The common narrative about mining companies is that they seek profits at all costs, often at the expense and exploitation of locals. Corporate Social Responsibility is meant to challenge this. The goal is to have responsible mining projects that support and empower the local community. Basically, companies that practice CSR supposedly try to have a positive rather than a negative impact by following certain ethical standards.
Not surprisingly, the authenticity of CSR and the ability of mining companies to be truly responsible is the subject of much debate. Let’s see if this idea is worth its weight in gold, or if it loses its shimmer when looked at closely.
There are two Canadian updates related to this topic. First, the Canadian Banro Corporation is starting its gold mining activity in the South Kivu province in the Democratic Republic of the Congo with rigorous CSR objectives realized by the specially established Congolese charity Banro Foundation. Second, the Canadian International Development Agency (CIDA) is now providing money to Canadian mining companies (Rio Tinto Alcan, Barrick Gold and Iamgold) to create CSR projects in collaboration with aid agencies, as Elizabeth Payne recently reported in the Ottawa Citizen.
NGOs are often criticized for working inefficiently and having to prioritize funding pursuits over their own projects. As Elizabeth Payne explains many development projects and aid initiatives have been cancelled because CIDA did not release who would be funded until three months after the deadline for accepting grant proposals. Companies usually have more financial security and thus the CSR projects (that are often led together with aid agencies) might be able to provide for more long-term investments.
The counter-arguments are numerous. It is said that the profit-oriented nature of corporations is in conflict with the aims of helping to develop a community. According to this view, it would be profitable for companies to operate in less developed areas, since there they could pay low wages. Engaging in costly development initiatives would thus be contrary to their needs. Furthermore, many argue that companies do not really care about their contribution to the environment or community; they engage in CSR practices simply to boost their reputation. After all, almost all mining companies in some way or another employ the tenants of CSR, yet they are continually seen as far from socially responsible.
With those arguments in mind, ACAC contacted Banro and inquired about their CSR project. We were provided with Sustainability Reports and had a chance to have an interview with one of their representatives. We were surprised, because two of the three ACAC principles were embedded in their strategy: Invest Locally, Promote Transparency. Banro reports that around $2.5 million have been invested in education, health care and infrastructure with the consultation of the local community (including information about the consultation process), even before the start of mining. More delicate matters, such as the resettlement of 463 homes, were also addressed, also in rather positive terms. To make a more informed judgment on the resettlement issue, it would be crucial to hear the voices of the affected locals and find out about the details of this process. Usually such processes cause much difficulty, though possible, it is unlikely that this resettlement occurred without damage on local structures.
Information in such reports specifically focuses on the positive and omits as far as possible the negative. After all, this is part of a company’s PR strategy. Therefore such reports have to be read with a grain of salt. Maybe it is true what most critics say, that CSR is implemented just for the creation of a positive reputation of the corporations. On the other hand, if companies are able to actually provide sustainable and well-managed contributions, one has to give them credit for that too. In the end, it all comes down to transparency. It is good if CSR can make positive contributions, but it should not turn into a mechanism of whitewashing a bad reputation and covering up the negative impact of a corporation’s presence on the local community or environment (note: this does not specifically refer to Banro). It is important that civil society keeps holding those companies accountable and is not simply convinced of the company’s positive intentions by seeing a certain amount of money invested in “good causes.” Ethical consumers and activists and the pressure they put on the mining industry have contributed to CSR becoming so wide-spread. Now, it is time to keep eyes and ears open to make sure that companies do what they say. This is easier said than done, because often one does not hear the voices of local communities loud enough. And most of us can’t go there and talk to someone.
It is important to hold each company individually accountable. This will increase pressure on them to do what they claim to do, but it will also bring the common narrative of all mining companies being the antagonists in question. Indeed, not all that glitters is gold. But some of it is, and some joint projects of NGOs and mining corporations might overall be very successful, for the all the parties involved. In order to find the real gold, one simply has to seek well enough, because for sure it is somewhere out there.
CIDA’s approach of financing CSR projects of big mining companies is probably not the right step. There are many NGO development projects that urgently need funding. Also, considering the profit many companies make off of their activities abroad, they should cover their own bills. Taxpayers’ money should not be used to subsidize mining companies CSR initiatives – if they are truly committed to the cause, they should foot the bill themselves.
Corporations need to be held accountable. The point of CSR should not be to mitigate negative impacts, but to minimize them in the first place. What remains to be seen is whether or not this is possible in when the game is resource extraction and the place is a conflict zone.