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Cut Zakiatusshadri

1604108010001

Journal of
Sustainable Mining

Research paper

Corporate social responsibility, risk and development in the


mining industry
(Majer 2013; Lamb, Jennings et al. 2017; Narula, Magray et al. 2017; Frederiksen 2018;
Frederiksen 2018; Rhee, Nyanza et al. 2018)

Keywords : Corporate Social Responsibility(CSR), mining companies, social involvement, local communities

ABSTRACT

In this article I examine how metals mining companies understand and act upon CSR
as risk management and the consequences for community CSR projects. I begin by
exploring the literature on CSR and development in the mining industry, motives for CSR
engagement in the industry, and risk and risk management. I then draw on my research data
to map how CSR programmes are seen as an important method of managing strategic
challenges to firms — categorised here as reputational, operational or regulatory ‘risks’—
and note how competition for capital and recent changes in the legal environment have
furthered this process. A focus on CSR as risk management can illuminate the poor
development outcomes of community CSR projects, despite recent rises in
spending.(Frederiksen 2018)

1. INTRODUCTION

Corporate Social Responsibility (CSR) has become par- ticularly important due to the
character of activities carried out by mining companies, associated with mining of coal,
a high level of employment and especially due to a strong impact on the social
environment. CSR is a relatively new approach to managing and is based on including
social inter- ests, environmental protection and a relationship with local community groups
in the company's strategy. The social involvement in the management of the company
focuses on building the right relationships with employees, respecting their rights and
involving them in the process of business management.(Majer 2013)
Enviromental management is a crucial tool for any activity that generates adverse
impacts and mining is one such activity. Mining operations pose potential hazards to human
health and the environment during exploration, production, and closure stages
(Adiansyah, Haque, Rosano, & Biswas, 2017). Developing hazard management
strategies is also necessary in order to obtain a social license to operate mines.(Adiansyah,
Rosano et al. 2017)
The first step of managing enviromental impacts is to prepare a comprehensive
enviromental management plan. This document mainly describes potential enviromental
impacts and risks, enviromental monitoring, measurement activities, control strategies, and
enviromental audits (Commonwealth of Australia, 2014). The tools that are usually
employed to study the enviromental impacts of different systems include life cycle
assessment life cycle costing, net present value, and benefit cost analysis (Ahlorth, Nilson,
Finnyeden, Hielm, & Hochschorner 2011; Erkayaog lu & Demirel 2016; McLellan Corder,
Giuro, & Green, 2009). These tools can be used to determine the feasibility of the
enviromental management strategies for mining operations.(Adiansyah, Rosano et al.
2017)

2. CSR AND RELATIONSHIP BUILDING WITH LOCAL COMMUNITIES

From the point of view of the specific operation of mining companies, appropriate
action in the area of social engagement and building relationships with groups of stake-
holders, including local communities, is an opportunity to acquire the „license to
operate” (Podręcznik CSR 2011) in a given location. Through involvement in social issues
com- panies can fully understand the public perception of their impact, which could
and should lead to minimizing risks associated with social protests.(Majer 2013)
The use of the principles deriving from CSR and taking action on its behalf brings a
number of benefits for compa- nies, among which the most common are:
 Creating a positive image of the company mission credibility in the eyes of customers
 Increase in competitiveness
 Gaining consumer loyalty
 Increase in trust among stakeholders gaining the favour of the local community
 A positive image of the company among employees building positive relationships
with the local authorities and the local community
 Increased investor interest
 Attracting and retaining the best employees
 Increased organizational culture within the company (Dżoga et al. 2010)

3. SUSTAINABILITY CHALLENGES OF COAL MINING

The major enviromental problems at the mining stage consist of the degradation of land
which is perhaps the most serious impact of coal mining operations. Mining projects not
only affect the people whoe land and house have been taken away for mining but also people
living in the general vicinity as they suffer from local enviromental impacts, which include
water scarity, air, noise, and water pollution, health impacts, etc. Open cast mining cause
much greater degradation to land than underground mining. (Narula, Magray et al. 2017)

4. BUILDING RELATIONSHIPS WITH LOCAL COMMUNITIES

The vast majority of analysed mining companies under- take a number of actions in
the area of social commitment, which belong to various thematic areas and also takes
differ- ent forms. The most significant number of initiatives is un- dertaken in the sphere
of culture and education as well as health, culture and art.
Active mining companies in the area of social engagement use various forms, including:
 Sponsorship of sports and/or cultural events scholarships for children and adolescents
 Educational activities (e.g. organization of thematic work- shops)
 Promotion of culture and local traditions
 Actions to promote health and support health care
 Financial support for community organizations and chari- ties
 Material aid
The following aspects are taken the form of mining activi- ties to a lesser extent: lending
equipment, premises, means of transport membership in local associations corporate
volunteering organized by the employer.(Majer 2013)

5. CONCLUSION

Livelihood generation is an important need when it comes to the rehabilitation of


affected communities in mining areas. How CSR investment can be directed or focused
towards livelihood genera- tion activities is important. Unless local capacities are
enhanced, the communities would not be able to generate livelihoods for themselves
especially in remote areas, implying emphasis on skill development work.(Narula, Magray
et al. 2017)
Sustainability of these livelihoods can only be achieved through the hand-holding of
the communities after skill development and the creatin of new enterprises. Self-sustainable
models with revenue generation achieved by the communities themselves could prove more
useful. This also helps to build a mutually beneficial and rewarding relationship with
communicaties. It is also seen that more needs to be invested in motivating local
communities by means of enterpreneurship develpment programs/training/hand-holding
facilities as was felt during the implementation of the project.(Narula, Magray et al. 2017)

Reference
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Rhee, S., E. C. Nyanza, et al. (2018). "Understanding environmental, health and economic
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