CSR and the mining industry

We recognize the important role of the mining industry in economic growth and development. However, the economic potential of mining has not been maximized due to environmental damage brought about by unacceptable mining practices. Thus, many communities in different economies in the Apec region have resisted the setting up of mining operations in their areas. The challenge, therefore, lies in finding ways to balance the benefits among the different mining stakeholders.

Mining is a double-edged sword. The industry promises vast resources for economic growth, but when they are not managed properly, mining operations can have devastating effects on the environment and the community.

One key practice that does promote and enhance sustainable development is Corporate Social Responsibility (CSR). CSR supports the principle that business can achieve economic objectives in a manner that also addresses social and environmental concerns.

These observations led the Asian Institute of Management Ramon V. del Rosario Center for Corporate Social Responsibility (AIM RVR Center) to undertake a study and documentation of CSR practices in the mining industry with the hope that it will encourage cooperation among the different stakeholders. Apec funded the study.

The project had several objectives: (1) to educate mining firms and other stakeholders (government and communities) on relevant CSR issues and practices in order to increase awareness on best CSR practices in mining corporations; (2) to provide information and logical frameworks that will help practitioners effectively implement CSR programs in the mining industry; (3) through the frameworks and cases, to enhance the effectiveness of local and central government agencies in formulating regulatory policies and operational systems with regard to implementing and promoting sustainable mining programs; and (4) to help develop the capacity of local communities and other civil society groups to effectively communicate and partner with mining operators in community programs.

Various stakeholders, including government officials, members of the mining communities, company representatives, civil society organizations representatives in various Apec countries, were interviewed for the study. The project had two major outputs. One was a series of cases documenting CSR practices in various companies together with a framework to understand the dynamics of CSR in the industry. The other was a training program design using the cases and other materials.

The project highlighted the strengths, weaknesses and opportunities to maximize the potential benefits of the industry. It focused on the regional and local demand for revenues.

The project had two key insights that became the focus of the educational framework as well as the choice of case studies. First, the key objective of sustainable mining is to ensure that the positive benefits last beyond the lifetime of the mine and that negative impact is either eliminated or minimized. The second key insight is that the central challenge is the timing mismatch between the revenue streams from mining operations and the revenue demand for minimizing negative impact (mine site rehabilitation).

Hence, the most effective approach to sustainable mining involves cooperation among the different stakeholders, including mediating stakeholders. For example, government is one of the largest beneficiaries of mining because of the revenues generated from mining operations. Moreover, it also plays a large role in ensuring responsible practices as well as managing the timing mismatch. It must, therefore, find ways to equip the stakeholders with the necessary regulation, knowledge and tools to function properly.

Mining companies, on the other hand, need to assure the rest of the stakeholders of their operations’ sustainability. While most of the companies have expressed their willingness to do so, legacy problems from other mine sites, including those of other companies, make this extremely challenging. Moreover, there seems to be room for information exchange concerning methods of addressing common concerns. Close coordination with the community in developing programs and activities can facilitate the overall process toward attaining sustainability. Mediating stakeholders such as the NGOs, the church or media can either aid or impede this process.

The preliminary results of the study were first presented at the annual Asian Institute of Management CSR conference held in Kuala Lumpur. The study has now been completed and the results will be presented and discussed during the Asian Forum for Corporate Social Responsibility which will be held on Oct. 18 and 19, 2011 at Edsa Shangri-La.

This is the 10th anniversary of AFCSR. There will be 37 confirmed speakers and presenters (50-61 target speakers) from different countries. Jaime Augusto Zobel de Ayala (Ayala Corporation), Ramon del Rosario (Phinma), Dr. Mary Gentile (Bobson College), Dr. Bradley Googins (Boston College), Regina Lopez (ABS-CBN) and many others are just some of the world-renowned CSR experts who will be attending and speaking for the conference.

For more information on AFCSR please visit www.asianforumcsr.com. The conference is organized by the Asian Institute of Management Ramon V. del Rosario Sr. Center for Corporate Social Responsibility.

Felipe B. Alfonso is the vice chairman of the AIM-Scientific Research Foundation and the AFCSR executive director of the Asian Institute of Management Ramon V. del Rosario Sr. Center for Corporate Social Responsibility.