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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 with resolution.


 
  
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