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Community Development Agreement Objectives

In furtherance of the objectives in 26.1, the provisions of the Community Development Agreement (“CDA”) shall include but not be limited to the following:

(a) The person, persons, board, committee, foundation, trust, forum, body or other entity registered or incorporated under the laws of the State which shall manage the CDA;
(b) The duly elected person or body that represents each affected community for the purposes of the CDA;
(c) The means by which members of any affected community will participate in the community’s CDA related decision-making processes;
(d) The means by which the interests of women, minority or marginalized groups within the community will be represented in the community’s CDA related decision-making processes and implementation;
(e) The goals and objectives of the CDA, including an objective to improve the Human Development Index of the affected community by certain agreed measures;
(f) The obligations of the Company to the affected community including but not limited to:

(a) Undertakings with respect to the social and economic contributions that the project will make to the sustainability of the community;
(b) Assistance in creating self-sustaining, income-generating activities, such as but not limited to, production of goods and services needed by the mine and the community;
(c) Consultation with the community in the planning of mine closure measures that seek to prepare the community for the eventual closure of the mining operations;

(g) The obligations of the affected community to the Company;
(h) The means by which the CDA shall be reviewed by the Company and the affected community every five (5) calendar years, and the commitment to be bound by the current CDA in the event that any modifications to the CDA sought by one Party cannot be mutually agreed with the other Party;
(i) The consultative and monitoring frameworks between the Company and the affected community, and the means by which the community may participate in the planning, implementation, management, measurement (including indicators) and monitoring of activities carried out under the CDA;
(j) The language(s) to be used in the preparation of reports, plans, and other written matters required under the CDA;
(k) The means by which any funds made available under the CDA are to be disbursed, for what purposes they may be disbursed, what accounts must be kept and by whom, and reporting and auditing requirements;
(l) The mechanisms under local laws and customs whereby the affected community (including members of the affected community) and the Company may lodge a grievance with each other, provided that where no such mechanism exists or is inadequate or less stringent, the grievance mechanism under paragraph 23 of IFC Performance Standard 1 shall be adopted;
(m) A statement to the effect that both the Company and the affected community or communities agree that any dispute regarding the CDA shall in the first instance be resolved by consultation between the holder and the affected community representative(s);
(n) The dispute resolution mechanism to be used when consultation between the holder and the affected community representative(s) fails, which shall be the most effective of any mechanism agreed by the Parties, or as stipulated in this CDA, or as provided under the paragraph 23 of IFC Performance Standard 1.
(o) The applicable law;
(p) Reasons and procedure for declaring Force Majeure;
(q) Duration of the CDA;
(r) Termination of the CDA;
(s) Transfer of all CDA rights and obligations to any party to whom the Company transfers its mining right;
(t) How notifications to respective Parties shall be done;
(u) Location where the CDA may be accessed by members of the community; and
(v) The CDA signatories, and witnesses where applicable.
(w) A breach by the Company of the terms of the CDA shall be considered to be a breach of this CDA, and the State shall be entitled to terminate the CDA upon the failure of the Company to diligently and consistently pursues a course of action that is reasonably intended to remedy the breach within sixty (60) Days of being notified in writing by the community of the breach.
(x) The Company shall provide an annual payment of [X AMOUNT] which shall deposited into a segregated Central Bank account to be managed and disbursed for the benefit of the State communities affected by the Project, as provided in the Community Development Agreement or Agreements. The first annual payment shall be made to the State on the Effective Date and each subsequent payment shall be made on the anniversary date of the Effective Date:

A development committee shall be appointed by or selected in accordance with procedures established by the State in Consultation with the Local Government, which procedures may be stated in any Community Development Agreement with local communities or Indigenous and Tribal Peoples. Such committee shall develop an annual budget in Consultation with the State and the Company, and the State shall make disbursements from the segregated Central Bank account in which such funds are deposited in accordance with such budget, the instructions of the committee, and any applicable Community Development Agreement.

The budget and disbursements by the State shall be public and shall be subject to the same audit procedures provided for expenditures by the State and as may be further provided by Applicable Law.

Periodic reports and audit reports shall be made available to the Company and to the public.

The State shall provide a credit to the Company for payments to the local community Central Bank account referenced in this Section.

Regional Development Council

Where appropriate in addition to or in lieu of a CDA,

(a) The State will establish a Regional Development Council (the “Council”) and shall lead its activities.
(b) The Council will be governed by a board, which shall include representatives of the State, local governance organizations, private sector entities, civil society organizations and donor and international financial institutions with activities directed towards the affected region.
(c) The Company will be a member of the Council’s governing board, and shall support the Council and its activities.
(d) The Council will assist the State in the following areas in terms of preparation, financing, organizing and implementation of the local and regional development strategy, plans and budgets:

(i) Support to local and regional development and encouraging transparent and responsible governance;
(ii) Coordination of in-migration influx;
(iii) Resolving matters of urban planning and development, including power, roads, water supply, heating and sewerage;
(iv) Organization of formal and non-formal education, including English language and vocational training;
(v) Focus on human health care, construction of diagnostic centers, cultural facilities, sport facilities, improvement of veterinary services; and
(vi) Support to capacity building for Local Governments and civil society.

(e) In addition to the above, the Company will support socio-economic development policies and activities undertaken by Local Government and will develop partnerships to ensure that sustainable benefits from the Project reach the State people, including people in affected region.
(f) The Company shall conduct all of its local and regional socio-economic development programs and activities based on principles of transparency, accountability and public participation.
(g) The Company shall continue to prepare, conduct, implement, update on an appropriate basis, and make public socio-economic baseline studies, socio-economic impact assessments, socio-economic risk analyses, as well as multi-year community plans, community relations management systems, policies, procedures and guidelines, and Closure Plans, all of which shall be produced with community participation and input and be consistent with Good Industry Practice.
(h) The Company shall give priority focus to those citizens and groups directly and indirectly impacted by the Project, as determined by socio-economic and environmental impact assessments and other relevant documents and, for this purpose, the Company shall regularly engage with and support the public and local stakeholders in the affected region.
(i) The Company shall establish cooperation agreements with local administrative organizations in accordance with Applicable Law and these agreements may include the establishment of local development and participation funds, local participation committees and local environmental monitoring committees.
(j) The Company will consult with Local Government to provide appropriate compensation upon resettlement of herder families located on the Mining Area who are directly impacted by the Project.
(k) The Company shall make as a priority training, recruiting and employing citizens of local communities in the affected region.
(l) The Company shall support special business development programs to assist in starting and growing local businesses so they can supply the Project, as well as the expansion and diversification of the State business partners so that they are not fully dependent on the Project.
(m) The Company shall continue to actively build and maintain productive working relationships, based on principles of transparency, accountability, accuracy, trust, respect and mutual interests, with non-governmental organizations, civic groups, civil councils and other stakeholders.

Community Development Foundation

The Company shall provide an annual payment of [X AMOUNT] to a Community Development Foundation established as part of the Community Development Plan, which shall be managed and disbursed, in efforts to promote local and regional development, or health education and welfare in the communities affected by the Project. The governing body of the Community Development Foundation shall include members of communities affected by the Project. The annual budget and disbursements from the Community Development Foundation shall be public and shall be subject to audit procedures provided for by Applicable Law and the terms of the agreement. Periodic reports and audit reports shall be made available to the Company, to the State, and to the public.

Acceptance of Obligations of Prior Owners

Unless specifically waived by the affected communities in writing, the obligations of the Parties under a CDA or any agreement made between affected communities and any assignor or predecessor-in-title of the Company shall be binding on affected communities and the Company and shall be enforceable by the Parties or their assignees or successors-in-title. No assignment of the Company’s interest under this agreement shall be effective until the assignee has acknowledged and agreed to be bound by such obligations.

REFER TO MMDA DISCLAIMERS AND MMDA USER’S GUIDE
PRIOR TO ANY USE OF THIS DOCUMENT.

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