Mining, Corporate Social Responsibility and the "Community": The Case of Rio Tinto, Richards Bay Minerals and the Mbonambi Author(s): Paul Kapelus Source: Journal of Business Ethics, Vol. 39, No. 3, Resource Extraction Industries in the Developing World (Sep., 2002), pp. 275-296 Published by: Springer Stable URL: http://www.jstor.org/stable/25074842 . Accessed: 25/11/2013 03:37

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This content downloaded from 165.123.34.86 on Mon, 25 Nov 2013 03:37:14 AM All use subject to JSTOR Terms and Conditions Mining, Corporate Social Responsibility and the "Community": The Case of Rio Tinto, Richards Bay Minerals and the Mbonambi Paul Kapelus

a ABSTRACT. Mining companies have long had a of major minor company has been implemented by questionable reputation for social responsibility, espe one of its subsidiaries in South Africa. cially in developing countries. In recent years, mining companies operating in developing countries have KEY WOPJDS: corporate social responsibility, mining come under increased pressure as opponents have ethics, Rio Tinto placed them under greater public scrutiny. Mining companies have responded by developing global cor social as of their porate responsibility strategies part At the Rio Tinto head quarters in St business In these a larger global strategies. strategies, James Square, London, an anthropology is to their with prominent place given relationship professor and his research assistant advise local communities. For business one basic issue ethics, the Rio Tinto mining operations around an to is whether such approach corporate responsi the world on community affairs. They is to address the comment on relations bility likely effectively development the company's concerns of local communities in coun developing with "the community", scrutinise five tries. This addresses this investi paper question by year community development plans and how the social gating corporate responsibility agenda provide direction for engaging with the on community sensitive cultural issues and advice on resettlement. On their desks sit Paul Kapelus is a co-founder of the African Institute of various reference books including James Corporate Citizenship (The views presented in this Ferguson's "The Anti-Politics Machine", paper are personal). Paul has been working in thefield "Civil Society" by Hann & Dunn and ? of social responsibility for the past ten years. Initial literature dealing with mine aboriginal research began in the migrant workers hostels of relations in Australia, as well as internet on Johannesburg and continued whilst working platinum web site printouts from the British mine in Organisational Development. Consultancy in Institute for Development Studies library. thefield of social and environmental impact assessment They maintain files for storing articles to a countries at allowed Paul work in number of African from the media about the operations on projects rangingfrom greenfields exploration through different mine sites and actively "surf the toprivatisation. Paul undertook a BA (HONS) in social web" examining sites that campaign anthropology at the University of the Witwatersrand, against Rio Tinto. South Africa, and a Masters in the Anthropology of Development at Sussex University, UK. On his return On the northern KwaZulu Natal coast in from the UK he co-founded the African Institute of South Africa, Richards Bay Minerals a Corporate Citizenship, a consultancy and advocacy (RBM), Rio Tinto subsidiary, is busy organisation. His work has focussed on corporate citi preparing to relocate a number of house zenship strategy, social management plan development, holds situated within the demarcated m tri-sectorpartnerships and socially responsible investment. 100 mining zone. The team of com

Journal of Business Ethics 39: 275-296, 2002. -^g- r" ? 2002 Kluwer Academic Publishers. Printed in theNetherlands.

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munity development workers goes out For business ethics, one basic issue that arises each to an day support community develop in this context is whether such approach by ment projects in the Mbonambi adjacent corporations to this situation is likely to effec community. The projects are displayed to tively address the development concerns that the the world in the Rio Tinto corporate local communities in developing countries have. reports and magazines, on the RJBM web It is this question that this paper investigates. I site and on billboard signs next to the a case examine this issue by way of study. development projects. Specifically, I look at the global CSR agenda set out by the mining giant Rio Tinto and how it in Enlightened corporations, including those the has been implemented by its subsidiary Richards mining industry, have long been aware that it Bay Minerals (RJiM) in the Mbonambi Tribal be in their interests to may address issues of Authority of South Africa. The case study concern to the local communities in which they analysis is based in part upon a series of inter operate. The pragmatic logic involved in this views with key figures in Rio Tinto, BJBM and notion is quite simple. Local communities are the local communities in and around Richards a to on often in position impose costs corpora Bay conducted in 1999.1 to so a tions, with their ability do being function In adopting a case study analysis in this paper, of the resources they command and their ability my goal is primarily heuristic, that is, to explore to organize themselves. What this has meant his the tensions that appear in the process and is that have to concerns torically corporations tended pay the that arise (rather than providing a more attention to those communities which have definitive evaluation of the effectiveness of the more resources. More specifically, corporations particular policies and their implementation and more have paid attention to the concerns of concrete steps to be taken to address shortcom communities in in developed countries which ings). Key aspects of the analysis involve the than to in coun they operate those developing investigation of how the company conceptualizes tries. and employs the notion of "community" and recent With processes of economic globalisa how its approach to these tasks is contested by more tion this simple truth has become compli stakeholder groups. one as cated. For thing, corporations increasingly shift their production to developing countries, are are not ones - they finding that they the only I. Context transnational mining are who going global. Civil society, and more corporations and their critics specifically, environmental and corporate watch are dog groups, also globalising and collaborating The transnationalization of (the mining) industry with civil society groups in developing countries. a are As result, corporations facing increased Over the last couple of decades transnational criticism in surveillance and of their activities corporations (TNCs) have experienced unprece as as developing countries, well increased pressure dented growth. While in 1970 there were to a operate in socially responsible fashion. For approximately 7000 TNCs, by 1994 the count their part, corporations are responding. As had risen to some 39 000 parent TNCs and the vignettes above indicate, large transnational 20 000 affiliate TNCs (Nelson, 1998). Various are as a mining companies changing result of bad technical, organizational and political factors have press, production delays and campaigns instigated provided the opportunities for the increased across by civil society groups. By way of response, these financial investment the globe. These are corporations developing global corporate include privatisation policies, liberalised invest ? social responsibility (CSR) strategies which ment policies, the reregulation of mining activ new employ the vocabularies of business ethics, ities, technology for global operations, - as concerns human rights and development part of their traditional about spreading financial more larger global business strategies. risks and effective production processes.

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Like TNCs generally, mining TNCs have Particularly significant among the opposition also been growing in recent years. As Reed doc to mining TNCs in developing countries has uments in his paper in this issue, the transna been the emergence of increased activism by tionalization of the mining industry is not indigenous communities, who are frequently new. Commercial mining has been expanding among the groups most directly and adversely a throughout the globe for more than 150 years, affected by mining activities. Large numbers of process that has largely been linked to the dom indigenous peoples are entering into conflict ination of colonial powers. In recent years, with mining companies (Fabig and Boele, 1999; however, mining companies have stepped up Burger, 1987). Indigenous communities are chal on a their operations in developing countries. The lenging mining companies wide range of are primary reasons for this the liberalizing ten issues including profit-flows, headquarters' new on dencies in the global economy, noted above, decision making procedures, representation as well as depletion of resources in developed the company board, rights to extract minerals, countries. compensation measures, reporting procedures and long-term strategies. Almost every aspect of a business is scrutinised from a social responsi The transnationalization of opposition bility perspective. These indigenous communities have benefited The mining industry has always provoked greatly from the globalisation of opposition to reaction to its operations, especially from local mining TNCs. In recent years a global network communities. While this is true in both devel of indigenous peoples organisations has emerged as a oped countries and developing countries, oppo result of this larger opposition movement. sition groups in developing countries have Members of the larger movement provide impor typically enjoyed advantages in making their tant services, such as reporting on negotiations demands heard due to greater resources, better between mining firms and local (indigenous) organization and more effective political repre communities. Such negotiations are often sentation. The organizational advantages in relevant for other indigenous groups, even if they developed countries have included more active are being held on another continent, as deals and better resourced social movements and struck between one group and a mining concerns as NGOs (operating around such company can be used as reference points or human rights, the environment, the rights of benchmarks for other groups (Broad, 1997). indigenous people, corporate responsibility, Reports on such negotiations help to ensure etc.). indigenous communities the best possible price As mining TNCs are increasingly becoming (in both financial terms and other considerations) so global corporations, has opposition to them for their granting of mining rights (Crowson, become increasingly global. While many estab 1998). lished NGOs in the developed world have long The efforts of indigenous peoples to organize been international in perspective, they have been have been paying off in other ways, as well. a taking greater interest in issues related to Indigenous peoples are starting to have more of new mining. As well, many NGOs have been their land claims officially recognized, as in over established the last couple of decades, the 1992 "Mabo ruling in Australia" (which including a variety with a specific focus on provided for native title of land if historical and mining concerns. Both newer and more estab continuous links with the land could be demon a to are lished NGOs have shown strong propensity strated). Indigenous people also having their collaborate, not only amongst themselves, but rights recognized in other fora. In 1989 the with organizations and local communities in the International Labour Organisation (ILO) adopted developing world. The result has been the estab Convention 169, "Concerning Indigenous lishment of networks of opposition to mining Peoples and Tribes in Independent Countries." firms. For its part, the United Nations Human Rights

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a on Commission has formed Working Group to transform. Entitled "Mining Minerals and a Indigenous Populations and developed draft Sustainable Development" (MMSD), this global Declaration of the Rights of Indigenous Peoples. programme is being administered by the The UN has also been active specifically with International Association of Environment and respect to indigenous peoples' relations with the Development (IIED). The stated intention of the mining industry, promoting the concepts of free project is "to identify how mining and minerals and informed consent, participation in the can best contribute to the global transition to benefits of development, compensation, and mit sustainable development" (IIED, 2000). The igation of adverse impacts. WBCSD hopes that the project will help to publicize the serious attempts of the mining an industry to construct agenda for CSR and encourage all members of the industry to live II. Corporate social responsibility up to the highest standards. Major research (mining) and the community themes of the project include human rights issues (conflict, abusive practices, corruption), concerns access CSR as a programmatic response to critics of indigenous peoples, to markets, world a trade and globalisation and finally designing While corporations have always been involved sustainable future. The findings of MMSD will on with CSR programs to some degree in one form be presented to the Rio +10 World Summit seen or another, the last couple of decades have Sustainable Development (WSSD) in 2002 in resources an explosion in terms of the effort and South Africa. are that corporations have been expending on CSR. In addition to civil society pressures, there numerous Mining and other resource sectors have been in international treaties and agreements more the forefront of this new surge of interest. There that attempt to promote responsible activity are a couple of overlapping reasons for this new by TNCs with respect to their social and envi on as awareness emphasis CSR. Perhaps, the major factor, ronmental impact.2 Environmental in discussed above, is the fact that NGOs, social particular has intensified in recent years, espe movement and indigenous peoples have increased cially after the convening of the 1992 Earth their organizational capacity and cooperation Summit in Rio. One key issue that has emerged so. tremendously over the last twenty years or with respect to international regulation is how This has allowed them to exert much greater TNCs might be encouraged to apply their home move to pressure on corporations, both directly (through standards abroad, when they locations actions against their production facilities and with lower labour costs and less stringent envi con campaigns directed at shareholders and ronmental regulations. Mining companies, in an as sumers) as well as indirectly (through the polit particular have been object of concern, they not ical system). have not only fulfilled their promises of being In addition the pressure from civil society engines of local economic growth, but frequently are organizations and indigenous peoples, TNCs adverse social and environmental impacts of their also encouraged to become more responsible and activities have far outweighed the economic take up CSR programs by pro-business organi benefits that have accrued (Anderson, 1996, cited zations, such as the World Business Council for in Carter, 1997). source to Sustainable Development (WBCSD), the Prince A final of pressure has do with the of Wales Business Leadership Forum (PWBLF), pragmatic interests that firms have with respect the Centre for International Private Enterprise to operating with a minimum of government as (CIPE), etc. A recent initiative by the WBCSD, regulation. The problem is that TNCs have more to for example, is directed specifically at the mining shifted their investment the developing an to recent them industry and represents effort confront the world in years, they have opened to not poor ethical reputation of the mining industry selves up criticism for maintaining and the resultant pressure placed on the industry adequate minimum standards. Underlying this

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charge is the notion that either existing standards business activities. This may involve such areas are not adequate or that they are not effectively as labour standards, environmental standards, etc. enforced. Such charges potentially pave the way A third key aspect, and the one probably most for more stringent regulation of TNCs (either closely associated with CSR, involves designing at the national level or internationally). CSR pro and implementing social-economic development grammes represent one possible method for programs and services. TNCs to dampen any pressure for increased reg In undertaking CSR initiatives, TNCs have ulation that may arise as the result of such engaged a variety of non-business experts to help their charges. develop initiatives, including explicating In taking up CSR programmes and responding their values and principles developing standards, concerns to about sustainable development, and designing programs. These include anthro mining companies readily acknowledged that pologists, ethicists, health professionals, develop they are responding to social pressure and that ment workers, etc. They have not forgotten, such a response is no longer optional. Marc however, to also hire a range of business profes Gonsalves, the Corporate Affairs manager of the sionals, especially in the media and publishing Billiton mining group, for example, states that world. Their function is to ensure that the world in the future, "undertaking corporate social knows what the values and commitments of the as are are responsibility programmes will be the same firm and how these expressed through having to print annual corporate reports. It is their CSR projects. Indeed, the intensity of the what business is about" (Gonsalves, 1999). agenda and the number of policies and pro Similarly, the Canadian mining company, Placer grammes in place has contributed to the CSR come a Dome has to accept that "its ability to global agenda becoming business in its own work within the sustainability framework will be right. Consultancy groups, public-relations com the key to getting good projects and developing panies, management and accounting firms are successful mines in many parts of the frontier employed in generating a virtual flood of paper zones of the world" (Wilson, 1999, p. 48). work in the form of conference material, brochures and reports and, as Fabig and Kapelus are (2000) argue, beginning to set the agenda and a Forging CSR agenda define the discourse of CSR.

a TNCs have taken up the CSR agenda in major way recently. One aspect of the CSR agenda The prominence of the "community" in CSR involves TNCs publicly proclaiming their values. a This may be done through any or several of As corporations have taken up CSR programs, number of types of documents produced by the one theme has tended to dominate. That is the firm (e.g., mission statements, code of ethics, commitment of the firm to the local communi code of conduct, etc.). Increasingly, TNCs have ties in which they operate. The corporate liter on also been signing to statements produced by ature on CSR is permeated with references to other groups, including: business organizations, how corporations perceive themselves to be part e.g., WBCSD, PWBLF; multilateral bodies, e.g., of the community. Such commitments are typi the OECD (principles of corporate governance), cally fleshed out both in terms of principles that the UN (Global Compact) and; human rights define the basis of the relationship and guidelines organizations and NGOs, e.g., Transparency that provide more practical instructions for a on International. There has been proliferation of managers how to establish good relations with such codes and statements over the "the past decade, community."3 much of it embracing the language of "sustain It is not only the corporations themselves that able development." A second related aspect of provide the community a place of prominence in CSR involves TNCS establishing appropriate the CSR agenda. International financial organi to standards operationalise their values in their zations also highlight the importance of rela

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a tionships with local communities. The World has become even more prominent. From prag Bank, for instances, hosted two conferences in matic perspective, the reason for this would seem 1998 entitled "Mining and the Community," the to be quite obvious. The operations of mining first in April in Quito, Ecuador and the second firms almost inevitably adversely affect (some in July in Madang, Papua New Guinea. The members of) the local communities (e.g., by a Bank is concerned that as result of the rapid degrading the environment, diminishing liveli globalisation of the mining industry and increased hood prospects, displacing people form their are investment in developing countries conflicts homes, etc.) in ways that likely to evoke between indigenous communities and the mining opposition. While adverse effects and opposition are commu industry are likely to increase. In line with this not necessarily limited to the local our situation, the Bank joined with the mining nity, especially in current global context (e.g., industry in expressing the belief that "proper regional, national and foreign politicians, NGOs, management of relations with communities is social movements, shareholders etc., may all raise concerns going to be the biggest challenge in the next about firms' activities), it is the local ten to twenty years" (McMahon, 1998, p. 10). community that is most directly affected and it most Discussions at the conference highlighted the fact is their claims that have the credibility. If, can that the rights of indigenous people and local for their part, companies convincingly make are communities increasingly being recognised the claim that the local community is benefiting around the globe. It was urged that consultation from their operations (e.g., though community as a by communities be recognized right and that development programs), then it provides them serves traditional values and customs of the community with a cloak of legitimacy that to protect be taken seriously in the decision-making them from charges by other groups (e.g., envi processes. ronmentalists, labour organizations) and enables on That the "community" has emerged as the them to continue with their activities (with distinctive narrative in the strategy of the mining a minimum of disruption and cost). sur sector for promoting CSR should not be on prising. An emphasis community in the devel ? a opment literature extends back to the British Defining the community complex and an colonial office, whose approach reflects controversial task - organic conception of the state widely held in - to the nineteenth century as being composed of Increasingly firms want to be able claim that social parts (Strathern, 1992). As noted above, local communities are benefiting from their are communities have always been important to the presence (and that where there negative on are mining sector to some degree. In the mining impacts communities these under control). a industry, the narrative of community has The logical first step in making such claim is to in As commonly been associated with the category of "identify" the community question. a to "culture." Usually, this category had negative noted above, the understanding of this need a new. or connotation for the industry as traditional identify community is not One way cultures were seen as an impediment to devel another mining firms have been identifying the on ever to opment generally and a potential constraint community since they first began spread zones. mining activities, as it could lead to opposition through the "frontier" Typically, the key to mining by the community and raise concerns step in identifying the community involved on to (by others) about the impact of mining the requesting permission mine from "the chief" to or an act local community.4 Typically, get around the other traditional authority, that implic set situation, the industry would undertake "cultural itly the boundaries of the community along appraisals" to ensure that projects could proceed the lines of the (de facto) authority of the chief. without adversely impacting the culture and the More recently, the process of identifying the more in community. community has become much explicit a It In recent times, the role of the "community" nature, being designated key task of CSR.

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as a has also become much more sophisticated, may be viewed method for minimizing costs. to can involving the entire machinery of CSR, With respect motivation, TNCs under a composed of community affairs, public relations, take CSR programs either because they have or social impact assessments, and public involvement strong moral commitment because they have in so indicated programmes. pragmatic interests doing (as a two Identifying a community, however, is above). These forms of motivation are, of con extremes. complex and contested task, especially in course, logical In actual practice, due temporary societies. There are several reasons to the wide variety of people and issues involved, can are to come into why this is so. For one, communities be both forms of motivation likely is to talk identified on the basis of any number of shared play.7 Generally, however, it possible as to one traits such as geographic territory, religion, about corporations operating closer culture, history, kinship, etc. For another, people pole than the other. can have multiple, overlapping identities and The function of CSR and the motivation of not an one these identities can change overtime.5 This means firms would be issue (at level)8 if it that any definition of a community is always a were universally true that being socially respon construct, an imposing of order that does not sible is good for business. Under these circum necessarily fit the lived experience of the people stances, TNCs would always be socially case errors in question. For this reason, it is also the that responsible (except when they make in definitions of community are necessarily open strategy), as this would help them to maximize to contestation, both in terms of the limits and profits (and shareholder value). It seems na?ve, assume the structure of the community.6 With respect however, to that this condition always to the limits, different definitions based upon dif holds.9 This is only likely to be the case to the ferent criteria include and exclude different degree that stakeholders can effectively impose a on people. As the choice of criteria is largely costs the firm. one subjective matter, any choice is inevitably The function and motivation underlying CSR going to be challenged, especially when excluded programs have practical implications with respect more individuals feel they should be included. With to communities. If firms tend to be morally as a respect to the structure, the key question is motivated, then they will employ CSR tool who (if anyone) can represent the community. of moral discernment. Under these circum to Historically, it was generally assumed that tradi stances, firms will be willing to live up their tional leaders could represent the community, obligations to stakeholders, even when it involves some on both de facto and in terms of having degree costs in terms of shareholder value. If, the more are of (moral) legitimacy. It is much problem other hand, firms primarily guided by atic to make these assumptions today, as tradi pragmatic interests (i.e., profits), then CSR can tional authorities have frequently lost much of become exclusively a business tool rather than an their decision-making power (to democratically approach to discerning moral responsibility. elected representatives), while their moral legit Under these circumstances firms will be inter imacy is also increasingly under attack. ested more in the appearance of social responsi bility than actually being socially responsible. In this scenario CSR programs are ultimately con CSR, ethics and the community cerned with minimizing disruption to the firm's (processing, transportation, marketing, etc.) activ CSR programs can have either of two functions ities and, thereby, minimizing costs. This has two and, correspondingly, may be undertaken for basic implications with respect to the definition either of two forms of motivation. From the per of communities. can a spective of business ethics, CSR programs The first implication of firms adopting prag are help corporations to discern and fulfil their oblig matic approach to CSR relates to how they ations to stakeholder groups. From the perspec likely to understand the structure of the com tive of business strategy, however, CSR programs munity. For purposes of maximizing profits, it is

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- in the interest of firms to be able to present the The CSR agenda global and local community as having an uncontested, legitimate authority. When such a legitimate authority In the contemporary economy, TNCs in the exists, and is in agreement with the firm, then mining sector are inevitably both global and local can a the firm's plans proceed in smoother in their organization. As multinational, their manner to (and responses any objections that may operations around the globe are becoming can more arise by dissenters be effectively devel increasingly integrated (e.g., in terms of strategy, oped and implemented). The need for agreement marketing, etc.) and subjected to centralized can by authorities, in turn, lead to a tendency control. As mining operations, however, their to are designate local (economic and traditional) operations inevitably local. They must extract as or com elites the legitimate authorities the resources from specific sites with specific char munity. Typically, it would not be in the inter acteristic in specific contexts that generate ests of firms to raise the question of the criteria specific problems. This global-local dynamic is by which such authorities could be considered also at play with respect to the CSR agendas of legitimate. Nor is it generally in their interests to mining TNCs. At the level of the global head note any disagreements within the community quarters, CSR agendas get worked out in terms (unless the dissenters can impose significant of abstract principles and general guidelines, as are costs), this may undermine the legitimacy of which to apply to the firm's operations the leaders of the community and the firm's claim worldwide. At the level of individual projects and run to be socially responsible. Similarly, firms might sites by subsidiaries, however, the CSR more not want to investigate the distribution of agenda of mining TNCs becomes much benefits deriving from their activities among local concrete. Here, actual projects must be developed communities. and implemented in accordance with the guide Second, to the extent that the firm is inter lines. Similarly, the notion of community at the can ested in limiting costs, it will want to limit the level of the global agenda remain rather size of the community as this will limit the claims abstract, which at the local level actual commu that can be made upon it. What restricting the nities need to be defined in concrete ways. a size of the community means practically can be As was noted above, there may be strong understood with reference to the concept of an tension between firms maximising profit and "ecological footprint" (Wackernagel and Rees, being socially responsible. This potential tension 1996). The ecological footprint, a device which can be reflected in different ways and to different ecologists commonly employ to investigate the extents at the global and local levels. At the over range of effects of the firms' operations, is impor global level, it may be more possible to pave tant in pointing out that many of the (adverse) the tension. Here it is easy for firms to make the effects of firms are diffuse, wide-ranging and fre assumption of a harmony of interests between quently not immediately evident. When firms the company and local communities.10 At this use the community as their basic unit of analysis, level of the global CSR agenda, where firms then the more they restrict the notion of com embrace general principles (e.g., participation, munity, the more they restrict their vision of human rights, etc.) and guidelines for CSR activ their "ecological footprint." More specifically, ities (e.g., community economic development commu they limit the number of people who they will programs) and do not identify specific see as affected by their operations and the fail to nities, they do not have to make concrete oblig or acknowledge the different ways in which people ations calculate the costs of being socially might be (adversely) affected. Such a restriction responsible in individual locations. Moreover, on their vision will function to limit their they can easily portray (past and current) terms responsibilities and costs. problems primarily in of misunderstand ings and organizational problems at local levels. From this perspective, the challenge of CSR is primarily to translate global commitments into

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the specific contexts of individual communities. Rio Tinto's story Nelson (1998, p. 11) refers to this as "the art of a was to being local world-wide," process whereby "the Rio Tinto originally founded in 1873 an community" becomes all-important focus of mine copper in Spain. Over the years it has been as attention which verifies the global firm's status restructured several times through mergers and two a good local corporate citizen. acquisitions. In 1954, thirds of the Spanish At the local level, firms do have to make operations were sold, with the remaining one specific obligations with specific communities third being divested later. In 1962, the Rio was and confront specific claims about their behav Tinto-Zinc Corporation (RTZ) formed iour. It is here where CSR principles and guide through the merger of two British firms, the Rio are lines implemented that the potential costs of Tinto Company and the Consolidated Zinc can same an being socially responsible be measured against Corporation. At the time Australian the potential profits of operations. In situations firm, Conzinc Rio Tinto of Australia (CRA) where the costs of being socially responsible was formed through the merger of Australian do not help keep total costs down, then local interests of the Rio Tinto Company and the managers will have to confront the tension Consolidated Zinc Corporation. In 1995 RTZ between being socially responsible and increasing and CRA were unified through a dual listed shareholder value. Here it is not as easy to facilely companies structure. In 1997, RTZ became Rio state that, "good ethics is good business." From Tinto pic and CBJV became Rio Tinto Limited. a pragmatic perspective, local managers will want The dual listed company is based in the UK and to find some way to (at least appear to) ease this in Australia, with control being exercised by the tension. Probably the most effective method they parent company in London. have for doing this is to shape the definition of Over the course of its history, Rio Tinto has the community in ways that restrict the number not only grown substantially, but has also diver of claims upon them. As noted above, this may sified. In the period immediately after the 1962 a more was help firms to limit costs and proceed in merger, its diversification limited to the - as new expeditious manner if they are not effectively mining sector, it opened up operations challenged.11 in uranium, tin and borax. Between 1968 and Such assumptions about the community, 1985, however it moved beyond mining into however, can be challenged (both by members of such areas as cement, oil and gas, chemicals and even the community and their allies). In what follows, manufacturing parts for the automotive we a will examine how company like Rio Tinto and construction industries. Following a review develops its CSR agenda around the notion of of the companies operations in 1987-1988, - community both at the global level and at the however, the decision was made to refocus the local level through its subsidiary Richards Bay firm's efforts on mining and related industries. - Minerals and how its account of CSR and the This led not only to the divestment of its non community is contested. mining operation, but a whole new series of acquisitions within the mining sector. As a result, now one Rio Tinto is of the world's largest private mining company with assets of over III. Rio Tinto's global CSR agenda ?1 billion. its but in in We did not as we Throughout history, particular just give help thought recent decades, Rio Tinto has been the subject fit but consulted with the community who of criticism with respect to a range of environ decided what the priorities were. The to to our mental, social and labour issues. In response community also worked achieve the accusations and activities of its Rio joint objective. We are now members of critics, - Tinto has undertaken to become the community for mutual benefit. steps (critics - team would more Leader of Ecuador exploration say "appear") socially responsible. (Rio Tinto, 1999, p. 6). It has developed, in effect, a global corporate

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two responsibility strategy. This strategy has basic the implementation of its values. This task it components: a declaration of its values and the primarily takes up in an internal corporate elaboration of policy guidelines for the imple document entitled "Community Policy Guide mentation of these values. These values and lines" (1997). The goals of these guidelines are are guidelines set forth in policy documents that to help the firm to build long-term relationships were produced by the company, and its anthro of mutual benefit between the operations and access to pology advisor, at the head office in London. their host communities, to enhance new They are intended to provide each of the existing and opportunities and to avoid parent firm's operating companies, subsidiaries costly disputes, higher project financing and reason and contractors with a programme for becoming insurance costs. The for having company to ensure stan socially responsible enterprises. The company wide-guidelines is not only that are emphasises that because it operates in diverse dards maintained throughout the company, cultural and social environments, each location is but also to facilitate that lessons learned can be a can on suc required to design unique social responsibility shared and the company build the cesses programme. of its individual components. Conceptually, the first part of Rio Tinto 's In line with the discussion in the previous strategy is to clearly state the company's values section, several points need to be highlighted. com and principles. The primary place where this First, Rio Tinto clearly defines its CSR a terms to happens is in document entitled "The Way We mitment in of its relationships local Work" (1998). Rio Tinto affirms a commitment communities. This emphasis not only runs as to widely accepted norms such human rights. throughout its documents, but is the organizing as It looks to the United National Universal principle of many key documents such the as Declaration of Human Rights as well the "Community Policy Guidelines". seems to a human rights provisions of the countries in Second, Rio Tinto allow for broad a which they operate to guide them in their understanding of community and diversity of to responsibilities. It also identifies other values forms of community. The former characteristic which it is committed. Most notable in this is indicated in its definition of "community" as regard are three principles that it proclaims will "anyone who is impacted in any way, socially, provide the basis for its relationships with local economically and environmentally by the oper communities, viz., mutual respect, active part ations of the mine" (Pettifer, 1998, p. 3). The a nership, and long-term commitment. Mutual latter trait is reflected in its recognition of wide respect, it is argued, is essential if relationships variety of possible bases for communities, a are to be lasting, beneficial and interactive. including "the nature of attachment to terri as Mutual respect entails "continuing and effective tory; self identification by others members of two way communication and realistic expecta a distinct group; the culture or common beliefs, a tions on both sides" (1998, p. 8). Active part attitudes and work interests of the group; or nership defines the way Rio Tinto hopes to work language dialect, which may be different from with local communities, regional and national the national language; the presence of unique or governments and other affected parties. The aim religious, political cultural beliefs" (Rio Tinto, In this of such partnership is to seek "mutual commit 1997, p. 8). principle broad, flexible on to seem to ment and reciprocity based trust and openness approach defining community would on so as to reach agreed objectives and shared allow for wide ranging responsibilities the to involvement" (1999, p. 8). Finally, long-term part of the corporation and might be taken more terms commitment is "sought so that social and imply that the firm views CSR in as a economic well being is safeguarded and, where of moral commitment than pragmatic possible, enhanced throughout the mine's life and business strategy. In documents beyond" (1999, p. 8). other places, however, the a narrower The second aspect of Rio Tinto s strategy is suggest understanding of community can more for to develop practical guidelines that facilitate and limited responsibilities. Thus,

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com from a example, when the company proclaims its local communities, etc.) range of mitment to protecting the dignity, well-being and groups including environmentalists (e.g., The are rights of people with whom they "directly" Earth Times), corporate watchdogs (e.g., involved, it identifies these people as employees Corporate Watch), mining activists (e.g., Project Asia and their families and people in "neighbouring" Underground), human rights groups (e.g., communities. Such passages reflect a more prag Pacific Human Rights Network) and labour as Here I focus on the criticisms matic approach to CSR, do passages empha organizations.12 access to Tinto I sizing the firm's aims of enhancing about Rio 's CSR agenda. will limit my to existing and new opportunities and avoiding investigations criticisms made by labour orga in based costly disputes, higher project financing and nizations, particular the Belgium insurance costs. Such pragmatism is also International Federation of Chemical, Energy, expressed by the non-business experts Rio Mine and General Workers' Unions (ICEM) and com Tinto hires. Professor Glynn Cochrane, the the International Confederation of Free Trade as are munities and anthropology advisor to Rio Unions (ICFTU), these representative of nature Rio Tinto, for example, states that the relationship the of the claims brought against between the company and the community has to Tinto. be business-like (rather than philanthropic). The As labour organizations, ICEM and ICFTU situation is one in which, "Rio Tinto is under are obviously concerned about Rio Tinto's we cannot to a microscope and if we screw up approach industrial relations. The ICEM has as a concern access goods. The time taken to license, insure, targeted Rio Tinto special object of to extreme in secure and finally start production has increased due "the actions of the company can cut to to by 300 per cent. Good relations down seeking de-unionise its operations and on lead time, disputes and delays" (Cochrane, restrict the bargaining rights of its workers" 1999). (ICEM, 1998a, p. i). In response to this situation, over met The ambiguity community in the docu ICEM affiliates in South Africa in February ments makes it unclear whether the firm views 1998 to form the Rio Tinto network of trade to CSR primarily in terms of moral responsibility unions with the aim of pressuring Rio Tinto or business strategy. The fact that there might improve its standards with respect to human a two be tension between these approaches is rights, workers' rights and environmental pro never addressed. Rather the firm seems to assume tection. Part of the ICEM's concerns, however, to a harmony between its moral responsibilities and relate directly the CSR agenda of Rio Tinto, see as a its business interests. This assumption is stated which it tends to somewhat cynical asserts to quite clearly in passages where the firm its attempt by the firm gain legitimacy by conviction that its "competitiveness and future claiming to represent the interests of local com on our success depend not only employees and munities. This skepticism about Rio Tinto's concern the quality and diversity of our assets but also intentions and about their practices is on our record as good neighbours and partners clearly expressed in the titles of two documents around the world" (Rio Tinto, 1998, p. 1). This that the ICEM has released on the firm, viz., - assumption of harmony also gets expressed "Rio Tinto Tainted Titan" (1998a) and "Rio - less directly, such as in the strong emphasis that Tinto Behind the Fa?ade" (1998b).13 on two Rio Tinto places the "value" of mutual The unions have basic criticisms of Rio benefit. Tinto's global CSR Agenda. First, with respect to its principles and guidelines, the ICEM believes that Rio Tinto does not go far enough. The counter-narrative: international trade unions More specifically, "The Way We Work" is as criticised being too weak to be able to effec a Rio Tinto has come under criticism over tively bind the company to responsible behav wide variety of issues (e.g., human rights, the iour. Apart from making reference to the on environment, labour relations, treatment of UN Declaration Human Rights, the ICFTU

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- (1998) argues, "The Way We Work" does Context CSR and the political not refer to the two most authoritative interna economy of South Africa tionally agreed definitions of responsible behav iour. These are the International Labour CSR in South Africa has in the past been Organisations' (ILO) Tripartite Declaration of restricted to the domain of paternalistic gift Principles Concerning Multinational Enterprise giving, making charitable donations to various and Social Policy, and the OECD Guidelines for organisations, and securing patronage from multinational enterprises. ICEM suggests that the traditional chiefs (with the metaphorical bottle omission of the international treaties and guide of whisky). This situation began to change with lines from "The Way We Work" discredits Rio the crumbling of "apartheid" in the late 1980s s Tinto claim that "their processes aim to provide and early 1990s. Many analysts consider the the required level of control, transparency and speech made by former President De Klerk on accountability in line with worldwide best February 2 1990 to be the watershed for more practice" (1998b, p. 9). responsible business in South Africa.14 The was a The second basic criticism that the labour country pushed into new environment in no organizations put forth is that Rio Tinto is not which the old rules and norms longer applied. adequately accountable for the implementation Initially, without any set of rules or norm to a of its principles and guidelines. The ICEM conform to, business was bit lost. It had to are no a new argues, for example, that there clear lines design strategy for engaging with the new a of responsibility between London and the local social order and shift from "racial capitalism" over on operating companies with respect to the (policies based racial ideology) to a "social on sight of the guidelines, a situation that leads to capitalism" (policies based development inconsistencies in the implementation of Rio ideology). Business had to rethink how it was to Tinto's global CSR agenda. The ICEM (1998b, behave responsibly. p. 8) states that "Rio Tinto itself knows that A shift from corporate giving to a total was implementation may most certainly not be uni social and political strategy engaged, with versal," the implication being that Rio Tinto business starting social upliftment programmes either does not care about or actually prefers this and poverty alleviation and supporting the polit state of affairs. ICEM's position is that, while ical negotiation process. Since the 1994 elections, some of its subsidiaries may live up to the legislation has forced business to start working on global CSR agenda, this is not sufficient. Until differently many fronts. New labour relations, all of its operations (including both wholly environmental management, affirmative action, are and partially owned subsidiaries) managed black empowerment and corporate governance in a socially and environmentally responsible have become the accepted standards rather way, Rio Tinto is a valid target of criticism than exceptional practices that go beyond "the and can rightfully be judged to be socially call of duty." International standards and decla irresponsible. rations have also become integrated, especially by leading business sectors, a process that has served to help integrate South African business into the IV. Richard Bay Mine's local CSR agenda global economy (Innes, 1992; Botha, 1994). Within the mining sector, the CSR initiatives as the end which come from some Just products have been impressive in quarters (although the minerals extracted from the sand it could still be argued that they are insufficient enhance the lives of millions of people compared to the profits generated, especially in the world, so the fruits of as throughout the most profitable sectors such platinum and mining are enhancing the lives of the - titanium). One of the more impressive examples people who walk that ground. Managing is the Anglo American and De Beers Chairman's Director, RBM 1999. Fund, which has an annual budget of R50 million (?5 million). The Fund has adopted an

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an "interactive partnership approach," where "own 1994, Godsell wrote in article in the South ership" and "choice" are the two fundamental African Labour Bulletin "[bjusiness is ready to principles driving all initiatives (Keaton, 1997b, participate in the reconstruction and develop p. 17). The Fund operates across the spectrum ment of South Africa," suggesting that social - a of CSR from being charity and donor investment could contribute to the growth of an through to acting as implementing agency. South Africa which "ultimately is the engine of The Billiton Development Trust, established poverty relief" (1994, p. 7). But working with by the Billiton company (now BHP Billiton), the new government required shifts in attitude to provides another example of a substantial devel with respect managing development programs - a opment programme. The Trust understands itself a shift from heavy-handed, controlling a or as development catalyst facilitator rather than approach to engaging with multiple stakeholders an implementing agent of development. The with different interests. In 1997 the mining Trust provides funds to NGOs so that they may, industry presented their official commitment to for example, "go and promote women's issues community development to the South African an under the Billiton banner" (Sepeei, 1999). Parliament in Cape Town. In effort to high While social intervention has always been light the shifts that mining companies have gone a practice of mining companies in South through with regard to environmental and devel Africa and elsewhere, such assistance largely opment challenges Margie Keeton of Anglo remained within the confines of the immediate American stated:

"mining community," namely employees and Mines and their communities are confronting their families. In South Africa, such a practice together, in a spirit of common purpose and has been fraught with racist policies underlined resolve, many of the country's critical development by the laws of the apartheid government, which challenges. Their efforts are making a real contri other social infrastruc regulated among things bution to the search for effective interventions ture, transport, separate amenities and housing, bringing new hope and opportunity to those mar education. For a number of before the new years ginalised from the mainstream of growth and democratic came to in government power 1994, advancement (1997, p. 6). various mining companies began to acknowledge their role in the socio-economic hardships expe Mining companies recognize that there is some rienced by both urban and rural communities. legitimacy to be gained in South Africa today areas Recognising that the labour sending in the from being involved in social and economic homelands suffered through migrant labour reconstruction. This is due in large part to the as policies, companies such Anglo American, government's plea for assistance from the private Johannesburg Consolidated Investments (JCI) and sector,15 including a greater emphasis on public as Gencor (now known BHP Billiton) instigated private partnerships. Yet, understanding how to social investment programmes. Subsequently, engage in such co-operation is not always an the events leading up to the first democratic easy for industry that historically has not set elections, the election victory of the African participation with diverse actors with different as a National Congress (ANC) and the instatement ideologies top priority. Mining companies as of Nelson Mandela President of South Africa have generally wielded the power to implement a more would lay the foundation for concerted community development policies (within limits on CSR drive the part of mining companies. set by government) that allowed them to get on new core After the elections, the Reconstruction with their business, namely the extraction and Development Programme (RDP), the of minerals. Now, having to undertake more platform from which the government launched participatory, democratic approaches to develop a their poverty alleviation drive, quickly became ment, which demand more professional and seen as to are important programme for business consultative approach, companies adopting to support, in part due the government's active different models. Some mining companies have sector over encouragement of private participation. In handed their CSR to non-profit organisa

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an tions to manage, others have established inde FJ3M first became involved with community pendent trust, while others retain the initiative issues shortly after the mine was established in within the company structures. The basis for 1976. This initial engagement came about as a these individual decisions in not entirely clear. result of the introduction of the Sullivan Nor, given the complexity of factors involved in Principles (the forerunner of the Sullivan Code). - determining CSR performance, is it yet certain Developed by the Rev. Leon Sullivan an one to over a that any model is be preferred the African-American Baptist minister, civil rights other. leader and a member of the Board of Directors - were of General Motors these principles designed to ensure that American companies RBM's story improved the conditions of their black workers (and their families) both at work and in the home Richards Bay Minerals (RBM) is a leading environment (O'Brien, 1998, p. 110). RBM's producer of titania slag, high purity pig iron, involvement with community affairs at this time, rutile and zircon. Jointly owned by Rio Tinto however, can be best described as limited and ad pic. and BHP Billiton pic, FJ3M is situated on hoc in nature. the coast of the Indian Ocean in northern It was only during events around the St. Lucia came more KwaZulu Natal province, approximately 20 kilo proposal that RBM to pay system meters from the town of Richards Bay. The town atic attention to CSR. The reaction surrounding is host to at least five major industries, including the St. Lucia proposal demonstrated to the fertilizer manufacturing, aluminum smelting and company that undertaking community social was paper and pulp manufacturing. The immediate investment good for business and reputation area in which BJBM is situated, the Mbonambi management. The St. Lucia episode highlighted Tribal Authority (MTA), is considered a rural the need for PJBM to professionalise and market area. Mining, commercial forestry, subsistence its CSR initiatives. O'Brien states: farming and basic retail activities dominate the [T]he company tried to convince its detractors of economic landscape (URC, 1999). The larger the fact that RJ3M would invest in the Richards underpriv region surrounding Bay, including St Lucia communities ... as it had done in the dunes in to the north and ileged Mozambique . . . the Richards Bay area [an] advertising and pub Madagascar to the east, is rich in mineral licity campaign launched [but] it was too late. The resources and host to a number of exploration tide of public opinion had swung firmly against the of companies assessing feasibility opening RBM and ultimately the battle for St Lucia was new mines.16 lost by RBM (1998, p. 190). For its part, RBM has also been seeking to expand its operations. In particular, RBM hoped It is hoped that successful marketing of the CSR to establish a new mine at St. Lucia, just north projects will help to encourage the government as of Mbonambi. This plan was halted however, to revisit the issue of allowing mining operation - the South African government after months of in St. Lucia and to ensure RBM is well placed - negotiations, studies and consultations decided to take advantage. Investing in "the community" as to exploit the eco-tourism potential rather than through CSR programs is viewed investing in the heavy mineral sands. This decision by the the financial future of the company. South African government may have been related A key step that RBM took in the wake of the was to the tremendous amount of attention that the unsuccessful St. Lucia proposal to work more proposal for mining drew from environmental closely with the local community through the lobby groups, NGOs and activists (Solomon, Community Development Council (CDC). The were ensure not 1997). This attention placed not only the stated goals here to help only an South African government under the spotlight, effective co-ordination of development ini however, but also RBM and forced RBM to tiatives in the MTA but more local participation. now a realign its CSR strategy. RBM organizes their efforts around five

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- year plan, which claims to embed the notion of The counter-narrative dissenters and the larger "partnership" in its approach to consultation and community a to stress "bottom-up" approach to develop are to ment. These principles supposed to enable While RBM undoubtedly contributes local the community to dictate the pace of efforts and community development through its CSR not promote community ownership and long-term projects, it is without its detractors, both self-sufficiency of projects. For its part, the within and beyond the Mbonambi "community." eleven-member RBM community development While within the Mbonambi community oppo team engages with the surrounding community sition is probably muted to a significant extent on a constant basis about development projects by the relatively generous levels of spending that are and negotiations over resettlement of homesteads the company provides, there still concerns. and graves and expropriation of grazing and The major concerns can perhaps be best under now on farming land. RBM prides itself the stood in terms of how the company operates its partnerships that it has established with the local CSR programs. While institutions like the World on or community through its community affairs oper Bank, picking up the vocabulary recent ation and sees itself as exemplifying the global development thinking, advocate a "partnership" on policies of Rio Tinto CSR. model for CSR (e.g., the "Business Partners for RJiM's pride is not without foundation. RJBM Development" programme), developing partner an supports a variety of CSR projects in such areas ships requires trust, learning and ability to as over a manner. education (e.g., assisting local schools, pro hand control in flexible This moting, technical education, teacher training, approach typically goes against the normal promoting life skills), health care (e.g., rural problem solving approach employed in mining clinics, a 24 hour clinic for employees, an firms like RBM, e.g., establishing what the a HIV/AIDS program) and community develop problem is and solving it in technocratic, linear a ment (e.g., gardening and cooking clubs, support manner. As result, local communities like the a can for small businesses, support for Rural Mbonambi feel alienated, even when they com Development Centre). In 1999 it funded its are enjoying relatively generous benefits. munity projects to the tune of RIO million (?1 Outside of the Mbonambi community, RBM million), a sum that dwarfs the funding that the also has its detractors. As noted above, RJ?M is a government has been able to provide. As result, located in the Mbonambi Tribal Authority. The FJ3M is the primary agent of development in the MTA, however, is but a small part of the Imfolozi MTA. sub-district, which comprises sixteen tribal RJ3M has not been shy about publicizing authorities (see Figure 1). The Imfolozi sub a its efforts locally. The Mbonambi community district, in turn, is but fraction of the larger are projects easily recognisable by large signs indi Uthungulu district, which comprises a total of or cating that RJ3M either sponsors assists the sixty-nine tribal authorities (Uthungulu Regional a project, whether it be school, cr?che or clinic. Development Plan, 1998). While each tribal a FJ3M also has share of local supporters who authority is the legal authority in its own local praise its efforts. Prominent among these is Inkosi area, it is the Uthungulu Regional Council (Chief) Mthiyane of Mbonambi, who has fre (URC) that is responsible for development quently expressed his strong appreciation of the planning in the Uthungulu district. sees not a efforts of RJ3M, whom he only "as With regards to regional development as a neighbour, but also friend" (Titania, 7 May planning and activities, its relationship with 1999).17 RBM has placed the MTA in a unique, and somewhat tense, position vis-?-vis its neighbours. In effect, its relationship to RBM, which serves as the de facto development agency for the MTA, has made the Mbonambi community an "island of development" in a URC sea of underdevel

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It an two senses. one opment. is island in On the development practices and the approach to public as hand, it is much better funded, is evident policy and development strategy. Their differ one ences when compares the RBM budget of RIO around these various points, discussed million (?1 million) for community projects in below, constitute two different tales of CSR. theMTA with the budget of the URC (approx imately ?4.6 million), which has to be spread Basic assumptions. It is commonly held that out over an 69 tribal districts. On the other hand, business has obligation to maximize share the MTA has few external linkages and networks. holder value. To the extent that business Most significantly, perhaps, is the fact that has obligations to stakeholder groups (e.g., FJ3M does not share its community development local communities) as well, a tension may arise plan with the URC. As RBM states, they between it meeting these two forms of obliga "have nothing to do with the URC unless it is tion. There are two basic dimensions to this requested" (O'Brien, 1999). tension. At a moral theoretical level, the basic one For its part, the URC feels somewhat frus tension is of competing moral claims (e.g., tratedwith (and a bit resentful of) theMTA and between shareholders and stakeholders), which RBM. As they do not have the community must be resolved on the basis of moral arguments a development plan from PJBM, they cannot inte and analysis. At practical level (when stake grate the MTA into its regional development holder claims are deemed to take precedence), seen plan (For its part, RBM has not the URC the tension involves the ability of the firm's board regional development plan.) The council officials and management to exercise their moral will to interviewed suggest that the council "takes a take decisions that go against their own interests hands off approach to Mbonambi" (Marais, (and those of shareholders). 1999). Accordingly, the URC, which commonly For their part, Rio Tinto and FJ?M seem to as refers to the Mbonambi the "PJBM commu make assumptions that deny the existence of any nity," does not take the MTA into account when tension. At the moral theoretical level, as we have comes a it to the allocation of funds. There is seen, they tend to assume a harmony between strong feeling that greater integration of RBM good ethics and good business. At the practical and the MTA into the URC would make for level, they also seem to assume that the company more effective regional development policy. The is committed to the values that it expresses and URC, however, has no way to force such par that their managers can act upon them. ticipation, nor does such participation seem to These assumptions contrast with those of be of interest to the RJ3M or the leadership of their detractors. Such opponents argue that Rio a the MBA (which is provided with great deal Tinto 's efforts to maximize shareholder value do on of local autonomy and political influence by its impinge its obligations to stakeholders. They relationship with RBM). also raise the question of whether Rio Tinto has the moral will to implement decisions that are not in the interests of its shareholders. Rio - V. Conclusion two tales of CSR Tinto 's failure to effectively implement its global CSR agenda across its subsidiaries, for example, as a Rio Tinto and its subsidiaries such PJ3M could be interpreted as such failure of will. have committed themselves in recent years to more was through their CSR agendas being The understanding of community. As noted a socially responsible. They have expressed this above, defining the notion of community is commitment primarily in the language of rela complex and controversial task. It is also the case to com can serve tionships with and responsibilities local that different definitions of community munities. Rio Tinto, however, is not without its different interests. We have seen that at the level detractors. Such critics differ with the firm at a of its global corporate agenda, Rio Tinto does number of different levels, viz., basic assump allow for some flexibility in defining communi a tions, the understanding of community, local ties which could, in principle, allow for wide

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range of stakeholder obligations. In the case of social movements. In order to promote their RBM, however, we have seen how a Rio Tinto ultimate goal of profit maximization, firms will a subsidiary adopts notion of community that have to take into account the costs and benefits tends to restrict the firm's obligations. In terms of addressing the concerns of each of these of boundaries, as we have noted, BJ?M defines groups, in the process ignoring the interests and the community as the MTA rather that the larger claims of some (e.g., small NGOs) and paying sub-district or district in which it operates. In close attention to those of others (e.g., multilat terms of structure, BJBM tends to make simpli eral financial institutions). we fying assumptions about the community (e.g., As noted above, Rio Tinto and RJ3M tend a that the local authority is legitimate, that there to make the simplifying assumption that being no are significant conflicts of interests, etc.). "good neighbour" is good for business. In doing These assumptions about the nature of the com so, they do not have to address the issue of whose munity serve to reduce BJBM's costs (by allowing interests they need to address and what the costs so are. them to streamline decision-making, not take of doing Similarly, by supposing a limited into account certain issues and claims, etc.). and undifferentiated concept of community and can In contrast to Rio Tinto's definition, it is the legitimacy of local elites, they claim that are possible to understand community more broadly their projects promoting the form of devel as (e.g., the Uthungulu community). It is also opment that the local community wants and are possible to acknowledge that the community is that they fulfilling their responsibilities. If or at times divided by different interests, values and NGOs other groups disagree with them, then strategies. This is the approach that is taken by Rio Tinto can always point to its support from the various opponents of Rio Tinto. Doing so, the local community (as Rio Tinto/FJ3M has however, is likely to increase the demands on defined it). PJ3M and Rio Tinto and, thereby, increase their Rio Tinto's detractors, on the other hand, a costs (and decrease profits). have different story to tell. They argue that to the degree that companies like Rio Tinto are cor on Local community development. As noted above, operating the basis of pragmatic motivation can a porations engage in CSR programs (and local (i.e., profits), they are basically engaging in community development projects) either out of public relations program. As such, they will or moral pragmatic motivation. These two moti generally want to finance high profile projects are vations, however, not necessarily compatible (which will put them in good stead with poten and do not necessarily lead to the same results. tial financiers and local elites) and to maintain are over To the extent that corporation primarily significant control the nature of the projects motivated by pragmatic considerations, they are (so as to be able to choose and promote them seeking to reduce costs (related to disruptions, effectively). However, firms like Rio Tinto are protests, shareholder action, etc.). To reduce costs constrained (for PR reasons) by their "commit they need to target different audiences. One is ment" to good development practices (including a the local community, which may be both direct such values as participation) and their need to source of costs (by initiating lawsuits, demon get cooperation from local elites and passive an strating, etc.) and indirect source of costs acceptance by the local population. Under these as (when portrayed by others being adversely circumstances, the most logical options for a firm affected by the firm's operations). Another are to: 1) try and restrict the number of its audience is comprised of potential financiers projects and the area over which it operates, so as (e.g., shareholders, banks, multilateral lending to make its impact appear more impressive (on agencies, etc.), which may be reluctant to invest a per capita basis); 2) to try and retain control for either moral or pragmatic reasons (which over the projects selected (to make certain that are might involve issues of costs, fiduciary responsi they high profile and provide good PR value bilities, etc.). Another possible audience that may for the money spent); 3) to limit participation to to need be placated is made up of NGOs and symbolic participation (so as not to impose

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excessive costs) and; 4) to ensure that the inter not address this claim directly, others have devel ests of the local elites (in terms of selection of oped conceptualisations and languages that allow are projects, public acknowledgment, etc.) met. for alternative explanations of the role of TNCs This, critics will argue, is what Rio Tinto has in providing services vis-?-vis the state. Ferguson - done. This is not to claim that Rio Tinto's (1998), for example, believes that the position - and in particular RBM's efforts have not had stated above involves a conceptualisation of as as any positive development impact, they clearly TNCs typically operating "below" the state, have. Rather, it is to claim that Rio Tinto has but at times (and more and more) entering the not fully lived up to its responsibilities (i.e., it state's domain. He suggests that an alternative more should be providing resources to more would be to view TNCs as an "integral part of a people, it should be respecting labour standards) new transnational apparatus of governmen and that it has not effectively promoted devel tality" (1998, p. 21). In this new apparatus, the opment (i.e., the resources that it has used could lines between business and government may more have been allocated efficiently, albeit in become more blurred, but it does not necessarily a ways that probably would have had less PR value mean withdrawal by the state. Rather, if on a for the firm). business takes larger responsibility than it previously had, this would allow the govern more Public policy and development strategy. Rio Tinto's ment to target it's development programs and RBM's CSR agendas operate in a larger effectively. political economy context. This is constituted by These two stories of CSR (and the concep different programs of economic liberalization tions of community that underlie them) are a (e.g., trade, financial markets, etc.) as well as clearly contradictory. The story that Rio Tinto one reduction in the various roles of the state (e.g., tells, is obviously the that works to its advan as as economic agents, providers of health, social tage. This is not to say, however, that it could not and educational programs, etc.) in countries also be the one that works to the best advantage s case around the globe. In addition to being sceptical of local communities. Rio Tinto remains own about the wisdom of this liberalisation for the shaky, however, weakened by its failure to own promotion of economic development generally, effectively and consistently implement its many critics of economic liberalization have a global CSR agenda. While some of its operations more concern specific that relates directly to like FJ3M have served as "showpieces," others CSR. The concern is that the CSR agendas of continue to lag much further behind (not only TNCs do not only serve to help local commu with respect to local development projects, but nities (and reduce TNC costs), but also function also in terms of human rights, environmental to justify liberalization policies. By taking over issues and labour relations). More consistent (and a functions that have traditionally been seen as the timely) implementation would go long way in role of the state, CSR programs may operate to making Rio Tinto's story more convincing. a legitimate government cutbacks and the privati Whether this would result in practical refuta sation of social programs. This in turn, it is tion of the alternative story is unclear, however. context feared, is resulting in decreased social spending, These narratives collide in the of the inappropriate priorities and the creation of larger disputation about processes of economic cor "islands of development" (centered around globalization. Yet, while it may not be possible com porate sites) in a larger sea of underdevelopment to envisage any resolution between the (as it could be argued is the case of the MTA and peting sides in this debate, companies like Rio can the Uthungulu district). Tinto (and should) continue to take steps that While there is little reason to doubt that CSR at least make their stories more consistent inter

can function to legitimate liberalization and the nally. privatisation of government functions (Crooke and Manor, 1998), it could be argued that this is not necessarily the case. While Rio Tinto does

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VI. Epilogue of the United Nations' International Labour Organisation" (Asia-Pacific Human Rights Since the research for this paper was done (in Network, 2001). Both resolutions were easily 1999), there have been some developments. Most defeated. Thus, while Rio Tinto's story may be significantly, perhaps, RJ3M has taken some steps becoming internally more consistent, it would more to try and work closely with regional seem that it is still far from convincing its critics planning authorities. I have not yet been able to that this is the proper story to be told. try and evaluate the reaction by local communi ties to these recent efforts, nor do I know of to so. other attempts do For its part, Rio Tinto Acknowledgements continues to refine its global CSR Agenda. This has included the publication of "Human Rights The author would like to acknowledge the on Guidance: Guidance for managers imple support and assistance offered by Richards Bay the human in 'The Council and res menting " rights policy Way Minerals, Uthungulu Regional We Work' (2001), efforts to ensure that its non idents of Mbonambi, which made the research managed companies also comply with appro for this paper possible. He would also like to priate CSR principle and practices, expanding express his appreciation for the support provided as as partnerships (e.g., with Earthwatch), well by the Mining and Energy Research Network signing on to the United Nations' "Global (MERN), University ofWarwick and Dr. Ralph to Compact." To this extent, it is attempting Brillo at Sussex University. make its own story more consistent. Despite its on-going efforts, Rio Tinto con tinues to come under criticism. In 2000, for Notes was a example it sued in US court by residents 1 of Bougainville, Papua New Guinea (who allege These interviews and this paper are based on an MA Dissertation at the of Sussex that the firm is responsible for environmental dis University 1999. and the An asters, toxin exposure, and the murder or resi (Kapelus, P., Mining Community: of Transnational and dents committed in complicity with the local Ethnography Corporations "Corporate Social Responsibility"), written with defence force). Rio Tinto 's operations in Brazil support from MERN. have also come under attack for human rights, 2 Among these are the Universal Declaration of environmental and health and safety violations. Human Rights, International Labour Organisation Similar complaints continued to be launched (ILO) conventions and Tripartite Declarations of Rio Tinto 's PT Kelian Mine in regarding Principles concerning Multinational Enterprise and Indonesia and Such (Drillbits Tailings, 2000). Social Policy, the International Covenant on Civil and critics are not practices, claim, only unacceptable, Political rights, and the Organisation for Economic but constitute of violations the commitments Co-operation and Development (OECD) Guidelines that Rio Tinto made when signing on to the for Multinational Enterprise. Various environmental such as UN's Global Compact (Kennedy, 2001). Nor is guidelines Agenda 21, International Standards certification standards and environ it only stakeholders who are concerned. Senior Organisation, mental and social assessments have management has also come under criticism impact emerged out of international conferences and environmental by (some) shareholders, who are upset, among agreements. other things that management did not support 3 all the time and resources into shareholder resolutions at the March 2000 Despite put building community relations, it would appear that the mining Annual General Meeting, which called for Rio industry is still struggling in its efforts. A vice presi Tinto: to become more accountable to share 1) dent of Orvana Minerals put the situation this way, holders the of an inde through appointment "The point of contact and potential conflict between to over pendent Deputy Chairman, and; 2) implement communities and mining interests social, socio a code of labour standards "based on the inter economic and environmental issues has been drawn core nationally agreed human rights conventions forward from the mining phase into the exploration

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. . . phase the industry collectively is ill equipped to long term liabilities and undermine shareholder handle this reality" (Thomson, 1997, p. 1). value. 4 12 For a discussion on culture as a constraint to devel Among the areas in the developing world where opment, see Grillo (1997) and Crewe and Harrison Rio Tinto has come under harsh criticism are Papua (1998). New Guinea, Indonesia and Namibia. In Papua New 5 Societies charcacterised by refugee movements may Guinea, Rio Tinto's Bougainville mine has become be particularly susceptible to having their traditional synonymous with environmental damage and associate to on In the identities questioned and having take multiple problems. Indonesia, company's operations identities. (e.g., the Kelian mine) during the time of the Suharto 6 For are not were not their part, corporate leaders certainly dictatorship only charged with extensive unaware nature of the contested of "the community. environmental and labour abuses, but also with major co numerous Marc Gonsalves (1999) of Billiton pic (one of the human rights abuses, including murders owners of Richards Bay Minerals) states the situation involving paramilitary organizations. During the this way, "the community is like a wheelbarrow apartheid era in South Africa, Pdo Tinto was violating pushed around by different political forces." basic international standards by illegally mining 7 This is a complex question as firms are themselves uranium in Namibia. In direct violation of UN a complex organizations and operate within larger resolutions, the company extracted uranium, business system. In such a system, business firms have according to the United Nations Council for to operate within the constraints of profitability. As a Namibia, "by virtual slave labour under brutal con result, CSR projects and budgets also have to operate ditions" (Asia-Pacific Human Rights Network, 2001). 13 under constraints. Insofar as firms have obligations to It is interesting to note that the layout, type face, cover shareholders and other stakeholders (e.g., consumers, pictures, paper quality and images of these employees) as well as stakeholders commonly associ documents reveal the same attention to aesthetic ated with CSR programs (e.g., local communities), considerations as the Rio Tinto corporate documents, then discussion about the constraints that have to be brochures and 14 magazines. placed upon CSR programs do not necessarily This speech indicated that there would be a indicate only a pragmatic motivation (although they handover of power through democratic elections and a may), but may also have strong moral component. that Nelson Mandela would be released from prison 8 It would, of course, be an important issues for after 27 years of incarceration. 15 deontologists, virtue theorists and others who place Such appeals have been made by various members a on motivation in as as strong emphasis moral analysis. of government well during the Truth and 9 Cragg et al. (1995) have argued that if firms only Reconciliation Commission (TRC), where Bishop are not Tutu to it's role in operate out of pragmatic motivation, they called upon business recognise to act in a fashion. apartheid and participate in the development of South likely10 responsible Not firms, but groups like the Africa. only pro-business 16 PWBLF also readily make this assumption. The These include Kenmare (Irish), Billiton (South PWBLF, for example, declares that being responsible African), Southern Mining (South African) and QIT to communities and cultures will "add value" to both among others. 17(Canadian), shareholders and society (Nelson, 1998). It is interesting to note that some PJBM officials 11 to ease their commitment in moral terms. Another argument that may help this clearly express to notion & tension, relates the of "dependency." Mr. Jabu Khubeka (General Manager, Public Companies and their CSR experts may express moral Community Affairs), for example, states that the concerns that in undertaking CSR there is some risk various CSR projects are being undertaken because of creating dependency on the company and local "what we believe in is human rights" and "we cannot authorities. This could relate to situations in which sleep if our neighbour is dying of hunger, we have firms are fulfilling legally required or voluntary oblig got to look in our cupboard" (interview, Mr. J. workers have access ations (e.g., ensuring adequate Khubeka, 23/06/99). to health and education services, community devel opment projects, etc.). Such dependency, it could be argued is not good for the "beneficiaries" of these References services in the long run. As well, from the perspec tive of the pragmatic interests of firms, such depen Appadurai, A.: 1986, 'Introduction: Commodities dency may also be undesirable as they may increase and the Politics of Value', in A. Appadurai

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