Corporate social responsibility (CSR) in the mining industry
Nowadays mining sector is a key economic driver of active development of Renewable Energy Sources. Mining activities can positively impact local economic development but also might be accompanied by negative side effects on local ecology, population’s standard of living, safe working conditions, may cause accidents and lead to higher morbidity or illnesses. Such factors as hazardous gases, dust concentrations from construction and production, harmful noise levels and industrial toxic chemicals clearly reveal the causes of mining’ social rejection. Therefore, governments’ increasing attention at the need for enhanced cooperation with business community is focused on the incorporation of subsoil users’ environmental and social obligations into common sustainable development.
CSR of mining companies
Apparently, human needs can fully met in steady economic growth accompanied by “expanding production and consumption of non-renewable mineral resources”.
It’s important to establish effective regulatory framework reducing potential environmentally harmful impact of mining (mining laws, environmental regulations as environmental impact assessment; sustainability principles, CSR, best practices, and others), which in turn will lead to “socially sustainable mines” and social acceptability.
Accepting all consequences of mining activities, governments use different mechanisms in order to create a value-add mining activity, one of which is CSR. The European Commission defines it as “the responsibility of enterprises for their impacts on society”. Altogether, CSR introduces “social, environmental, ethical, human rights and consumer concerns into the business operations and core strategy in close collaboration with the stakeholders” (Figure 1). For example, Finland adopted “guidance for stakeholder engagement in exploration and practices supporting environmental regulation and socially sustainable mines”.
In the developing economies, for its part, influenced by some aspects of the governments’ policies (increasing frequency of civil conflicts, economic slowdown, corruption and other concerns), CRS activities are less efficient. For example, conflict in Nigeria’s Niger Delta on the view of “the environmental damage caused by gas flaring, tailings, and oil spills (local communities / extractive companies (Shell and Chevron) / the Nigerian government)”.
Figure 1. Carroll’s CSR pyramid
Thereby, the CSR key concept “is not only the gain from mining, but also to raise local community’s standards of living, to support them, to provide alternative job replacement after closing of mining projects and to restore land areas and other natural features damaged by mining activities to a condition suitable for further use, while conserving the environment and preserving cultural heritage”.
Mineral resources dilemma: balance of interests of stakeholders
The mining activities’ negative effects are particularly acute local communities’ issues. Local population’s strong opposition to mining and exploration activities, which are the result from “impact on the environment, unfair distribution of profits from mining and exploration activities, insufficient contributions to local government budgets and lack of transparency regarding ultimate ownership of companies conducting exploration and mining”, can trigger suspension or termination of mining projects.
Significant number of countries have faced an increase in tensions and conflicts related to mining projects. In actual practice, there are many examples when mining projects were terminated due to the protests against, for instance, the Canadian gold mining company “Osisko” in Argentine (July 2013); Shell’s plans to extract gas in the Yuzivska shale gas field (January 2013); British protest actions in the West Sussex village against hydraulic fracturing in the framework of an oil exploration site in rural England (August 2013), and others.
Local populations view critically not only ongoing exploration and mining projects but also auctions and tenders procedures by which subsoil use rights are granted.
Considering the subsoil belongs to the State (as stipulated in the Constitutions of Germany, Norway, Russia, Sweden, and others) and not to local population communities or local authorities, for the most part, public participation in decision-making processes remains perfunctory. Public authorities in the sphere of subsoil resources held a different view and believe in mining’s favourable outcome. This case can be clearly observed in Kazakhstan. However, even if the country joined the Extractive Industries Transparence Initiative, which requires much more information on subsoil users’ contributions to the country to be disclosed (in particular to the socio-economic development of the region and the development of its infrastructure), it doesn’t make a big difference. As a result, “unfair distribution of financial profitability to local business, notwithstanding massive benefits for mining companies and royalties for government”, can be observed.
How can mining become more sustainable?
Given the above, “a large majority of actual mining legislations set out preferential land use and a model of territorial management that is to promote and facilitate mining activities”.
Within CSR, “a good community relations program must maintain the balance between making real contributions to local community growth and replacing the government’s role or creating unrealistic expectations. The Dominican Republic demonstrates a clear example. Falconbridge Ltd. found that, as a result of its community development foundation’s several million dollar investments in local education, the government began to renounce its responsibilities in that particular province”, which is recognized unacceptable. In such cases, all stakeholders should be involved, including “NGOs, development agencies or other local, regional or international groups to achieve social goals”.
Table 1. Sample of a possible solution to the mineral resource dilemma and their consequences
Table 1 illustrates “the final solution to the mineral resource dilemma which emerged from the State decision (geological survey, exploration, and production). Those decisions should be based on establishing programs of sustainable development and replenishment of mineral resources, considering the needs and objectives of the government as well as of local communities”.
The purpose of mining is not solely the benefit but likewise to improve quality of life of the local population while conserving the environment and preserving cultural heritage. It will create more sustainable mines that local communities support.
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- R. Sweeting, A. P. Clark, Lightening the Lode: A Guide to Responsible Large-scale 2000, Mining, 111 p., p. 43, Conservation International, [Online] https://www.conservation.org/docs/default-source/publication-pdfs/ci_policy-center_lightening-the-lode-a-guide-to-responsible-large-scale-mining.pdf (19/11/2019).
- How Mining Companies with Strong CSR Programs Benefit All Stakeholders, Investing News Network – July 16th, 2018, [Online] https://investingnews.com/daily/resource-investing/precious-metals-investing/gold-investing/csr-for-mining-companies/ (20/11/2019).
Key words: sustainable mines, mineral resource, exploration, subsoil user, mining company, local communities, social obligations, corporate social responsibility, negative environmental impact, government, protests against mining projects.