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Applying for the Social License to Operate by Corporate Social Responsibility Policies and Actions

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Foreign Mining Investment Law

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Abstract

Foreign investments in mining projects used to be an issue between international mining companies and the national, at most local governments.

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Notes

  1. 1.

    Thomson (2012).

  2. 2.

    Nelsen (2006), p. 161.

  3. 3.

    Thomson (2012).

  4. 4.

    Fulcher (2012).

  5. 5.

    The World Bank defines CSR as: “Corporate social responsibility is the commitment of business to contribute to sustainable economic development—working with employees, their families, the local community and society at large to improve the quality of life, in ways that are both good for business and good for development.”, see: Ward 2014, p. 3.

  6. 6.

    Commission of the European Communities (2001), p. 6.

  7. 7.

    Ramlall (2012), p. 275.

  8. 8.

    Nelsen (2006), p. 161.

  9. 9.

    Nelsen (2006), p. 161.

  10. 10.

    Diniz (2013).

  11. 11.

    An initiative masterminded by Andrew Forrest is “The Australian Employment Covenant (“AEC”)”. Industry-led, it is in a way a national CSR policy and at least a coordinated CSR effort for several Australian mining companies. It aims to unite Australians to work together to “break the vicious cycle of unemployment and poverty amongst Indigenous Australians”. The initiative, which started in 2008, created the largest team-up of various employers in the history of the Commonwealth of Australia and by June 30th, 2011 over 290 employers committed to creating over 55,000 job opportunities for Indigenous Australians. By the end of 2012, this had grown to over 330 employers and over 60,000 job commitments. Even more importantly, at that time already 12,000 jobs had actually been filled with Indigenous Australians. Initiatives such as “Generation One” now urge the employers to act upon their commitment in full.

  12. 12.

    Rio Tinto (2014b); “We’re committed to providing employment and career development opportunities to local communities. This mutually beneficial arrangement not only contributes to local economic growth, it also provides a stable talent-pool for our operations. In 2012, around seven per cent of our Australian employees were Indigenous Australians.”

  13. 13.

    Rio Tinto (2014a), Bruce Harvey, p. 3.

  14. 14.

    Bauman and Glick (2012), p. 4.

  15. 15.

    Bauman and Glick (2012), p. 6.

  16. 16.

    Bauman and Glick (2012), p. 6.

  17. 17.

    Bauman and Glick (2012), p. 7.

  18. 18.

    Bauman and Glick (2012), p. 7.

  19. 19.

    Coronado and Fallon (2010), p. 671; “(…) by earning a good reputation for our care of the environment and contribution to social improvement and the economic conditions of local [Indigenous] communities . . . we gain improved access to land, people and capital, the three critical resources on which our business success is built.”

  20. 20.

    Rio Tinto (2014c); “Our approach enables us to manage risks effectively, reduce environmental impacts and engage with our host communities. It can also decrease operating costs, provide additional business opportunities and attract high-caliber employees. Ultimately, it allows us to deliver better returns for our shareholders.”

  21. 21.

    Rio Tinto (2014a), Bruce Harvey, p. 2.

  22. 22.

    Rio Tinto (2014a), Bruce Harvey, p. 2.

  23. 23.

    Rio Tinto (2014a), Bruce Harvey, p. 2.

  24. 24.

    Bauman and Glick (2012), p. 16.

  25. 25.

    Coronado and Fallon (2010), p. 669.

  26. 26.

    Coronado and Fallon (2010), p. 669.

  27. 27.

    Coronado and Fallon (2010), p. 670.

  28. 28.

    AngloGold Ashanti (2013b).

  29. 29.

    AngloGold Ashanti (2013c).

  30. 30.

    AngloGold Ashanti (2013c).

  31. 31.

    AngloGold Ashanti (2013c).

  32. 32.

    AngloGold Ashanti (2013c), p. 62; Under local employment, AngloGold Ashanti states: “Local employees refers to individuals either born or who have the legal right to reside indefinitely, (…) aspects of expenditure associated with local employment are (…): Wages and benefits paid to local employees and contractors [and] total payroll, which means employees’ salaries, including amounts paid to government institutions (employee taxes, levies, and unemployment funds) on behalf of employees. Total benefits, which include regular contributions (e.g. to pensions, insurance, Company vehicles, and private health), as well as other employee support such as housing, interest free loans, public transport assistance, educational grants, and redundancy payments.”; Under local procurement, AngloGold Ashanti aims to purchase from: “(…) providers of materials, products, goods and services that are based in the same geographic market as the site (i.e. excluding transnational payments).”

  33. 33.

    AngloGold Ashanti (2013c), p. 68; As for the objective of its global management standards, AngloGold Ashanti states that its: “sites are [to be] managed in line with the Company’s vision, mission and values, and to meet the Company’s Environment and Community Policy commitment to undertake initiatives that contribute to sustainable futures in partnership with the societies in which we operate.” This broad aim is then narrowed down to require: “Each site, regional and country office, as appropriate, [to] have a strategy to address its social and economic contribution in a manner appropriate to its size and stage of development, to the nature and magnitude of its impacts, to the environmental and social context, legacy issues, scope of engagement and, availability of funds and other resources”. This strategy is to be developed with the help of regularly updated studies and is at least to include: “Local procurement objectives, targets and spend; (…) [and] Local employment strategy and associated targets.”

  34. 34.

    AngloGold Ashanti (2012b); “(…) continues to meet the targets set in its Social and Labour Plans (SLPs). The region has developed a framework to address the socio-economic focus areas within and outside of the business over a three-year period. This involves partnerships with government as well as with social and industry stakeholders to address economic gaps created as the operations mature and production declines.”

  35. 35.

    AngloGold Ashanti (2012a).

  36. 36.

    AngloGold Ashanti (2014).

  37. 37.

    Crush and Williams (2006).

  38. 38.

    Kloppers and du Plessis (2008), p. 91.

  39. 39.

    Kloppers and du Plessis (2008), p. 92.

  40. 40.

    Kloppers and du Plessis (2008), p. 91.

  41. 41.

    Fig (2005), p. 599.

  42. 42.

    Fig (2005), p. 601.

  43. 43.

    UNAIDS (2013).

  44. 44.

    Kloppers and du Plessis (2008), p. 115.

  45. 45.

    Ramlall (2012), p. 272.

  46. 46.

    Ramlall (2012), p. 273.

  47. 47.

    Ramlall (2012), p. 281.

  48. 48.

    Ramlall (2012), p. 281.

  49. 49.

    Ramlall (2012), p. 281.

  50. 50.

    BDO (2013).

  51. 51.

    Ramlall (2012), p. 281.

  52. 52.

    AngloGold Ashanti (2013b).

  53. 53.

    AngloGold Ashanti (2013c).

  54. 54.

    AngloGold Ashanti (2013c).

  55. 55.

    AngloGold Ashanti (2013c).

  56. 56.

    AngloGold Ashanti (2013c), p. 62; “It is AngloGold Ashanti’s value intention that the communities and societies in which the Company operates will be better off for it having been there. This is achieved through, among other things, the Company’s socio-economic contribution in the host country, including economic value generation and distribution. (…) This approach to sustainability calls for integration of community development and economic considerations into core business decision-making. AngloGold Ashanti’s value-add is implemented through, (…), local employment, local procurement, (…).”; Under local employment, AngloGold Ashanti refers to: “(…) individuals either born or who have the legal right to reside indefinitely,” and states that: “(…) aspects of expenditure associated with local employment are (…): Wages and benefits paid to local employees and contractors. Total payroll, which means employees’ salaries, including amounts paid to government institutions (employee taxes, levies, and unemployment funds) on behalf of employees. Total benefits, which include regular contributions (e.g. to pensions, insurance, Company vehicles, and private health), as well as other employee support such as housing, interest free loans, public transport assistance, educational grants, and redundancy payments.” Under local procurement AngloGold Ashanti refers to and fosters: “(…) providers of materials, products, goods and services that are based in the same geographic market as the site (i.e. excluding transnational payments).”

  57. 57.

    AngloGold Ashanti (2013c), p. 68; As the objective of its global management standards AngloGold Ashanti states that: “sites are [to be] managed in line with the Company’s vision, mission and values, and to meet the Company’s Environment and Community Policy commitment to “undertake initiatives that contribute to sustainable futures in partnership with the societies in which we operate.” This broad aim is then narrowed down so that: “Each site, regional and country office, as appropriate, must have a strategy to address its social and economic contribution in a manner appropriate to its size and stage of development, to the nature and magnitude of its impacts, to the environmental and social context, legacy issues, scope of engagement and, availability of funds and other resources”.

  58. 58.

    AngloGold Ashanti (2013c), p. 69.

  59. 59.

    AngloGold Ashanti (2011); it states: “La generación de riqueza e inclusión que AngloGold Ashanti Colombia de forma voluntaria hace en las comunidades, parte del inventario de la capacidad instalada con el fin de encontrar oportunidades en contratación de empresas, compras locales y empleo. Es por esto que AngloGold Ashanti Colombia ha decidido priorizar a las comunidades, los municipios y región donde se realizan sus operaciones de exploración y producción para el empleo, la contratación y las compras, priorizando al proveedor en los casos que se presenten igualdad de condiciones.”

    [The wealth generation and inclusion that AngloGold Ashanti Colombia voluntarily does in local communities originates from the available local capacity, for finding opportunities to hiring companies, local purchases and employment. It is due to this that AngloGold Ashanti Colombia has decided to prioritize for employment, contracting and purchasing, the communities, municipalities and region where their exploration and production operations are carried out, giving priority to the supplier in equality of conditions.]

    “[Eso] nos exige un acompañamiento permanente a los contratistas con el fin de hacer realidad con ellos la Política de Responsabilidad Social Corporativa y en particular la inclusión del Componente Local a través de la generación de oportunidades laborales y del excelente desempeño de las relaciones entre los contratistas con sus empleados, a través de procesos de búsqueda, selección, enganche, desarrollo y desvinculación transparentes, coherentes, justos y amables cumpliendo con la ley, honrando los principios y haciendo realidad la Política de Responsabilidad Social Corporativa de AngloGold Ashanti Colombia.”

    [[This] demands a permanent support of the contractors in order fulfil with them the CSR policies and particularly the “Local Component” inclusion through the generation of labour opportunities and the excellent performance of the contractor-employee relations through transparent, coherent, just, amiable and law complying processes of search, selection, connection, development and detachment, honouring the values of and fulfilling AngloGold Ashanti Colombia’s CSR Policies.

    Es responsabilidad de AGAC y del contratista dar preferencia en la participación de empleo al personal de la región donde se realizan los trabajos, en igualdad de preparación, calidad de trabajo y capacidades, de acuerdo con los perfiles de cargos elaborados por el contratista. Toda vinculación de personal de las comunidades y de la región deberá hacerla AGA y el contratista bajo los parámetros establecidos por la Compañía.

    En la oferta se deberán entregar los perfiles de todos los cargos tanto calificados como no calificados que vayan a ser ocupados en la ejecución del contrato.

    [AngloGold Ashanti Colombia and the contractors are then responsible for giving preference to employment to the personnel of the region where the operations are carried out, in equality of preparation, quality of work and capacities, in agreement with the position profiles prepared by the contractor.

    All entailment of personnel of the communities and of the region will have to be carried out by AngloGold Ashanti Colombia and the contractors under the parameters established by the Company. All profiles covered under (…) the agreement should be delivered to offer positions to both, qualified and not qualified personnel.]

  60. 60.

    AngloGold Ashanti (2011), p. 11; “Una vez finalizados los contratos individuales de trabajo, el contratista evaluará a cada trabajador. También se deberán aplicar a todos los trabajadores vinculados al contrato la encuesta de satisfacción laboral. Dichas evaluaciones y encuestas deberán ser entregadas y discutidas con el gerente del contrato. Por otra parte, la adquisición local de bienes y servicios facilitan la aceptación del contratista en el área y por ende su eficiencia y rendimiento en la ejecución de los trabajos contratados, por tanto será preferible su obtención local, sin detrimento de la calidad y competitividad en precios.”

    [Once the individual work contract is completed, the contractor will evaluate every worker. In addition, all workers entailed to the agreement should fill out the labour satisfaction survey. The above mentioned evaluations and surveys will have to be delivered to and discussed with the manager of the contract.

    Besides, the local acquisition of goods and services ease the acceptance of the contractor in the area and thus its efficiency and performance in the execution of the contracted works, therefore the local procurement will be preferable, without detriment to quality or to competitiveness in prices.]

  61. 61.

    AngloGold Ashanti (2013c), p. 89; [ASM] refers to artisanal and small-scale mining as including: “(…) any mining and or processing activities undertaken by individuals who may have formed a collective or cooperative to undertake these activities. The scale of activity can range from one individual to large collectives of hundreds or even thousands of individuals working an area with the common denominator being a low level of mechanization. Activity is often well coordinated, although it may seem informal, and is sometimes regulated by local legislation, though often the activities are unregulated.”

  62. 62.

    AngloGold Ashanti (2013c), p. 68.

  63. 63.

    AngloGold Ashanti (2013a).

  64. 64.

    Gutierrez and Lobo (2007), p. 40.

  65. 65.

    Pulido and Ramiro (2014), p. 106.

  66. 66.

    Cerrejón (2014).

  67. 67.

    Szegedy-Maszák (2008), p. 295.

  68. 68.

    Szegedy-Maszák (2008), p. 305; Further analysis on CSR initiatives in Colombia can be found at: Lindgreen et al. (2010), p. 229; and specifically for the case of the energy industry: Heincke (2006).

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    Richard W. Roeder

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Roeder, R.W. (2016). Applying for the Social License to Operate by Corporate Social Responsibility Policies and Actions. In: Foreign Mining Investment Law. Springer, Cham. https://doi.org/10.1007/978-3-319-31217-0_11

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