intensive use of energy and reliance on fossil fuels for energy generation.
Social concerns: The equitable allocation of benefits from the industry (both regionally and at the local community level) is also likely to prove challenging going forward, especially in the face of aforementioned changes that digitalisation is already causing in mining’s traditional shared-value proposition.
A well-set strategy has the potential to prepare the region to make the most of these megatrends and mitigate negative impacts locally. The impact of these megatrends on mining municipalities in the Antofagasta will depend on the long-term policy strategy to address changes and prepare firms and communities for the future.
Ensuring a sustained improvement of people’s well-being
As mentioned in the previous chapter, Antofagasta is the largest copper producer and among the top lithium producers in the world. The sector has historically represented most of Antofagasta’s GDP (53% in 2018) and exports (90%). The region stands out as the country’s second-largest recipient of foreign direct investment, only surpassed by Santiago Metropolitan Region (Atienza et al., 2015[1]).
This sector has also pivoted the Chilean economy in the last decade. During 2010-20, the sector represented almost 10% of the country’s GDP, contributed up to 56% of the national exports and generated 9.3% of tax revenue (Ministerio de Minería, 2020[2]). The participation of mining in the national GDP has grown from 8.1% in 2016 to 14.6% in 2021, and the contribution in tax revenue has gone from 2% to 13% in this same period.
However, while this natural wealth has fuelled Chile’s development and positioned it as one of the most developed countries in Latin American, it has not fully translated into a relatively greater quality of life for Antofagasta. This region faces important development bottlenecks across different dimensions of well-being, with greater stagnation in some areas relative to other Chilean regions that did not benefit from such historic wealth.
Economically, the region exhibits a relatively high unemployment rate (9.6% in 2022) compared to the OECD benchmark of mining regions (7%) and relatively high economic volatility (Chapter 2). Furthermore, there is low participation of local companies in the mining value chain (15% of companies in the region in the World Class Supplier Program), with few forward linkages of the mining process (e.g. most copper is exported without a refining process) (Chapter 3).
In the social dimension, mining communities lack accessibility to quality education, childcare and specialised health. Children’s and public green parks are an existing concern in the communities.
In the environmental dimension, the region is one of the most arid in the world, the mining sector has increased the demand for continental water and some extraction process also augment the risk of pollution of water reservoirs. There is also a lack of assessment of the biodiversity of the region (e.g. fauna and flora), coupled with visual pollution and relatively high levels of air pollution (Chapter 2).
Materialising previous and current initiatives that aimed to translate mining wealth into greater well-being
Different polices and initiatives in Chile and Antofagasta have tried to better translate mining wealth into greater well-being locally. At the national level, mainly, the Ministry of Mines and the Production Development Corporation (CORFO) have encouraged policies and strategies to promote development in Antofagasta, mainly targeting the economic dimension in the region.
At the regional level, the Mining Cluster of Antofagasta was likely the first clear, coherent plan to sustainably improve the role and interaction of the local economy with the mining process. Private companies and state-owned copper mining company Codelco have also undertaken initiatives to improve the effect of mining in the local communities. Table 4.3 summarises a number of main initiatives that have aimed at improving the mining impact in Antofagasta’s development.
At the regional level, the idea of a mining cluster was likely the first clear, coherent plan to sustainably improve the role and interaction of the local economy with the mining process. In 2000-06, the regional government put in place its mining cluster strategy, acknowledging that the regional businesses showed marginal participation in mining companies' secondary activities and there was low interaction between large and medium/small mining companies. This strategy was initially created in the 1990s due to the impact of the large investments that began during that decade. In the 2000s, it was recognised as one of the axes of the regional strategy of development for 2000-06, reflecting the need to consolidate a “mining, industrial and services productive complex” to take advantage of all of the potential and synergy associated with mining, and to support the growth and development of all other sectors of the regional economy. This policy goal has helped strengthen the linkages of regional businesses as providers of mining companies.
Yet, the mining cluster initiative in its different forms has not fulfilled the expectations, as few local businesses or the mining equipment, technology and services have grown internationally with a local market that is still fragmented and limited vertical knowledge transfer (Devenin, 2021[4]; Atienza et al., 2015[1]). This policy alone is not enough to address the increasing outsourcing trend of mining activity, which, together with changes in information and transportation technologies, has given rise to a process of relocation of production chains outside the regions of origin of the activity, both nationally and internationally (Atienza et al., 2015[1]).
Social and environmental aspects have been overseen in the different polices aiming at translating the mining wealth into the community. In particular, a reduced of attention to the social needs of mining communities (green areas, children’s parks, education linked to industrial needs or quality healthcare) has led to a enabling environment that struggles to retain and attract skilled workers and companies.
While different private companies and Codelco have individually issued programmes to improve liveability in local communities, those actions are dispersed, lacking co-ordination among each other and scalability to create long-term solutions for the region. For example, the World Class Supplier Program successfully achieved its goals of creating technological solutions for large firms and developing supplier capacities. However, the scaling-up and internationalisation effects of the programme seemed small, given the low incentive from mining companies to collaborate in the scaling-up and internationalisation of providers (Navarro, 2018[3]).
An initiative worth mentioning and from which lessons can be learnt is Calama Plus. The Calama Plus Consortium resulted from a joint effort between Calama’s public and private sectors, with the aim of building a comprehensive vision to improve quality of life in the city (Box 4.1). Despite the thoughtful structure and process, the initiative did not manage to meet expectations and fell short in implementing most of the projects. This led Codelco and many other companies to withdraw as project funders. Part of the difficulty was to maintain trust throughout the project’s structuring and implementation as well as balancing project prioritisation and problem solving. Also, the lack of capacity of the municipal government to structure and implement projects undermined trust in the outcomes of the initiative. In Chile, many projects require approval from national agencies – e.g. acquiring land needs the approval of the Ministry of National Goods – and the municipal government struggled to meet the requirements of the project proposal or present a proposal on time.
In 2012, Codelco, together with the local government, established the Calama Plus Consortium to set up a sustainable urban development plan to improve the city’s attractiveness and raise the standard of quality of life for its inhabitants. Codelco was the initial financer of the initiative, which gathered a total of ten private companies operating around the town, including the largest mining companies in Calama (e.g. Antofagasta Minerals, Freeport MacMoran, Glencore), mining suppliers (e.g. Komatsu) and retail companies (e.g. Sodimac Calama).
The initiative included a governance body made up of different local actors (mining companies, regional governments and municipalities) compiling a list of local priorities in various workshops and meetings with the participation of about 24 000 inhabitants. These meetings helped to identify main priorities and agree on a number of projects capable of improving the urban development of the city and, thus, quality of life.
However, from 2012 to 2019, few of the priority projects were implemented, which led to the community’s discontent and some companies’ decision to withdraw. By 2019, main funder Codelco also decided to leave the initiative and reallocate resources to other initiatives (e.g. mining cluster). Many factors were behind the difficulty in meeting expectations and outputs, including:
A governance body which lacked the capacity to reach a consensus and change the course of action and an unequal representation of members where the funding provider had greater decision-making weight.
Lack of capacity to come up with agreements and compromises across different levels of government (national and municipal) to speed up implementation of key projects.
Lack of capacity (human and technical) in the municipal government to structure, present and implement projects.
Source: Devenin, V. (2021[4]), “Collaborative community development in mining regions: The Calama Plus and Creo Antofagasta programs in Chile”, https://doi.org/10.1016/j.resourpol.2018.10.009; CALAMATV (2020[5]), Pasado y futuro de Calama Plus, https://www.youtube.com/watch?v=t4VycLVIvOI.
Different aspects might explain the challenges in producing structural well-being improvements in Antofagasta. They include a lack of long-term planning to support diversified economic activities, a historical market-oriented economic policy framework and a lack of co-ordination between local and national governments to prioritise relevant projects for the social and environmental well-being of local communities.
Links with Chile’s National Mining Policy 2050
Most recently, in 2022, the Chilean Ministry of Mines, on behalf of the national government, issued the National Mining Policy 2050 (Ministerio de Minería, 2020[2]). This policy acknowledges that “the absence of a long-term national mining policy, with answers to the growing and complex transformations on a national and global scale, undermines the possibilities of sustainable development of the mining sector and of the country as a whole”. This policy has national objectives at the economic, social, environmental and institutional levels with a main national vision of the effect. It serves as a navigation chart for industry and the state, which was elaborated with a wider participation of citizens across the different regions of Chile (Box 4.2).
The Ministry of Mining decided to develop a National Mining Policy 2050 in order to have effective governance, strengthen institutions, open opportunities for dialogue and collaboration, encourage competitiveness and promote innovation, safe and inclusive development and a state-of-the-art environmental management system.
The process of the policy involved the participation of more than 3 500 stakeholders in all elaboration phases, with 128 open roundtables that set up 128 initiatives throughout the country covering the challenges posed in the 9 transversal axes of the policy. This elaboration process included a territorial focus with 1 500 participants and 18 regional workshops.
The vision of this policy is to: “Maintain and strengthen our leadership by supplying the minerals the world needs by 2050 in the fight against global warming, addressing the consequences of climate change and generating value for the country” (Ministerio de Minería, 2020[2]).
The policy recognises different challenges related to the economic, social and environmental spheres, which are the basis for the main objectives.
While this national policy set a good basis for the integration of mining and regional development, it fell short in adopting a place-based approach and conveying roles for regional and local governments in co-ordinating and implementing projects of strategic interest for mining communities. The national mining strategy did promote main regional priorities across the country but did not establish action lines or objectives per region despite regions having different assets and challenges. Furthermore, while the National Mining Policy 2050 sets a good roadmap to improve the mining sector as a whole and its impact on Chilean society, it does not set clear strategies to unlock specific regional assets or address particular challenges in the different regions.
Supporting upcoming investments in the mining and energy sector and ensuring their linkages with the local economy
As of January 2023, Antofagasta is the second region in Chile with the highest investment projection for the next 5 years (24% of the total national investment in projects) (Oficina de Grandes Proyectos, 2023[7]). These investments are mainly driven by the mining sector (51% of the total), followed closely by those in the energy sector (44%). In total, the investments are estimated to create about 29 563 jobs during the construction process (7% of the employed population) and 15 000 during the operation process. The nature of the investment from mining is mostly brownfield (replacement or expansion of current operations or change of the production process) (Comision Chilena de Cobre, 2022[8]), while renewable energy investments tend to be linked to new operations. According to the Chilean Copper Commission (Comision Chilena de Cobre, 2022[8]), most mining-related investments in Antofagasta (until 2031) are related to copper mining (93%).
These productive investments add up to corporate social responsibility (CSP) projects in Antofagasta. They include drinking water and sewerage programmes (Antofagasta Minerals and Codelco), programmes to improve urban and recreational infrastructure (Antofagasta Minerals, BHP and Codelco), to improve digital skills of students and the working force and provide tertiary education opportunities (Antofagasta Minerals, BHP, Codelco, Glencore Sierra Gorda) or initiatives to support economic diversification (Albemarle and SQM).
All of these initiatives and investments would benefit from greater co-ordination with each other and with public investments as well as visibility in the community. A government mining strategy should also help to maintain and scale up CSP projects, which are usually focused only on the communities surrounding the mines and prioritise initial investment rather than ongoing operations.
Capitalising on the ongoing decentralisation process in Chile
As well as the need for a coherent long-term vision for Antofagasta, a long-term strategy created at the regional level can benefit from the ongoing decentralisation process in Chile by relying on the new elected figure of regional governor, alongside regional government’s greater strategy implementation tools and accountability.
Chile has undertaken decentralisation efforts that provide regional government with greater responsability. Since 2021, regional governors in Chile can be elected by popular vote, based on Laws No. 20.990/2017 and No. 21.073/2018 that transformed the “mixed” regional system (both deconcentrated and decentralised) – in place since 1992 – into a full self-government system, with direct election of the regional executive (governors) by popular vote every four years (Biblioteca del Congreso Nacional de Chile, 2021[9]). The regional government is constituted by a governor (the executive body of the region) and a regional council (the legislative body) that has the deliberative power. The members of the council have been directly elected every four years since 2014 (OECD/UCLG, 2022[10]).
Under this evolving framework, the governor has acquired new responsibilities, including developing investment strategies and land use planning (Box 4.3). This represents an important shift from the previous multilevel governance structure, where each region was governed by an intendent, a delegate appointed by the President of the Republic to administrate the resources and design the policies for the region.
These changes open up new opportunities for regional governors to design and define their regions’ development strategies and target strategic investment programmes. Furthermore, it creates a figure elected by public vote accountable for addressing the regional priorities of the population and implementing the strategic plans for development.
Since the late 2000s, the Chilean government has pursued important decentralisation and regionalisation reforms. Laws No. 20.990/2017 and No. 21.073/2018 allow governors to be elected by popular vote. The first 16 elected regional governors took office in July 2021 for a period of 4 years and with the possibility of re-election. In parallel, Law No. 21.074/2018 transferred from the national government to the new self-governing regions responsibilities on land use planning, economic and social development and culture.
The Inter-ministerial Committee of Decentralisation supports and advises the President of the Republic on the competencies to be transferred, which can result from presidential initiative or upon request from the regional government. The newly elected governor is accompanied by a presidential delegate who is appointed by the President of the Republic for each region and is in charge of the exercise of matters concerning internal government, public security, emergencies and co-ordination, supervision and control of public services operating in each region.
The regional governor has, among others, the following duties:
Formulates development policies for the region, considering the respective community policies and plans.
Submits to the regional council the policies, strategies and projects of regional development plans and their modifications.
Submits to the regional council the proposed budget of the respective regional government.
Represents the regional government judicially and extrajudicially,
Appoints and removes the public officials in the regional government that the law determines.
Ensures compliance with the rules on administrative probity.
Promulgates, with the prior agreement of the regional council, the regional land use plan, the metropolitan, intercommunal, communal and sectional regulatory plans and the detailed plans of intercommunal regulatory plans.
Law No. 21.074/2018 also created a mechanism through which regions can ask for further competencies to be transferred to them, which is under discussion.
Source: OECD/UCLG (2022[10]), 2022 Country Profiles of the World Observatory on Subnational Government Finance and Investment, https://www.sng-wofi.org/country-profiles/; Biblioteca del Congreso Nacional de Chile (2021[9]), Elección democrática de gobernadores regionals, https://www.bcn.cl/portal/leyfacil/recurso/eleccion-democratica-de-gobernadores-regionales.
However, the match of responsibilities and resources for regional governments is still unclear. By 2020, grants and subsidies represented a significant (56.1%) and growing share of subnational revenues, slightly above the OECD average when only considering local governments (53.3%), reflecting the high level of dependency of municipalities with regard to the central government (OECD/UCLG, 2022[10]). The national government has a strategic role in implementing regional development plans.
The Ministerial Regional Secretaries (SEREMIs) – deconcentrated entities representing each ministry at the regional level – have responsibilities in environmental, land use or education policies, among others. Furthermore, auditing bodies like the Superintendence of the Environment are of particular importance to ensure mining activities do not affect the environment. In fact, meetings with regional stakeholders often referred to the low capacity of the Superintendence of the Environment (SMA) as one of the main bottlenecks to ensuring efficient environmental protection from mining and other activities in the region. For example, the SMA’s staff is relatively small compared to the number of mining operations and companies to monitor.
Furthermore, there is an imperative to streamline the approval process for local public projects by the SEREMIs in order to expedite actions that address the needs of local communities. For instance, the execution of local projects related to community or economic infrastructure in mining municipalities of Antofagasta, such as expanding health centres or creating parks, green spaces or industrial areas, need approval from the SEREMI of National Goods to access public land. This process is often characterised by bureaucracy and lacks flexibility, further complicating matters for local governments with limited institutional capacity and constrained by the four-year political cycle.
Likewise, local governments also find it difficult to propose projects that need to be accepted by the SEREMI of National Goods, e.g. developing or expanding health centres, a park, a green or an industrial area. This process is often characterised by bureaucracy and lacks flexibility, further complicating matters for local governments with limited institutional capacity and constrained by the four-year political cycle. Therefore, the national government should strengthen the SEREMI of National Goods to allow it to prioritise strategic projects for the well-being of mining communities in Antofagasta that have to deal with a high proportion of public lands and the large number of mining properties owned in the region. This could include improving the technical and human capacity of national institutions, with a particular focus on easing the public land administration and management system.
The definition of responsibilities and financial autonomy for regions is still under discussion in Chile and discussions on a mechanism through which regions can ask for further competencies and resources to be transferred to them are still ongoing. In fact, during the development of this study, the national government announced the entry of a draft law, known as Stronger Regions, for approval by congress, a bill whose objective is to provide greater regional autonomy and financial flexibility and establish better inter-territorial compensation mechanisms and safeguard sustainability and fiscal responsibility. This draft law goes in the right direction as it aims to guarantee better correspondence between the responsibilities and attributions that the law gives to the regional governments and the resources they have for their exercise.
It is worth noting that these discussions of devolving regional powers have occurred in the midst of political unrest that led in 2020 to a plebiscite in which Chileans voted in favour of a new constitution. While the final drafting proposal for the new constitution, presented on 5 July 2022, was rejected, discussions are ongoing to reach agreement on a new constitution.
Therefore, a regional mining strategy for Antofagasta can be that roadmap to strengthen Antofagasta’s mining sector and ensure that the mineral wealth provides a long-lasting increase in regional well-being. It will leverage a number of opportunities:
Improving well-being of communities and Indigenous peoples in the region of Antofagasta by helping address the main development priorities for the region.
Ensuring mining sector competitiveness and co-ordinating its investments to ensure its role as an economic engine for the region/
Unifying regional actors around a single vision of the role of mining in regional development.
Making the most of the ongoing decentralisation process in Chile to improve the regional government capacity and raise the strategic capacity of SEREMIs for the region.
Improving co-ordination with Chile’s national mining strategy to attain efficiencies in investment and programmes, and with other regional development policies, to unlock cross-sectoral synergies in the economy.
Based on the potential benefits of an Antofagasta regional mining strategy, the next sub-sections describe the main components of this regional strategy, drawing from some best practice examples of national and regional mining strategies across the OECD.
Building the mining strategy for the well-being of Antofagasta
The experience across several OECD countries and regions has shown that strategic planning for extractive sectors is an important tool for economic growth, environmental protection and regional social improvements (reducing inequality and access to opportunities). A mining strategy connects the different actors across the mining value chain and promotes external networks by clarifying the role of mining for regional and national development. In a context where mining faces concerns from some parts of society, a well-designed strategy can help raise awareness among local communities of the opportunities and challenges involved in mining development and outline ways to better share the mining benefits.
A participatory process to legitimise and ensure alignment with local needs
Since October 2022, conducted as part of this study, the construction process of this regional strategy has involved more than 80 in-person meetings and focus groups, either with OECD representatives and peer reviewers of other member countries or organised directly by the regional government and the Catholic University of the North. Some of these meetings combined private and public sector representatives along with academia and civil society in an open discussion about the future of the region and the role of mining. Other meetings gathered specific groups of society to dive deeper into the main priorities and challenges for development. The regional government hast complemented these meetings by identifying ESG initiatives implemented by the different mining companies across the region and priorities informed by the different communities. This process is in line with other mining strategy construction processes in OECD countries (Box 4.4)
The Canadian Minerals and Metals Plan includes a vision, principles and strategic directions that governments, industry and stakeholders can pursue to drive industry competitiveness and long-term success. This generational initiative aims to raise Canadians’ awareness of the importance of the minerals and metals sector, respond to ongoing and emerging challenges and help position Canada for opportunities offered by an evolving economy.
This plan was informed by engaging with Indigenous peoples, innovation experts, private companies, industry associations, non-governmental organisations, young people, other stakeholders and partners, as well as Canadians from across the country.
The government consulted with civil society to gather main concerns, ideas and suggestions to inform the plan. This engagement process included in-person activities with workshops, bilateral meetings and expert report submissions. It also adopted online activities through quizzes, surveys and ideas submitted through social media (Figure 4.1).
Source: Government of Canada (2019[11]), The Canadian Minerals and Metals Plan, https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/CMMP/CMMP_The_Plan-EN.pdf.
This strategy, its objectives and its implementation respect the the Indigenous and Tribal Peoples Convention No. 169 adopted by the International Labour Organization (ILO) (ILO, 1989[12]) and approved by the Chilean congress on 15 September 2009 as part of Chilean legislation. In virtue of this agreement, the implementation of the actions emerging from this strategy needs to consider the active participation of Indigenous peoples by guaranteeing respect for its integrity.
This process can be continued, especially during the phases of monitoring and rebalancing of priorities. Priorities today may not be the same as those in the future and a continuous participation channel to identify priorities is needed to account for changes in local conditions. Building on the efforts already made, the continuous engagement process can go further and involve expert reports in thematic areas and differentiated strategies to reach various types of populations, like social media for youth or radio and mail surveys for the older population.
A long-term vision that moves from past and current concerns towards a path for the future
Setting a clear and ambitious goal in the strategy is useful to align efforts across different levels of government and other regional stakeholders to meet common goals, attract skilled workers and new investors and create partnerships with international actors that support the long-term plan of the region (OECD, 2020[13]). A region with clarity in its long-term goals and certainty in the actions needed to get there becomes attractive for investment and public support.
In Antofagasta, as in other mining regions, discussing the effects of mining on local well-being often times leads to extreme positions across the regional stakeholders. The mining sector benefits and uses the territory’s endemic natural resources, which disturb natural ecosystems, require natural resources like water and land and create visual, noise and air pollution. In Antofagasta, many mining operations occur in lands of Indigenous populations whose beliefs and ways of life can be disturbed by the mining activity. Moreover, in Antofagasta, there is a lack of information on the past and current impacts of mining on the environment and human health.
The strategy’s preparation and final output have been a catalyst to contrast the different views of development in the region, conveying main concerns from different parts of the population and reaching common priorities for future development. On the one hand, interviews with regional stakeholders underlined the need to recognise that mining governance in Antofagasta has not addressed the welfare needs of the communities where mining occurs. On the other, mining companies and businesses linked to them require institutional certainty for long-term investments in a sector that is increasingly competitive worldwide.
Despite these apparently different needs, meetings and survey responses from different regional stakeholders indicated that mining is perceived to be one of the engines of the region’s future development (Box 4.5). This common understating provides a good basis to build from, as in mining regions – where one single sector represents most of the economic growth – development strategies that are designed at the margin of this sector risk missing the core actors and dynamics for regional development. Therefore, the strategy’s vision needs to leverage regional mining assets, to attain greater objectives, such an improved well-being, that meet the expectations of other stakeholders and sectors in the region.
According to a survey of 700 inhabitants of Antofagasta conducted by the Catholic University of the North in April 2023, most people agreed with the development of the mining sector in the region (56%), while a lower share (13%) disagreed totally or partially with the activity. Disagreement against the sector has also decreased (19%) since 2021, with the undecided share increasing since then (from 15% to 30%).
However, the share of people agreeing with the mining activity in the region has decreased since 2021 (from 65% to 56%). Furthermore, when survey participants are asked to reply about how much mining contributes to the development of the region, the share of individuals considering that the sector contributes little or nothing has increased from 31% in 2021 to 46% in 2023.
When the survey asked interviewees which of the axes proposed by the regional government in the Mining Strategy they consider most important, most people ranked well-being and quality of life (36%) as the highest, followed by development in harmony with the environment.
Source: Catholic University of the North (2023[14]), Results Report Regional Barometer Survey of Antofagasta 2023, Institute of Public Policy, Catholic University of the North, Antofagasta.
This strategy needs to fulfil the expectations of the different parts of society to regain trust and establish a social agreement that manages to move towards a common goal. This common goal should be built on the recognition of the different priorities:
Recognising that mining communities in Antofagasta have been left behind in some well-being dimensions and that more needs to be done to ensure local development opportunities.
Recognising the strategic role of the mining sector in the development of Antofagasta.
Based on this recognition, the long-term vision of the strategy should be one that sets a long-term and aspirational goal for the region: a greater economic and social well-being for mining communities with an internationally competitive mining sector that protects the environment. A well-managed vision becomes a slogan that helps different actors to work in the same direction. As a marketing slogan, the vision needs to be communicated and widely shared, and could translate as follows: “A greater well-being in Antofagasta built on a competitive and environmentally responsible mining sector”.
Mining Stragegy objectives helping to address Antofagasta’s development priorities
The objectives of the Mining Strategy need to address the main regional priorities that help ensure greater quality of life with a more environmentally sustainable and competitive mining sector (Chapters 2 and 3). These main priorities were already identified in the previous chapters of this report and align with those main concerns raised across the multiple meetings and information gatherings with regional stakeholders. Table 4.5 outlines these priorities and their relationship with long-term objectives to attain the vision of the strategy.
According to the discussions with the different regional actors throughout the engagement activities and the priorities identified, the regional government should include at least five comprehensive, challenging but trackable objectives in its 2023-2050 strategy. In this strategy, well-being is a horizontal outcome that would emerge by attaining some of the different objectives and sub-objectives. Well-being, the ultimate goal of this strategy, is a multidimensional outcome compounded by the addition of greater economic, social and environmental factors.
This structure of objectives follows the SMART (specific, measurable, action-oriented, realistic and time-bound) model to define the length and formulation of objectives. While these objectives represent a clearer and longer-term goal, framed with basic statements, they also place the region on a challenging and concrete path relative to the strategies of other mining jurisdictions (Box 4.7).
Source: OECD based on meetings with regional stakeholders.
Objectives serve as the basis for creating the policy framework and are fundamental to monitoring and evaluating performance.
The suitability of objectives should be tested against the so-called SMART model. Objectives should be:
Specific: an objective must be concrete, describing the result to be achieved, and focused, contributing to the solution of the problem.
Measurable: an objective should be expressed numerically and quantitatively in relation to a specific benchmark and should allow the progress of implementation to be tracked.
Action-oriented/attainable/achievable: an objective should motivate action and should state what is to be improved, increased, strengthened, etc., but should also be reachable.
Realistic: an objective should be realistic in terms of time and available resources.
Time-bound: the realisation of the objective should be specified in terms of a time period.
The set of objectives should tell the “story” of the strategy in a logical and sequential way, so they should be logically connected. They should be connected to all of the defined and selected problems that require reform and – where multiple layers of objectives are used – should be linked to each other in order to provide a complete picture of the reforms envisaged.
Source: Vági, P. and E. Rimkute (2018[15]), “Toolkit for the preparation, implementation, monitoring, reporting and evaluation of public administration reform and sector strategies: Guidance for SIGMA partners”, https://doi.org/10.1787/37e212e6-en.
The objectives in this strategy require specific goals to measure their success, framed as impact indicators. The specific level to be attained by these indicators in 2030 and 2050 needs to be agreed upon with the main stakeholders in the region. Agreeing on these indicators will be the process of forming regional agreements for the future development of the region. Table 4.7 depicts a suggestion of indicators in a way that is legible and easy to monitor for everyone.
This vision and these objectives can also help establish common agreements with regional stakeholders to achieve a shared development target. The government of Antofagasta has reached several common agreements with the private sector and communities to establish concrete commitments from all segments of society to fulfil the goals and vision outlined in this regional strategy. Annex 4.A outlines the commitments that different segments of society have envisaged to agree upon to support the strategy.
Materialising long-term objectives through strategic projects
Attaining the objectives requires specific actions that build trust in the strategy in the short term and ensure a long-term continuous implementation. To this end, a timeframe of strategic projects should be put in place by indicating the projects that are a priority and feasible to implement in the next few years (e.g. 2024-27) and those inscribed on a longer timeline (2030-50).
Selected projects are set to meet the most pressing priorities in the region. These projects have been identified from three types of sources: i) more than 80 meetings with regional stakeholders for the preparation of this strategy, conducted by the regional government and the OECD; ii) direct information provided to the regional government since October 2022 by key stakeholders; iii) assessment conducted by this OECD study (Chapter 2) and the regional priorities already identified by two flagship regional strategies: the regional development plan and the innovation strategy (see next section). Table 4.8 presents a suggested timeframe of strategic projects to attain the five objectives of the strategy.
The short-term projects already identified for the strategy are part of the pipeline of projects to be developed in the regional plans or linked to the mining companies’ CSR plans. These short-term projects can help create local alliances to work towards a unified vision and rebuild trust at the regional level by demonstrating that change.
The long-term projects are not described in detail in this document but aim to outline the main priorities identified in the region. For example, the creation of a fund to support Indigenous businesses emerged from the need of entrepreneurs and SMEs in mining communities to make business plans marketing strategies, use technological solutions and access financing. This project can get inspiration from the Canadian Council for Aboriginal Business (n.d.[17]).
Many of the strategic projects consist of creating better alliances with mining companies or universities to give continuity and scale to the projects already in the pipeline. An important action is related to giving visibility in a unified way to all of the projects that mining companies are carrying out. Mining companies initiate and continue workforce training, sewerage improvement or street lighting programmes. However, given their atomisation, the population is not aware of these private initiatives, their impact and their investment. The Mining Strategy website must fulfil this task of diffusion.
Links with other regional development strategies
This Mining Strategy cannot replace the regional development plan but it can contribute to attaining long-term regional development objectives and create synergies with other sectoral plans. The weight of the mining activity in Antofagasta makes it a sector with links across various areas of development and, if well-managed, a potential engine for other economic sectors in the region, such as tourism, agriculture or manufacturing. This Mining Strategy comes at the end of the first development plan (2021-24) built by a democratically elected government. Thus, it can leverage the development objectives of that plan and maintain the efforts in implementing some of the unfinished projects.
The regional government of Antofagasta has issued two other relevant strategies to guide the development of the region: the 2021-2024 Regional Development Plan and the Regional Innovation Strategy 2022-2028. The regional development plan places an important focus on increasing civil participation, improving service provision and environmental protection, as well as updating land use and territorial planning instruments. The plan also highlights the importance of innovation and diversification for the development of the region (Regional Government of Antofagasta, 2021[18]).
The Regional Innovation Strategy 2022-2028 is based on the smart specialisation strategy of the European Commission, aiming at integrating government policies to address the key priorities and mobilise the competitive advantages of the region though technological and non-technological innovation. This strategy recognised that Antofagasta is one the most innovative regions in the country, with the greater number of companies in terms of innovation rates (data for 2015-16, see Chapter 2), which is driven mainly by the mining sector, whose innovation centres mainly on business process. Yet, innovation in mining is mainly in house and with low levels of spillovers to other economic sectors. This smart specialisation approach rightly identifies a sustainable mining sector as the backbone activity to build on in order to boost the regional innovation ecosystem. Therefore, the other two regional specialisation areas identified by the strategy are: i) Nature Labs to mobilise environmental amenities (astronomy, renewable energy); and ii) niche tourism.
The Mining Strategy has synergies with different action lines of the regional development plan (Table 4.10), which requires aligning funds and efforts to accelerate the implementation of common strategies. These potentially common strategies include greater involvement of civil society in planning mining strategy governance mechanisms, improving health and education supply, supporting economic diversification and strengthening water management, reuse and recycling.
Links with other development strategies in the region can be promoted through the following actions:
Creating shared investment lines that target objectives of different regional strategies.
Ensuring common goals with other development strategies, which can be translated into common outcome indicators.
Including representatives of institutions in charge of other regional policies in the monitoring process of this strategy.
Setting a sound governing system to oversee, monitor and adjust a long-term strategy is as important as the definition of objectives and strategic projects. A long-term strategy such as this one requires the engagement of regional stakeholders and clear long-term financial sources to ensure the efforts to attain the objectives are continuous, regardless of any political change in the regional government.
A governance mechanism to monitor progress and ensure sustainability in the long run
For the strategy to be successful and lasting, a governance mechanism capable of making the strategy last beyond political cycles must be implemented, which allows prioritising projects and deciding the best way to implement them, as well as monitoring their results until 2050. Based on international practices, this governance must be made up of various actors in the region, with a clear structure of participants and an established decision-making capacity and frequency of meetings. Other OECD regions like Brainport in the Netherlands or Morelos in Mexico have adopted multi-stakeholder governance models to oversee the design and implementation of key strategies for regional development.
Figure 4.3 describes the suggested governance scheme for Antofagasta, which has the following characteristics:
The executive secretary of the strategy represented by a government official with a defined budget and team for operation and co-ordination.
The steering committee prioritises and monitors projects, and proposes new orientations to the strategy. It could be composed of different regional actors with periodic rotation (e.g. two years) whose decisions are made unanimously. The committee should consist of at least one representative from the following groups:
The technical committee in charge of structuring and finding operators for the strategic projects, providing updates on the progress of the project and the budget, and responding to other requests from the steering committee. This committee is made up of an executive secretary with a team of professionals in collaboration with personnel from academia and private companies.
Monitoring the strategy with hierarchical indicators
Antofagasta’s Mining Strategy needs a monitoring framework with a clear differentiation among impact, outcome and output indicators (Schumann, 2016[19]) (Box 4.8).
Impact indicators measure the long-term policy impact of achieving each of the strategic objectives. This impact indicators are actionable when it is horizontal to all five objectives. In this strategy, a clear impact indicator is the improvement of economic, social and environmental well-being in Antofagasta with a competitive mining sector. The government should choose a limited number of variables to measure the improvement of the multidimensional well-being and the competitiveness of the mining sector. The impact indicator is rather a referent and cannot be seen as directly reflecting the effect of implementing the strategy, as many other factors can influence the attainment of objectives in the long term.
Outcome indicators measure the medium-term effects of implementing each strategic project in each of the objectives. In other words, outcome indicators measure the reason for implementing the strategic project in the first place.
Output indicators measure the implementation of each strategic project and its operative tasks.
Monitoring the achievements of the 2014-20 European Cohesion Policy is based on specific indicators (common indicators) associated with the priority axis, category of regions (where relevant) and investment priority in each European operational programme. Each indicator has a baseline target to reach and is monitored during the entire programming period.
Figure 4.4 below shows an example of how a European Union-funded project – in the field of early childhood education – would trigger (measurable) changes at different levels, forming a “result chain”. After the initial financial commitment and the activities implemented on the ground, it generates a direct output (in this example, the number of textbooks distributed to students and the teachers trained by the project), producing the project’s intended outcome (increasing school completion). The outcomes of multiple projects generate the overall policy impact (e.g. increased literacy).
Indicators associated with each stage of the chain should be carefully monitored and evaluated against suitable counterfactuals (what would have happened without the project/policy?). Monitoring and evaluation should be part of gradual, transparent, evidence-based policy learning (Crescenzi, de Blasio and Giua, 2018[20]).
Source (figure): Adapted from EC (n.d.[21]), EuropeAid - DEVCO 06 - Quality and Results, European Commission; Crescenzi, R., G. de Blasio and M. Giua (2018[20]), “Cohesion policy incentives for collaborative industrial research. Evaluation of a smart specialisation forerunner programme”, https://doi.org/10.1080/00343404.2018.1502422; Crescenzi, R. (n.d.[22]), “Indicators for territorial public policy: the case of the European Union”.
The strategy also needs to promote horizontal performance indicators with a sense of complementarity to avoid duplication of tasks across the parts of the government implementing the strategic projects. The success of some transversal efforts, such as infrastructure development, inclusion of small businesses or environmental protection, can benefit from transversal indicators to co-ordinate actions across different parts of the regional government. For example, strategic projects involving infrastructure development (e.g. green parks, health centres) need the participation of different divisions of regional government (e.g. Division of Infrastructure and Transport and Division of Planning and Regional Development) along with the co-ordination of different national agencies (e.g. SEREMI of National Goods, SEREMI of the Environment or SEREMI of Health).
Table 4.11 provides an example of monitoring indicators for the strategy and the short-term strategic projects.
Financing the tasks to meet the strategic objectives
The strategy needs long-term and formal financial budget lines to cover the operational tasks of the team co-ordinating the strategy and supporting the implementation of short-term and long-term projects. Some short-term strategy projects are already costed and partially funded by the mining companies or the government budget. For example, the strategic project Improve Drinking Water and Sewerage Systems in Mining Communities can leverage upcoming projects in the region, like the new wastewater treatment plant in Antofagasta to be operated by the Concessionary Company of Sanitary Services (ECONSSA Chile s.a) with an estimated value of USD 250 million.
Changes in the management of regional governments' financial sources and more flexibility and transparency are part of the discussion of decentralisation in Chile with the bill Stronger Regions, presented at the same time as the elaboration of this report. Therefore, clear autonomy and long-term financial sources for the mining strategies can be further defined in the coming months.
Regardless of the changes in the financial autonomy of the region, the regional government needs to ensure that the strategy has long-term and formal financial sources, with some strategic long-term projects attached to multi-year budgets. The government would have the capacity in the short term to use the new resources provided by lithium developments and complement them with investment funding from the National Fund for Regional Development, which finances all kinds of investment initiatives (basic studies, programmes and projects) of any public investment sector (education, culture, health, sport, etc.) that are framed within the regulations of the National Investment System (SNI).
The government should also seek a mechanism that facilitates co-funding from private companies for the implementation of specific projects. Some of the strategic projects identified for the short term are initiatives that mining companies have already put in place. Complementing this funding to expand the initiative or ensure sustainability in time is a priority for the strategy.
The role of municipal governments
As mines are geographically located, mining requires a place-based policy approach that accounts for the singularities of the hosting areas. It is instrumental in defining the possible effects of mining on local economies and ensuring local governments are aligned with the policies so as to increase social license to operate mining ventures.
Integrating municipal development plans and views in the Mining Strategy can be done through active and formal co-ordination mechanisms. While the regional government has regular interaction with local governments, this co-ordination is not formally institutionalised. Instead, it occurs through a case-by-case scenario for specific projects or to address particular issues. Aligning the Mining Strategy with the municipal development plans should be the first step to closer collaboration. The regional government should also establish a formal communication channel to ensure the continuity of co-ordination over time. This channel could be included within a formal multi-stakeholder working group on mining development that meets regularly (see next section).
The role of civil society
The concept of inclusive policy making through stakeholder engagement largely overlaps with that of open government. As a result, openness and inclusion represent two pillars to deliver better policy outcomes not only for but with citizens. Today, inclusive policy making through stakeholder engagement is set to enhance government accountability, broaden citizens’ influence on decisions and build civic capacity (OECD, 2016[23]). Local communities not only have better knowledge of local conditions but also the capacity to adapt policies to the context. In addition, the participation and involvement of citizens are associated with higher levels of policy compliance and an important driver of legitimacy and trust in the government.
Antofagasta benefits from a good structure of civil society organisations. The COSOC is a citizen body that has a role in municipal governments and the regional government by being part of social co-responsibility processes between citizens and the government and monitoring public actions. This council can be instrumental in transmitting progress and changes in community priorities to the steering committee of the Mining Strategy. It should also help monitor the implementation of the projects and identify possible issues that might emerge from or within the communities.
Furthermore, communities in Antofagasta also benefit from the Neighborhood Councils (juntas de vecinos), territorial community organisations that represent the inhabitants of a community before the authorities and that are formally regulated by law. Their aim is to inform municipal decisions, propose projects that benefit the community or manage the solution of problems before the authorities (Biblioteca del Congreso Nacional de Chile, 2014[24]). These Neighborhood Councils can further support the role of the COSOC and be in charge of monitoring the implementation of the strategy in their communities.
Partnering with Indigenous communities
Since Chile implemented its Indigenous Law No. 19.253 in 1993 and ratified ILO Convention 169 in 2008, Indigenous communities have been negotiating with the lithium industry (Lorca et al., 2022[25]). These negotiations have included different forms of participation for Indigenous communities and indirectly helped them organise themselves to ask for greater decision power. Agreements have allowed Indigenous communities – especially Atacameño communities1 – to get involved in environmental monitoring and establish benefit sharing in the form of jobs or compensatory payments.
This strategy needs to acknowledge Indigenous land rights and involve these communities to map and help standardise the benefit-sharing agreements to be conducted with the mining companies. This implies clarifying the mechanisms and measures to share mining benefits locally. A clear framework for benefit-sharing agreements can help the region understand how private companies relate to Indigenous communities and non-Indigenous groups. This should aim to organise a more standard approach for the relationship between mining companies and the population. If well designed, these agreements are important tools to increase economic opportunities and quality of life for host communities and reduce social conflict around mining (O’Faircheallaigh, 2013[26]). There are different types of benefit-sharing agreements:
Monetary benefits (also known as benefit funds) include payments, profit sharing, tax sharing (e.g. royalties) and investment funds.
Non-monetary benefits comprise local hiring, skills development, education, cultural support and environmental protection and remediation. In terms of governance, agreements can be government-controlled, voluntary company-led initiatives and partnership models, among others (Söderholm and Svahn, 2014[27]).
Besides the type of agreement, the extent to which benefit-sharing agreements deliver robust results for communities comes down to how they are governed and implemented. Some agreements are privately negotiated and legally enforceable (some non-monetary benefits agreements), while others are general financial structures with revenues collected by governments (e.g. benefit funds). These agreements can be government-controlled, voluntary companies-led initiatives, partnership models or ownership and control models. While the government leads actions in the government-controlled type, it may equally play some role in voluntary, company-led and partnership models as a facilitator (Box 4.9).
Benefit-sharing agreements and funds are often established at the onset of resource development or the extraction process and set out a financial or working relationship that spans its lifetime. Benefits may include payments, profit sharing, local hiring, skills development, education, cultural support and environmental protection and remediation, and takes several forms and governance types.
The role of the private sector and academia
The private sector and academia are also fundamental in this strategy. The mining companies in the region have been one of the main promoters of diverse initiatives to improve local well-being. While often company-driven and dispersed, they have created links with local needs and helped companies establish relationships with the communities. Companies can help the implementation of the strategy mainly by committing their support and collaboration in different forms, first, sharing information with the government about projects, agreements with communities, environmental information and labour force needs. All companies in Antofagasta have a community relationship officer who should play a facilitator role in implementing this strategy.
Second, mining companies can support the implementation of some strategic projects either by sharing the capacity to structure projects or facilitating the expansion of their individual projects. Mining companies in the region tend to concentrate on the most skilful professionals and have relevant planning capacities. Finally, some resources allocated to individual ESG or CSR projects can be allocated to strategic projects in this strategy for greater impact and a more sustained outcome.
The region benefits from an important presence of private and public universities and higher education institutions. There are two public and five private universities along with at least seven educational and professional institutes. This network of institutions can be co-ordinated to improve capacities in the region, aligning the educational offer with the needs of the mining industry and diversification plans within the value chain in line with the projects identified in this Mining Strategy. Tertiary and secondary education institutions are relevant actors in the governance mechanism of the Mining Strategy They are needed to guide some strategic projects in education and innovation, as well as support the capacities of the regional government for planning and implementation when necessary.
The Mining Strategy can help the region of Antofagasta capitalise on the increased global demand for its minerals and make the most of the digital and green transitions with the aim of delivering greater well-being standards to its inhabitants.
This strategy needs to start by recognising the role of mining in the regional economy and the need to close the welfare gaps of the many mining communities that have been left behind.
This recognition process has been part of the strategy-building process, which has focused on thinking about what the region needs to achieve a better future for all by 2050.
This future is guided by the vision of “A greater well-being in Antofagasta built on a competitive and environmentally responsible mining sector” and materialised by the five objectives that have been co-identified with regional stakeholders. To achieve each objective, short- and long-term concrete projects have been defined, with monitoring and impact indicators.
Implementing this strategy requires a joint effort of the different regional stakeholders to participate in the governance mechanism of the strategy, monitor project implementation and adjust the path to achieving the different objectives.
References
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Note
← 1. Atacameño communities inhabit the oases, valleys and ravines of the Salar de Atacama and Loa River basins, located in the Antofagasta Region of Chile. Small populations are also found in northwestern Argentina, in the puna of Salta and Jujuy, and in the southwestern highlands of Bolivia.