CSR and the Mining Industry

Corporate Social Responsibility in the corporate world is perceived more as a charity or as a philanthropic activity than as a responsibility. Some good deeds to the community are done merely as  tokenisms so that something can be written under the head of CSR in the company’s website and annual report. Companies must realise or be made to realise that this is a responsibility as serious and non-negotiable as is the responsibility a parent has towards providing for his or her child. This is because the company takes from the community the majority of it’s resources both material and human and is therefore bound to give back to the community. This is specially true for the mining industry more than any other industry. Because mining often happens in remote locations, in forests and hinterlands where tribals and the poor reside and they don’t get the benefits of development. 

It is because Mining companies have not taken this responsibility seriously that they have earned for themselves a disrepute so deep that it has resulted in bans and legal excesses that has slowed the whole industry to a limp. Take the mining bans in Goa, and the problems that Vedanta has been facing in Orissa and Tamilnadu. CSR programs in the mining industry are one way to compensate communities for the social and environmental costs associated with mining.

What is Corporate Social Responsibility?

Let’s look at some textbook definitions :

“The process of communicating the social and environmental effect  of organization economic action to particular interest group  within  the  society and society at large” – Gray

 “Disclosure of those cost  and  benefit  that  may or may not  be quantifiable  in  monetary terms  arising from economic activity  and subsequently  born by  community  at  large  or other stakeholders” -Perk

 “CSR is  the concept whereby companies integrate social and environmental concern in their business operation and in their interaction with  their  stockholders  on  a  voluntary  basis.”  – EU Commission

In simple terms we may say that Corporate Social Responsibility refers to a company’s  voluntary  actions  to  either  reduce  the  negative  impacts  of  mining or  to improve  the  living  conditions  of the  local  communities where  they  operate. Indian  National Voluntary CSR Guidelines revised in 2011 outlines nine principles which companies must follow to effectively  carry out their social responsibility. These include issues of ethics, accountability, transparency, human rights, environment, well-being of employees, responses towards marginalised and vulnerable groups, equitable growth and development, and providing value to customers and consumers.

How can Indian Mining companies do CSR better?

  1. For CSR programmes to be successful companies must accord the highest priority to stakeholder engagement. And they must engage with all the stakeholders including investors, employees, customers and most importantly the entire communities in which they operate.
  2. The CSR programmes must be seriously planned and implemented right from day one of the mining project. Listening to community members , getting to know their concerns and needs and taking them into the decision making process right from the beginning promotes transparency and helps the company build trust in the company. Most of our companies make the mistake of focussing on CSR only when it gets too late. Their focus at the outset instead is on getting permits and meeting legal requirements. Even Community engagements are done out of compulsion rather than out of a sense of concern and responsibility for the community. And so naturally distrust and conflicts crop up when the operations go full swing and explorations begin. A CSR programme that is pro-active and transparent helps the companies be seen as agents for positive change. 
  3. An experienced management team to handle the CSR is very important – a management team who have close knowledge of the difference that community engagement can make to the community and the company.

Research shows us that those companies with strong CSR programs also perform better financially over the long-term and carry less risk than their non-CSR-adopting counterparts. So even in the profits vs environment debate, CSR scores in both. It is good for the company’s balance sheets and good for the community and for maintaining the sustainability of resources for our future generations.

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