Mining Investments and CSR: a path to sustainable development?
Fernandez del Castillo Kasten, C.
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Mining is an industry pursued by many developing countries as a strategy for development through economic growth and supposed consequent poverty reduction. However, mining has also been associated with numerous damages to communities at the local level mostly emanating from loss of land and displacement. With globalization’s decrease in economic and political barriers, more and more TNCs are making mining acquisitions in developing countries. As a result, Corporate Social Responsibility has come to the center of the mining debate as a way to mitigate and compensate damages, and benefit and contribute to local development including the stakeholder communities impacted the most. While many academics are weary of the beneficial potential from mining, optimists see TNCs as a new player of governamentatily and plausible development agents. But how useful is CSR in reality in the context of mining as an agent and contributor of local sustainable development? This research focuses on the case of Tete, Mozambique; one of the largest coal reserves in the world, untouched until recently, where large-scale foreign mining investments are booming. Two multinational mining giants, Rio Tinto and Vale, have developed open-pit mines and have already begun extracting and exporting coal to foreign countries. Both companies count with self-made CSR frameworks and claim to be deeply committed to sustainable development. This research seeks to find out what these companies are doing for local communities in terms of CSR, including compensation, mitigation, shared value creation, stakeholder inclusion and sustainability, and whether the results corroborate with corporations’ CSR discourse and the academic debate regarding the potential of Corporate Social Responsibility for local sustainable development. Findings show that the companies did not properly compensate the resettled communities that previously occupied the land, the damages were not mitigated, and there is very little shared value created. In reality and at the local level, companies have a different conceptualization of what CSR entails in contrast to their CSR discourse. Companies do not adhere to their own CSR frameworks, and even when they do, the benefits that communities would acrrue are not sustainable or significant for the long-term. Companies are faced with multiple challenges including limited sovereignty to deliberately have a direct influence in local socioeconomic development.