Corporate Social Responsibility in Australian Mining Industries - Term Paper Example

 CORPORATE SOCIAL RESPONSIBILITY IN AUSTRALIAN MINING INDUSTRIES The role of mining industries in Corporate Social Responsibility has always been criticized in Australia. This is due to the fact that many industries have a lack of concern for their stakeholders, mostly their local community. This paper attempts to discuss various criticisms and critically discuss those criticisms pointed out by the people of Australia with their justification. The paper aims to analyze global standards of corporate social responsibility which has been set a guideline for mining industries to prevent any harm to its stakeholders and most importantly the environmental destruction. The responsibility of an organization for its activities that it has performed and decisions that has been taken which has an impact on society and its surroundings. The Social Corporate Responsibility ensures that the company must undertake sustainable development and should have care for the health and welfare of the society. It makes sure that the company should abide the applicable law and should adhere to the international norms and behavior (Australian Government 2012). The aim to create global standards is to minimize the impact of an organization’s decisions and activities on society and the environment. It is the commitment of the industry to manage health and safety of its workers while pertaining to care for environmental and economic issues and to publicly report the progress of the industry. It also focuses in delivering the shareholders value and to cover the expectation of their shareholders. These norms have been defined by the principal industry body known as the Minerals Council of Australia (MCA) which is responsible to look in to the matter of Mineral industries and monitor their operations. However, if industries do not adhere to the principles outlined by the global body then companies might pose serious threat to the overall community (Australian Government 2012). The reporting of CSR activities is the new approach amongst different companies because it addresses issues for the society’s well-being. It can have an impact on the performance and the goodwill of the company which is a greater concern for its stakeholders. It outlines priorities of the company and its stakeholders. It is considered to be an accountability practice for firms that are willing to improve their performance and profitability. In new ways, it is considered to be a marketing strategy to grab attraction of audience (Alfonso 2011). There are numerous social and environmental factors that results in the criticism of the practices by the mining industries. Mining creates an impact in lives of the people as positive impacts include the improvement in infrastructure, creation of new communities and towns, increased job opportunities and wealth of individuals which are part of the CSR activity. Similarly, it also has some negative impacts in the communities which make it difficult for the local community in a particular society. The most common complains that are recorded in Australia against mining industry are the land issues which are associated with the exploration and mining (Tilt and Symes 1999). The environmental pollution is a most disturbing factor for the people in the community as they face the routine health issues and damages social life of people. Socially, the mining industry can negatively impact the lives of people in a way that they do not share benefits equally to the community for damages that have been made by mining. Australian people claim that they should be given compensation for the poor health of its citizens, which is mainly caused by air pollution by the mining machineries. They also claim for the compensation of the noise pollution that has been made for the whole time during the presence of the mining industry. Mining industries are consistently violating human rights of its citizens by not adhering to the CSR (Obara and Jenkin 2008). The corporate social responsibilities of mining industries have always been questioned around the world but in Australia it seems to have much more impact on communities. It has been reported that mining industries create social tensions for the people which often gives rise to violent conflicts in the particular region. People get obsessed with the noise and the disturbance in their routine life that they are forced to exercise violent activity (Jones, Marshall and Mitchell 2007). The mining industry of Australia is facing problems with respect to its growth as companies are investing in many projects at one time which makes difficult for them to cope up with all projects. This give rise to complain from the workers of the company that they are not being paid well by the company. This creates a conflict between workers and investors as companies are not able to pay off its worker with good salaries as they promised in the agreement. The rise in the mining boom has caused such a stir among mining industries that have forced them to increase production rate but their CSR activity lacks behind. Australian government has taken serious steps against these criticisms and has taken measures to slow down the mining boom. Government have disabled different mining projects which are run by a same company so that it doesn’t run too hot and have advised companies to pay off the basic salaries of their workers which risks their lives stepping into those mines (Kapelus 2002). CSR can have influence on the stakeholders and can raise their concerns if mining industries are criticized for their poor CSR performance. However, it has been a debate between business analysts that the noise and air pollution in the community where mining industries are working is a common issue around the world which has limited chances to get resolved. They believe that corporate social responsibility law should be changed because these laws have become impossible for companies in achieving their desired response from their stakeholders (Husted and David 2007). Mining industry is considered to be a high source for the economic growth in Australia which defines the success of the country. In today’s world, sustainable environment plays an important role in the success of these companies as they would have to specifically mention for the care of the environment. Most mining companies in Australia have to convince stakeholders that their vision is to incorporate CSR activities in the organization and has to adhere to the global standards of environment and CSR (AMMA 2012). Mining is the oldest industry around the world and it has been increasing at a rapid pace. It is becoming difficult for companies to maintain the same pace of work while maintaining the same pace for CSR activities. As the production in the mining industry has been increasing, environmental and social concerns are on the rise in Australia which makes life difficult for its citizens. CSR for the mining industry is relevant because it affects the social, economical and environmental dimensions. It is viewed as the most damaging industry for public and their society if anything does not goes with the plan (Yakovleva 2005). There is very low probability for the protection of environment in the mining industry. However, a company can take great steps for the mitigation of those risks and preventing the environment from harmful waste materials. In the context of CSR, local community plays an important role and is an important stakeholder. They are affected in terms of social welfare and economic due to the impacts of the natural environment (Justmeans 2010). Technology plays an important role in the mining industry which also becomes the reason for dissatisfaction among the local community which in turn criticizes the company. The technological advancements in mining machineries and technical improvements lead to the decrease in employment of the local people. The skills that are required for the labor needs frequent improvement which is the source of disappointment among people that they get neglected by mining industries. Companies are responsible to train their people if any transformation or technological advancement occurs in the industry. The global standard of CSR in the mining industry specifically points out the rights of employees in the company. Company is responsible that they should provide an update to their workers in handling of their machineries and different operations (Alfonso 2011). There always have been disputes amongst the mining industries of Australia and Australian government over the rights of the land. The land disputes takes a longer period of time to be resolved under the jurisdiction of court as there are many parties involved to claim the rights of the land including the local communities. Most of the business analyst believes the other reason for the criticism of Australian people against mining industries is because 83% of the mining industries in Australia are owned by foreign companies and they do not consider and treats the country as its own. Many of them considers that this has also played a bigger role in the dispute of land between government and local communities as they need permission from Australian government for the purchasing of the land. This becomes a source of criticism for the local community because they have lived in their land for most of the centuries and then a sudden moment their land gets occupied by the mining industry for the purpose of gaining profitability. The citizen claims that they are deprived of their land. The most cases have been recorded in the Northern region of Australia in which majority of the population belong to the indigenous people of Australia who are still deprived of their freedom (Longbottom and Langton 2012). Due to the influx of outside mining industries, companies face difficulty in coping up with cultures of a particular society when it enters into a particular state or a region in Australia. The indigenous people in Australia which consists of Aborigines and Torres Strait Islander have a different culture and social background and they does not welcome people from outside into their regions. The mining industries that enter into a particular region do face problems in coping up with the CSR activities. The mining companies are careful as they do not want to disrupt their relations with the indigenous people so as to get negative impact in the goodwill of the company. However, in the proposal of the treaty of indigenous people of Australia they have also mentioned that they want fair rights in the treatment of land ownership and they have criticized the unfair treatment from mining industries (Longbottom and Langton 2012). The global standard that have been set worldwide does not only allow mining companies for the prevention of things that may become the basis for criticism for the local community but it also allows companies to develop and enhance their communities. Many cases have been recorded regarding the complaints made by the local people that they were promised by mining industries for the advancement of infrastructure but unfortunately they could not find anyone amongst officials that could listen to their complaints. So the global standards clearly mention that a mining industry should deliver what they promise to their local citizen or they should recompense for what destruction they have committed during their tenure to the environment (Yakovleva 2005). The justification of criticisms can be found on the basis of social discrimination and not adhering to the laws of CSR that have been set worldwide (Hunt 2009). People in Australia amongst the workers who work in the mining companies are not fully aware of their rights neither these mining companies follow the rules which are underlined in CSR activity. Most of the mining companies in Australia belong to the foreign companies and they neglect and do not consider CSR activity as their responsibility towards their stakeholders (Yakovleva 2005). The most prominent reason for the criticism of mining industries with respect to the CSR activity is the concern for its stakeholders. Customers, employees, business partners and importantly societies have a vital role in the success of company’s CSR activity. People of Australia have criticized over the fact that they have many issues with the mining industries including land rights, noise pollution, air pollution, and decrease in employment, lower wage rate and many others. It is the responsibility of the company to take steps in order to make a good impression to its stakeholders. If the company would focus on satisfying their stakeholders, then it would earn profitability for the company and enhance its goodwill. Reference List Alfonso, Felipe. "CSR and the mining industry." opinion.inquirer.net. September 02, 2011. http://opinion.inquirer.net/11193/csr-and-the-mining-industry (accessed September 13, 2012). AMMA. "Building Better Community Relationships." www.miningoilgasjobs.com.au. 2012. http://www.miningoilgasjobs.com.au/Mining/All-you-need-to-know-about-the-Mining---Metals-Sec/Building-Better-Community-Relationships.aspx (accessed September 13, 2012). Australian Government. Social Responsibility in the Mining and Metal Sector in Developing Countries. Research, Sydney: Creative Commons Attribution, 2012. Hunt, Michael. Mining Law in Western Australia. Sydney: Federation Press, 2009. Husted, Bryan, and Allen David. "Corporate Social Strategy in Multinational Enterprises: Antecedents and Value Creation." Journal of Business Ethics, 2007: 345-361. Jones, Meredith, Shelley Marshall, and Richard Mitchell. "Corporate Social Responsibility and the Management of Labour in Two Australian Mining Companies." Corporate Governence: An International Review 15, no. 1 (2007): 57-67. Justmeans. "Responsible Mining: CSR in the Extractives Industry." www.justmeans.com. April 20, 2010. http://www.justmeans.com/Responsible-Mining-CSR-in-Extractives-Industry/13188.html (accessed September 13, 2012). Kapelus, Paul. "Mining, Corporate Social Responsibility and the "Community": The Case of Rio Tinto, Richards Bay Minerals and." Journal of Business Ethics 39 (2002): 275-296. Longbottom, Judy, and Marcia Langton. Foundations for Indigenous Peoples in the Global Mining Boom. New York: Routledge, 2012. Obara, Louise, and Heledd Jenkin. "Corporate Social Responsibility (CSR) in the mining industry - the risk of community dependency." Queen's University Belfast Journal, 2008: 1-20. Tilt, Carol, and Christopher Symes. 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