CSR and Development in Africa

The issue of corporate social responsibility (CSR), as it relates to the mining sector, has emerged in a particular historical context. Several decades of reform that liberalized regulatory frameworks and mining codes in mineral-rich countries of Africa in order to encourage investment has contributed to redefining the role and functions of mineral-rich states, as well as contributed to the shift of what were formerly considered state functions to private actors – often large transnational mining companies. In the context of the weakened institutional and political capacities of states – and consequently of their weakened capacity to pursue developmental objectives, to enforce regulations in areas of key importance to communities, and to meet national economic objectives, along with the trend of transferring public responsibilities to private actors – issues of legitimacy have emerged about the operations of mining companies themselves. Such a redefinition of spheres of authority and responsibility in situations of declining public resources – compounded by the fact that mineral-rich states have become less able to ensure the needed monitoring, follow-up, and, if necessary, bring in remedial measures –has called into question the regulatory role of states, hence creating a legitimacy gap, which inevitably impacts on the activities of mining enterprises.

While past and current trends may have allowed governments to shift the locus of responsibility for what were previously considered state functions – including public service delivery (clinics, roads, infrastructure, security, etc.) as well as rule-setting and implementation and mediation – to the private operators of large-scale mining projects and NGOs (which helps explain the pressures on companies to introduce CSR projects in order to gain a social license to operate), such transfers are problematic for several reasons. With regard to the origins of CSR projects, they are most often the result of externally-driven initiatives rather than ideas emanating from a domestic policy process and as integral parts of locally-owned public policies. Moreover, not only do they silence the legitimate, and indeed necessary, right of governments to offer services to their populations – a precondition to their being held publicly accountable – they also contribute to obscuring the issue of government responsibility itself. The current sidestepping of the state – by suggesting companies can gain better legitimacy for their operations by offering social services – runs the risk of undermining a precondition for building responsible governments and the basis of democratic practice: the need to hold governments publicly accountable. The blurring of lines of responsibility of public, as opposed to private, actors is a key element in explaining why – in situations when differences of opinion among stakeholders arise over land rights or compensation, for example – there are increasing risks of a degeneration into violent conflicts.

There have been different responses to these issues of legitimacy emanating from different arenas, including the multilateral level – as, for example, though the production of international norms to which companies are invited to adhere, such as in the area of environmental impact assessments or involuntary displacements. However, such “transnational legal frameworks” leave unresolved the key issue of enforcement, as they do not address the problem of the capacity of states to ensure their implementation and to bring in corrective measures if necessary. There have also been proposals from bilateral agencies, such as the production of tool kits to better manage situations of risk and potential conflict. These initiatives similarly fail to address the origins of such conflicts, which often concern the perceived legitimacy of the positions held by different stakeholders (communities as opposed to companies), about whether to proceed with a particular project, the conditions under which it is undertaken, or the distribution of the revenues it produces.

Finally and a third type of response are CSR projects put forward by private actors with a view of obtaining a social license to operate. While one can understand the motivation behind such initiatives, by their very nature and origin they are most likely to be attempts to respond to community grievances – that is, symptoms or manifestations of the problems at hand – rather than an addressing of their causes, namely, issues such as the control over resources and access to land rights, the distribution of influence and authority among actors, and the choice of the development agenda being implemented. Beyond the fact that such CSR strategies are usually externally driven and raise issues of local appropriation and sustainability beyond the life of a particular project, they not only fail to address the issue of the regulatory authority of states, but by sidestepping the state, they may even contribute to postponing the conditions necessary for resolving the problems of legitimacy that they are intended to address.

The issue of legitimacy that companies increasingly face can be seen as a consequence of evolving structural relations that have resulted, at least in part, from the manner in which the mining sector has been reformed. These structural relations have significantly modified – and sometimes obscured – the demarcation of spheres of responsibilities, whether public or private, and have frequently also blurred distinctions between the political and the technical domains. Such a perspective underlines the importance of taking into account the reforms at the origin of the reshaping of institutional arrangements, the structural relations of influence and authority that characterize these reforms, and the roles and responsibilities of the various actors involved.

Moreover, strategies of CSR often appear premised on the faulty hypothesis that it is investments initiated by private companies that are going to drive development. In fact, there is no historical example anywhere on the earth whereby sustainable growth, social and economic development, and poverty reduction took place through private investment in the absence of appropriate public policies and state interventions needed in order to plan strategically, regulate, and monitor investment as well as to ensure that the presence of the private sector be harnessed to meet the development objectives determined by the countries and the governments concerned.

A useful example of recognition of the above is a 2011 report of the United Nations Economic Commission for Africa (UNECA), which sets out recommendations for the mining sector in Africa in order to encourage it to become a catalyst for sustainable, intergenerational, and equitable development. With regard to CSR, the report is clear: “From a policy perspective, CSR initiatives should not be considered a substitute for government responsibility towards its citizens in providing basic infrastructure and other public goods. Indeed, CSR initiatives should complement government efforts through local government institutions and local authorities”.

Significantly, CSR projects could reduce the motivation of governments to fulfill their responsibilities to citizens, and the latter could come to see the company as the provider of those services for which they should be looking to the state. Better coordination between the planning and investment of the state and corporate outlays under CSR could improve the value of both streams of expenditure. For example, the sustainable use of a school or clinic built as part of a CSR strategy is more likely if the project is coordinated with the state to ensure that it fits into a larger plan and that the state can support health staff or teachers should the mine halt its support. Finally, the norms according to which CSR initiatives are undertaken should be part of a national policy debate on the mining industry’s obligations regarding social development objectives. Indicators needed to assess the impact of good CSR projects must be built into a nationally derived framework and applied by a range of stakeholders, including civil society. The framework must focus on stakeholder consultation and allow for a review of obligations and commitments. This review must be based on reporting requirements that should be part of the CSR framework.

In the end, companies have the following responsibilities: 1) Signing contracts in a transparent manner and making these public; 2) paying fair royalties and taxes in a transparent manner; 3) respecting the laws of the country in which they operate, international obligations, and human rights obligations. Should companies wish to contribute in other ways to the sustainable development of the countries in which they operate, the guidelines set out by UNECA leave little doubt as to how best to proceed.