The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™
The politics of resources redefined™

A new ‘native’ title

By Juliet Hepker

A new book on how extractive firms use ‘CSR’ to build relations with indigenous peoples convincingly outlines the problems but less so the solutions

Taking a critical view of mining companies

‘Earth Matters – Indigenous peoples, the extractive industries and corporate social responsibility’ edited by Ciaran O’Faircheallaigh and Saleem Ali (2008). Greenleaf Publishing Ltd., 272 pages, £35.

As community protests and campaigns over the years bear witness, indigenous peoples and mining and oil firms have often had a fractious relationship. ‘Earth Matters’ takes an uncynical, yet often critical view of the motivation for and effectiveness of corporate social responsibility (CSR) initiatives in this area. A collection of papers on the topic by academics, NGOs and other specialists in the area, and including case studies ranging from Australia to Russia, the book’s strengths lie in a varied and nuanced analysis which draws out the complexities of even the most promising approaches. Lacking, however, are clear recommendations and, most of all, practical steps to help companies achieve a more secure social license on the ground.

Examining the motivations for CSR in the extractive industry, the book identifies increased stakeholder pressure and an ‘internal cultural shift’ as the key factors. An often theoretical approach on the part of the authors leads to robust – if sometimes obvious – findings. Stakeholder pressure is attributed to the emergence of “shareholder transnational advocacy networks” (STANs) which link indigenous communities at the local level to international NGOs and corporate shareholders. These STANs can set in motion a so-called “boomerang pattern of influence” which allows pressure to be applied on the company (or indeed the government) from the outside. Companies will be responsive to stakeholder pressures, marking an ‘internal cultural shift’, it is argued, on condition that that this is in their long term interests and, importantly, that the ‘business case’ is harnessed by internal advocates.

Like industry, indigenous peoples’ groups have also gone through a transition and are today more of a force to be reckoned with, evidenced by the recent UN Declaration on the Rights of Indigenous Peoples. For indigenous communities, often with non-market based cultural systems, there exists a complex set of trade-offs between a resource project’s economic contribution and wider impacts on community well-being. In this respect, ‘CSR’ initiatives are an attempt to help balance these trade-offs.

Relationship difficulties

The book’s analysis of some of the most widely-used and promising CSR approaches on the part of companies draws out their complexities and from this, it is true, a number of recommendations can be inferred. For example, an analysis of the ‘interpersonal domain’ between companies and communities advises companies not to rely on good personal relations between staff and community members – a “naively optimistic” approach which is vulnerable to staff turnover and fails to address structural incapacities. An analysis of contractual agreements between companies and indigenous peoples, meanwhile, suggests there should be more consideration (at least of the part of indigenous communities) of the ways such agreements can limit other options available to them – for example, the use of political and legal strategies to influence contractual and regulatory terms, or the ability to mobilise other stakeholders.

Partnerships with NGOs, as well as what are described as multi-stakeholder “deliberative spaces”, are also considered. Though these are widely held to be among the most promising CSR approaches, the book raises some concerns here too. It is argued, for example, that NGOs considered “desirable partners” by industry and government are often only the ones prepared to focus on improved development outcomes, while NGOs that support a community’s “right to say no” to a project are effectively side-lined. Companies are later sternly told “to accept the reality of political opposition” and “not to co-opt resistance”. Based on a detailed look at multi-stakeholder dialogue processes at Tintaya and Yanacocha mines in Peru, companies are urged to demonstrate clear support for participatory decision-making and the involvement of communities at every stage of the project.

While ‘Earth Matters’ raises many legitimate concerns, however, these reveal more about the difficulty of getting things rights than, from a companies’ perspective, how to do so in practice. Most extractive firms, even the best resourced and most progressive ones, are a long way from applying the recommendations above, particularly those that would appear to them to severely inhibit their ability to develop projects. With a dozen chapters by different academic and NGO authors, what is arguably missing from the book is a chunk of input from management writers.

A key challenge for companies is ‘structural incapacity’, for example, as the book points out. But how do companies develop the necessary tools to address the issues raised in practice? It is very well to push for participatory decision-making “no matter how long and arduous the process may be,” but how can companies be incentivised to focus beyond the intense short-term commercial pressures they often face – even if doing so may be their long-term interest?

Put another way, what sort of management processes should companies put in place to ensure they build strong relations with indigenous peoples but without hobbling their ability to create value? And how exactly should they assess the risks posed to project development by community pressures and structure their responses accordingly? To plug our own research, Critical Resource’sLicenseSecure™ model is aimed precisely at supporting management responses in such complex areas.

But the basic instruction to companies which can be gleaned from ‘Earth Matters’ – namely, to “come to grips with nuances involved in dealing with indigenous populations” – is an important point. And in explaining the nuances, even if not the practical responses, the book makes a valuable contribution.

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