Overview |
In negotiation, parties to a conflict meet to reach a mutually acceptable solution. There is no facilitation or mediation by an external party: each party represents its own interest. |
In facilitation, an external party works with the parties to the conflict to ensure that there is a constructive dialogue on the process of interaction and the substantive issues. This approach is often used when there are multiple parties and where issues are unclear. Facilitators create the conditions for a free, open and orderly exchange between the parties. The facilitator focuses on process and does not volunteer views on substance, unless requested. As well as being used to resolve conflicts, facilitation can be used as a first step to identify an appropriate dispute-resolution process. |
Mediation is a process of addressing conflict in which an external party oversees the negotiation between two (or more) parties to the conflict. Together, the parties to the conflict choose a mediator to guide them in designing a process for engagement and reaching an agreement on mutually acceptable solutions. The mediator seeks to establish a conducive environment for information sharing, addressing underlying problems and expressing emotions. It is more formal than facilitation. While parties often share the costs of mediation, this is not always the case. Mediation is useful when the parties have reached an impasse. |
Arbitration is a process in which a neutral, independent external party or panel meets with the parties in conflict, hears presentations from each side and makes a finding on the dispute. It is a less formal alternative to litigation. The arbitrator’s decision may be binding or not, depending on prior agreement between the parties. The parties choose the arbitrator through consensus and the parties may set the rules that govern the process. |
Adjudication involves taking recourse through the courts. In a legal proceeding, the parties to a dispute are heard by a court of law that decides upon the case based on the laws in place in the jurisdiction. Adjudication can be unpredictable, intimidating for stakeholders, lengthy and expensive, and stakeholders may also regard the law as unfair. It should therefore usually be used as a last resort, although Anglo American must always respect the rights of stakeholders to seek legal redress. While it may at times not be possible, the initiation of adjudication should not preclude attempts at ongoing engagement between the parties, with a view to maintaining dialogue, seeking resolution and consequently avoiding court proceedings. |
Result sought |
Mutually acceptable agreement |
Mutually agreed outcome |
Mutually acceptable agreement |
Arbitration award |
Court judgment |
Voluntary/Involuntary |
Voluntary |
Voluntary |
Voluntary |
Voluntary |
Involuntary |
Binding/non-binding |
Agreement enforceable as a contract, if opted for by the parties |
Non-binding |
Agreement enforceable as a contract, if opted for by the parties |
Binding or non-binding |
Binding |
Private/public |
Private |
Private |
Private |
Private |
Public |
Participants |
Parties only |
Facilitator and parties |
Mediator and parties |
Arbitrator and parties |
Judge and parties |
Third-party Involvement |
Parties communicate directly |
Facilitator, selected by the parties, facilitates the process |
Mediator, selected by parties, facilitates the process |
Arbitrator, agreed on and appointed by the parties, conducts the arbitration process |
Lawyers, judge |
Structure |
- Usually informal and unstructured
- Non-adversarial
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- Flexible
- Mutually agreed ground rules
- Non-adversarial
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- Flexible
- Usually informal and unstructured
- Non-adversarial
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- More formal than mediation but less formal than adjudication
- Procedural rules and substantive laws may be set by parties
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- Formal
- Structured by pre-determined rules
- Adversarial
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Advantages |
- Can be quicker and cheaper than adjudication or legal solution
- Parties retain control over process and outcome
- Parties work together to find win-win solutions
- Decisions can be tailored to needs of parties
- Agreements more likely to be implemented and future problems solved in non-adversarial way
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- Can be quicker and cheaper than adjudication or legal solution
- Allows for a wide range of issues to be dealt with quickly
- Parties work to understand issues, generate options and explore implications
- Parties identify way forward
- Parties build improved relationships
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- Can be quicker and cheaper than adjudication or legal solution
- Enables creative solutions to be found
- Parties retain control over process and outcome
- Parties work together to find win-win solutions
- Substantive issues of importance to parties can be addressed
- Decisions can be tailored to needs of parties
- Parties can directly contribute expert understanding and expertise
- Results in greater likelihood of implementation of agreement and improved relationships
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- Can be quicker and cheaper than adjudication or legal solution
- Parties can tailor process to suit their needs
- Parties can choose subject-matter experts as arbitrators
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- Application of court and legal rules may help to address power imbalances
- May be only option where a root cause is related to lack of clarity in legal rights
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Disadvantages |
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This method may not be suitable for complex cases
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Failure to implement agreement may necessitate enforcement through courts (where agreement is enforceable as a contract) or may require another conflict approach to be taken
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This process is non-binding
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Facilitation does not result in contractual agreement. Should a formal contractual agreement be required, a process of negotiation would need to follow the outcome of a facilitated process
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Power imbalances may be enhanced
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Agreement may not be reached
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Failure to implement agreement may require enforcement through courts (where agreement is enforceable as a contract) or may require another conflict approach to be taken
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Parties relinquish control over final decision
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Success depends on competence of arbitrators
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Depending on the legal regime applying, there may be limited opportunity to appeal or seek a formal review of an arbitration award
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Slow and expensive
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Court processes can be intimidating and hard to understand for many stakeholders
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Initial outcomes of legal proceedings may result in appeals or further litigation
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Decisions are restricted to narrow legal parameters and may not include guidance on matters such as future constructive relationships between the parties
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Parties relinquish control over process and decision
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Inappropriate for disputes involving broader social issues or matters of fairness not reflected in law
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