Viewpoints concerning CSR from the Barents region mining industry
The main part of the interviews addressed diverse issues connected to the thematic area of CSR. The following section outlines which specific positions the corporate actors held towards the relevance of CSR in general and the particular relevance towards their business and its operations.
The representatives of the European Arctic mining industry gave diverse answers and perspectives on how they perceived the relevance of CSR to their mining activities (q.v. Figure 27: The relevance of CSR in the Barents region mining sector). It is important to note that CSR implies the idea of voluntary actions and going beyond the business practices which are demanded by law and specified in regulations (Reinhardt et al. 2008; Sarker 2013). This aspect had been challenged only by one respondent.
157 Figure 27. The relevance of CSR in the Barents region mining sector.
The interviewee from Sotkamo Silver stated that laws and regulations (with reference to Finland and Sweden) are abundantly developed and cover all the relevant issues. From this follows that in his opinion there is no need for additional voluntary actions for the mining industry in the Nordic countries. He underlined his statement with the fact that there are many laws, mining acts, corporate codes which sufficiently cover all the responsibilities of mining companies.
“First you have to follow regulations and laws, then you are told to go beyond those… Why should you go beyond them? Because the laws and regulations are very strict. Especially, when you look at mining companies, they are mostly stock-listed companies. There are even corporate responsibility rules and management codes and corporate codes and there are hundreds and hundreds of pages of, … thousands of pages of regulations, laws and codes you have to follow and that is an issue of people to follow those. There is no need to go beyond because there are so many.” (Inter-viewee No. 7 – Sotkamo Silver)
Several other corporate respondents described the relevance of CSR from their own viewpoints, and in this context some approaches going beyond the legal frameworks had been highlighted as well. The Rana Gruber interviewee mentioned that CSR helps him and his management to get the CSR issues onto the business agenda and adapt the corporate strategy accordingly. At Severstal the concept of CSR addresses the different stakeholder groups and the implied societal diversity.
There is a direct linkage between CSR and social and environmental problems, including the need for corporate commitments to achieving efficiency
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improvements. Additionally, the Severstal interviewee pointed out that CSR helps to improve the strategic decision-making processes. The perception that non-financial issues can shine a light on challenges and difficulties from new angles and therefore create better quality business decisions was expressed, due to the fact that fewer aspects can be accidently neglected. CSR as a voluntary concept is better adaptable to the specific situation and needs of an individual company than established laws and prescriptions as they only statically address the entire industrial sector. From this follows the relevance of moving beyond CSR and addressing CSR issues specifically for each enterprise and each unit of a corporation (Sarker 2013).
“CSR concept as a model of interaction between industry and society can solve busi-ness problems and, at the same time, contribute to the sustainable development of so-ciety, and take into account the interests of a wide range of stakeholders. This concept reflects the constructive interaction with various social groups, improves the quality of strategic decision-making and operational efficiency. Involving a wide range of stakeholders to solve social and environmental problems helps to achieve sustainable development in different operational areas, and the company itself.” (Interviewee No. 8 – Severstal)
In terms of image and reputation, which are continuously growing in significance inside the mining industry, the sustainability manager from Agnico Eagle pointed out that CSR practices create transparency. Transparency is a key word when corporate actors speak about their practices nowadays (Murphy et al. 2013). This development originates probably from the fact that NGOs and environmentalists have in the past largely criticized the lack of transparency in terms of corporate decisions. To this date many scandals, such as large cases of environmental pollution caused by company activities, can be traced back to insufficient transparency on what companies do and how they actually operate. Transparency is also an issue which recognises the concept of free, prior and informed consent (Bice 2016) as corporate actors should consult actors outside the business who have a stake in the companies to some extent, instead of just informing them.
“The concept of CSR allows us to create transparency.” (Interviewee No. 5 – Ag-nico Eagle)
The CSR relevance is also based on the investors’ and shareholders’ demands.
These actors have to consider their own reputation more these days, particularly the large-scale institutional investors, such as pension funds, insurance groups, investment banks and others. Fund managers have placed more emphasis since the mid-2000s (Thomson Reuters; Gitman 2009) on considering environmental social governance (ESG) risks in their investment portfolios as requested by their
159 investment community. Many institutional investors have taken shares of companies out of their portfolios which harm the environment extensively or stand for creating societal conflicts and problems. Popular examples are the weapons industry or industries that are known for continuously causing environmental deterioration (Kynge 2017). This development is in line with Boliden’s viewpoint that CSR is relevant in attracting investors, which even large companies such as Boliden permanently need to fulfil their expansion plans. Boliden, for example, just acquired the Kevitsa Nickel/Copper mine in Finnish Lapland in February 2016 from the Canadian multinational mining company First Quantum Minerals.
“CSR has a very high relevance. It is asked for, for example by the investors.” (In-terviewee No. 3 – Boliden)
Environmental problems caused by the mining industry were not only mentioned by the non-industry mining expert interviewees to explain the relevance of CSR.
That mining has large exposures towards environment and society was also mentioned by the Nordic Mining interviewee. In addition to the adverse effects on the ecosystem, other points raised in the interview included land use conflicts with other industries and the large amount of energy used. Land-use is significant from two perspectives within the CSR discourse.
“Oh it is extremely important, simply because the mining industry by nature has the largest exposure towards society compared to many other industries, it uses land, it uses energy, it uses forces to drill and blast and creates risk. It generates noise and dust, so it has an extremely wide exposure for society and also for the environment and also in some occasions it is competing with other businesses such as farming or other businesses. That is why I think CSR has the highest relevance in the mining industry.” (Interviewee No. 1 – Nordic Mining ASA)
First, it is relevant to allow all actors who have a claim on a specific land area at the same time to continue their customs and business to the greatest possible extent.
Secondly, in terms of mining, it is important that a mining project is organised so that once the deposit is mined, future generations will have the possibility to use the land for other purposes again. Backfilling of waste rock and re-vegetation are important activities in the post-mining era (Marsden & House 2006; q.v. Chapter 6:
The metal mining industry – a global business – the life cycle of a mine).
Viewpoints of CSR from NGOs and geological survey representatives
The non-industry mining expert interviewees who participated in this study reflected a few notable viewpoints on the relevance of CSR on mining (q.v. Figure
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27: The relevance of CSR in the Barents region mining sector). As environmental organisations and other NGOs had participated in the study, the interviewees focused partly on different dimensions of sustainability and CSR, while some interviewees put more emphasis on the ecology and others on socio-economic impacts.
The SGU mining expert explained a clear distinction between developing and developed countries in terms of CSR relevance in the mining sector. It is particularly important to consider which social services local mining enterprises need to provide to the local communities (Morozova & Britvin 2013; Juholin 2004).
In the Swedish Arctic and overall in Sweden, the interviewee’s predominant focus area, she explains social investment activities are not needed as the Swedish state and municipalities have taken over the provision of health care centres, education and the operation of airports and railway stations.
“I think they do on different levels, so, for instance I know a number of exploration companies that are going to or do actually collaborate with the local communities in different ways. Depending on the phase they are employing local people, and they are, but it’s not like they build schools, or airports or things like that because we don’t have this kind of need in a developed country. And I know that there are places that decide to buy everything for the office locally. The local supermarket or so on or so forth. Just to make it possible for the supermarket to survive and be there for the em-ployees and for the people in the community.“ (Interviewee No. 12 – SGU)
In Russia by contrast the situation is different as extractive industry companies to this date still invest in social services, a practice that dates back to the times of the Soviet Union (Morozova & Britvin 2013; Crotty & Rodgers 2012). The example provided of Nornickel’s mining operations on the Kola Peninsula outline these business actions in practice. Nornickel values charity highly as a part of its social mission and they report the expenditures that have been used to build a sports centre in Monchegorsk and the maternity ward reconstruction in the Pechenga central district hospital (Nornickel – CSR report 2013). The employment of young professionals and professional training to educate the youth are further efforts of this kind. The Nornickel representative highlights their role in the social and economic development in the regions of their mining operations as follows:
“Мany entities of the Nornickel Group are the largest employers in the communities where they operate. The company’s role in the social and economic development of its regions of operation is so high that local self-government authorities always capture its economic performance in their regional development strategies.” (Nornickel – contribution to the development of the regions of operations)
161 Another notable example that was highlighted by the SGU representative was the LKAB case from Sweden with the relocation of Kiruna’s city centre three kilometres to the east of its current location, due to a mining expansion program of the company (Nilsson 2010). The strategic decision to continue mining in the area has led to enormous societal effects with positive and negative perspectives. On the one hand, the engine of local wealth, the mining industry, remains in the region as a beneficial element providing income stability and job security. On the other hand, citizens have to be relocated and notable buildings, such as the Kiruna church need to be dismantled and rebuilt at another location. From this it can be seen that the local culture is severely affected by corporate decisions. Voluntary commitments, as part of CSR (Clarkson 1995; Sarker 2013; Carroll 1999), are needed in this situation as it emerges in Kiruna to find the strategic path to enable dialogue and consensus building in cooperation with local communities and other stakeholders to determine the best courses of action for the entire community.
"I know that LKAB has really big programs going on in both Kiruna and Malm-berget concerning moving the cities, because they have to move them, because they want to continue to mine under the city. And those are huge programs for moving the city, where they are paying for new schools, new hospitals, new sports halls and so on. So it’s huge when it comes to CSR. It is so big we almost don’t think about CSR.“ (Interviewee No. 12 – SGU)
In the interview, the geologist from GTK explains another important aspect that was not largely discussed in the other interviews. He agreed that CSR is crucial and highly relevant and added in this respect that real CSR actions as a consequence are needed. In this context he stated that CSR is relevant if it is not just rhetoric or used for propaganda purposes. This leads into the topic of green-washing (Dunne 2007) and the misuse of CSR, so that alleged environmental and social benefits of a company are highlighted and advertised to gain image benefits and attract customers, business partners and investors. The term green-washing is used if the actual CSR/sustainability performance is considerably lower than reported, and respectively there is no positive performance at all (Dunne 2007). The GTK interviewee, just like his colleague from the Swedish Geological Survey organisation, also points out the enormous relevance of CSR practices in developing countries.
“I think it is crucial, it is really needed and not only in the level of rhetoric or propa-ganda, but in a real sense really. The industry needs to adapt to a modern world. It needs to respect local communities, local people, the environment, and indigenous people. It is not only a question here in Finland, of course, but it is more even critical in developing countries. So I think that the concept of CSR and its practices and de-velopment is a kind of very strategic question for the mining industry. It really
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should apply and develop these concepts, methods, and tools in order to achieve more acceptance. So, it is a very critical issue for the mining industry really start to behave in a responsible manner, everywhere, not only in industrial countries, but also and especially in developing countries.” (Interviewee No. 11 – GTK)
Mine closing, voluntary ecological footprint improvements and a lower input of toxic chemicals were issues brought up by the NGU interviewee. Just like the other interviewees in the semi-structured interviews, he underlines that transparency is required to be in line with the CSR concept. He also stated that CSR is of relevance for companies which have image problems. The stakeholder expectations towards socially responsible mining activities address the whole industry, both on the small-scale and large-small-scale, and it is not only the image that plays a major role in terms of CSR relevance. Sara Bice (2016) developed five overall principles that characterise responsible mining. Two of these principles embrace the issues of good governance and community-based agreement-making. Following these two principles on a path towards responsible mining are essential to meet stakeholder expectations, which amount to a social license to operate.
“The concept is important, I mean it has to do with trust it has to do with showing, both actively and it works that companies are working to minimalise the environ-mental impact, they want to minimalise the amount of waste, they want to minimal-ise the use of chemicals, the visibility. They would take care of the remediation of the mining site once the mine is closed and that sort of thing. And of course also in terms of employees, so it is probably particularly so for mining, where in many cases you have a poor reputation. I would say that CSR is really important.” (Interviewee No. 11 – NGU)
The Swedwatch interviewee raised the linkage between mining and local communities in his answer and praised an achievement of the industry in this regard. Mining companies have extensively improved the dialogue and relations with local communities since the early 2000s. The importance of these close stakeholder relations due to the fact that mining operations are often much closer to the communities than the production processes of many other industries. In his answer the interviewees differentiates responsible companies from the “others” but praises those who have learned and adapted to the stakeholder demands.
“So mining companies, even though they are still lacking in many cases, when it comes to free, prior and informed consent, they are much more aware and they have much more responsible mining procedures in place to conduct due diligence and dia-logue with local communities than many other industries have, which are more re-moved from the local communities. So, I think that is a good example that many other companies can also learn about to actually do proper due diligence. I think the
min-163 ing industry, or the responsible companies are on the forefront there.” (Interviewee No. 13 – Swedwatch)
The Bellona representative refers to the idea of going beyond the law in connection to the CSR concept. He underlines the fact that mining licenses and other permits are granted almost in every case and therefore a need for further voluntary activities is evident because the law does not make a distinction which mining projects are good to go from a socially responsible viewpoint and which projects should not be allowed. Permission is occasionally postponed, and remediation of environmental plans are sometimes requested, but normally in the Nordic countries and Russia, a mining license is granted in the end, even though the process is time-consuming and can last several years up to a decade. Furthermore, he links his answer to the motivation of companies to implement CSR. In this context, it is important which companies show commitment to the ecological and social needs of a community. These may be based on EIAs, SIAs, or further studies, and allow a mining company to address specific problems more than merely required by the authorities. From the perspective of the Nordic countries, this was contested as several interviewees voiced the opinion that the laws and prescriptions are strong in Norway, Sweden and Finland, and that the law is sufficiently enforced and consequently the need for socially responsible extra-efforts is limited.
“I understand CSR, to go beyond the compliance with the standards required by gov-ernments and authorities. You get the license in almost every nation for a mining project by complying with certain standards and CSR is kind of commitment that goes beyond this standard and says we want to be a responsible agency, not only be-cause the government tells us to be, but bebe-cause we feel responsible, we want to ex-tract these resources with as little impact as possible and also pay back some of the benefits to the local community that are affected by our presence.” (Interviewee No.
14 – Bellona)
Mining companies and the implementation of CSR
Social responsibilities were already formulated by Howard Bowen in the 1950s as discussed previously, however, the implementation of CSR and sustainability as conceptual strategies in corporate activities have been found in most large-scale enterprises since 2000. The time-frame of CSR has been part of this dissertation, and here we will examine how the mining industry has managed to insert CSR practices onto the corporate agenda.
The case study mining companies have different background situations, and in
The case study mining companies have different background situations, and in