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.     

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.     

Elusive Partnerships: Gas extraction and CSR in Bangladesh

This paper examines Chevron's programme of CSR at a gas field in Bangladesh. Whilst apparently building partnerships in the villages that surround the Bibiyana Gas Field, we suggest that the corporation remains detached from the local population via their community development programmes and employment policies. This contradiction is submerged by ideas and practices within global development discourse which celebrate the disconnection and disengagement of donors via the rhetoric of sustainability. Chiming with development praxis and the neo-liberal values which underscore it by stressing self-reliance, entrepreneurship and ‘helping people to help themselves’, the corporation's Community Engagement Programme does little to meet the demands of local people who hoped for employment and long term investment, a form of connection that is discordant to discourses of self-reliance and sustainability.     

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.     

The evolution of the Canadian mining industry: The role of regulatory punctuation

In this study, we analyze the evolution of Canada's mining industry from 1929 to 2006, focussing on the determinants of the number of firms in the industry and why this number changed over that period. Most empirical studies of industry evolution have focused on manufacturing industries that share similar structural characteristics. Perhaps because of this, extant models of industry evolution tend to ignore industry-specific and national-specific factors that can cause atypical trajectories, that is, heterogeneous industry evolution. Initial inspection of the Canadian mining industry shows that it is atypical in that it exhibits “negative skew” over time in the number of firms rather than the typical “positive skew.” We review two dominant theoretical approaches to industry evolution: the density-dependence theory and variants of industrial organization economics. We also consider possible sources of industry evolution heterogeneity, focussing particularly on “regulatory punctuation”. Using Canadian mining data, we find that the traditional models do not fully explain the changes in population size in Canada's mining industry. As a result, we introduce a number of hybrid models. The results from these hybrid models suggest that Canadian-specific regulatory punctuations, particularly the introduction of significant new taxes, environmental legislation, and incentives have shaped the trajectory of mining firm participation.     

A clash of cultures (and lawyers): Anglo Platinum and mine-affected communities in Limpopo Province,South Africa

The human rights related controversies surrounding Anglo Platinum's Mogalakwena mine in South Africa's Limpopo Province hit the world stage in 2008, attracting public scrutiny and instigating much debate in the realm of international business and human rights discussions. We provide an in-depth analysis of the controversies at Mogalakwena, and Anglo Platinum's responses. This case study contributes to ongoing debates on mining company-community relations in the context of the emerging business and human rights agenda, specifically with respect to the notion of human rights ‘due diligence’. We argue that the Mogalakwena case study illustrates the risks of companies adhering to and emphasizing the technical and logistical facets of due diligence, without sufficient attention to the relational, communicative and emergent aspects, which are closely tied to corporate culture. We highlight the complexities of company-community relationships, with particular reference to the issues of legitimate community representation and participatory decision-making, and discuss the role that organizational culture plays in exacerbating or mitigating corporate-community conflict. The case study demonstrates how legal challenges often exacerbate rather than resolve the conflicts that arise due to a clash between corporate and community cultures. We suggest the need for corporate leaders to become more conscious of this cultural dimension of effective social management, particularly when interacting with communities whose cultures are markedly different from those of business corporations.     

Social dimensions of mining: Research,policy and practice challenges for the minerals industry in Australia

The social dimensions of the mining industry are increasingly acknowledged as critical to business success, yet remain the least understood aspect of the business concept of sustainable development—the ‘triple bottom line’ of economy, environment and society.     

The legal environmental risk analysis (LERA) sample of mining and the environment in Turkish legislation

As advancing technology and increasing demands for natural resources continue to mount pressure on the environment, environmental conservation and sustainable management have become ever more important. Individual countries have been increasingly taking action to reduce environmental destruction caused by human activities in an attempt to find a balance in between the necessary exploitation of resources and environmental conservation. In Turkey, the struggle between environmental conservation and mining activities is set within the legal context, with the requisite legal regulations (which describe various procedures) in the midst of being updated or renewed. The legal environmental risk analysis (LERA), beginning by discussing the main legal regulations of environmental conservation in relation to mining activities, defines basic environmental components which form the basis of environmental conservation in relation to mining, and analyzes the impact of mining on each component. The analysis (LERA) finishes with an evaluation of the components as they currently stand and makes some suggestions for the improvement of insufficient regulations.     

The supply behaviour of state mining enterprises: A case study of the Jordanian phosphate industry

An important feature of export-oriented production in mineral-rich developing countries for almost three decades after 1960 was the growth of state-owned enterprises. For the phosphate industry, this was reflected in the expansion of companies such as Office Cherifienne des Phosphate (OCP) in Morocco and the Jordan Phosphate Mines Company (JPMC). There was a strategic importance of the industry for these nations and the large capital outlays necessary for phosphate and fertilizer production expansion often required considerable government assistance because of the perceived high risks of private investment in the industry.     

New mercantilism: A perspective on how politics is shaping world metal supply

The major countries consuming metals tended historically to be also the major countries producing them. It was in their interest to promote mine development to provide low cost raw materials. Over the past fifty years, the share of global production accounted for by consuming countries has declined and producers and consumers of metals have been slowly moving into separate camps having distinct and differing interests. As a consequence of this, governments of producing countries have become more focused on how to maximise the benefit of metal extraction to their economies rather than on how to supply cheap raw materials; a tendency which has found expression in resource nationalism. Governments of consuming countries have in response become increasingly concerned about the implications of this tendency to their economic development and some countries, most notably China, have adopted robust policies to secure their supplies. Through their actions to influence capital flows within the mining industry and to force metals trade into channels which better serve their national interests (a process characterised here as ‘new mercantilism’), metal producing and metal consuming countries are reshaping global supply.     

Multiproduct mine output and the case of mining waste utilization

This article addresses the concepts of economies of scope and multiproduct production, subadditivity and transray convexity as it applies to the mining industry. The article goes on to expand these concepts to include the case of mining waste utilization. It discusses how the modification of mining wastes into a marketable product can develop a relationship across the cost functions of the modified mining waste and ore production and how this interrelationship affects the profit maximizing condition. It discusses four possible outcomes from mining waste modification and its development into marketable products on the profitability and production of ore by the firm. Finally, it discusses mining waste utilization effects on rehabilitation costs and the potential for a decrease in the adverse community effects due to mine closure.     

Green accounting and sustainability of the Peruvian metal mining sector

This paper estimates the true economic income of Peru’s metal mining sector for the period 1992–2006, using a model of green economic income based on Hamilton (2000). The total depletion of natural capital caused by metal mining is calculated by estimating, on the one hand, the depreciation of mining resources (using the Hotelling rent approach) and, on the other, the environmental degradation provoked by metal mining activities. The results show that the total loss of natural capital represents between 31% and 51% of the metal mining GDP and between 2% and 4.9% of Peru’s GDP. On the other hand, correcting the usual GDP measure produced by the traditional National Account System (NAS) for the total loss of natural capital caused by mining activities shows that the GDP traditional measure overestimated by 51–64% the true economic income generated by Peruvian's metal mining sector during the period 1992–2006. The importance of the generation, taxation, and disposition of mining economic rents for Peru’s sustainable development in the future is also discussed.     

Economic implications of long distance commuting in the Chilean mining industry

More than 10% of the labor force that works in Antofagasta lives in other regions, commuting on average more than 800 km in a shift system that allows working several days in a row followed by several days off. The mining industry is the main contractor of such workers and the impact of the process spreads through the rest of the Chilean territory.Using an input-output approach, this paper shows that a significant amount of resources generated by the mining industries in the Region of Antofagasta goes to other regions in wages earned by commuters who have decided to work in this region but live in another. The commuting process seems to be driven by centripetal forces that support centralization, thus arguing for regional policies to promote the attractiveness of the peripheral regions.     

Linkages in Ghana's gold mining industry: Challenging the enclave thesis

By 2009, Ghana was the second-ranked African producer after South Africa, and had become the world's ninth largest producer of gold, at some 3.8% of global production, up from 2.6% five years earlier. Gold production volumes and revenues rose significantly over the decade from 2000. Yet gold mining tends to be perceived negatively in Ghana, and is seen as providing far less than it should in terms of public revenue, employment, skills development and spillovers, and localised economic development. Gold mining is often depicted as having an enclave status, disconnected and isolated from the rest of the economy. In contrast, the research findings here demonstrate that after a period of strong investment and growth, gold mining can no longer be viewed as an enclave activity: it is in fact more deeply linked into the Ghanaian economy than hitherto understood, through a set of as yet under-researched but promising economic linkages, notably backward linkages, which can potentially be strengthened by policy and support measures.     

Mining and social development: Refocusing community investment using multi-criteria decision analysis

This paper addresses the question: How can mining companies assess social investment projects so that projects create value for the company and communities in which they operate? Mining companies are still wrestling with the limits of their responsibility in relation to social development even though they accept the business case for community investment at a general level. Fully aware of the practical hazards involved in taking an active role in facilitating local development, companies increasingly avoid methods that are overly paternalistic or assume the functions of the national or local governments. Gaining senior management's commitment to long-term social projects, which are characterised by uncertainty and complexity, is made easier if projects are shown to benefit the site's strategic goals. Case study research on large global mining companies, including interviews with social investment decision makers, has assisted in developing a Social Investment Decision Analysis Tool (SIDAT), a decision model for evaluating social projects. Multi-criteria decision analysis techniques integrating business planning processes with social impact assessment have proved useful in assisting mining companies think beyond seeking reputational benefits, to how they can meet their business goals and contribute to sustainable development.     

Legitimizing industry and multi-sectoral regulation of cumulative impacts: A comparison of mining and energy development in Athabasca,Canada and the Hunter Valley,Australia

The Alberta oil sands industry and the New South Wales coal industry both faced controversies related to their cumulative impacts. In an attempt to generate hypotheses, we compared their attempts to maintain legitimacy, in its various aspects, for both their industries and the regulatory regimes that evolved as the controversies persisted. Both the existing literature and the two cases suggest that greater use of multi-sectoral stakeholder forums for the governance of cumulative impacts can bolster the legitimacy of both the industry and its regulatory regime, including those aspects handled through self-regulation. The cases suggested the additional hypotheses that (a) the importance of the decisions allocated to the multi-stakeholder regulatory forum affects legitimacy perceptions generally, and (b) the multi-stakeholder approach to regulation does little to bolster legitimacy when stakeholders include activists who are more interested in transnational issues than local cumulative impacts.     

Corporate Social Responsibility and development in Africa: Redefining the roles and responsibilities of public and private actors in the mining sector

This paper revisits the role of Corporate Social Responsibility (CSR), suggesting the usefulness of adopting a holistic and historical perspective. It underlines the importance of taking into account the evolving regulatory frameworks within which mining activities take place in order to consider the changing roles played by the various actors involved, whether multilateral, national or local, public or private. In this broad context it then becomes possible to revisit issues of legitimacy, responsibility, and accountability, which CSR strategies aim to address. The article draws attention to the shortcomings of strategies, whether bilateral or multilateral, public or private, which, in an attempt to respond to problems of risk and legitimacy faced by mining companies, have put forward measures in the name of CSR that do not address the origins that give rise to such problems and, in so doing, tend to mask the very nature of the difficulties at hand. The analysis leads to quite different conclusions as compared to those that result from the adoption of a shorter term and investment-led perspective.     

Small-scale mining in Ghana: The government and the galamsey

This paper argues that the current formalization system for small-scale gold miners in Ghana has been undermined and the small-scale mining laws no longer capture the reality of the sector’s activities. The paper will examine the small-scale mining system and shows that registered and unregistered actors operate not only in parallel but are actually intertwined and highly dependent on one another. The paper shows that the perceived dichotomy of formal and informal actors in the sector does not actually exist. The sector has instead evolved into a highly intertwined group of semi-formal sectors operating with varying degrees of legal registrations. The paper concludes that political leniency and law enforcement corruption has resulted in a booming small-scale gold system under poor government control. The paper recommends that politicians move to enact reforms to regularize the small-scale mining sector and curtail ubiquitous environmental and occupational safety problems. Anti-corruption initiatives and law enforcement reforms are the most urgent. However, reforming the laws is also necessary to capture and regulate the technological innovations the sector is currently using.     

A SWOT analysis of environmental management practices in Greek Mining and Mineral Industry

Over the last two decades, mining and mineral exploration companies have adopted various environmental management practices in response to society’s pressure for better environmental protection. The literature highlights a number of benefits and challenges for companies adopting environmental management practices with the Greek Mining and Mineral Industry (GMMI) facing similar issues. In order to analyze the challenges faced by the GMMI, a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis was conducted, which examined the strengths, weaknesses, opportunities and threats faced by the industry when adopting environmental management practices. The analysis prescribes policy recommendations both for the government and industry which, if adopted, could facilitate improved environmental performance.     

Permitting a new mine: Insights from the community debate

When a mining company selects a site for development, the company begins a dialogue with the local community about receiving the necessary approvals for the mining permits. The dialogue focuses on how well the company can use science and technology to manage risk to the local environment, and on how much economic benefit will be gained by the local community for accepting the risk. A useful approach to better understand how the debate affects the outcome of the permitting effort is to use the method of “discourse communities and analysis”. This paper analyzes two efforts by Kennecott (Rio Tinto) and one by Exxon to develop base metal mine sites in the Upper Midwest of the USA. As the three case studies show, the local pro- and anti-mining discourse community members will not be changing their basic positions as the permitting of a new mine is debated. Accordingly, both communities are trying to convince undecided stakeholders rather than talking to each other. Both sides are using ever more sophisticated media methods to communicate their message to the undecided residents of the community. By winning the support of the majority of the undecided residents, political pressure can be used to sway the decision.