Corporate Social Responsibility of Mining Industries

Abstract

Historically, the mining industry has taken a 'devil may care' attitude to the impacts of its operations; operating in areas without social legitimacy, causing major devastation and then leaving when an area has been exhausted of all economically valuable resources. Cost benefit language has often been used to excuse the damage caused in one place because it is outweighed by the overall financial benefits.

However, in recent years the global mining industry has addressed its social and environmental responsibilities; numerous factors have contributed to this, and the extractive industry is key in debates about social and environmental sustainability. The Corporate Social Responsibility (CSR) programmes of mining companies tend to focus on community initiatives as their impact in economic, social and environmental terms is felt greatest at the local level.

However, the effectiveness of CSR initiatives in the oil, gas and mining sectors has been increasingly questioned. While multinational mining companies have 'remodeled' themselves as good corporate citizens there is little evidence as to how this recognition of the need to address sustainability issues has affected communities, and whether community development initiatives have been effective in contributing to more sustainable communities. There is some risk that in undertaking CSR a dependency on the company will develop. Whether intentional or unintentional this can have serious consequences for the dependant community, particularly after the mine closes.

This paper aims to examine the community development approaches of large scale mining companies, with particular reference to how they may engender community dependency. The paper begins with a review of CSR in the mining industry, corporate community initiatives and the problem of mining dependency at a national, regional and local level.

Keywords: Corporate Social Responsibility, Mining, Industries, Development, Environment, Government

JEL Classification: K00, K10, K19, K30, K49, L20