How can public–private partnerships contribute to security and human rights policy and practice in the extractive industries? A case study of The Democratic Republic of Congo (DRC)

Across sub-Saharan Africa, the presence of foreign large-scale mining companies is increasing. This is in part a result of depleting resources in countries such as Canada, United States and Australia, and in part from a more favorable national mine investment climate in several mineral-rich African countries. Their increased presence raises important questions around the potential role and function of Corporate Social Responsibility (CSR) in the sector. In post-conflict and/or fragile states, CSR has further implications for conflict and risk mitigation strategies to ensure the protection of human rights. One CSR approach increasingly being considered is the public–private partnership, whereby companies, public donors, and development agencies leverage their relationships for mutual benefit. There is merit in exploring its function in post-conflict fragile states, where socio-economic needs are high and the capacity of the state to respond to a variety of mine governance challenges is limited. Two case studies from the Democratic Republic of Congo (DRC) are presented, and their policy implications, discussed.     

Corporate social responsibility in the mining industry: Perspectives from stakeholder groups in Argentina

Since the liberalisation of its investment regime in the 1990s, Argentina has seen a rise in foreign direct investment into large-scale exploration and exploitation of mineral resources. However, many social groups (local communities, grassroots movement and the church) often strongly oppose new mining projects on the grounds of environmental, ethical and economic concerns. In a situation marked by widespread conflict, mining companies continue operating and develop Corporate Social Responsibility (CSR) initiatives which are often promoted as a means of contributing to the sustainability and development of the nation. The paper develops a framework to highlight how the principles of stakeholder theory could be used as conceptual and practical guidance for conflict-resolution oriented CSR policies. The framework is further used to analyse two case studies of conflictive mining projects in Argentina. The paper explores how key stakeholders perceive contribution of CSR to welfare and the socio-economic development of mining communities and sustainable development of the nation. It demonstrates that institutional and social stakeholder networks often strongly oppose the idea of voluntary self-regulation implied by CSR in situations characterised by weak governance. Even though the CSR of companies could be improved in areas of corporate communication, transparency, stakeholder engagement and dialogue, it is not seen as a panacea for the social conflicts in the sector.     

Corporate Social Responsibility (CSR) for exploration: Consultants,companies and communities in processes of engagements

Over the last fifteen years, large-scale mining companies have started engaging in Corporate Social Responsibility (CSR), with the aim of contributing to developing local communities affected by their operations. Large-scale mining companies, together with the World Bank, have formulated voluntary principles and benchmarks to guide these company–community relations. Recently, it has been argued that CSR is also crucial in the early stages of exploration. Nowadays, mining consultants propagate a process approach to company–community relations, from early exploration to post-mining planning.     

A collaborative approach to address the cumulative impacts of mine-water discharge: Negotiating a cross-sectoral waterway partnership in the Bowen Basin,Australia

The social and environmental impacts of rapidly expanding coal and gas industries have generated high levels of public concern and there is increasing evidence of cumulative impacts. In the Bowen Basin of Queensland (Australia) water quality issues have triggered a collaborative response to coordinate monitoring efforts, integrate data and information and undertake regional analysis to inform landscape-scale management. Collaborative governance is promoted as a response to complex environmental problems, such as cumulative impacts. However, application of this approach to the resources and energy sectors remains a significant research gap. This paper reports the results of action research in the 2 years taken to negotiate the establishment of collaborative governance arrangements to address mine-water discharge impacts in the Bowen Basin. The long establishment phase has been required to refine objectives, build trust, develop governance mechanisms and secure resourcing commitments. The partnership established involves more than 20 organisations including regulators, resources and energy companies, agricultural industries and research organisations. The breadth of participating sectors is a significant innovation, but also represents a major challenge in establishing this model of regional environmental governance. Promising strategies adopted to manage these tensions have included neutral brokerage, facilitative leadership, establishing legitimacy of the collaboration and credibility of its reports. The case study provides a cautionary tale of the pursuit of the promise of ‘everyone working together’ to address cumulative impacts. Policy implications include the need for extended commitment and integration of collaborative and other responses.     

Corporate social responsibility, partnerships, and institutional change: The case of mining companies in South Africa

Internationally and in South Africa, mining companies are increasingly referring to corporate social responsibility (CSR) and partnerships in terms of the business case, or the expectation that being responsible and collaborating with stakeholders is good for profits. Based on a case study of platinum and chrome mining in South Africa, this article argues that the business case is circumscribed by companies’ institutional context. In the past, mining companies’ dominant interpretation of CSR has been in terms of charitable donations and support to good causes. These efforts have not alleviated the contribution of mining companies to growing social problems around the mines, primarily because they have not impacted on core business practices and have not contributed to necessary cross‐sectoral collaboration. Recently, however, there has been an important transition involving the broadening of the interpretation of CSR and increasing commitment to these issues amongst corporate leadership. Though market‐based incentives have contributed to this, the key driver has been the State's legislated transformation programme premised on State sovereignty over mineral resources. Hence, while the interrelationship between companies and their institutional context has, in the past, brought about a vicious cycle of irresponsibility and minimal collaboration, this cycle may be reversed into a virtuous one, driven in particular by the State. The broader implication is that references to a business case for CSR and partnerships cannot be relied upon independently of continued efforts at shaping the public sector context of companies.     

Could a public ecology approach help resolve the mountaintop mining controversy?

In recent years, controversy has grown around decisions related to mountaintop removal mining of coal in Central Appalachia, USA. While this mining method can be particularly efficient, it necessitates removal and relocation of huge volumes of earth—permanently altering the natural landform and potentially impacting local environments and communities. Current decision-making systems and regulatory frameworks have been largely ineffective at incorporating the values and concerns of stakeholders. This is due, in part, to contradicting policies, a legacy of distrust, and problems related to scale. Further, the lack of good civic science related to mountaintop mining and meaningful routes for public involvement have also hampered effective decision-making. We propose that the fundamental concepts of public ecology may provide a progressive approach to resolving these complex issues, and examine the challenges that must be met along the way.     

Managers as drivers of CSR in state-owned enterprises

Corporate social responsibility (CSR) is increasingly required not only of private sector companies, but also of state-owned enterprises (SOEs), whose main function is to provide services to society and not principally to obtain financial reward. The important role played by managers in implementing CSR has been demonstrated by prior research. The objective of this paper is to examine how managers of SOEs perceive the concept of CSR, the reasons for their involvement and how it is integrated into everyday business practices. In addition, we examine whether managers' attitudes towards CSR policies are influenced by their personal profiles and by the sector in which the SOEs work. We find that, although these managers are aware of the importance of the CSR principles underlying their activities and understand the meaning, scope and dimensions of CSR, there remains an evident need to enhance the application of CSR policies among the strategies of SOEs. The manager profile and the sector in which the SOEs work both have a strong influence on their behaviour regarding CSR issues.     

Corporate Social Responsibility: Exploring a Framework for the Agribusiness Sector

Corporate social responsibility (CSR) has long been an issue for research and practice. More recently, in response to growing public scrutiny, it has also gained importance in the agribusiness sector. Research has highlighted a growing gap between public perceptions of farming and food production processes and the realities of modern agriculture and the food industry. This can threaten the reputation and legitimacy of companies operating in this sector. One proactive means for companies to meet societal expectations is to make an active commitment to society and its needs by implementing a CSR policy. However, there is still no clear definition of CSR, and what important stakeholders actually expect from companies remains largely unknown. This paper focuses on consumers’ perception of CSR. Its objective is to explore a CSR policy design for German agribusiness based on Archie B. Carroll’s famous pyramid model. A consumer survey was conducted to evaluate the CSR demands society places on agribusiness companies. An explorative factor analysis was employed to discover the outline of the construct in the German agribusiness context. The results reveal that Carroll’s model, which was developed from a U.S. point of view, cannot be confirmed for German agribusiness. Instead of Carroll’s four responsibility groups, three areas of responsibility were identified: economic, internal and external. These results have manifold implications for CSR strategies in agribusiness firms and represent an important origin for future investigations on CSR in other countries as well as in specific agribusiness subsectors.     

Perspectives on corporate social responsibility in the chemical sector: A comparative analysis of the Mexican and South African cases

In recent years, the debate on corporate responsibility has shifted from a focus on environmental management towards a broader concept of corporate social responsibility (CSR). This article examines the chemical industry's approach to CSR from the perspective of two emerging economies: Mexico and South Africa. The global chemical industry was one of the first to respond to public concerns about environmental pollution, toxic waste and human health by adopting an industry‐wide code of practice, known as Responsible Care. This article examines the extent to which the chemical industry has responded to the broader debate on CSR. On the basis of a comparative case study, this article argues that the response to social issues by Mexican and South African chemical companies has tended to be limited to the ‘community awareness and emergency response’ (CAER) or community dialogue component of the international voluntary management framework, Responsible Care. Similarities and differences in regulatory and institutional conditions, as well as different levels of civil society engagement, reveal additional limitations for CSR, beyond that of the Responsible Care framework. This article argues that the socio‐political context influences the extent to which companies embrace CSR, especially in emerging economies, and highlights several challenges for the chemical industry in moving forward on CSR: credibility, stakeholder engagement, value‐chain accountability, disclosure and transparency. Reflecting on these challenges, the authors conclude by recommending a renewed focus on: (1) developing a broader set of CSR management practices beyond Responsible Care; (2) institutionalizing stronger accountability measures, such as reporting and verification; and (3) developing multi‐stakeholder partnerships that complement regulation and build public sector regulatory and guidance capacity.     

Coltan from Central Africa,international trade and implications for any certification

The exploitation of coltan in Central Africa can be considered a case of conflict minerals due to its nature. Many international organizations and bodies, national governments and private sector organizations seek to address this conflict, in particular via transparency, certification and accountability along the material supply chain. This paper analyses the international trade dimension of coltan and gives evidence on the dimension of illicit trade of coltan. The authors start from the hypothesis that illicit trade of coltan sooner or later will enter the market and will be reflected in the statistics. The paper is structured in the following manner: first, a short section gives a profile of coltan production and markets; second, an overview of the mining situation in the Democratic Republic of Congo (DRC) and related actors. The third section addresses mechanisms, actors and measurement issues involved in the international trade of coltan. The final part draws lessons for certification and conflict analysis and offers some guidance for future research.     

Chinese resource security policies and the restructuring of the Asia-Pacific iron ore market

This paper reviews the restructuring of the Asia-Pacific iron ore market in the wake of the rise of the Chinese steel industry. Prior to the 2000s, this market was characterised by two key features—high firm-level concentration on both the producer and consumer sides, and price determination through annually negotiated benchmark pricing between Australian mining and Japanese steel firms. However, owing to rapid growth in the Chinese steel industry and its emergence as the region's principal iron ore consumer, the Asia-Pacific iron ore market has been dramatically restructured during the last decade. This process has been accelerated since 2005 by Chinese governmental resource security policies, which have sought to address current record high iron ore prices through the use of foreign investment to sponsor new market entrants and the formation of an import cartel amongst the Chinese steel firms. This paper evaluates how these policies have driven restructuring in the Asia-Pacific iron ore market, through an analysis of the growth of China's steel industry, Chinese resource security policies aimed at lowering iron ore import costs, and their effects upon the regional market's ownership structure and price determination mechanisms. It argues that while Chinese investment and cartelisation policies have catalysed significant changes to the ownership and pricing structures of the Asia-Pacific iron ore market, they have carried only mixed benefits for the Chinese steel industry's resource security.     

Statistical considerations of progressive value and risk in mineral exploration

Financial markets recognise maximisation of expected value (E), in an essentially risk-neutral context, as the main corporate financial objective of private enterprise. This may be valid for large, integrated mining companies. Yet, most junior and middle-size exploration companies behave in a risk-averse fashion when making decisions about progressively more expensive exploration programs. From their perspective, a potential increase in expected value from either an increase in target value or related probability of discovery, or both, may not be a sufficient incentive to embark in an exploration programme if the resultant increase in expected value is accompanied by a significant increase in possible maximum loss. Risk-averse explorers may be unwilling to bear larger, albeit less probable losses, when the cost of successive exploration programmes is taken into account. The paper provides a practical methodology for such explorers to optimise the decision whether to progress to the next stage of exploration or to farm out a risky project. It uses a decision-tree model incorporating the effectiveness of the proposed exploration programme, the explorer's risk tolerance and related utility values and the probability distribution of the possible value of the exploration target.     

Capital structure and asset utilization: the case of resource intensive industries

This research studies the relationship between the capital structure of a firm and its asset utilization rate in resource intensive industries. We study this issue from both private and public policy perspectives. From a private perspective, it's conceivable that a positive relationship may exist because a company is trying to increase its use of debt to effect a more efficient utilization of its assets. However, from a public policy perspective, finding a positive relationship between asset utilization and debt levels in natural resource sensitive industries may signal a sub-optimal exploitation of natural resources when debt levels rise. This research examines measures of leverage and asset utilization in firms from the mining, oil, and timber industries to determine whether the behavior alleged in the PALCO/MAXXAM case (an increased cutting rate to pay off junk bond financing) has been observed more systematically. We observe a positive relationship between leverage and asset utilization in all three industries when leverage is calculated using book value measures. When market value measures are used, this positive relationship no longer holds in the mining industry. Possible explanations for these results are offered.     

State mineral production taxes and mining law reform

Fuel and leasable minerals mined in the United States have historically been subject to federal royalties while locatable minerals have not. In recent years there have been multiple attempts to alter this policy and subject locatable minerals to federal royalties as well; most recently the preliminary 2012 Obama budget included a gross royalty on hard-rock mining on public lands. This paper analyzes the issue of imposing such federal royalties from both a legal and economic perspective. From a legal perspective, it is argued that the state of western property rights precludes royalties on currently extant claims so revenues from a royalty would not be realized for many years. From an economic perspective, it is argued that the effect on revenue would be smaller than one might anticipate due to such a royalty crowding out state levies or encouraging vertical disintegration on the part of mining firms to avoid much of the burden of the royalty.     

Is corporate social responsibility possible in the mining sector? Evidence from Catalan companies

This paper examines the role and diffusion of corporate social responsibility (CSR) management, especially in relation with the adoption of other management systems, in small and medium sized companies in the surface mining industry in Catalonia (Spain). Specifically, it identifies the most salient CSR practices, procedures and metrics and the profiles of companies more prone to adopt them. To fulfill this aim, a survey has been conducted. Results show that mining companies are familiar with CSR practices, but there is not much formalization of procedures and measurement systems of CSR yet. Results show that the majority of socially responsible practices are related to environmental issues and therefore there is a relation between CSR and the application of environmental management systems. The analysis reveals that the management of CSR activities improves with the diffusion of knowledge on CSR practices. A second survey collected the opinion of professional associations in the sector. Respondents indicate that an improvement in CSR management will lead to a better global competitive position.     

Corporate Social Responsibility in the extractive industries: Experiences from developing countries

This paper introduces a special issue on ‘Corporate Social Responsibility in the extractive industries: experiences from developing countries’. Drawing upon case study analysis from Latin America, sub-Saharan Africa and Asia, the papers in this issue broaden understanding of how multinational mining and oil and gas companies have embraced the CSR challenge and responded to criticisms of their performance in developing countries. This paper provides an introduction to the debate on CSR in the extractive industries in developing countries, reviewing the key issues examined on this subject to date.     

What Is a Good Public Participation Process? Five Perspectives from the Public

It is now widely accepted that members of the public should be involved in environmental decision-making. This has inspired many to search for principles that characterize good public participation processes. In this paper we report on a study that identifies discourses about what defines a good process. Our case study was a forest planning process in northern New England and New York. We employed Q methodology to learn how participants characterize a good process differently, by selecting, defining, and privileging different principles. Five discourses, or perspectives, about good process emerged from our study. One perspective emphasizes that a good process acquires and maintains popular legitimacy. A second sees a good process as one that facilitates an ideological discussion. A third focuses on the fairness of the process. A fourth perspective conceptualizes participatory processes as a power struggle—in this instance a power play between local landowning interests and outsiders. A fifth perspective highlights the need for leadership and compromise. Dramatic differences among these views suggest an important challenge for those responsible for designing and carrying out public participation processes. Conflicts may emerge about process designs because people disagree about what is good in specific contexts.     

Food Supply Chain Governance And Public Health Externalities: Upstream Policy Interventions And The UK State

Contemporary food supply chains are generating externalities with high economic and social costs, notably in public health terms through the rise in diet-related non-communicable disease. The UK State is developing policy strategies to tackle these public health problems alongside intergovernmental responses. However, the governance of food supply chains is conducted by, and across, both private and public spheres and within a multilevel framework. The realities of contemporary food governance are that private interests are key drivers of food supply chains and have institutionalized a great deal of standards-setting and quality, notably from their locations in the downstream and midstream sectors. The UK State is designing some downstream and some midstream interventions to ameliorate the public health impacts of current food consumption patterns in England. The UK State has not addressed upstream interventions towards public health diet at the primary food production and processing stages, although traditionally it has shaped agricultural policy. Within the realities of contemporary multilevel governance, the UK State must act within the contexts set by the international regimes of the Common Agricultural Policy and the World Trade Organization agreements, notably on agriculture. The potential for further upstream agricultural policy reform is considered as part of a wider policy approach to address the public health externalities issuing from contemporary food supply chains within this multilevel governance context.     

Challenges with eradicating illegal mining in Ghana: A perspective from the grassroots

This paper argues that artisanal mining communities are somewhat bound to their operations, and helps explain why formalisation, alternative livelihood projects and military intervention—the traditional strategies employed by governments to tackle illegal mining—have proved ineffective. Findings from recent research carried out in Noyem (Eastern Region of Ghana) are used to illustrate why illegal artisanal mining is such a deeply rooted activity in sub-Saharan Africa. The analysis provides four explanations in support of this: a heavy involvement of traditional leaders in operations; the mindsets of many operators toward alternative income-earning activities; the numerous and diverse range of employment opportunities provided by the sector; and the level of investment in operations.