Business Responsibilities Today- Mining in Southern Africa - Case Study Example

Business Responsibilities Today- Mining in Southern Africa 1. Introduction Southern Africa is the region rich for gold deposits most of which, were formed between 3 500 and 2500 million years ago (Miller, Desai, and Lee-Thorp, 2000). Gold mining and gold trade has been developing in southern Africa for nearly 1000 years (Miller, Desai, and Lee-Thorp, 2000). During this long history gold mining industry experienced significant growth, gold trade development with Islamic merchants, destruction of trade because of war with Portuguese, followed by further disruption, spread of disease, slave trade and other negative aspects, which have led to drastic decline in indigenous production of gold (Miller, Desai, and Lee-Thorp, 2000). Nowadays, an increasing number of companies operating in gold mining industry in southern Africa tend to focus more on Corporate Social Responsibility (CSR) practices and reporting (Hamann and Kapelus, 2004). The aim of this report is to discuss the key issues or corporate responsibility and ethical issues in mining sector in southern Africa and to identify the ‘best practice’ within the sector with reference to ethical theory. The remainder of the report is structured as follows: Section 2 provides an overview of CSR in mining sectors in southern Africa, raising key issues related. Section 3 identifies what is considered to be ‘best practice’ within the sector, supported with relevant arguments. Section 4 is the final part of the report, which provides recommendations for business, indicating key areas for improvement in terms of corporate responsibility. 2. Mining sector in southern Africa 2.1. Brief overview According to (Littlewood, 2014: 42), “South Africa is a forefront of legislative and policy developments aimed at encouraging more socially and environmentally responsible behavior within the mining industry, including in relation to mine closure.” May be that is why, the concept of CSR is not new in Africa as a whole, and mining industry in particular (Idemudia, 2014). Nowadays, many mining corporations place their headquarters and regional hubs in South Africa, which serves as a starting point for rolling out many voluntary CSR initiatives (Littlewood, 2014). While many mining corporations claim to be global citizens, embracing and integrating CSR concepts in corporate strategies, many of them are criticised for underlying motivations and superficial idealisation of their commitment to social and environmental responsibility (Hamann and Kapelus, 2004). Many critics feels that large international corporations publicly claiming about their CSR achievements are initially pressurised by various external factors, rather than by philanthropic philosophical and ethical concerns. There exist three major drivers of CSR in Africa, including: internal drivers (corporate-community conflict, social movements in local communities, etc.), external drivers (such as concerns about international reputation, necessity to comply with norms set by international and global organisations, shareholder activism, etc.), and transnational factors (such as collaboration between Western non-government organisations (NGOs) and African NGOs (Idemudia, 2014). Critics believe that international and transnational corporations (TNCs) failed to address the social problems and meet social needs in Africa (Idemudia, 2014). As Rivas-Ducca (2002:4) said in relation to companies operating in mining industry, “in a vacuum of effective, legally binding reputation, mining corporations simply walk away from what should be their “corporate responsibility,’ their ecological and social debt to affected societies.” Thus, critics indicate on the gaps existing between the real impact of business on society and environment and the impact, which the company decides to report to or inform about its stakeholders. Even though a company/country might undertake many different CSR initiatives aimed at improving and supporting communities, it is quite challenging to asses a country or a company in terms of both positive and negative economic, environmental, and social impacts of business/economic activity (Hamann and Kapelus, 2004). TNCs generate significant profits by exploiting natural and human resources in southern Africa on a daily basis, but most people (Idemudia, 2014) can hardly feel their contribution to environment protection or social welfare. The views on sustainability in mining industry in southern Africa vary greatly and depend on the interests pursued by different parties. To illustrate contrasting perception and interpretations, Trahar (2002 cited in Hamann and Kapelus, 2004:87) cite on the one hand, Anglo America’s CEO: ‘Johannesburg, built on the gold industry, is a shining example of sustainable development!’, but on the other hand, other authors said that “Johannesburg is perhaps the world’s most unsustainable city” (cited in Bond, 2001). Hamann and Kapelus (2004) have carried out a case study research in the platinum and chrome mining area near the Rustenburg town located in South Africa’s Province. The study has shown that the companies do undertake philanthropic efforts in communities surrounding mines or launch programmes in health, education, small business development at national level. However, these initiatives fail to address the root causes of social problems of communities living in mining areas (Hamann and Kapelus, 2004). Some of these problems and issues are discussed in the following subsections. 2.2. Key issues of corporate responsibility/ethical issues in mining sector in southern Africa 2.2.1. Recruitment and employment, and other human resource rights violation There are several serious social problems related to recruitment and employment of workers in mining industry in southern Africa (Hamann and Kapelus, 2004; Idemudia, 2014). These issues have been widely ignored by large mining companies publishing sustainability reports. Most TNCs render Africans poorer and cause the increase of poverty and income inequalities in the region, while generating super profits (Idemudia, 2014). Mining companies pursuing CSR approach do not have relevant organisational structures and no policy influence on its housing practices (Hamann and Kapelus, 2004). As Hamann and Kapeus explained (2004), gold mining companies are heavily reliant on single-sex hostels, which cause many health and safety problems. Moreover, gold mining is recognised to be labour-intensive and dangerous work. Many local gold mine workers in Southern Africa are heavily exploited by middlemen and labor agencies, working in dangerous working conditions for low wages (Brilliant Earth, n.d.). Some gold miners in South Africa work for major corporations for miserable pay and live in homes with no running water or electricity (Brilliant Earth, n.d.). 2.2.3. Workplace safety As is it has been already mentioned, gold mining is very dangerous work. According to Lim et al. (2011), the mortality rate from unnatural deaths of South Africa has been very high during the period between 1992 to 2008, as well as a rate of occupational fatalities. Gold mining industry has negative impact on the overall health state of gold miners because of extracting poisonous and toxic substances such as mercury (Brilliant Earth, n.d.). Regular exposure to this mineral causes health problems such as respiratory ailments, kidney disease, and neurological diseases (Brilliant Earth, n.d.). Moreover, there is a high level of South African mine workers who have positive immunodeficiency virus (HIV), which also causes deaths. Working conditions lacking sanitation and health safety lead to increased rate of infections (Corbett, et al., 2002). In addition to health safety the gold mining industry is characterised by frequent fatal cases. Many gold miners lack expertise and protecting equipment, which increases the risks of accidents. Tunnel collapses landslides and other natural events can not only injure gold miners but bury them alive in seconds (Brilliant Earth, n.d.). Thus, for example, in 2014, “nine workers at a South African gold mine died when a rock fall triggered a fire” (Brilliant Earth, n.d., n.p.). 2.2.4. Conflict between local communities 3. Best practice Identify what you consider to be 'best practice' within the sector and explain why, making reference to ethical theory 4. Recommendations Make recommendations for businesses in the sector to show they are being more responsible. References: Brilliant Earth, (n.d.). Facts about dirty gold mining. [online] Available at: http://www.brilliantearth.com/dirty-gold-facts/ [Accessed 23 Apr. 2015]. Corbett E., Churchyard, G., Charalambos, S., Samb, B., Moloi, V., Clayton, T., Grant, A., Murray, J., Hayes, R., Cock, K. (2002), Morbidity and mortality in South African gold miners: impact of untreated disease due to human immunodeficiency virus’, Clinical Infectious Diseases, 34, pp. 1251-1257. Idemudia, U. (2014). "Corporate Social Responsibility and Development in Africa: Issues and Possibilities". Geography compass (1749-8198), 8 (7), p. 421. Littlewood, D.( 2014), "'Cursed' Communities? Corporate Social Responsibility (CSR), Company Towns and the Mining Industry in Namibia", Journal of Business Ethics, vol. 120, no. 1, pp. 39-63. Lim MSC, Murray J, Dowdeswell RJ, Glynn JR, Sonnenberg P (2011) Unnatural Deaths in South African Platinum Miners, 1992–2008. PLoS ONE 6(9). Miller, D., Desai, N., and Lee-Thorp, J. (2000), ‘African Naissance: The Limpopo Valley 1000 years ago’, Southern African Archaelogical Society Goodwin Series, 8, pp. 91-99. Rivas-Ducca, G. (2002), Less Mining for a better world, LINK, 101, London: Friends of the Earth International. Read More