Time to step up to the batting cage
January 2014 marks another catastrophe for the South African mining industry. Its largest platinum sector union called for increased wages potentially halting production for the world’s top producers, Anglo American Platinum, Impala Platinum and Lonmin Platinum. The Association of Mineworkers and Construction Union (ACMU) have confirmed that 70,000 miners will go on strike. South Africa’s Minister of Finance, Pravin Gordhan, said that the country’s ailing economy is unable to afford any more mine labour unrest. This was just the tipping point of the long and most recent history of increasing turmoil.
In November 2013, the “Marikana Massacre” was a police operation that opened fire on hundreds of striking miners. Thirty-four miners were killed, more than seventy wounded, and over 600 rounds were fired. It was symbolic of the increasing pressure on the South African government to protect one of its largest industries, the failure of mining companies to alleviate poverty surrounding mining sites, and the failure to impose regulation processes that protect human rights and labour standards.
These are just one of many examples where despite the enormous contributions the mining industry has brought to economic development, it fails to convince its constituents and stakeholders of its ‘social license to operate‘ in many parts of the world.
Given the vast movement for multi-national corporations to be more mindful of their social responsibility to the local communities where they operate as well as to their consumers, there have not yet been notable improvements across the mining sector. The most prominent explanation for this is that there still lacks a strong business case for regulating conditions and harbouring sustainable development in the mining industry. On the one hand, the relationship that binds end users to mining products is thin at best, and bridging this gap requires education on the nature of mineral supply chains that link commodities to consumer brands like Apple or Sony. On the other, a general lack of transparency makes a difficult business case for mining companies to agree to sign up for improving their practices.
One potential concern for mining companies is that investors expect high returns and do the best they can to mitigate risk. However, in recent years there has been considerable worry over the industry’s financial results. Lowering labour and health costs of mining workers by implementing programmes that reduce risk could improve mining company access to lenders and insurers. Better business continuity and mitigating risk could produce a market advantage. And this is where the importance of stakeholders comes into play. Governments, financial stakeholders, non-governmental organizations, international organizations and academia all need to find a way to identify, pursue their own objectives, and capitalize on this valuable business case.
However, international and other civil society organizations historically have been highly opposed to implementing projects, accepting funding, or even engaging in bi-lateral meetings with mining companies despite the wide negative impact their operations pose for beneficiaries. Many UN agencies have highlighted the responsibility of companies and governments to be accountable to their workers and citizens; much work has been done toward defining universal norms and principles in business and human rights. However, policy is simply not enough, especially given the highly lucrative activities resulting from States going to bed with mining companies time and time again. In fact, it is common knowledge that in Mozambique, perhaps the worst of all cases, many high-ranking officials in the agencies that regulate the country’s mining industry are also executives of private companies within the same sector, presenting clear conflicts of interest.
At the United Nations Forum on Business and Human Rights this past December, there remained a general hesitation to play ‘good cop’ and engage with mining companies to mitigate the hardship their operations pose to local and indigenous communities. Of serious consideration would be the risk involved in destroying a potential UN agency relationship with host governments on the ground, hindering their other activities. Of uppermost importance is also the value of the UN brand and reputation,. The UN brand is indeed far more valuable than that of your average mining company. However, what many often fail to understand is that it is almost never the ‘who’ or the ‘what’ when it comes to engagement but rather the ‘how’ that will pave the way to bridging the gap between the private sector and humanitarian operations in the developing world.
Enhanced methods in due diligence, building capacity and basic field training in reputation risk management and business ethics are the keys to engaging the smart way, and reaching miners that need humanitarian expertise. Learning ‘how’ to best engage with both the hero companies and those with a history of controversies, humanitarian agencies are able to address or at least educate about the negative externalities of mine work such as HIV/AIDS and tuberculosis cases, child labour, human trafficking, land acquisition, ethical recruitment, and death related to mining rather than mitigate their symptoms.
International Organizations cannot fulfil their mandates if they create arbitrary and wide reaching guidelines that bar engagement with companies associated with mining controversies. In fact, all potential risks considered, companies that have suffered through mining controversies are the ones with whom the United Nations should discuss reasonable modes of engagement designed to identify and work toward mutual goals. These are decreasing security costs, decreasing payments to stakeholder groups, creating lean and affective community development programmes, and decreasing disruption and conflict during operations. The United Nations has a long history of addressing governmental abuse of human rights. The question begs as to why the same should not apply for the private sector.
United Nations agencies and other humanitarian organisations have a vast potential to advise, engage and facilitate key local stakeholders, and implement projects that enhance the community relations and corporate social responsibility programmes being implemented by mining companies. Many mining companies see a business case in improving their relations with local communities and keeping their social license to operate. If optimal performance – be it funding or mandate fulfilment – is the aim then international organizations and civil society must remember that their ultimate goal is to cease to exist. Sitting back in a tidy corner among often equally corrupt governments is the equivalent to turning a blind eye to migrants, children, women, and mine workers that need them most desperately.
Article by Lindsay Michiels