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15PLAC126 Law and Natural Resources

Published : 20-Oct,2021  |  Views : 10

Question:

(1) What are the most important agreements for a mining company to make?
(2) EIAs are vital for future mining projects, criJcally discuss.
(3) Corporate social responsibility is on the increase in relaJon to the mining sector, criJcally discuss.

(a) Choose topic and
(b) Then choose countries and
(c) Type of resource (s)
(d) Submit to me for approval

Answer:

1.0 Introduction:

Corporate Social Responsibility is serious practices that involve initiatives that benefit societies and communities. A business’s corporate social responsibility can cover a wide range of facts, from giving away a part of company’s profits to charity to implementing sustainable business operations. Conventional models of corporate social responsibility mostly focus on “rights.” This traditional approach to CSR (corporate social responsibility) is shown in the figure 1.

                                   

Figure 1: Traditional model of corporate social responsibility

(Source: )

This approach can be described as productively running a business paying regards to the interest of employees, investors, suppliers and customers while providing donations to and social investments in the local community. The traditional model of corporate social responsibility also includes two forms of socially accountable practices, which are philanthropic giving, and the accomplishment of codes of conduct. These two approaches eliminate or minimize environmental and social impacts in response to the ethical imperative through add-on social expenditure measures. These types of measures are most of the times costly and non-productive. For instance, cleaning up pollution once it has occurred means adding on pricey end-of-pipe treatment technologies such as water handling plants, dust precipitators and smelter scrubbers.

Before critically analyzing the CSR activities in mining industries of Pakistan and South Africa, it is important to understand the significance of such activities in that sector. There are several reasons that CSR activities are important in mining sector. On the other hand, it can also be said that there are some external pressures that force mining companies to initiate CSR activities. Some of those reasons are hereby mentioned below.

Public opinion about this sector is poor as its operations related to extraction of natural resources are expected to cause several damages to the environment and nearby communities.

This sector is continuously targeted by pressure groups that have questioned its legitimacy at local and international levels. One such example is several protests done by some environmental and indigenous groups against the development of Uranium mine at Jabiluka in Australia. On the other hand, several NGOs have also targeted the mining industry such as Oxfam’s Mining Campaign, and Friends of the Earth International’s Mining Campaign.

The financial sector is gradually focusing on this sector of risk management and social responsibility perspectives. It is not atypical for mining companies to be screened out of social responsibility investing (SRI) funds altogether.

For mining companies, it is a challenge to maintain "a license to operate." For instance, Newmont had to suspend its mining activities at Mount Quilish Peru because of several protests from social organizations.

On the other hand, there are some business reasons with these external pressures behind the CSR activities of mining companies. Those reasons are,

Competitive advantage: Mining companies are using its investment plans to aid the presentation of concessions, as organizations appearing to be collectively responsible are often favored in this process.

Stable work environment: CSR initiatives are sporadically initiated as a means of buying the local communities agreement that allows the companies to operate.

Brand image: In today’s business context, showing responsibility towards the environment and local communities is important for any organization. It not only improves the brand image of that organization but also attract potential consumers.

Developing a happy workforce: It is seen that if an organization is good at CSR initiatives, then its employees feel more positive and motivated. On the other hand, CSR activities can also help to retain and recruit best employees.

2.2 Community perspective

Along with those external pressures and business reasons, the welfare of communities is another manor reason behind the increasing CSR activities of mining companies. Local communities are main stakeholders for all mining companies as operations related to mining have a strong impact on those communities. Some positive impacts include additional income from export revenues and royalties, employment, training programs, infrastructure such as roads, schools and health clinics. The negative impacts of mining are hereby mentioned below.

Social tensions in communities because of alterations brought about by mining can give rise to aggressive divergence.

Technical enhancement in mining industry can lead to a decrease in employment and boost in the level of skills required.

Disputes related to land title between local communities and mining companies can take place.

Inefficient local and national supremacy can lead a mining company having too much power in local context.

2.3 Maintaining positive relations with mining communities

According to the Mining, Minerals and Sustainable Development Project (MMSD) report “Breaking New Ground”, there are three dissimilar types of mining societies such as work-related, housing and aboriginal. Occupational societies are families who obtain most of their or all earnings from mining. Housing communities are living within the regions that are affected by mining activities. Indigenous communities are known as families who carry an prehistoric and cultural connection to the land where mining activities are taking place. Along with these communities, another community that sometimes co-exists with the mining operations is the small-scale community.

These different types of communities are not reciprocally restricted and are more precisely delineated here than the authenticity on ground. However, it is a complex task to identify a community, as any definition of community cannot fit with real life scenarios. Mining companies are now more focused to perform this complex task with the support of local governments. However, it is also true that in some cases, political volatility, and lack of governmental existence and low level of monitoring are creating issues for the mining companies.

In spite of such issues, mining companies are now regularly delivering monetary compensations for loss of land and other problems that the local community might have faced. Some other community involvement initiatives taken by the mining sector companies are,

Infrastructure: Mining companies are contributing to the local communities by constructing access roads, community buildings and educational centers.

Community health initiatives: Mining companies are also offering health care services to the workers along with the local citizens and their families by developing hospitals and health centers.

Community foundations: It is known as a fund generated by a mining organization that it uses for social investment purposes.  

Assisting local businesses: Mining companies are offering preferential procurement policies for domestic suppliers.

Sustainable livelihood projects: Mining companies are also implementing sustainable livelihood projects with a purpose to minimize the economic dependence of communities on mining activities. Besides, it also helps to develop substitute and sustainable employment chances for stakeholders’ communities.

Micro-credit finance schemes: Mining companies have implemented this loan system to help commence new ventures, create jobs and help local economies to prosper. With access to credit, families can spend as per their own importance, for instance, educational fees, health care, housing and nourishment. This scheme also helps the most underprivileged groups in communities. However, a number of reasons are found that can fail an organization’s CSR programs and the needs of communities

Country explicit issues including dishonesty, divergence and bureaucracy: In Ghana a disagreement is seen between the large-scale mining corporations and small-scale illegal miners who mine on their concessions. This has impacted on how organizations distinguish the society and how they will establish their area participation initiatives.

Failure to involve the beneficiaries of CSR: Communities must be allowed to have the chances to help themselves via an ongoing contribution in community development projects rather than being recipients of top-down “gifts” from the companies.  

Micro-level perspective: It is assumed that the location of a mine can harm the people living in nearby locations. However, the effects of mining are much more complex. Therefore, companies must follow a macro-level perspective to integrate CSR initiatives such as community involvement into a larger sustainable development plan. Most of the mining companies fail to do that and as a result, their CSR activities become inefficient.

Consultationwith communities: Sometimes, consultation with communities is not required before implementing CSR initiatives. Consultations are rarely all inclusive, leading to some members of the community being provided more voice than other people are.

Therefore, the question is whether the activities related to corporate social responsibility in mining Industry are increasing or not. In order to understand this, in the next part of this essay, CSR activities in mining industries in Pakistan and South Africa are described in detail.

3.0 CSR Activities in Mining sector of Pakistan

In Pakistan, the word corporate social responsibility is extremely new, especially in the mining industry. Several important aspects of corporate social responsibility such as human rights, environmental protection and corporate governance are most of the times not viewed as important entities. Most of the organizations see this as a role of government. The organizations in the mining sector of Pakistan believe that it is the role of government to enact laws, rules and regulations to cover all the issues and challenges. On the other hand, most of the business organizations within this industry see these problems as impediments in their manufacturing process and always try to find paths to escape from the observation of such social responsibilities.

Because of inclusive legislation on labor practices enacted by the government, most of the companies in the mining industry of Pakistan have their own written policies. However, most of the mining companies in Pakistan are struggling to develop environmental policies related to mining operations. There are both good things and bad things in Pakistan’s mining industry in terms of corporate social responsibility.

3.1 The good side of CSR

In recent years, mining related companies in Pakistan has evolved their corporate social responsibility identity in line with the sociological stance of the country. More companies are putting emphasis on contextually relevant issues and are avoiding one-size-fits-all solutions that comes with a pre-made template from the west. Besides, the government of Pakistan has also shown periodic assistance for CSR and sustainability, which is also a good omen. However, according to the thinking of western world, local companies in Pakistan have no consciousness about CSR and that is why they show no movement to adopt it. However, more and more young people are joining the mining industry and bringing knowledge, awareness and motivation to develop an ethical and responsible workplace. In Pakistan, CSR in mining sector activities are steadily gaining popularity, which will lead to a more impactful initiatives.

3.2 The bad side of CSR

One aspect that is hampering the growth of CSR activities in Pakistan is the much-required consumer push. Consumers in South Asia are mostly priced sensitive. They will favor the cheapest option unless it presents a direct threat to their health and safety. In the current condition of the country where the people are dealing with poor economic growth and political instability, no one expects companies to do anything beyond delivering products or services. As a result of this thinking, business organizations in Pakistan are abandoning their CSR programs in favor for more media and PR driven initiatives.

The media of Pakistan is another weak link in the CSR debate. Most of the media related companies are only focusing on political issues and neglecting their responsibility as corporate watchdog. In Pakistan, it is rare to see any news about corporate misdemeanor unless it has political undertones. Therefore, it is expected that in a country where consumers are unaware and media has no concern about CSR activities, the companies will not take the term CSR seriously. In the contrary, socio-cultural complexity is another major problem that is hampering CSR implementations in Pakistan. These issues are extremely varied and sensitive; therefore, companies do not want to deal with them as they afraid of losing rapport with the people. Challenges related to religious intolerance, gender inequality and sectarianism are hampering the growth of Pakistan. Government of the country is doing everything to address these issues in the first place and that is why a little time is there to pursue other issues such as absence of CSR activities in mining industry.

Another major setback for the CSR movements in the country is the loss of foreign investment over the past few years. For the multinational organizations and domestic organizations dealing with international partners, the main trigger always comes from abroad. Local companies were expected to engage in CSR activities in mining industry. However, this scenario has changed a lot since 9/11 and so has the stance of the companies on the CSR agenda in Pakistan.

3.3 Companies with best CSR Practices in Pakistan

Four companies in Pakistan are known for their best CSR practices in the country, which are the Jalal Din Wali Group (JDW) that owns sugar mills, and agriculture farms in Southern Punjab, the Shakarganj Group, Barclays Bank and the Nestle Group. The JDW group has included local communities in its CSR programs. The organization has successfully established schools and drinking water filtration facilities. This group has also facilitated flood relief activities where it has delivered food, shelter and other important accessories to the affected communities. It also runs women’s development program through community organizations.

The Shakarganj Group on the other hand, is running a “Social Action Program” in the Central Punjab. This program is developed to ensure improved life of the local communities living near the mills premises. Through this program, the organization has provided arts and skill development centers to the local community. The organization has also initiated Shakarganj Nutritional Program where over 5,000 students, teachers and non-teaching staffs were examined for hepatitis B and C. This organization also runs programs on adult literacy and health care for neighboring communities around the property of Shakarganj Mills.

The Nestle Group is also running a corporate social responsibility program in Punjab. This program is social and financial in nature. Three primary working areas in this program are compliance, sustainability and community. As per the management of the organization, compliance is respect for the law, sustainability is nourishment of farming community’s efficiency, and community is defined as the farming society.  

Barclays Bank has already developed a widespread sustainability program in Pakistan. In Pakistan, Barclays Bank started its operations in 2008 and since then has committed over PKR25 million to CSR projects.

From this the above discussion it is seen that CSR activities are there in Pakistan; however, most of the recognized and useful CSR activities are performed by different sectors. Mining companies are not participating in it.

3.4 Pakistan Gemstone and Jewelry Development Company (PGJDC)

This organization was developed to establish the gem and jewelry industry of Pakistan from mine to market. The centre-point of the gemstone industry in Pakistan is Khyber Pakhtoonkhwa where the organization operates. This organization can be considered as the only company in the mining industry that is engaged in some sort of CSR activities. PGJDC is providing training to the local people about gemstones and jewellery making. The management of the organization has worked sincerely to seek affiliation with dissimilar technical boards. Courses that are provided in Karachi training center have been gathered from the Sindh Board of Technical Education. On the other hand, the organization is also going to join hand with TEVTA Punjab. With the help of the management of PGJDC, postgraduate diploma courses in jewelry designing and manufacturing have started at Karachi and Lahore.

The company has also developed completely functional training centers in Karachi, Lahore, Peshawar and Gilgit. On the other hand, the organization is also representing the gems and jewelry sector of Pakistan in some major countries such as USA, Thailand, Germany and Hon Kong via different international shows. This organization’s CSR activities are not direct and do not directly serve any particular community. It is actually helping to develop the entire gems and jewelry market of Pakistan which in turn in helping the country to improve its economy. In upcoming years, PGDJC is planning to execute several such plans, which are hereby mentioned below.

  • The management of PGDJC is planning to develop more training centers in Sargodha, Bahawalpur, Faisalabad, Multan and Sukkur. It will help the government of Pakistan to reduce the rate of unemployment in the country.
  • The company is also planning to develop gem processing, mining and training centers in Abbottabad, Chillas, Chitral, Gizir and Skardu.
  • Business development centers are expected to be built in Karachi, Islamabad and Gilgit.
  • PGDJC is also planning to develop Diamond cutting and faceting facilities in Pakistan.

3.5 Environmental, Social and Economic Considerations in Pakistan’s mining industry

According to the World Bank, rules and regulations at the federal and provincial levels in Pakistan related to environmental protection in the mining sector is not only disjointed but also outdated. However, organizations are making continuous efforts to update their Mineral Rules and making those rules in line with the international standards. Companies are also focusing on environmental protection at the time of exploration and mining operations. However, it is necessary to develop priorities and policies in order to allocate resources properly. Besides, it is also necessary to have balanced tradeoffs between natural resources development and alternative land-uses. In Pakistan, Tethyan Copper Company has already finished an extensive environmental and social impact evaluation (ESIA) for the RekoDiq (EL-5, H14-15) . However, companies will have to include capacity building on technical topics, such as protection of the environment and social safeguard along with community establishment for evaluating feasibility studies.  It will help to protect the environment and upgrade socio-economic aspects, which will help to bring mining sector of Pakistan up to international standards.

In Pakistan, any social obligation related to mining industry is considered as a provincial matter. According to the World Bank, in Pakistan there is a lack of legal and enforceable set of social standards that address and mitigate the main social challenges of mining operations that include significant issues such as mining-related resettlement, alternative livelihood, protection to the community and local establishment. The World Bank also stated that government of Pakistan would have to develop authorities for inspection and monitoring mining areas. Mining companies in the country will have to support the government to initiate community development and protection campaigns.

3.6 Opportunities for CSR activities in mining industry of Pakistan

As per the World Bank, there are endless chances for developing corporate social responsibility related activities in Pakistan’s mining industry. The unequal distribution of wealth and lack of employment chances within major urban centers are affecting the growth of Pakistan cities. Pakistan is the world’s sixth most populated country where more than 70% people live in rural areas. It is required to establish infrastructure and community enhancement programs in rural areas as it will reduce the pressure on cities. The World Bank also stated that in order to feed itself and to become a productive and progressive country, Pakistan would have to develop rural areas.

On the other hand, in order to develop a self-sustaining and merit-based political and judicial system in Pakistan, the government and companies will have to focus on the development of rural areas. Only a few multinational organizations in Pakistan have realized this and are already investing in expanding their production facilities and operations. If the people of Pakistan get the protection by law, then the country will be able to experience economic growth. This means people must be able to access to education, healthcare, water and sanitation. Besides, there must be roads and appropriate telecommunication facilities. They must be trained about personal and collective human rights and duties towards the society and the country.

3.7 Existing situation in Pakistan related to CSR

  • Some of the multinational companies in Pakistan have special departments to design, implement and broadcast reports on the activity of the company towards the social well-being of the communities. These organizations have also adapted CSR models from developed countries into Pakistan.
  • Median and small business organizations have no idea about the concept of corporate social responsibility.
  • Most of the industrial groups do not have any type of code related to ethical standards to bind the units to follow them.
  • Most of the corporate social responsibility related activities performed by the business organizations are voluntary in nature.
  • Corporate, environment, labor and customer rules and regulations and governing CSR activities in Pakistan.
  • A handful amount of business organization has introduced code of conduct and ethical principles. A consistent CSR code of convincing law prevailing CSR practices does not subsist at governmental level.

3.8 The gaps

In the mining industry of Pakistan, there is a lack of conceptual understanding of the corporate social responsibility, its framework and design. On the other hand, business organizations are not willing to distinguish between philanthropic CSR and the expansion of shared value for example, pertinent CSR that affects the value chain. The biggest issue is the lack of awareness among the normal people about general human rights, citizen rights and consumer rights. Therefore, the citizen is not asking questions about any unethical operations done by mining companies. As a result of this unawareness, only a few companies introduced different CSR departments where inclusive CSR models are recognized and practices.

3.9 The way forward

It is expected that corporate social responsibility will play a major role in overall growth of economy of Pakistan. As mentioned by the World Bank, corporate social responsibility has the potential to develop difference in the several sectors such as development of rural regions, empowerment of communities, health care, protection of law, education, developing more business chances, improving the financial performance of the business and ensuring the transparency parameters. In the rural areas where there are mining activities are going on, CSR can play a major role in empowering community, minimizing unemployment, establishing infrastructure and eliminating the gap in income distributions. In the mining sector, corporate social responsibility activities will increase the canvas of the social responsibility and will enhance public well-being. However, the civil society of Pakistan will have to play a major role in the following three dimensions if they want to experience CSR activities.

  • Regular campaigns must be launched to raise awareness about CSR among the people with the help of the government and mining companies that have already initiated some CSR activities.
  • The central government, with the help of local governments will have to develop regulations to inculcate CSR activities in mining sector as a compulsory part. These rules and regulations will not be formulated until the citizens demand their rights.
  • Citizens of Pakistan will have to develop voluntary bodies that will work as pressure groups in order to motivate positive CSR initiatives. These pressure groups will also question unethical practices done by mining organizations along with raising awareness of the local people about their rights.

Besides, it is also necessary to conduct stakeholder meetings by the mining companies to develop future strategies to design the products and business operations as per the demand and well-being of the local people. This initiative can include trade organizations, labor unions, NGOs, media groups and educational institutes. In the end, corporate social responsibility related to requirement of Pakistan must be assessed and particular solutions must be tailored as needed. It is not recommended to import solutions from the developed countries.

4.0 CSR Activities in Mining sector of South Africa

Before 1944, mining sector in South Africa experienced some extremely socially destructive practices of the era. In the post 1944 democratic dispensation, CSR has always been treated as a vehicle for restorative justice. For this reason, the mining industry has become a leader in implementing CSR activities and has made the biggest monetary contributions as a sector. South Africa’s evolution to democracy brought wholesale political, institutional and social changes. These types of changes impacted the concept and role of CSR in two ways.

First, the capital markets of South Africa became linked to international markets. As a result, the mining companies of South Africa were pressured to meet international CSR expectations, in accordance with the guidelines of corporate governance. These listed organizations had to increase their investments in CSR commitments in order to attract more investors. Due to this increasing expectation from international levels, policies at a local level also changes.

On the other hand, after 1994 dispensation, a newly developed government took the responsibility of managing country’s mineral resources on behalf of all South African people. Private investors were still permitted to apply for mining licenses and concessions. The Mineral and Petroleum Resources Development Act (MPRDA) was established in the year of 2002 that represents a legislative commitment to accomplish equitable access to and sustainable expansion of South Africa's mineral and petroleum resources. BEE or Black Element Empowerment policy has been improved by elements of MPRDA and mining companies were asked to convert their old rights under the new Mineral Act 50 that was established in 1991. Corporate Social Investment (CSI) programs were initiated that were the action plan-led interventions to implement CSR policy frameworks.

However, MPRDA does not precisely and particularly stipulate how this aims and goals will be accomplished. On the other hand, the way in which mining houses selected to comply with the act is voluntary. That means, how the companies will apply the act will be a reflection of the degree of their CSR compliance. This clearly shows the poor formulation of MPRDA.

4.1 Mining industry of South Africa

The mining industry is extremely consequential for South Africa because of several social, economic and chronological reasons. Reasonably, South Africa is the leading country in terms of exporting minerals such as gold, platinum, manganese and chromium. On the other hand, its mining industry is accounts for over 50% of the country’s exported goods. That is why; mining industry of South Africa (SA) is considered as its heart of economy that contributes nearly 20% of the country’s GDP and directly employs 14 million people. In spite of its contribution to regional and national development by providing revenues, employment and infrastructure, the mining industry of South Africa also has some negative effects that includes disruption of river flows, land-use, dilapidation of forest and possessions, commotion of local communities and environmental pollution.

Historically, an immense amount of nervousness was always seen amid mining companies and the societies in the operational areas. These tensions arise from the discrimination of apartheid because “the actions of the mining houses were associated with the regal and subsequently apartheid policies via the immigrant employment structure. Mining companies in South Africa were notorious for several reasons. They always neglected their nearby communities during the apartheid regime. The mining communities used to face severe problems related to electricity, housing and water. Their farmlands were also destroyed because of mining activities. The companies claimed that they had done enough to correct their wrongdoings; however, they did nothing to enhance the lives of the people living in the mining areas.

Until the introduction of South African Constitution in the year of 1996, the mining sector of the country was heavily exploited for the rich mineral resources. Foreign investors owned most of the mining companies in South Africa. These companies used to abandon mines without any regard to their environmental damage and social destruction they were leaving behind.

The South African Constitution understood the state’s obligation to protect the citizen’s social and economic rights including right to housing, clean water and medical support. In the chapter seven of the South African constitution, the objectives of local government are stated. Those objectives clearly stated that it is significant to promote social and economicaldevelopment which will ensure service provisions in a sustainable manner. It is also stated that safe and healthy environment should be provided to the citizens of South Africa.

4.2 Socio-Economic empowerment charter for the South African mining industry

As per mentioned by BEE Act, the government has the right to make industry charters that will administer the technique that industry endorses and enforces BEE. In the year of 2002, the Broad-Based Socio-Economic Empowerment Charter was developed for the mining industry in South Africa. The Chamber of Mines of South Africa along with the Department of Minerals and Energy, the South African Mining Development Association and the National Union of Mineworkers developed it for the mining industry. The main objective of this charter was to assist the recreation of a collective revelation of internationally spirited mining industry that will consume human and financial resources of all South African people and will offer real benefits to all South Africans. The target was to develop an industry that will actually replicate the pledge of a non-racial South Africa.

Within this act, a list of rules and regulations are there that all the stakeholders in the mining industry will have to follow in any circumstances. These rules and regulations are identified by the seven bases of BBBEE, which are Human Resource Development, Employment Evenhandedness Immigrant Labor, Mine society and Countryside growth along with Housing-Living condition, Procurement, Ownership-Join Ventures and Beneficiation. Besides, these rules and regulations also required government compliance, which was divided into some different sections which are exploration-prospecting, state assets, licensing, financing mechanism, regulatory framework and industry conformity along with discussion, monitoring, evaluation and coverage.

After the introduction of Mining Charter, the amount of merger and acquisition with BEE dimension increased. Between 1998 and 2002, the proportion of merger and acquisition related to BEE was only fifteen percent. However, this changed between 2003 and 2005 up to 32 percent. Mining Charter also made tremendous progress towards social and economical justice. However, some applications of the charter are opposed to developing new black business comprised of a new and increasing class of affluent and triumphant black South African capitalists. A group of black business moguls includes the leaders such as the chief of the BEE Commission Cyril Ramaphosa, who are taking numerous advantages out of BBBEE. In the same situation, majority of the South Africans are remaining socio-economically poor as before BBBEE.

4.4 Mineral and Petroleum Resourced Development Act

MPRDA of the Mineral and Petroleum Resource Development Act was approved in the June of 2002 that represents the governmental obligation to accomplish evenhanded admission to and sustainable expansion of South Africa’s mineral and petroleum possessions. This act helps to gain all mining privileges with the state and forces mining organizations to change their old order mining rights to new order rights. In order to meet the rules and regulations of this Act, the mining companies have to meet a set of communal and employment targets that overall with the targets in the mining charter.

On the other hand, MPRDA emphasises rectifying the legacy of apartheid. The foreword outlines the role of the state in the mining business:

“It will be the state’s responsibility to save the atmosphere for the assistance of present and upcoming generations which will guarantee environmentally sustainable establishment of mineral and gasoline possessions and will endorse monetary and communal expansion. It will be also important to endorse domestic and countryside establishment and the community uplift of communities exaggerated by the mining operations. It will be the responsibility of the state to restructure to bring evenhanded admission to South Africa’s mineral and petroleum possessions. “

The embracing of Mining Charter and MPRDA clearly states that the mining business is committed to operate within a new and dissimilar lawmaking agenda. In terms of corporate social responsibility, the most significant purpose of the Act is Section 2 (i) that makes sure that mining associations are contributing towards the socio-economic growth of the regions in which they operate. However, one problem with this Act is it does not state how these aims and objectives must be accomplished. Besides, the entire responsibility is left up for the business to assume the rules and regulations of the act in an important way.

In compliance with the act, when a mining company will apply for a new mining right, its management will have to submit a mine work plan along with a social and labor plan and environmental management plan. As a result of this legislation, activities related to corporate social responsibility was indirectly injected in the mining industry. That is why, the mining organization that were once the pariahs of capitalism are very same companies that are now leading the way in CSR activities in mining sector of South Africa.

4.5 CSR initiatives in Mining sector of South Africa

The mining business of South Africa has always been occupied by communities for many years. These organizations found themselves in the limelight for the situation connected to migrant labor system followed by them. Mining companies in South Africa are now engaging in several CSR linked initiatives in order to re-develop their image in the country. In the year of 1970, Anglo American set up the urban establishment anticipated to help improve road and rail network and schooling in the township. Later in the year of 1977, Sullivan code was established to improve the human rights in American companies operation in mining industry of South Africa. Some domestic companies were listed in the overseas stock markets that catalyzed a more definite move towards corporate social responsibility on the part of many mining organizations in the South Africa. Later it was empowered by a propagation of the local legislation mandating “CSR-linked” assistance for local socio-economic expansion.

Since the development of democratic system in South Africa in the year of 1994, several numbers of legislation and policy documents were established to manage domestic economic establishment. Some of those documents and rules are already discussed in this report. As per mentioned in the South African Constitution, the responsibilities and objectives of local government related to mining industry change drastically. Some of those objectives are, ‘

  • To promote social and economic establishment
  • To ensure service stipulation in a sustainable way
  • To deliver safe and healthy environment

4.6 Existing partnership and their challenges

A number of partnerships are there between mining houses and different stakeholders such as domestic government, local community and labor associations. From 2002, Anglo American has introduced it’s HID/AIDS program that is delivering free anti-retroviral treatment for all the employees who need it. As a result of this partnership, the organization is receiving benefits such as productivity, health and social well-being of the employees and brand image. This initiative is assisted by the labor union in South Africa and Congress of South African Trade Unions (COSATU).

Some other companies are also involved in a number of corporate social investment initiatives where they are providing financial help to local people. Companies are now actively introducing CSI initiatives; however, most of those companies are multi-national business organizations such as De Beers, BHP Billiton and Kumba Resources. Some of these companies have included CSI activities as their core business function where some of these companies are using external implementation agents who are managing and monitoring the funds. The areas of investment done by the companies include health and welfare, skill development, sports, education and crime prevention. On the other hand, several mining organizations are also involved in the “adopt a school campaign” which makes sure that the school’s management, monetary, administrative and academic requirements are met. Another important CSR initiative is TEBA development, which is a non-profit NGO, developed in the year of 2001 with the help of mining organizations and its stakeholders. The main objective of this association is to facilitate development in rural regions where mines are located or in rural communities that have delivered workers to the mines. TEBA Development is also responsible for supporting entrepreneurial and other job creating chances by ex-miners who have been retired.

However, unanimously it is believed that these partnerships have not yielded a significant impact on several numbers of reasons. Mining companies in South Africa have always exhibited lack of willingness to collaborate in initial stages of CSR activities. Later they expressed their intentions to boost their CSR activities. However, most of these organizations engaged in “single-handed” CSR efforts only to increase publicity mileage to enhance their reputations.

4.7 Recommendation for South African Mining Industry

From the entire discussion, it is seen that mining companies in South Africa have initiated some CSR activities. However, most of those activities are facilitated only to improve their own brand image. Their intention is not to help develop the community and the people within it. Besides, there are several other challenges that are also discussed previously in the report. In order to deal with those issues, some steps should be taken which are here by mentioned below.

  • It is recommended to facilitate an alignment of mines’ CSR programs to municipal planning structures such as the IDP. It will ensure that challenges related to municipalities are included.
  • Local communities must be empowered to engage with mines efficiently around the issues related to corporate social responsibility. They must be recommended to participate actively in the mining activities and related benefits.
  • Transfer of skills to local people is also a critical thing to do. The investment must be done in business schooling for the youth of the communities.
  • A true partnership must be motivated depended on “equality” principles between locals and external entrepreneurs who are engaged in mining operations in an area.
  • It is important to facilitate continuous review, monitoring and evaluation of CSR projects. There is no doubt that this review process is not only time-consuming but also cost effective.  This review process can be avoided if mining organizations move away from their aim of just meeting minimum requirements to being committed to sustainable local socio-economic establishment and CSR. They will also have to display their complete support towards CSR initiatives.
  • There must be ongoing communication between all the partners in corporate social responsibility to make sure that all stakeholders are properly operating.
  • Mining organizations will have to commence and employ the LED interventions as a part of the requirement of the social and labor plans.  
  • The local government of South Africa will have to develop an enabling environment for forming corporate social responsibility related partnership.
  • Mining organizations in the country will have to always consult and involve local governments and communities in the CSR projects.
  • All the mining companies in South Africa will have to understand the importance of corporate social responsibility in business operations. It must become core to the corporate strategy and not be seen as an add-on method.
  • If the companies do not want to develop new departments for CSR activities then they can outsource the management of CSR projects. However, they must not outsource the methods and responsibilities.
  • As mentioned by DPLG, if the mining companies in South Africa want to develop successful CSR partnership then they will have become effective in the local context. Besides, CSR activities must be relevant to the requirements of the local stakeholders.
  • Mining organizations will also have to establish exit strategies to make sure that the LED interventions are sustainable

4.8 Roles of different associations in implementing proper CSR activities in South African Mining industry

Local Government: It will have to provide a positive environment for the partnership to take place. The community role in LED, related to mining CSR can be on developing forums to build partnerships and to associate with a range of stakeholders.

Environmental organizations and NGOs: Both domestic environmental organizations and NGOs will have to figure out and communicate the socio-environmental priorities of the local societies related to mining.

Mining companies: Mining organization will have to engage with local economic and business organizations in order to find out the economic requirements and priorities of the local people. They will have to work together with the other stakeholders to address these requirements and priorities. On the other hand, mining companies will have to initiate and implement LED interventions as a part of the requirement of the social and labor plans.

5.0 Comparative Analysis between CSR activities in mining sector of Pakistan and South Africa:

Factors

Pakistan

South Africa

Health related CSR activities

There are no CSR activities have been undertaken in the Pakistan mining sector. In fact, it has been noted that in several occasions the safety related precautions were not carried out by the mining companies.

The mining companies in South Africa actively participate in the health initiatives. It has been observed that they offer health services to the employees and their families. They have been also observed to develop health centers, and develop and equip healthcare settings.

Education related CSR activities

In the Pakistani mining sector the education related CSR activities are not observed at all.

The South African mining companies have been popular for partake in the education related CSR activities. They actively tries to make aware of the local community regarding various social aspects. IN addition to that, they offer scholarship program for many talented students.

Community aid related CSR activities

The mining companies in Pakistan make a very limited effort to enhance the lifestyle of the local community.  

Majority of the mining companies in South Africa effectively generates fund for the investment in community development. Moreover, the mining companies also focused on supporting the local business.

Livelihood related CSR activities

There has not been any livelihood related CSR activities noted in the mining sector of Pakistan.

The mining companies in South Africa emphasize on the sustainable livelihood projects. These projects are highly effective for sustainable and alternativeemployment opportunities, which in turn reduce the dependence on  mine.

Conclusion:

In this report, corporate social responsibility related activities in the mining industries of Pakistan and South Africa are discussed in a detailed manner. From the discussion it can be concluded that in both the countries, CSR activities in the mining sector are yet not executed properly. In Pakistan, it is seen that most of the organizations have no idea about the concept of corporate social responsibility. Issues related to religion, unstable political condition and economic condition are some factor that is hampering the overall growth of Pakistan.  Therefore, both the government and media are not bothered about what the mining organizations are contributing to the society. However, some organizations in mining sector of Pakistan are executing activities to help the local communities. Therefore, it can be said that slowly but steadily initiatives related to CSR are occurring in Pakistan. On the other hand, the scenario in South Africa is quite different. Before the development of South African Constitution, all the mining companies did whatever they could do to increase their profitability through the natural resources of South Africa. They did not care about the damage they were doing to the country and the communities living near the mining areas. However, after 1994 and the development of South African constitution, the condition has changed to some extent. Some well-renowned organizations are willingly executing CSR activities to help the local communities. However, the problem is those activities are not making much of difference. Each of those organizations is implementing strategies single-handedly. Therefore, the effects of such activities are negligible. Those companies are not executing CSR strategies to help the communities, but to improve their brand image and reputation. On the other hand, there are still a lot of companies who are not responding to the CSR-related rules and regulations of the country. Some serious legislation is also developed by the government of the country in order to force the organizations to invest in CSR activities. Those rules and regulations are actually helping the people of government to become wealthy. Therefore, in the case of South Africa, CSR activities are also increasing but are providing little or no effect on the communities. In the end, it can be concluded that in both the countries, the number of CSR activities are increasing in the mining industry.

However, corporate social responsibility related activities are well arranged in South Africa. In the South African Constitution, rules and regulations related to corporate social responsibility are already mentioned. All the mining companies are asked to follow those rules and regulations. On the other hand, there are no such rules related to corporate social responsibility in the mining industry of Pakistan. Only a handful number of companies are conducting their CSR activities only for their own gains. Absence of governmental policies is also making the mining companies of Pakistan to move away from their CSR activities. In any country, there must be governmental policies related to corporate social responsibility, especially in the mining industry that is responsible for not only environmental damage but also responsible for community related damages. Therefore, from the entire analysis done on mining industries of South Africa and Pakistan, it can be stated that South African mining industry has already taken a step forward in terms of corporate social responsibility where Pakistan is still busy with its political instability. It is the high time for the government of Pakistan to establish legislations related to CSR activities in mining industry. It must also ask the companies to follow those rules at any cost for the betterment of the communities that are living in the mining areas.

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