Community Benefits Snapshot: Stillwater Good Neighbor Agreement

Highlights

The Stillwater good neighbor agreement, signed in 2000, is a legally binding contract between Sibanye-Stillwater Mining Company and three local organizations: Northern Plains Resource Council, Cottonwood Resource Council, and Stillwater Protective Association. Unique within the mining industry, the agreement protects local watersheds from environmental degradation due to mining activities; mitigates the impact of an influx of mine workers on local communities through traffic plans that reduce mining traffic on country roads; provides local communities with access to information about mining operations and the opportunity to address problems before they occur; sets aside company-owned land in conservation easements; and requires the company to fund mining and water experts who advise the local organizations.

Context

About the project and involved stakeholders: The good neighbor agreement (GNA) was signed between Stillwater Mining Company (SMC) and Northern Plains Resource Council (Northern Plains), Cottonwood Resource Council (CRC) and Stillwater Protective Association (SPA) on May 8, 2000. Its purpose was to protect local watersheds from environmental degradation due to mining activities and mitigate the impact of an influx of mine workers on local communities.  

SMC is the primary platinum- and palladium-producing mining company in the United States. It was acquired by Sibanye Gold Limited in 2017 and is now known as Sibanye-Stillwater. The company is headquartered in Johannesburg, South Africa and is one of the world’s largest producers of platinum, palladium and rhodium. Northern Plains is a statewide grassroots conservation organization that was established in 1972 to protect Montana’s water, land, air and quality of life. Northern Plains has affiliate organizations (including the CRC and SPA) in 13 communities across Montana; henceforth the three organizations will be referred to as the Councils. Established in 1975, SPA focuses on ensuring the company operates the Stillwater mine near Nye, Montana without harming the environment or neighboring communities. CRC, founded in 1988, focuses on addressing the impacts of hard rock mining on the East Boulder River near Big Timber, Montana.  

The GNA applies to the Stillwater and East Boulder mines, which are both underground mining operations located near the towns of Nye in Stillwater County and Big Timber in Sweet Grass County. 

Engagement

In the mid-1990s, SMC wanted to expand the Stillwater mine by constructing tailing impoundment and waste disposal facilities downstream from the mine. Around this time, SMC was also seeking permits to develop its East Boulder mine. Initially, the Councils sought litigation to halt these developments. In 1992, Northern Plains and CRC sued the Montana State Board of Health and Environmental Services for its decision to issue an exemption while giving SMC a permit for the proposed East Boulder mine. This exemption would have allowed the company to ignore a key provision of the Montana Water Quality Act and the mine to degrade the East Boulder River. While this case was moving through the courts, the Montana legislature weakened the state’s Water Quality Act, which diminished the water quality standards the lawsuit was based on. In February 1999, Northern Plains and SPA filed a lawsuit challenging the Montana Department of Environmental Quality’s (MDEQ) decision to approve the expansion of the Stillwater mine. MDEQ also issued a draft permit for the East Boulder mine, leading CRC to contemplate reopening its previous lawsuit and pursuing a legal challenge. However, realizing that litigation would be costly and arduous, the Councils entered into negotiations with SMC in May 1999 to mitigate impacts from the expansion of the Stillwater mine and the development of the East Boulder mine.

Bill Nettles, then SMC’s CEO, ​​​​was very receptive to an agreement and believed that a GNA could help avoid production delays from legal challenges to the company’s expansion plans, while increasing SMC’s profile as a “good neighbor” in Montana. According to one of the interviewed GNA negotiators, “We asked the company if they would be interested in pursuing a good neighbor agreement, and we sent a letter to that effect, and much to our surprise within a week they wrote back and said yes, they would be willing to sit down with us.”

The closed-door negotiations between representatives of SMC and the Councils lasted almost a year. I​​​​n preparation for the GNA negotiation, the​​ ​​​​Councils identified key negotiators who underwent two days of training with Jim Thomas, a nationally recognized professional negotiator and author of the book “Negotiate to Win.” The training focused on the art of making a deal and how to use leverage in deal-making. ​​​​Northern Plains and its staff also provided valuable leadership and expertise; one staff member was an attorney who provided legal expertise, and another was a former hard rock miner with intimate knowledge of the mining industry who helped translate technical data. During the negotiation, the Councils had access to technical consultants and company data to facilitate their understanding of mining issues.

During this process, t​​​​he Councils never claimed to represent the general public, though they engaged in several community outreach efforts. Generally, for project agreements to be effective, developers should negotiate with stakeholders who are representative of the community. This can raise questions, such as how the community is defined and whether these stakeholders truly represent their community’s views of the project. Such questions can be tricky to navigate and can make or break an agreement. An interviewee from the company shared that, even though the Councils did not represent all of the local community, they were in fact “speaking on behalf of an organized group of people” in the community who cared passionately about clean air, clean water and retaining the rural character of the area.

The Stillwater GNA has been amended six times to reflect accomplishments in the implementation of the agreement and address new challenges. Ultimately, the agreement will terminate when mining operations have ceased and the company has fulfilled federal and state closure and reclamation requirements, as well as met the more stringent GNA baseline water quality requirements.

In September 2024, Sibanye-Stillwater announced plans to cut production from both mines and lay off hundreds of workers in Montana due to declining prices for palladium. This is not expected to impact the GNA since the agreement is a legally binding contract and dispute resolution mechanisms must be followed before parties can be relieved of their obligations. However, this development raises a broader point: Economic stress on developers can potentially put stress on project agreements, including GNAs. Therefore, when negotiating agreements for proposed projects, communities must ensure that the finalized agreements prevent the developer from walking away before commitments have been met.

Benefits

Many project agreements have been in non-environmental sectors, with a focus on collective bargaining, labor relations, and job quality issues. The Stillwater GNA, in contrast, is concerned primarily with addressing environmental pollution, natural resources, and human population impacts from mining projects.

Key benefits of the GNA include:

• Water quality protection: The Stillwater and East Boulder rivers are rigorously monitored for water quality changes by defining and tracking water quality metrics that are more stringent than existing state and federal regulatory standards. Any change from baseline water quality requires an immediate response. This has allowed the company and the Councils to identify water quality issues well before they impact the rivers.
• Traffic reduction measures: The GNA includes measures to reduce traffic around the areas of operation, including consolidating commercial loads, restricting the use of private vehicles, and providing buses for employees between the mine and population centers. All our interviewees noted these provisions have significantly reduced accidents and congestion on rural roads.
• Conservation easements: The GNA requires all private land owned by SMC to be placed under conservation easement to protect it from future development. SMC also agreed to keep employee housing near existing towns to prevent the development of “man camps,” or camps to house workers, near the mine site. These efforts have protected traditional land uses and preserved the community’s rural character.
• Company funding of monitoring activities: The company pays for independent scientific and technical consultants who conduct environmental performance audits; an evaluation of the company’s reclamation plan and performance bond (the latter which is provided by the company under state and federal law, and which details its reclamation obligations); a fisheries study and monitoring plan; a baseline water quality report; and groundwater studies. The Councils have been able to participate in all aspects of the audits, studies and sampling conducted by independent consultants, giving local communities an important role in the process.
• Company funding of Northern Plains’ participation in monitoring and implementation of the GNA: The amount of money is negotiated each year for qualifying expenses. In 2024, the approved GNA budget for program implementation and professional technical services was approximately $523,000.

Oversight

The GNA created two oversight committees which meet three times a year to monitor the implementation of the agreement and establish a process for incorporating new issues into the GNA. Both the East Boulder and the Stillwater oversight committees have four voting members. SMC appoints two to each committee and each Council appoints two. ​​All decisions are taken by majority vote.

The GNA also created a responsible mining practices and technology committee comprised of three company representatives and three representatives from the Councils. This committee identifies new technologies and practices that can reduce or eliminate adverse environmental and public safety impacts of mining. The company has a designated team of employees and consultants that identify, research, develop and implement new technologies and practices. In 2015, for instance, the mine installed liners on its waste rock storage piles to prevent nitrogen pollution that had been escaping into the river.

The GNA includes significant provisions to give the Councils access to information, which is necessary for effective monitoring. These include:

• The right to enter and inspect mine facilities — up to two inspections per mine site per year. The Councils can conduct citizen sampling, take photographs, and meet with relevant company employees during all such inspections.
• The requirement for Stillwater to disclose all data, sampling results, studies, evaluations, audits and other documents collected under the agreement to members of the Councils, with confidential materials to be only shared with designated members.
• Allowing the Councils to review and comment on any company revisions to the mine operating permits and Montana Pollutant Discharge Elimination System permits for the Stillwater and East Boulder mines at least three months prior to submission to the relevant agency.
• Consultations with the Councils before acquiring property for future tailings and waste rock disposal.
• A requirement for the company to self-monitor water quality, notify the relevant oversight committee if water quality trigger levels are exceeded, and prepare a corrective course of action that is approved by the oversight committee.

Finally, the GNA includes extensive dispute resolution mechanisms. Parties are bound to first negotiate in good faith to resolve disputes, and may submit the dispute to binding arbitration where a neutral third party makes a legally binding decision on the case. If negotiation fails to resolve the conflict, parties to the agreement can seek to enforce the GNA through civil action in a district court to enforce the legal contract.

Strengths of the Stillwater GNA

The Stillwater GNA is often considered the “Cadillac” of GNAs.  In the 24 years of the GNA’s existence, there has been no arbitration or environmental litigation, which is a significant accomplishment for a mining company.

The organizational strength of the Councils enabled effective negotiations. Northern Plains and its two affiliate organizations had several years of experience lobbying the legislature, testifying at public hearings, providing comments on numerous environmental impact statements, and challenging mining operations in the courtroom and the media. These organizations brought years of considerable organizational strength in negotiations with SMC and benefited from access to outside legal and technical support that enabled them to participate on equal footing with a well-resourced company. Northern Plains estimates that they spent at least 3,000 hours of staff time and $63,000 on consultants and outside experts during the negotiation process.

The GNA’s mechanisms for ongoing consultations with the community have fostered trust between parties. The Councils are to be consulted, for instance, regarding future operating permit amendments, as well as property acquisitions for tailings and waste rock disposal and camps to house workers. The GNA includes other provisions enabling the community to monitor the company’s operations and participate in company environmental management. As a result, there is good will and trust between the Councils and the company. As one interviewee noted, “When you’re sitting at the table with somebody for 20 years, you develop a relationship with them, and you also develop credibility from both sides, and you can take each other on as equals.”

​​​​​Local community groups held considerable leverage that brought SMC to the negotiating table. Project agreements such as GNAs and community benefits agreements depend on the willingness of local communities and developers to negotiate. Leverage to bring developers to the negotiating table can include a company’s need for a permit or similar public approval, the threat of a lawsuit, and the desire for a company to avoid negative publicity. In this case, SMC was facing a pending lawsuit over the expansion of the Stillwater mine, which potentially drove the company’s willingness to negotiate given the possibility that the lawsuit would be dismissed in exchange. The lawsuit was in fact withdrawn in exchange for SMC’s commitment to the agreement and, according to one of our interviewees, “This lawsuit and previous legal action were essential to build leverage for the local community.” As a publicly traded company, SMC also likely wanted to protect its image as a community friendly and environmentally responsible company.

SMC leadership was motivated to reach an agreement with the local community. Although the company faced pressure from other mining companies and trade associations not to enter into a GNA, CEO Bill Nettles was committed to making the agreement happen to avoid production delays from legal challenges and enhance SMC’s profile in Montana, a commitment shared by the company’s current owner. Moreover, senior company officials living in the area shared community concerns about protecting local beauty and quality of life. An interviewee from the company noted, “If you’re not getting platinum and palladium from us, you’re getting it from Russia. So, we think, from just a responsible and community-friendly critical minerals production standpoint, it’s really important that we keep producing here in Montana.”

The GNA is tied to the mine regardless of ownership transfers. In 2003, a Russian company, Norilsk Nickel, bought a 51% stake in SMC, and Sibanye-Stillwater acquired the company in 2017. Despite changes in ownership since its signing, the Stillwater GNA is a legally binding contract that subsequent owners of the mines must uphold. Though changes in mine ownership could have impacted the implementation of the agreement, it did not, largely because several people managing the mines on the ground have remained the same. For example, a company interviewee shared that two of the senior environmental team members have remained the same and pointed out that all new hires are educated about the GNA, so they understand its benefits to the company and community.

Challenges and Gaps of the Stillwater GNA

The ability of volunteers from the Councils to sustain the efforts necessary to keep the GNA functioning could be a challenge. The scope and complexity of the GNA requires a large commitment of voluntary time from Northern Plains and its two affiliates. The individuals serving on the two oversight committees, for instance, are volunteers who average up to 10-20 hours each week monitoring the GNA and prepping for and attending committee meetings. The future success of the GNA will depend on the recruitment of community volunteers.

Community groups without significant organizational resources may find it challenging to replicate the GNA’s success. The agreement’s progress was dependent on​​ a provision requiring the company to fund most of Northern Plains’ monitoring and oversight expenses. While the Stillwater GNA has been successful and offers insights for future GNAs, it is not necessarily a replicable model for community groups who have less resources or who can’t secure resources from companies for their implementation activities.