in this study engage in exploration and/or extraction activities in the Arctic, and
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because the interviewees were pretty much aware of the potential for conflict in the discourse, the local communities indigenous and non-indigenous were often picked as central topics by the interviewees.
The role of stakeholders was sometimes also seen as critical by some company representatives as they were accused of lobbyism and characteristics of hypocrisy were outlined. Company representatives explained that society needs metals, including all stakeholders for their everyday life, but when it comes to mining, it was felt that many stakeholders do not accept mining due to the negative impacts.
Stakeholders have different viewpoints in this regard. Some approve of mining completely, others are totally against it. Not only in the Arctic is there a two-sided attitude. Stakeholders, who in this respect are often the communities, declare, mining is valuable and necessary, but they do not want a mine close to their homes (Franks & Vanclay 2013).
“Certainly, it is the pressure from the stakeholders. The pressure from the common people. But, what is the main driver? It is human people, it is people. Stakeholders are one big problem that many times the stakeholders, even if you are one of the stakeholders. Stakeholders think that they are good people. They are specialised NGOs and environmental associations, Greenpeace and whatever it is. They think that they are very good people. They are not stakeholders, but they are lobbyists who are living globally, they are living very well, they are travelling very well. They are living in nice hotels to be a stakeholder in the mine. And we often forget that.” (In-terviewee No.7 – Sotkamo Silver)
The indigenous people, particularly the Sami people were a point of discussion in the interviews in relation to the incentives. Their land rights and possible land-use conflicts are constantly found in the discourse. Solutions on how traditional livelihoods and extractive industries can co-exist were not presented by corporate actors. International debates, such as the ratification processes of ILO Convention 169 – Indigenous and Tribal Peoples Convention from 1989, show that consensus building in land-use conflicts is challenging (Wilson 2017 Tatarkin & Loginov 2015).
Indigenous people in the Barents region are mining stakeholders and representatives of indigenous groups have criticised the extractive industries, frequently linked to land issues. Stakeholder dialogue and consensus building are CSR elements and good community relations are a valid CSR incentive (Davis &
Franks 2014; Carroll & Buchholtz 2003; Albareda et al. 2008; Falck and Spangenberg 2014).
The image benefits of mining have also been widely discussed in the literature and certainly there is positive correlation between good CSR practices and image improvements of companies (Murphy et al. 2013). The question that follows from this viewpoint is whether it is legitimate to pursue social responsibilities primarily for building reputations in terms of business ethics. If the CSR performance is good
187 overall and the stakeholder relations are intact does it matter what the reason was for implementing CSR? It is not an element of this study to answer this question in its entirety, it just is an outcome of this study that the companies do not point out the image benefits of CSR as strongly as the non-corporate-mining representatives highlighted it. However, the studied companies did not strongly mention the reputational opportunities related to CSR, even though motivational factors that are closely linked to a positive corporate image are often described. The interviewee from Boliden used the adjectives “trustworthy”, “reliable” and “credible” to explain how the company aims to be perceived in society.
By addressing social and environmental responsibilities, these three attributes can be associated with the company in the stakeholders’ minds (Porter & Kramer 2011; Carroll & Buchholtz 2003; Albareda et al. 2008). Without overall stakeholder recognition that a company is reliable, trustworthy and credible, a good reputation is unlikely (Murphy et al. 2013).
As old as the mining industry is, so is the issue of health and safety for the mining workforce. The global mining sector has increased its efforts to minimise accidents on mining sites and in production enormously since the notion of CSR emerged in the past 20 years (Tuusjärvi 2013; Kumar 2010). The Severstal interviewee pointed out that CSR policies help to improve awareness among workers to approach tasks safely and that the CSR strategy implies training for mining workers to help them perceive potential accident risks for themselves and their co-workers.
NGOs and geological survey organisations: the incentives for mining compa-nies to implement CSR practices
The eight interviewees from the chosen non-industry mining expert organisations reflected several opinions on why the application of CSR practices could be attractive for the mining industry in general and in the Barents region in particular.
The consideration of good relations with the Sami peoples and the local communities in general was given as a fundamental reason for the mining sector to consider CSR practices. Dialogue with local communities, which are affected by business operations is an important element of a far-reaching CSR strategy and because commercially oriented organisations are interested in achieving a good reputation. In an era of globalization with stronger demand for metals in developing countries, as well as the increasing transportation of products, and in the age of easier Internet access to information, the reputation and image of companies have become more relevant for industrial actors (Murphy et al. 2013).
This was perceived by the non-industry mining experts who were interviewed in this study as well (q.v. Figure 33: Incentives for the mining industry to implement CSR into the corporate strategy).
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The GTK representative indicated that this period coincides with the beginning of the era of neoliberalism and that NGOs from industrial countries have sent their members to developing countries to survey mining practices there. Mostly, these mining projects were initiated and owned by large-scale mining companies headquartered in industrial countries, just like the NGOs who entered the debate.
Different actors, companies, local communities and NGOs with different expectations in terms of ecological mining footprints and minimum social standards have led to potential conflict and this has been harmful to the reputation of the entire sector. More awareness of environmental impacts and scarcities of natural resources has created a paradigm shift in the society and has resulted in rising pressure on the mining industry from the stakeholder community (Crotty &
Rodgers 2012). Conflicts are costly, as demonstrations, strikes and other protest activities might reduce production to a standstill and consequently incur huge costs without any productivity. In some cases these events have resulted in the end of a project or bankruptcy of a mining company.
“I think it is very important to them to have a good relationship with the surround-ing society because they are gosurround-ing, you can’t do any minsurround-ing without affectsurround-ing the en-vironment, but you can do it as well as possible. So to get acceptance I think it is re-ally good that they work with those issues and communicate with the surrounding society.” (Interviewee No. 10 – SGU)
The mining industry itself has started to develop guidelines and principles. These are voluntary standards and can be perceived as the first steps in the direction of CSR in the industry (Sarker 2013). From this follows that conflict prevention and conflict management are important strategic elements, which are in line with CSR concepts (Prno & Slocombe 2012). The GTK representative links mining conflicts and the aim of mining actors to receive a social license to operate (Bice 2016;
Koivurova et al. 2015; Tiainen et al. 2014).
In another non-industry mining expert interview, the representative sees an overwhelming incentive to implement public relations initiatives and also SLO.
Public relations is a term that can be associated with advertisements, promotions, campaigning and other activities aiming to attract attention and awake positive emotions from the customer and stakeholder side towards the business activities.
Public relations are executed to generate image benefits and to build a good reputation. However, no interviewee from the industry side put PR and image benefits to the forefront of the corporate incentives. In contrast, the non-industry mining expert interviewees almost all referred to this motivational aspect. The representative from Friends of the Earth Norway assessed that image benefits were the predominant for focusing on CSR in the mining industry and she explained her criticism and reservations towards it.
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“The incentive is of course that they want to be perceived as more environmentally friendly, which will give them a good image. I think this is the main reason. Of course they say, they want to, almost like idealist they want to save the world, but I mean they usually think about earning as much money as possible. I think the main reason is to improve the image.” (Interviewee 16 – Friends of the Earth Norway) The Bellona interviewee pointed out the PR benefits as a driving force for CSR and further explained why he thinks mining companies follow CSR practices. He referred in this regard to the natural fact in mining that the ore body determines where the mine is located, not the management. The company has to mine at the location where they find the most promising ore concentrations during the exploration phase. This is in contrast to other industries, where companies can decide the location of a factory based on environmental and social criteria and can choose a spot with low sensitivity. This particular statement moves away from the idea that CSR activities are predominantly strategic. There is the idea that companies have responsibility because they will cause ecological damage at a spot that has been chosen because it is rich in ore. By assigning environmental concerns to a lower level of significance and deciding due to mine rich ores at a particular location, the responsibility emerges to carry out the extraction and other mining activities with the least possible environmental impact.
“That is the big difference between mining and other industries. You can pick differ-ent places to locate a factory but geological ores, are located where they are located, they can’t be removed and that means that the extraction has to take place at this lo-cation. So that some companies probably also feel responsibility and they have genu-ine commitment to try to avoid unnecessary environmental damage.” (Interviewee No. 14 – Bellona)
Another important idea in relation to CSR is the development or creation of trust, respectively mutual trust between companies and their stakeholders.
“Mining companies are dependent on the social acceptance of what they are doing They need to generate trust. They need to generate loyalty.” (Interviewee No. 10 – NGU)
Trust can be built concerning many activities and aspects in the CSR discourse. To achieve social acceptance for a mining project, trust implies trust in environmentally responsible operations, trust in fair working conditions and fair wages and salaries, trust in the development of the region, and trust in local wealth generation (Clifford 2009). All these stated benefits are drivers for the SLO and create responsibilities for the mining companies to develop strategies and activities
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that comply with these stakeholder demands (Tiainen et al. 2014; Prno & Slocombe 2012).
Figure 33. Incentives for the mining industry to implement CSR into the corporate strategy. 12
9.4 THE RELEVANCE OF CSR STANDARDS – QUALITY OUT-WEIGHS QUANTITY
One of the three key elements of the study is the relevance of CSR and sustainability standards in the mining industry in the Barents region. The interviewees were asked a set of questions with respect to corporate and general aspects of CSR standards. These aspects include the relevance, benefits, malpractices and applicability of standards, by simultaneously considering the quantity and quality of available CSR standards and frameworks for the mining industry.
The case study companies have implemented CSR/sustainability standards to this date in different quantities, meaning that the numbers of standards considered within the CSR strategy are different. One of the aspects revealed in the semi-structured interviews was that large-scale multi-national mining companies, such as Boliden, Severstal and Nornickel, have a greater focus on sustainability standards. Smaller companies, particularly those, who are in the pre-exploitation
12 Analysis based on interview responses (and partially outlined in the literature).
191 phase usually consider at maximum three standards. The number of standards, particularly due to the fact that many principles and guidelines are overlapping, does not reflect the quality of an individual CSR strategy, as a company with one implemented standard might have a stronger CSR performance than a company with ten implemented standards (Kotler & Lee 2005). The performance depends largely on the quality of a standard and on the implementation efficiency inside the organisation (q.v. Chapter 5.6: CSR – A jungle of standards, frameworks and guidelines). Boliden follows several standards but has identified the GRI G4 Guidelines as the outstanding tool to follow its social responsibilities. In this light the company frequently publishes two reports, its annual integrated report comprising financial and non-financial data at the same time and the separate GRI report (q.v. Chapter 5.6: CSR – A jungle of standards, frameworks and guidelines – Global Reporting Initiative). Boliden changed its strategy of separate financial and sustainability reports to the “integrated report” after 2010 and additionally the annual GRI report highlighting Boliden’s performance towards the specific GRI indicators. In the interview the Boliden director highlights the relevance of standards, for example, the GRI guidelines, to allow comparability of sustainability performance within the sector and in also cross-sectoral manner. Standards are beneficial for benchmarking and allow stakeholders to gain a better understanding of who sets the best practices in the industry. He also underlines the high magnitude of emissions due to smelting activities and the need to disclose carbon data in this context.
The development of standards is also relevant. The business world, its industries and markets are developing all the time and from this follows the logic that sustainability standards that address the ecological, social, economic and governance performances of companies need to adapt frequently as well, particularly reporting standards (Matten & Moon 2008; Gitman 2009; Bice 2016;
Rasche 2009). The Boliden director points out that the revision of the GRI guidelines to the current version GRI G4 is helpful and enables the company to report materiality issues more easily.
“I think it is very useful to have a standard, because it is needed to benchmark, to compare also for the people who are following Boliden and following other companies and to try to get a picture of what we are doing. I think the GRI guidelines are good.
We are reporting according to G4. We have had this standard for two years now and the new standard has improved from the earlier one very much. There is a larger fo-cus now on materiality that we can do the materiality analysis and really fofo-cus on the things that we think are important. And I know that we are reporting quite a lot, maybe more than average, but this is also because we want to be transparent, we want to be very open with our performance. You are asking about alternative stand-ards! GRI is our main reporting standard, but then for example we also report our carbon emissions because we have quite large emissions on the smelting side, maybe
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not so much on the mining side but more on the smelters.” (Interviewee No. 3 – Boliden)
In this part of the interview, the Severstal CSR manager replied that CSR reporting tools are a good instrument for communicating with stakeholders. From this viewpoint another close connection links to the issue of transparency, and this notion was stated by several interviewees. Furthermore, at Severstal they consider reporting systems to be useful to improve the CSR management internally in a corporation. Standards used at Severstal include the GRI G4 guidelines, ISO 26000 and the RSPP key performance indicators (Russian Union of Industrialists and Entrepreneurs/Severstal CSR report 2016).
“Regular reporting in the field of CSR and sustainable development can improve the quality of communication with stakeholders and contributes to continuous improve-ment of our CSR manageimprove-ment system.” (Interviewee No. 8 – Severstal)
Nornickel has a large range of standards, which they had implemented or would consider for strategic decisions. These standards cover accounting, auditing, reporting and policy elements and consider an internal, Russian and an international point of view (q.v. Figure 34: Nornickel – internal, national and international standards and frameworks of a CSR strategy). The latest CSR report by Nornickel to this date (CSR report 2015) highlights the performance indicators of GRI, several ISO standards (ISO 9001, ISO 14001, ISO 26000), ILO labour standards and international financial reporting standards (IFRS). The national and regional Russian standards are also notable. These comprise amongst others the Anti-Corruption Charter of Russian Business, the Labour Code of the Russian Federation and the Social Charter of Russian Business (Nornickel – Social Mission and CSR strategy). With particular focus on the Barents region operations, the company concentrates on the Regional Environmental Declaration of the Murmansk region.
Additionally, various internal codes and frameworks were presented in the CSR report 2015 and on the website of Nornickel. The company has implemented a code of conduct, a business integrity code and internal policies focusing on anti-corruption, social issues, environmental protection and information transparency (Nornickel – Development of Corporate Social Responsibility Reporting; Nornickel – CSR report 2013). The following chart depicts the current CSR standards and frameworks which are used in the corporate practices of Nornickel.
193 Figure 34. Nornickel – internal, national and international standards and frameworks of a CSR strategy. 13
The Nordic Mining interviewee explained that the main focus in terms of reporting in the non-exploitation phase was the financial standard established by the Oslo Stock exchange. As soon as the extraction of metals is under way as it was before, the ISO 14001 environmental management system was considered for sustainability improvements. Overall the implementation of CSR standards as strategic tools or the use of guidelines for reporting purposes is comparatively low at Nordic Mining ASA to this date.
13 Nornickel – CSR Report 2013; environmental protection and social policy of Nornickel; Nornickel – sustainable development activities 2015.
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“We are using the standards reporting system according to the Oslo Stock Exchange that is our main standard as such, but then again there will be more standards once we are in operations. Until 2013 we had one mine in operation and then we had an ISO certificate for that mine and that has been stopped and this will be not relevant until we are in operation again.” (Interviewee No. 1 – Nordic Mining ASA)
CSR standards – case study representative viewpoints
This study aims to learn about the perceptions of the case study company representatives concerning how difficult it is to apply CSR and sustainability guidelines in mining operations. The interviewees reflected on what extent they believed CSR standards to help them in the current situation and which they considered to be a challenge or not, considering the number of available standards (q.v. Figure 35: Application concerns regarding CSR standards of Barents region mining companies based on the interviews).
“There are certainly too many, but they are useful. It is a little bit like this type of
“There are certainly too many, but they are useful. It is a little bit like this type of