May 2010

CSR grows up

Improved returns from partnering with local communities

By G. Woodford

On a recent trip to Paraguay to explore the potential construction of an aluminum smelter, Rio Tinto’s Claude Perras did something a little unorthodox. He sought out the people and organizations whose work it is to keep the likes of him and his company out of their country and he asked them for a meeting.

“The traditional way of doing things is to say, We won’t talk to them because they’re against us,’” says Perras, director of community relations. “But we talked to the most radical groups.”

Each side talked and each side listened. And while no miracles happened in Paraguay, Perras is convinced reaching out was the right thing to do. “The reception that we received was very good,” he says. “And now that the communication channel is open, transparency is expected.” Many mining insiders say this is the direction corporate social responsibility (CSR) must take – not only in order to be nicer, but also, to be more profitable.

Then and now

The pressure to create a more sophisticated approach to community engagement came largely from local community groups themselves and improved government regulations in countries where mining companies operate. They, in turn, responded with detailed CSR policies stating a commitment to the so-called “triple bottom line,” consisting of economic, environmental and social profit. This approach has evolved out of the concept of “sustainable development.” CSR and sustainable development are two sides of the same coin, with CSR tending to focus more on social engagement and sustainable development on environmental concerns. But many in the industry use the terms interchangeably.

Canada’s mining companies insist this is not all just fancy window dressing. Many now track their CSR performance, or hire third parties to do so, and share the information with the public and shareholders. They also take part in initiatives like the Mining Association of Canada’s Towards Sustainable Mining initiative, which gathers and publishes CSR performance data on a number of indicators, such as tailings management, crisis preparedness and energy use.

“We used to think we should do CSR for moral reasons or because it grants us social licence,” says Gary Merasty, vice-president, CSR at Cameco. “But the problem with that approach is that it’s based on friction with society, and that’s hard to measure. There’s been a global shift. We now understand the interdependence between business and society. Strategic CSR is about remaining true to that link.”

Catherine Coumans, of watchdog group MiningWatch Canada, acknowledges and commends the industry for the strides it has made in a relatively short period. “Back in 1999, when MiningWatch began, it was hard to have a conversation with people in the industry about the problems,” she recalls. “Now we’re past the point where we have to discuss that. It’s a more sophisticated conversation now.” But engaging critics is only the first step, says Coumans who contends that the voluntary nature of CSR standards is a huge stumbling block to widespread implementation. “CSR can be brought into play and taken out at whim,” she adds. “One CEO can be enthusiastic about CSR, then the next one won’t be.”

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