Community Development Agreements

At a Glance
  • Local procurement in the extractive sector is increasingly regulated through “Community Development Agreements” (CDAs), also referred to as “Impact Benefit Agreements” (IBAs)in Canada, “Indigenous Land Use Agreement” (ILUA) in Australia, and “Mining Cooperation Agreements” (MCAs) in Mongolia.
  • CDAs have their origins in agreements between extractive industry companies and Indigenous communities in Australia and in Canada.
  • CDAs range from a very broad set of principles in a memorandum of understanding (MoU), to complex and comprehensive agreements that are similar to contracts that have formal complaint mechanisms.
  • CDAs present an important advantage over national regulations in that they are generally made for only one site (or in some cases a cluster of extractive industry sites) allowing tailored, context-specific approaches to local procurement that are not possible in national-level approaches. 
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[1] Dr Jo-Anne Everingham et al., Why Agreements Matter, (Rio Tinto, 2016), 2, 9

Key Resources

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Mining Community Development Agreements: Source Book

The aim of this handbook is to support strategic and collaborative community development planning by governments, companies, civil society, ...

Why Agreements Matter

This resource provides guidance on integrating agreements into communities and social performance. Rio Tinto is used as an example to ...

Emerging Practices in Community Development Agreements

This resource reviews existing research on Community Development Agreements (CDAs), as well as available agreements from the extractive ...

Topic Briefing

An increasingly common way that extractive industry local procurement is being regulated is through using what are generally referred to as “Community Development Agreements” (CDAs), though there are a multitude of names used to describe these arrangements. These names include “Impact Benefit Agreements” (IBAs) in Canada, “Indigenous Land Use Agreement” (ILUA) in Australia, and “Mining Cooperation Agreements” (MCAs) in Mongolia. CDAs have their origins in agreements between extractive industry companies and Indigenous communities in Australia and in Canada. Mining company Rio Tinto concluded its first agreement in 1995 in Australia, and as of 2016 had over 40 CDAs across their operations.[1]

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CDAs range from a very broad set of principles in a memorandum of understanding (MoU), to complex and comprehensive agreements that are similar to contracts that have formal complaint mechanisms. Government policymakers have many options for using CDAs to regulate local procurement. In some cases, such as Mongolia for mining, having an agreement is technically a requirement to mine. In other cases, like many provinces in Canada, while not required formally, a proposed project is not likely to be approved without the presence of such agreements. Alternatively, there are other instances where extractive industry companies have made agreements simply out of a belief in their utility, without any pressure or requirement of government.

CDAs can include provisions on many aspects of ELLED including both demand and supply side local procurement provisions. While most CDAs remain confidential, the common types of provisions regarding local procurement mirror the types of policy provisions commonly outlined in regulations and contracts. One advantage of CDAs over national regulations is that they are generally made for only one site (or in some cases a cluster of extractive industry sites), allowing tailored, context-specific approaches to local procurement that are not possible in a nation-wide approach. That said, what works to increase local procurement in CDAs is still not well researched as many of these agreements are confidential.