SUSTAINABLE COMMUNITY DEVELOPMENT USING SHARED VALUE APPROACH – AN ALTERNATIVE TO CORPORATE SOCIAL RESPONSIBILITY IN MINING INDUSTRY?
Mining plays an important role in the economic growth of the country. It creates wealth for the local economy by providing job opportunities and developing infrastructure. However, mining companies face enormous pressure to address social and environmental issues and if unattended, may lead to delay or major interruptions in mining operations.
It is important for mining companies to recognize that all stakeholders are intricately connected to the mining operation and their needs must be addressed. Communities in the vicinity of the mining operation are potentially the most heavily impacted and proper engagement is vital for strong local support with ongoing operations.
A sustainable revenue growth is achievable if the company’s vision moves from “shareholders” to “all stakeholders”. This vision can be brought forth by a shared value (SV) approach where the corporate business model is intricately connected with the social and environmental issues of the surrounding communities.
Traditionally, Corporate Social Responsibility (CSR), where the money “handed out” to the community creates no economic benefits for the company has been the route taken by companies to do social good. In certain situations, CSR initiatives may not come to fruition at all due to various hindering factors. This can discourage companies to take on such an initiative. In this paper, we argue that an implementation approach to SV - sustainable community development (SCD), is the right step forward for mining companies to tackle social and environmental issues because the process enables companies to obtain “social license to operate”. Also, the money invested in the community by the company creates economic benefits both for the community and company creating a reinforcing economic growth cycle.
SCD approach does not allocate revenue into the community based on philanthropic inclinations but rather by revisiting corporate policies and existing technologies and understand what changes would drive economic growth for the company, focussing on opening up community scaled economic opportunities for the surrounding people.
Furthermore, with such a business model, innovation can be brought forth by building on wealth generating activities, including cluster development in the communities. In this paper we talk about how social and environmental impact assessment and adopting new technologies for water treatment and optimized water usage in mining operations can not only reduce stress on the environment but also help companies save costs and stay competitive.
Shared value helps remove some of the barriers that may cause hindrance in establishing a sustainable community development model. Economic benefits generated from shared value will also encourage companies to support businesses in the community that will make local people self-sustaining and improve their quality of life. However, to achieve this task, it is imperative that the private sector, local government and finally, non-governmental organizations (NGOs) collaborate with the company and stakeholders to create a roadmap for implementing effective solutions.
The importance of carrying out social and environment impact assessment at the exploration / surveying stage is also outlined in this paper. The process helps understand any potential impacts that may be generated from mining operation and establish methods to mitigate these impacts prior to building infrastructure for mining. This can minimize human conflicts and ecological imbalance that may otherwise be generated from the mining operations. The importance of engaging all stakeholders when establishing shared value model to come up with effective solutions by targeting the pressing societal issues is also presented in this paper.