District Mineral Foundation: Concerns and Recommendations

The governance of company-local community relationships is central to understanding conflict risks at mines and their broader impacts on the rule of law. Extractives sites and sectors are potential drivers of conflict. The good governance of those sites and sectors are key to mitigating that conflict risk. Given the context-specificity of extractive industries, policymakers have recently promoted decentralized and multi-stakeholder governance of mine sites. They have emphasized direct dialogue between local stakeholders and companies to produce political and procedural norms that counter communities’ political marginalization, and intervene locally to level the playing field between companies and communities, for example, by providing communities with legal advice.

Focusing on the implementation of District Mineral Foundations (DMFs) in India, this project shows how such interventions must be understood in a subnational political context. Based on interviews with dozens of local community members, politicians, and mining company actors, we find that key subnational actors structure local governance, often entrenching unequal power relations, and sometimes “recentralizing” governance in the hands of the state through the back door. In other words, decentralized governance of extractive industries may strengthen, rather than disrupt, existing local patterns of exploitation and marginalization as those governance arrangements are refracted through subnational elites.

Put simply, in the context of extractives, the stakes are so high that decentralized governance can be no substitute for the ongoing work of politically, socially and economically empowering marginalized and affected communities. We go on to show that decentralized governance could be a complement to that work; however, it can also exacerbate marginalization depending on the political conditions. We point to three main challenges that policymakers must tackle: identifying the affected community; instituting participatory frameworks for local governance and expenditure; and ensuring community development funds are properly disbursed.