Taking responsibility

Materials World magazine
1 Feb 2009

Mike Heath, a Senior Lecturer at Sheffield Hallam University, UK, considers corporate social responsibility in the minerals industry.

The concept of corporate social responsibility (CSR) emerged in the 1970s in response to growing awareness of the social impact of business. Since then, CSR policies have evolved into a widely-adopted approach to managing the economic, environmental and social impacts of industrial activity. It attempts to meet the needs of a variety of stakeholders, including shareholders, employees, customers, suppliers and the communities and ecologies affected by business activities.

The UK’s Department for Business, Enterprise and Regulatory Reform set the UK Government’s vision for CSR as ‘to see UK businesses taking account of their economic, social and environmental impacts, and acting to address the key sustainable development challenges based on their core competences wherever they operate – locally, regionally and internationally’.

In the mining industry, this might be interpreted, as suggested in BHP Billiton’s Health, Safety, Environment, and Community (HSEC) Management Standards, as including ‘all operational aspects and activities that have the potential to affect, positively or negatively, the health and safety of people, the environment or the community’. Activities extend over a long period of exploration and development, through to operation and mine closure and the post-closure period.

Though companies may adopt CSR policies simply to improve their public image, there may also be an acknowledgement of a wider responsibility towards the Earth’s resources. Whatever the motivation, there are benefits to be gained from good CSR practice.

Rio Tinto, for example, sees CSR in terms of its ‘economic, social and environmental contribution to sustainable development.’ ‘Securing access to financial, human and land resources is one of the key strategic benefits of the enhanced reputation,’ says Chairman Paul Skinner in Rio Tinto’s 2006 Sustainable Development Review.

Socially aware

The inclusion of social considerations in the environmental policies of mining organisations is fairly new. Following the Global Mining Initiative in 1998, a number of organisations embarked on the CSR process, including Anglo American, whose Community Engagement Guidelines included a commitment that ‘every project will have a three-year Community Engagement Strategy in place by 2002’. As a result, Anglo American Group member Tarmac added social impacts to its Safety Health, Environment and Social Report 2002, placing social responsibility in the context of sustainable development.

A useful overview of CSR in the mining industry was provided in 2004 by the World Bank CSR Practice report on Company Codes of Conduct and International Standards – An Analytical Comparison. The report includes a critique of the CSR policies and practices in place at the time and the role of CSR in many of the major mineral corporations.

Contributing to sustainable development is often cited as a key motivation for CSR initiatives. ‘Sustainable Development’ was defined in the Brundtland Report of 1987 as a ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’.

The challenges associated with balancing economic development with environmental protection are perhaps illustrated in the minerals industry more than in any other sector, and has led to the concept of ‘sustainable mining’ – an oxymoron to some. Mine products are essential for economic development but minerals often occur in environmentally sensitive locations and in areas inhabited by indigenous peoples. The debates surrounding mineral development is therefore complex and challenges even the best intentions.

In 2002, the International Institute for Environment and Development launched its two-year Mining, Minerals and Sustainable Development (MMSD) project, the results of which were published in MMSD’s Breaking New Ground in 2004. The report, which included a review of the sustainable development policies of key mining companies, concluded that the road to sustainable development must include ‘all those affected – policymakers, business leaders, public interest campaigners, people working in mines, local communities, and – very important – consumers’. It is multi-stakeholder engagement that underscores successful CSR initiatives.

Impact management

The environmental and ecological impacts of mining are well known and relate to land use, biodiversity, water management and pollution, air quality, energy, waste management (overburden and tailings), transport, and other direct and indirect physical and chemical impacts. These can usually be managed by environmental protection technology and environmental management systems (EMS), such as ISO 14001 or, within the European Union, the Eco-Management and Audit Scheme (EMAS). The tougher requirements of the latter, including the need to publish environmental statements, have not deterred some minerals operations. Lafarge Cement, for example, is implementing and securing registration under the EMAS system for its Hope Valley site is in the Peak District National Park, UK.

Social and cultural impacts are sometimes harder to address. This has attracted the attention of the media in India, among other countries, where mineral development is sometimes proposed in areas of forest and sites inhabited by tribal peoples. UK metals and mining company Vedanta Resources, for example, was challenged in the High Court in London in 2007 over proposals to mine bauxite in Niyamgiri, Orissa, India.

Kumati Majhi was part of a delegation of the Niyamgiri people supported by ActionAid at the High Court, and campaigned under the slogan, ‘We will not sell our God for your profit’. Majhi’s observation that ‘the company is destroying our place of worship, destroying our mountain God Niyamgiri and destroying our way of life’ is hard to address in an EMS, but Vedanta’s 2008 Sustainability Report states that local communities are engaged ‘to ensure sustainability and ownership of the projects, processes and outcomes’. Similarly, challenging scenarios have occurred in Canada, Australia and elsewhere, where indigenous peoples may have a complex relationship with the land.

Corporate social responsibility policies can be called upon to resolve contentious questions concerning land rights, displacement and resettlement; the provision of housing, education and health facilities; the use of forced, bonded and child labour; non-discrimination; financial transparency; wages, benefits, working conditions and terms of employment; the role of trade unions and collective bargaining; and policies regarding small-scale and artisanal mining, among others.

Many of these issues are covered in the Council on Economic Priorities Accreditation Agency’s Social Accountability 8000 standard, which can provide guidance for addressing wider social and human rights issues, and is used by BHP Billiton in framing its HSEC management standards.

Looking forward

Some excellent CSR practice has evolved, though often under the banner of environmental management or sustainable development. This might mean securing long-term economic development beyond the life of the mine itself.

Ecological restoration practice is well-established, often featuring afforestation, sometimes with a social forestry dimension. Environmental management systems such as ISO 14001 are now widely adopted in the mining sector, sometimes extending to suppliers and contractors through what has become known as ‘greening the supply chain’.

For the future, a Product Stewardship Scheme proposed by MMSD is being developed by the International Council on Mining and Metals. Lifecycle analysis will be used for product certification schemes, perhaps like those already developed for forest and marine products.

The complex environmental, social and economic impacts of mining put the minerals industry in a unique position to pioneer CSR in the context of sustainable development. Resolving the economic development versus environmental protection conundrum remains a challenge, but awareness of the wider social impact of its activities has kindled positive initiatives which seem set to develop further.