A study commissioned by the
Canadian Mining industry found that Canadian mining companies were involved in
4 times as many mining "incidents" as companies from other countries.
The study was intended for internal consumption only but has been leaked to the
press recently. The study found that Canadian mining companies were involved in
nearly two thirds of the 171 "high profile" environmental and human
rights violations it studied occurring between 1999 and 2009. Members of the
mining industry pointed out that the occurrences are in proportion to their
representation on the global mining scene, indicating that they were no better
or worse than companies from other countries.
First some background on the study. The study findings
were captured in a report titled "Corporate Social Responsibility & the Canadian
International Extractive Sector: A Survey". The report was prepared
for the Prospectors and Developers Association of Canada (PDAC) by the Canadian
Centre for the Study of Resource Conflict (CCSRC). The purpose of the study was
to measure the level of Corporate Social Responsibility (CSR) in the
"extractive" sector. The extractive sector, for those of us untutored
in the terminology means exploration, gas, oil, and mining companies. The
document leaked to the press was a first draft of the report, not the final
draft. I should also mention that there is a bill, C-300, before the Canadian
parliament which would make financing for foreign ventures contingent on
meeting federally defined CSR standards. The exploration, gas, oil, and mining
companies, and the organizations which represent them are very much against
this bill. Leaking the negative aspects of this report was fortuitous for those
in support of bill C-300 and disastrous for those opposed to it.
One of the observations the
report makes is that adoption of formal CSR policies by companies with
international interests is "remarkably low", but that those companies
which have adopted CSR policies have experienced positive outcomes. The CCSRC
contacted 584 companies which they felt met their criteria to participate in
the study. Of those, 202 chose to participate. The first survey question was
"Do you have a CSR policy or Code of International Business Conduct?"
56 of the 202 companies had documented policies in place. The study broke the
202 companies they surveyed into "junior" and "major"
companies. 50% of the companies designated as major had documented CSR policies
while only 21% of junior companies had one.
The survey also asked about the
positive effects of a CSR policy. 24% of respondents claimed a reduction in
conflicts or complications, 62% claimed better community relations (relations
with the communities they were doing business in), and 25% reported increased
shareholder interest. On the downside, 24% reported increased administration
costs and 25% reported increased operating costs. One question they failed to
ask was whether the benefits outweighed the costs.
The information I've stated in
the preceding 2 paragraphs was gleaned from the final draft of the report. I
don't have access to the first draft but apparently it described some of the 171
violations they were addressing in the study. I reported on one such violation
in Project Management Tips section of this web site under the title "CSR
Problems". The incidents reported on reflect the difficulty faced by
companies who conduct business in some international locations. These incidents
juxtapose our Canadian values and ethics with those of the countries our
exploration, gas, mining, and oil companies do business in. One incident
reported on, and attributed to the mining company's lack of CSR by the media,
pitted one host community against another with the resulting violence blamed on
the Canadian mining company. I'm not suggesting here that these companies have
not made mistakes in the past, or that improvements cannot be made in their CSR
efforts, I am suggesting that we should have realistic expectations about the
effectiveness of a CSR policy to prevent any problems in a foreign venture.
A reasonable expectation in some
cases would be that the company have a documented CSR policy which conforms to
the standards and ethics of this country (Canada), abides by the laws of the
host country, and conforms to the standards and ethics of the host country. The
expectation should be tempered with the acknowledgment that the operating
environment these companies encounter in host countries can be radically
different than that found here. For example, when one community is in conflict
with another over whether a mining operation should take place, we tend to look
to non-violent forms of dispute resolution where some countries may resort to
extreme violence to settle the dispute. Canadian companies frequently hire locals
as security guards to protect their property as local authorities cannot
perform this duty for one reason or another. It is reasonable to expect the
hiring company to do its due diligence in hiring these people to ensure they
don't create a threat to the surrounding community. It is not reasonable to
expect that there will be no conflicts arising out of these situations. Where
it is suspected that a security guard overstepped their authority, or engaged
in illegal behaviour, it is reasonable to expect the employer to cooperate with
the local authorities in the investigation.
North American companies doing
business internationally have long had to deal with conflicts between
acceptable corporate behaviour in their own country and acceptable behaviour in
the host country. Bribery is the classic example. There are countries where
bribery is not only accepted but essential to conducting business. Our laws
will convict anyone proved to have offered a bribe but failure to pay the bribe
may result in a failure to perform on the part of the North American company.
Failure to perform might result in the loss of all or part of the company's
investment in the project. Holding a
company to this type of double standard can only result in one of 2 outcomes:
the company will break the rule against bribery, or the company will cease to
do business in that host country.
Since this web site is aimed at
the project management community, let's draw some conclusions from the survey
and CSR in general that may help project managers. The first conclusion I would
draw from all of the above is that the CSR policy that governs your project
must describe achievable goals. By this I mean that the goals, objectives, and
standards stated in the policy must be within the project's power to achieve,
or comply with. The second conclusion is that the right CSR policy carefully
implemented can provide a business benefit to the organization. It is the
project manager's job to ensure that those benefits are realized.
The goals and objectives of the
project must include goals and objectives in support of the CSR policy. Those
goals and objectives should be spelled out in the Project Charter and the connection
between those goals and objectives and the CSR policy clearly defined. Make
sure that the CSR related goals and objectives you set for the project are
clearly defined, measurable, and obtainable and then agree with your
stakeholders on the conditions that will indicate the goals have been met.
Check for CSR policy goals and objectives that might conflict with each other
and any of your project's goals and objectives, both CSR related and non-CSR.
Goals and objectives you feel might conflict with each other, or with the CSR
policy should be resolved by senior management. Start your escalation by
drawing the project sponsor's attention to the conflict and ask for their help