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Impact Assessment and Quality Analysis of Corporate Social Responsibility

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Impact Assessment and Quality Analysis of Corporate Social Responsibility FUNDAÇÃO GETULIO VARGAS ESCOLA BRASILEIRA DE ADMINISTRAÇÃO PÚBLICA E DE EMPRESAS MESTRADO EXECUTIVO EM GESTÃO EMPRESARIAL IMPACT ASSESSMENT AND QUALITY ANALYSIS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) PROGRAMS OF MINING COMPANIES AND THEIR CONTRIBUTION TO SUSTAINABLE DEVELOPMENT IN THE COMMUNITIES THEY OPERATE: CASE STUDY: TENKE FUNGURUME MINING SA IN THE DEMOCRATIC REPUBLIC OF C ONGO (DRC). DISSERTAÇÃO APRESENTADA À ESCOLA BRASILEIRA DE ADMINISTRAÇÃO PÚBLICA E DE EMPRESAS PARA OBTENÇÃO DO GRAU DE MESTRE Jaynet Desire Kabila Rio de Janeiro - 2015 1 A picturesque overview of copper in its raw nature at one of TFM Mining Concessions in the Democratic Republic of Congo. Photo: TFM 2 DEDICATION To my loving parents: My Father Mzee Laurent Desire KABILA, a charismatic Leader (In loving Memory); and My Mother Sifa Mahanya KABILA a devout and compassionate companion. I Ficha catalográfica elaborada pela Biblioteca Mario Henrique Simonsen/FGV Kabila, Jaynet Desire Impact assessment and quality analysis of corporate social responsability (CSR) programs of mining companies and their contribution to sustainable development in the communities they operate: case study Tenke Fungurume Mining SA in the Democratic Republic of Congo (DRC) / Jaynet Desire Kabila. – 2015. 142 f. Dissertação (mestrado) - Escola Brasileira de Administração Pública e de Empresas, Centro de Formação Acadêmica e Pesquisa. Orientador: Joaquim Rubens Fontes Filho Inclui bibliografia. 1. Responsabilidade social da empresa. 2. Desenvolvimento sustentável. 3. Administração local. 4. Indústria mineral. I. Fontes Filho, Joaquim Rubens. II. Escola Brasileira de Administração Pública e de Empresas. Centro de Formação Acadêmica e Pesquisa. III. Título. CDD – 658.408 II III ACKNOWLEDGEMENTS Reaching this far meant that I had many shoulders to lean on all along the winding road and enduring journey. To God the Lord Almighty for all; My recognition and gratitude goes to: . My supervisor Professor Joaquim Rubens Fontes Filho, PhD for his valuable guidance and encouragement all along the preparation process of this thesis; . My family and friends, always supportive and caring; . All the participants physical and moral persons who contributed to this study in terms of their precious time and information; . The Tenke Fungurume Company for having accepted their Company to be the Case of Study for this thesis and to all the Company Executives, senior to junior officers for all their support during the field visits; . The habitants of Tenke and Fungurume areas for their valuable insight and information during the Focus Group Discussions, Interviews and field visits; Thank you all for your invaluable and unconditional participation and support. God Bless you all abundantly! Kinshasa, October 2015 IV ABSTRACT Purpose – This case study presents an impact assessment of Corporate Social Responsibility (CSR) programs of the TFM Company in order to understand how they contribute to the sustainable development of communities in areas in which they operate. Design/Methodology/Approach - Data for this study was collected using qualitative data methods that included semi-structured interviews and Focus Group Discussions most of them audio and video recorded. Documentary analysis and a field visit were also undertaken for the purpose of quality analysis of the CSR programs on the terrain. Data collected was analyzed using the Seven Questions to sustainability (7Qs) framework, an evaluation tool developed by the Mining, Minerals and Sustainable Development (MMSD) North America chapter. Content analysis method was on the other hand used to examine the interviews and FGDs of the study participants. Findings - Results shows that CSR programs of TFM SA do contribute to community development, as there have been notable changes in the communities’ living conditions. But whether they have contributed to sustainable development is not yet the case as programs that enhance the capacity of communities and other stakeholders to support these projects development beyond the implementation stage and the mines operation lifetime need to be considered and implemented. Originality/Value – In DRC, there is paucity of information of research studies that focus on impact assessment of CSR programs in general and specifically those of mining companies and their contribution to sustainable development of local communities. Many of the available studies cover issues of minerals and conflict or conflict minerals as mostly referred to. This study addressees this gap. Keywords: V Africa, Assessment, CSR, Democratic Republic of Congo, Mining Industry, local communities, Sustainable Development LIST OF TABLES TABLES Page Table 1.1 Selected Minerals Production of African Countries, USGS 2005 6 Table 1.2 Cobalt Mine productions, Mining Reserves, Refinery production, 6 Refinery Capacity per Country. In metric tonnes (MT), 2006. Table 3.1 Questions and Sub-elements of the 7Qs Assessment Framework to be used for Impact Assessment 31 Table 3.2 Criterion of Study Sample Selection 33 Table 3.3 Criteria: 1,3,4,5 33 Table 3.4 Comparative Data for Top 5 Mining Companies 33 Table 3.5 Interview, Focus Group Discussions and Field Visit Respondents 40 Table 4.1 Geographical Distributions of Minerals in DRC by Province 54 Table 4.2 Illustration of the Main / Key Entities Charged with regulation in the Mining industry and their Key responsibilities 59 Table 4.3 Tenke Fungurume Mining Company SA at a glance 63 Table 4.4 Presentations of TFM Community Development Programs 66 Table 4.5 Presentation of CSR Program and Detailed Projects of the TFM Social Fund 67 Table 4.6 TFM Annual 0.3% Net Values of Sales to the SCF 71 Table 4.7 TFM Contributions to SCF per Program (March 2009 August 2015) 72 Table 5.1 Presentation Template of the TFM CSR programs/Project 75 VI within the 7Qs Impact Assessment Tool Table 5.2 Presentation of the TFM CSR programs/Projects within the 7Qs Impact Assessment Tool 77 LIST OF IMAGES & FIGURES IMAGES Page Image: 4.1 An excerpt on Draining of a continent: The Case of Congo 50 Image: 4.2 ‘The status of the Congolese Economy’ 52 Image 4.3: Map of the DRC with the New 26 Constitutional Provinces 56 Image 4.4: TFM Mining Concession Area 67 Image 5.1 Integrated Development Zone Total Area 93 Image 5.2 First Phase of the New Town Development in the IDZ area 94 Image 5.3 The TFM Resettlement process 94 FIGURES Fig: 3.1 The Study Framework 35 VII LIST OF ACRONYMS ARN Africa Natural Resources APP Africa Progress Panel APR Africa Progress Report AU African Union BAD Banque Africaine de Developpement (African Development Bank) CEPAS Centre d’Etudes pour l’Action Sociale – (The Centre of Study for social Action) CSR Corporate Social Responsibility DRC Democratic Republic of Congo EITI (ITIE) Extractive Industry Transparency Initiative ESI Environmental and Social Impact Report GDP Gross Domestic Product GRI Global Reporting Initiative ICMM International Council on Mining and Metal IFC International Finance Corporation IFM International Finance Management IMF International Monetary Fund KPMG Klynveld Peat Marwick Goerdeler. LACRPF Land Access, Compensation, and Resettlement Policy Framework (for TFM) MAD Mining Africa Development MMSD Mining Minerals and Sustainable Development OECD Organization for Economic Cooperation and Development PWC Price Water Coopers UNDP United Nations Development Programs UNDP HDI United Nations Development Programs / Human Development Index USGS United States Geological Survey UN United Nations WB World Bank WBCSD World Business Council on Sustainable Development WBG World Bank Group WCED World Commission on Environment and Development’s VIII WESD World Earth Summit Declaration TABLE OF CONTENTS Content Page DEDICATION PAGE I ACKNOWLEDGEMENTS II ABSTRACT III LIST OF TABLES IV LIST OF IMAGES & FIGURES V LIST OF ACRONYMS VI CHAPTER ONE: Study Orientation and Basics 1.1 INTRODUCTION 1 1.1.1 Corporate Social Responsibility, the Global Context 4 1.1.2 Mining (Extractive) Industry in the Global Context 5 1.2 Contextual Background on CSR and the Mining Industry in the Democratic Republic of Congo (DRC) 7 1.3 Study Justification 8 1.4 General and Main Objectives of the Study 10 1.4.1 General Objective 1.4.2 Specific / Main Objectives 1.4.3 What is Impact Assessment then? 11 1.5 Conceptual Study Approach 11 1.6 Limitations of the Study 12 CHAPTER TWO: Literature Review and Conceptual Analysis 2.1 Introduction 13 2.2 A brief Background of (Corporate) Social Responsibility 13 IX Content Page 2.2.1 The Global outlook on CSR and the mining Industry 17 2.2.2 CSR in the Mining Industry in the Democratic Republic of Congo: An Overview of Legal Obligations 18 2.3 Contextualizing of the Corporate Social Responsibility and Sustainable Development concepts 19 2.4 Corporate Social Responsibility (CSR) 21 2.4.1 Corporate Social Responsibility in the mining industry 2.5 Contextualising Sustainable Development 23 2.5.1 Sustainable Development, CSR and Theoretical Perspectives CHAPTER THREE: Research Methodology 3.1 Introduction 24 3.2 Research Methodology and Design 24 3.2.1 Methodology 25 3.2.2 A Look at the Case Study Methods 26 3.2.3 Case Study as an Evaluation Research Method 28 3.3. Selecting and Defining the Case for Study 32 3.3.1 Study Sample 3.4 Research Action Plan 34 3.4.1 Structure of the Study 35 3.5 Data Collection Methods 35 3.5.1 Primary Sources 36 3.5.2 Secondary Sources 3.6 Data Analysis 42 3.6.1 Introduction 3.6.2 Qualitative Data Analysis 42 3.6.3 Content Analysis 43 X Content Page 3.7 Ethical issues
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