Mining, Corporate Social

Responsibility and the

“Community”: The Case of
Rio Tinto, Richards Bay
Minerals and the Mbonambi Paul Kapelus

ABSTRACT. Mining companies have long had a of a major minor company has been implemented by
questionable reputation for social responsibility, espe- one of its subsidiaries in South Africa.
cially in developing countries. In recent years, mining
companies operating in developing countries have KEY WORDS: corporate social responsibility, mining
come under increased pressure as opponents have ethics, Rio Tinto
placed them under greater public scrutiny. Mining
companies have responded by developing global cor-
porate social responsibility strategies as part of their At the Rio Tinto head quarters in St
larger global business strategies. In these strategies, a James Square, London, an anthropology
prominent place is given to their relationship with professor and his research assistant advise
local communities. For business ethics, one basic issue the Rio Tinto mining operations around
is whether such an approach to corporate responsi- the world on community affairs. They
bility is likely to effectively address the development comment on the company’s relations
concerns of local communities in developing coun- with “the community”, scrutinise five-
tries. This paper addresses this question by investi- year community development plans and
gating how the corporate social responsibility agenda provide direction for engaging with the
community on sensitive cultural issues and
advice on resettlement. On their desks sit
Paul Kapelus is a co-founder of the African Institute of various reference books including James
Corporate Citizenship (The views presented in this Ferguson’s “The Anti-Politics Machine”,
paper are personal). Paul has been working in the field “Civil Society” by Hann & Dunn and
of social responsibility for the past ten years. Initial literature dealing with mine – aboriginal
research began in the migrant workers hostels of relations in Australia, as well as internet
Johannesburg and continued whilst working on platinum web site printouts from the British
mine in Organisational Development. Consultancy in Institute for Development Studies library.
the field of social and environmental impact assessment They maintain files for storing articles
allowed Paul to work in a number of African countries from the media about the operations at
on projects ranging from greenfields exploration through different mine sites and actively “surf the
to privatisation. Paul undertook a BA (HONS) in social web” examining sites that campaign
anthropology at the University of the Witwatersrand, against Rio Tinto.
South Africa, and a Masters in the Anthropology of
Development at Sussex University, UK. On his return On the northern KwaZulu Natal coast in
from the UK he co-founded the African Institute of South Africa, Richards Bay Minerals
Corporate Citizenship, a consultancy and advocacy (RBM), a Rio Tinto subsidiary, is busy
organisation. His work has focussed on corporate citi- preparing to relocate a number of house-
zenship strategy, social management plan development, holds situated within the demarcated
tri-sector partnerships and socially responsible investment. 100 m mining zone. The team of com-

Journal of Business Ethics 39: 275–296, 2002.

© 2002 Kluwer Academic Publishers. Printed in the Netherlands.
276 Paul Kapelus

munity development workers goes out For business ethics, one basic issue that arises
each day to support community develop- in this context is whether such an approach by
ment projects in the adjacent Mbonambi corporations to this situation is likely to effec-
community. The projects are displayed to tively address the development concerns that the
the world in the Rio Tinto corporate local communities in developing countries have.
reports and magazines, on the RBM web
It is this question that this paper investigates. I
site and on billboard signs next to the
development projects.
examine this issue by way of a case study.
Specifically, I look at the global CSR agenda set
out by the mining giant Rio Tinto and how it
Enlightened corporations, including those in the has been implemented by its subsidiary Richards
mining industry, have long been aware that it Bay Minerals (RBM) in the Mbonambi Tribal
may be in their interests to address issues of Authority of South Africa. The case study
concern to the local communities in which they analysis is based in part upon a series of inter-
operate. The pragmatic logic involved in this views with key figures in Rio Tinto, RBM and
notion is quite simple. Local communities are the local communities in and around Richards
often in a position to impose costs on corpora- Bay conducted in 1999.1
tions, with their ability to do so being a function In adopting a case study analysis in this paper,
of the resources they command and their ability my goal is primarily heuristic, that is, to explore
to organize themselves. What this has meant his- the tensions that appear in the process and
torically is that corporations have tended to pay the concerns that arise (rather than providing a
more attention to those communities which have definitive evaluation of the effectiveness of the
more resources. More specifically, corporations particular policies and their implementation and
have paid more attention to the concerns of concrete steps to be taken to address shortcom-
communities in developed countries in which ings). Key aspects of the analysis involve the
they operate than to those in developing coun- investigation of how the company conceptualizes
tries. and employs the notion of “community” and
With recent processes of economic globalisa- how its approach to these tasks is contested by
tion this simple truth has become more compli- stakeholder groups.
cated. For one thing, as corporations increasingly
shift their production to developing countries,
they are finding that they are not the only ones I. Context – transnational mining
who are going global. Civil society, and more corporations and their critics
specifically, environmental and corporate watch-
dog groups, are also globalising and collaborating The transnationalization of (the mining) industry
with civil society groups in developing countries.
As a result, corporations are facing increased Over the last couple of decades transnational
surveillance and criticism of their activities in corporations (TNCs) have experienced unprece-
developing countries, as well as increased pressure dented growth. While in 1970 there were
to operate in a socially responsible fashion. For approximately 7000 TNCs, by 1994 the count
their part, corporations are responding. As had risen to some 39 000 parent TNCs and
the vignettes above indicate, large transnational 20 000 affiliate TNCs (Nelson, 1998). Various
mining companies are changing as a result of bad technical, organizational and political factors have
press, production delays and campaigns instigated provided the opportunities for the increased
by civil society groups. By way of response, these financial investment across the globe. These
corporations are developing global corporate include privatisation policies, liberalised invest-
social responsibility (CSR) strategies – which ment policies, the reregulation of mining activ-
employ the vocabularies of business ethics, ities, new technology for global operations,
human rights and development – as part of their traditional concerns about spreading financial
larger global business strategies. risks and more effective production processes.
 Mining, Corporate Social Responsibility and the ‘Community’ 277

Like TNCs generally, mining TNCs have Particularly significant among the opposition
also been growing in recent years. As Reed doc- to mining TNCs in developing countries has
uments in his paper in this issue, the transna- been the emergence of increased activism by
tionalization of the mining industry is not indigenous communities, who are frequently
new. Commercial mining has been expanding among the groups most directly and adversely
throughout the globe for more than 150 years, a affected by mining activities. Large numbers of
process that has largely been linked to the dom- indigenous peoples are entering into conflict
ination of colonial powers. In recent years, with mining companies (Fabig and Boele, 1999;
however, mining companies have stepped up Burger, 1987). Indigenous communities are chal-
their operations in developing countries. The lenging mining companies on a wide range of
primary reasons for this are the liberalizing ten- issues including profit-flows, headquarters’
dencies in the new global economy, noted above, decision making procedures, representation on
as well as depletion of resources in developed the company board, rights to extract minerals,
countries. compensation measures, reporting procedures
and long-term strategies. Almost every aspect of
a business is scrutinised from a social responsi-
The transnationalization of opposition bility perspective.
These indigenous communities have benefited
The mining industry has always provoked greatly from the globalisation of opposition to
reaction to its operations, especially from local mining TNCs. In recent years a global network
communities. While this is true in both devel- of indigenous peoples organisations has emerged
oped countries and developing countries, oppo- as a result of this larger opposition movement.
sition groups in developing countries have Members of the larger movement provide impor-
typically enjoyed advantages in making their tant services, such as reporting on negotiations
demands heard due to greater resources, better between mining firms and local (indigenous)
organization and more effective political repre- communities. Such negotiations are often
sentation. The organizational advantages in relevant for other indigenous groups, even if they
developed countries have included more active are being held on another continent, as deals
and better resourced social movements and struck between one group and a mining
NGOs (operating around such concerns as company can be used as reference points or
human rights, the environment, the rights of benchmarks for other groups (Broad, 1997).
indigenous people, corporate responsibility, Reports on such negotiations help to ensure
etc.). indigenous communities the best possible price
As mining TNCs are increasingly becoming (in both financial terms and other considerations)
global corporations, so has opposition to them for their granting of mining rights (Crowson,
become increasingly global. While many estab- 1998).
lished NGOs in the developed world have long The efforts of indigenous peoples to organize
been international in perspective, they have been have been paying off in other ways, as well.
taking a greater interest in issues related to Indigenous peoples are starting to have more of
mining. As well, many new NGOs have been their land claims officially recognized, as in
established over the last couple of decades, the 1992 “Mabo ruling in Australia” (which
including a variety with a specific focus on provided for native title of land if historical and
mining concerns. Both newer and more estab- continuous links with the land could be demon-
lished NGOs have shown a strong propensity to strated). Indigenous people are also having their
collaborate, not only amongst themselves, but rights recognized in other fora. In 1989 the
with organizations and local communities in the International Labour Organisation (ILO) adopted
developing world. The result has been the estab- Convention 169, “Concerning Indigenous
lishment of networks of opposition to mining Peoples and Tribes in Independent Countries.”
firms. For its part, the United Nations Human Rights
278 Paul Kapelus

Commission has formed a Working Group on to transform. Entitled “Mining Minerals and
Indigenous Populations and developed a draft Sustainable Development” (MMSD), this global
Declaration of the Rights of Indigenous Peoples. programme is being administered by the
The UN has also been active specifically with International Association of Environment and
respect to indigenous peoples’ relations with the Development (IIED). The stated intention of the
mining industry, promoting the concepts of free project is “to identify how mining and minerals
and informed consent, participation in the can best contribute to the global transition to
benefits of development, compensation, and mit- sustainable development” (IIED, 2000). The
igation of adverse impacts. WBCSD hopes that the project will help to
publicize the serious attempts of the mining
industry to construct an agenda for CSR and
encourage all members of the industry to live
II. Corporate social responsibility up to the highest standards. Major research
(mining) and the community themes of the project include human rights issues
(conflict, abusive practices, corruption), concerns
CSR as a programmatic response to critics of indigenous peoples, access to markets, world
trade and globalisation and finally designing a
While corporations have always been involved sustainable future. The findings of MMSD will
with CSR programs to some degree in one form be presented to the Rio +10 World Summit on
or another, the last couple of decades have seen Sustainable Development (WSSD) in 2002 in
an explosion in terms of the effort and resources South Africa.
that corporations have been expending on CSR. In addition to civil society pressures, there are
Mining and other resource sectors have been in numerous international treaties and agreements
the forefront of this new surge of interest. There that attempt to promote more responsible activity
are a couple of overlapping reasons for this new by TNCs with respect to their social and envi-
emphasis on CSR. Perhaps, the major factor, as ronmental impact.2 Environmental awareness in
discussed above, is the fact that NGOs, social particular has intensified in recent years, espe-
movement and indigenous peoples have increased cially after the convening of the 1992 Earth
their organizational capacity and cooperation Summit in Rio. One key issue that has emerged
tremendously over the last twenty years or so. with respect to international regulation is how
This has allowed them to exert much greater TNCs might be encouraged to apply their home
pressure on corporations, both directly (through standards abroad, when they move to locations
actions against their production facilities and with lower labour costs and less stringent envi-
campaigns directed at shareholders and con- ronmental regulations. Mining companies, in
sumers) as well as indirectly (through the polit- particular have been an object of concern, as they
ical system). have not only not fulfilled their promises of being
In addition the pressure from civil society engines of local economic growth, but frequently
organizations and indigenous peoples, TNCs are adverse social and environmental impacts of their
also encouraged to become more responsible and activities have far outweighed the economic
take up CSR programs by pro-business organi- benefits that have accrued (Anderson, 1996, cited
zations, such as the World Business Council for in Carter, 1997).
Sustainable Development (WBCSD), the Prince A final source of pressure has to do with the
of Wales Business Leadership Forum (PWBLF), pragmatic interests that firms have with respect
the Centre for International Private Enterprise to operating with a minimum of government
(CIPE), etc. A recent initiative by the WBCSD, regulation. The problem is that as TNCs have
for example, is directed specifically at the mining shifted their investment more to the developing
industry and represents an effort to confront the world in recent years, they have opened them-
poor ethical reputation of the mining industry selves up to criticism for not maintaining
and the resultant pressure placed on the industry adequate minimum standards. Underlying this
 Mining, Corporate Social Responsibility and the ‘Community’ 279

charge is the notion that either existing standards business activities. This may involve such areas
are not adequate or that they are not effectively as labour standards, environmental standards, etc.
enforced. Such charges potentially pave the way A third key aspect, and the one probably most
for more stringent regulation of TNCs (either closely associated with CSR, involves designing
at the national level or internationally). CSR pro- and implementing social-economic development
grammes represent one possible method for programs and services.
TNCs to dampen any pressure for increased reg- In undertaking CSR initiatives, TNCs have
ulation that may arise as the result of such engaged a variety of non-business experts to help
charges. develop their initiatives, including explicating
In taking up CSR programmes and responding their values and principles developing standards,
to concerns about sustainable development, and designing programs. These include anthro-
mining companies readily acknowledged that pologists, ethicists, health professionals, develop-
they are responding to social pressure and that ment workers, etc. They have not forgotten,
such a response is no longer optional. Marc however, to also hire a range of business profes-
Gonsalves, the Corporate Affairs manager of the sionals, especially in the media and publishing
Billiton mining group, for example, states that world. Their function is to ensure that the world
in the future, “undertaking corporate social knows what the values and commitments of the
responsibility programmes will be the same as firm are and how these are expressed through
having to print annual corporate reports. It is their CSR projects. Indeed, the intensity of the
what business is about” (Gonsalves, 1999). agenda and the number of policies and pro-
Similarly, the Canadian mining company, Placer grammes in place has contributed to the CSR
Dome has come to accept that “its ability to global agenda becoming a business in its own
work within the sustainability framework will be right. Consultancy groups, public-relations com-
the key to getting good projects and developing panies, management and accounting firms are
successful mines in many parts of the frontier employed in generating a virtual flood of paper-
zones of the world” (Wilson, 1999, p. 48). work in the form of conference material,
brochures and reports and, as Fabig and Kapelus
(2000) argue, are beginning to set the agenda and
Forging a CSR agenda define the discourse of CSR.

TNCs have taken up the CSR agenda in a major

way recently. One aspect of the CSR agenda The prominence of the “community” in CSR
involves TNCs publicly proclaiming their values.
This may be done through any or several of a As corporations have taken up CSR programs,
number of types of documents produced by the one theme has tended to dominate. That is the
firm (e.g., mission statements, code of ethics, commitment of the firm to the local communi-
code of conduct, etc.). Increasingly, TNCs have ties in which they operate. The corporate liter-
also been signing on to statements produced by ature on CSR is permeated with references to
other groups, including: business organizations, how corporations perceive themselves to be part
e.g., WBCSD, PWBLF; multilateral bodies, e.g., of the community. Such commitments are typi-
the OECD (principles of corporate governance), cally fleshed out both in terms of principles that
the UN (Global Compact) and; human rights define the basis of the relationship and guidelines
organizations and NGOs, e.g., Transparency that provide more practical instructions for
International. There has been a proliferation of managers on how to establish good relations with
such codes and statements over the past decade, “the community.”3
much of it embracing the language of “sustain- It is not only the corporations themselves that
able development.” A second related aspect of provide the community a place of prominence in
CSR involves TNCS establishing appropriate the CSR agenda. International financial organi-
standards to operationalise their values in their zations also highlight the importance of rela-
280 Paul Kapelus

tionships with local communities. The World has become even more prominent. From a prag-
Bank, for instances, hosted two conferences in matic perspective, the reason for this would seem
1998 entitled “Mining and the Community,” the to be quite obvious. The operations of mining
first in April in Quito, Ecuador and the second firms almost inevitably adversely affect (some
in July in Madang, Papua New Guinea. The members of ) the local communities (e.g., by
Bank is concerned that as a result of the rapid degrading the environment, diminishing liveli-
globalisation of the mining industry and increased hood prospects, displacing people form their
investment in developing countries conflicts homes, etc.) in ways that are likely to evoke
between indigenous communities and the mining opposition. While adverse effects and opposition
industry are likely to increase. In line with this are not necessarily limited to the local commu-
situation, the Bank joined with the mining nity, especially in our current global context (e.g.,
industry in expressing the belief that “proper regional, national and foreign politicians, NGOs,
management of relations with communities is social movements, shareholders etc., may all raise
going to be the biggest challenge in the next concerns about firms’ activities), it is the local
ten to twenty years” (McMahon, 1998, p. 10). community that is most directly affected and it
Discussions at the conference highlighted the fact is their claims that have the most credibility. If,
that the rights of indigenous people and local for their part, companies can convincingly make
communities are increasingly being recognised the claim that the local community is benefiting
around the globe. It was urged that consultation from their operations (e.g., though community
by communities be recognized as a right and that development programs), then it provides them
traditional values and customs of the community with a cloak of legitimacy that serves to protect
be taken seriously in the decision-making them from charges by other groups (e.g., envi-
processes. ronmentalists, labour organizations) and enables
That the “community” has emerged as the them to continue on with their activities (with
distinctive narrative in the strategy of the mining a minimum of disruption and cost).
sector for promoting CSR should not be sur-
prising. An emphasis on community in the devel-
opment literature extends back to the British Defining the community – a complex and
colonial office, whose approach reflects an controversial task
organic conception of the state – widely held in
the nineteenth century – as being composed of Increasingly firms want to be able to claim that
social parts (Strathern, 1992). As noted above, local communities are benefiting from their
communities have always been important to the presence (and that where there are negative
mining sector to some degree. In the mining impacts on communities these are under control).
industry, the narrative of community has The logical first step in making such a claim is
commonly been associated with the category of to “identify” the community in question. As
“culture.” Usually, this category had a negative noted above, the understanding of this need to
connotation for the industry as traditional identify a community is not new. One way or
cultures were seen as an impediment to devel- another mining firms have been identifying the
opment generally and a potential constraint on community ever since they first began to spread
mining activities, as it could lead to opposition through the “frontier” zones. Typically, the key
to mining by the community and raise concerns step in identifying the community involved
(by others) about the impact of mining on the requesting permission to mine from “the chief ”
local community.4 Typically, to get around the or other traditional authority, an act that implic-
situation, the industry would undertake “cultural itly set the boundaries of the community along
appraisals” to ensure that projects could proceed the lines of the (de facto) authority of the chief.
without adversely impacting the culture and the More recently, the process of identifying the
community. community has become much more explicit in
In recent times, the role of the “community” nature, being designated a key task of CSR. It
 Mining, Corporate Social Responsibility and the ‘Community’ 281

has also become much more sophisticated, may be viewed as a method for minimizing costs.
involving the entire machinery of CSR, With respect to motivation, TNCs can under-
composed of community affairs, public relations, take CSR programs either because they have a
social impact assessments, and public involvement strong moral commitment or because they have
programmes. pragmatic interests in doing so (as indicated
Identifying a community, however, is a above). These two forms of motivation are, of
complex and contested task, especially in con- course, logical extremes. In actual practice, due
temporary societies. There are several reasons to the wide variety of people and issues involved,
why this is so. For one, communities can be both forms of motivation are likely to come into
identified on the basis of any number of shared play.7 Generally, however, it is possible to talk
traits such as geographic territory, religion, about corporations as operating closer to one
culture, history, kinship, etc. For another, people pole than the other.
can have multiple, overlapping identities and The function of CSR and the motivation of
these identities can change overtime.5 This means firms would not be an issue (at one level)8 if it
that any definition of a community is always a were universally true that being socially respon-
construct, an imposing of order that does not sible is good for business. Under these circum-
necessarily fit the lived experience of the people stances, TNCs would always be socially
in question. For this reason, it is also the case that responsible (except when they make errors in
definitions of community are necessarily open strategy), as this would help them to maximize
to contestation, both in terms of the limits and profits (and shareholder value). It seems naïve,
the structure of the community.6 With respect however, to assume that this condition always
to the limits, different definitions based upon dif- holds.9 This is only likely to be the case to the
ferent criteria include and exclude different degree that stakeholders can effectively impose
people. As the choice of criteria is largely a costs on the firm.
subjective matter, any one choice is inevitably The function and motivation underlying CSR
going to be challenged, especially when excluded programs have practical implications with respect
individuals feel they should be included. With to communities. If firms tend to be more morally
respect to the structure, the key question is motivated, then they will employ CSR as a tool
who (if anyone) can represent the community. of moral discernment. Under these circum-
Historically, it was generally assumed that tradi- stances, firms will be willing to live up to their
tional leaders could represent the community, obligations to stakeholders, even when it involves
both de facto and in terms of having some degree costs in terms of shareholder value. If, on the
of (moral) legitimacy. It is much more problem- other hand, firms are primarily guided by
atic to make these assumptions today, as tradi- pragmatic interests (i.e., profits), then CSR can
tional authorities have frequently lost much of become exclusively a business tool rather than an
their decision-making power (to democratically approach to discerning moral responsibility.
elected representatives), while their moral legit- Under these circumstances firms will be inter-
imacy is also increasingly under attack. ested more in the appearance of social responsi-
bility than actually being socially responsible. In
this scenario CSR programs are ultimately con-
CSR, ethics and the community cerned with minimizing disruption to the firm’s
(processing, transportation, marketing, etc.) activ-
CSR programs can have either of two functions ities and, thereby, minimizing costs. This has two
and, correspondingly, may be undertaken for basic implications with respect to the definition
either of two forms of motivation. From the per- of communities.
spective of business ethics, CSR programs can The first implication of firms adopting a prag-
help corporations to discern and fulfil their oblig- matic approach to CSR relates to how they are
ations to stakeholder groups. From the perspec- likely to understand the structure of the com-
tive of business strategy, however, CSR programs munity. For purposes of maximizing profits, it is
282 Paul Kapelus

in the interest of firms to be able to present the The CSR agenda – global and local
community as having an uncontested, legitimate
authority. When such a legitimate authority In the contemporary economy, TNCs in the
exists, and is in agreement with the firm, then mining sector are inevitably both global and local
the firm’s plans can proceed in a smoother in their organization. As multinational, their
manner (and responses to any objections that may operations around the globe are becoming
arise by dissenters can be more effectively devel- increasingly integrated (e.g., in terms of strategy,
oped and implemented). The need for agreement marketing, etc.) and subjected to centralized
by authorities, in turn, can lead to a tendency control. As mining operations, however, their
to designate local (economic and traditional) operations are inevitably local. They must extract
elites as the legitimate authorities or the com- resources from specific sites with specific char-
munity. Typically, it would not be in the inter- acteristic in specific contexts that generate
ests of firms to raise the question of the criteria specific problems. This global-local dynamic is
by which such authorities could be considered also at play with respect to the CSR agendas of
legitimate. Nor is it generally in their interests to mining TNCs. At the level of the global head-
note any disagreements within the community quarters, CSR agendas get worked out in terms
(unless the dissenters can impose significant of abstract principles and general guidelines,
costs), as this may undermine the legitimacy of which are to apply to the firm’s operations
the leaders of the community and the firm’s claim worldwide. At the level of individual projects and
to be socially responsible. Similarly, firms might sites run by subsidiaries, however, the CSR
not want to investigate the distribution of agenda of mining TNCs becomes much more
benefits deriving from their activities among local concrete. Here, actual projects must be developed
communities. and implemented in accordance with the guide-
Second, to the extent that the firm is inter- lines. Similarly, the notion of community at the
ested in limiting costs, it will want to limit the level of the global agenda can remain rather
size of the community as this will limit the claims abstract, which at the local level actual commu-
that can be made upon it. What restricting the nities need to be defined in concrete ways.
size of the community means practically can be As was noted above, there may be a strong
understood with reference to the concept of an tension between firms maximising profit and
“ecological footprint” (Wackernagel and Rees, being socially responsible. This potential tension
1996). The ecological footprint, a device which can be reflected in different ways and to different
ecologists commonly employ to investigate the extents at the global and local levels. At the
range of effects of the firms’ operations, is impor- global level, it may be more possible to pave over
tant in pointing out that many of the (adverse) the tension. Here it is easy for firms to make the
effects of firms are diffuse, wide-ranging and fre- assumption of a harmony of interests between
quently not immediately evident. When firms the company and local communities.10 At this
use the community as their basic unit of analysis, level of the global CSR agenda, where firms
then the more they restrict the notion of com- embrace general principles (e.g., participation,
munity, the more they restrict their vision of human rights, etc.) and guidelines for CSR activ-
their “ecological footprint.” More specifically, ities (e.g., community economic development
they limit the number of people who they will programs) and do not identify specific commu-
see as affected by their operations and the fail to nities, they do not have to make concrete oblig-
acknowledge the different ways in which people ations or calculate the costs of being socially
might be (adversely) affected. Such a restriction responsible in individual locations. Moreover,
on their vision will function to limit their they can easily portray (past and current)
responsibilities and costs. problems primarily in terms of misunderstand-
ings and organizational problems at local levels.
From this perspective, the challenge of CSR is
primarily to translate global commitments into
 Mining, Corporate Social Responsibility and the ‘Community’ 283

the specific contexts of individual communities. Rio Tinto’s story

Nelson (1998, p. 11) refers to this as “the art of
being local world-wide,” a process whereby “the Rio Tinto was originally founded in 1873 to
community” becomes an all-important focus of mine copper in Spain. Over the years it has been
attention which verifies the global firm’s status as restructured several times through mergers and
a good local corporate citizen. acquisitions. In 1954, two thirds of the Spanish
At the local level, firms do have to make operations were sold, with the remaining one
specific obligations with specific communities third being divested later. In 1962, the Rio
and confront specific claims about their behav- Tinto-Zinc Corporation (RTZ) was formed
iour. It is here where CSR principles and guide- through the merger of two British firms, the Rio
lines are implemented that the potential costs of Tinto Company and the Consolidated Zinc
being socially responsible can be measured against Corporation. At the same time an Australian
the potential profits of operations. In situations firm, Conzinc Rio Tinto of Australia (CRA)
where the costs of being socially responsible was formed through the merger of Australian
do not help keep total costs down, then local interests of the Rio Tinto Company and the
managers will have to confront the tension Consolidated Zinc Corporation. In 1995 RTZ
between being socially responsible and increasing and CRA were unified through a dual listed
shareholder value. Here it is not as easy to facilely companies structure. In 1997, RTZ became Rio
state that, “good ethics is good business.” From Tinto plc and CRA became Rio Tinto Limited.
a pragmatic perspective, local managers will want The dual listed company is based in the UK and
to find some way to (at least appear to) ease this in Australia, with control being exercised by the
tension. Probably the most effective method they parent company in London.
have for doing this is to shape the definition of Over the course of its history, Rio Tinto has
the community in ways that restrict the number not only grown substantially, but has also diver-
of claims upon them. As noted above, this may sified. In the period immediately after the 1962
help firms to limit costs and proceed in a more merger, its diversification was limited to the
expeditious manner – if they are not effectively mining sector, as it opened up new operations
challenged.11 in uranium, tin and borax. Between 1968 and
Such assumptions about the community, 1985, however it moved beyond mining into
however, can be challenged (both by members of such areas as cement, oil and gas, chemicals and
the community and their allies). In what follows, even manufacturing parts for the automotive
we will examine how a company like Rio Tinto and construction industries. Following a review
develops its CSR agenda around the notion of of the companies operations in 1987–1988,
community – both at the global level and at the however, the decision was made to refocus the
local level through its subsidiary Richards Bay firm’s efforts on mining and related industries.
Minerals – and how its account of CSR and the This led not only to the divestment of its non-
community is contested. mining operation, but a whole new series of
acquisitions within the mining sector. As a result,
Rio Tinto is now one of the world’s largest
III. Rio Tinto’s global CSR agenda private mining company with assets of over £7
billion.
Throughout its history, but in particular in
We did not just give help as we thought
recent decades, Rio Tinto has been the subject
fit but consulted with the community who
decided what the priorities were. The of criticism with respect to a range of environ-
community also worked to achieve our mental, social and labour issues. In response to
joint objective. We are now members of the accusations and activities of its critics, Rio
the community – for mutual benefit. Tinto has undertaken steps to become (critics
– Leader of Ecuador exploration team would say “appear”) more socially responsible.
(Rio Tinto, 1999, p. 6). It has developed, in effect, a global corporate
284 Paul Kapelus

responsibility strategy. This strategy has two basic the implementation of its values. This task it
components: a declaration of its values and the primarily takes up in an internal corporate
elaboration of policy guidelines for the imple- document entitled “Community Policy Guide-
mentation of these values. These values and lines” (1997). The goals of these guidelines are
guidelines are set forth in policy documents that to help the firm to build long-term relationships
were produced by the company, and its anthro- of mutual benefit between the operations and
pology advisor, at the head office in London. their host communities, to enhance access to
They are intended to provide each of the existing and new opportunities and to avoid
parent firm’s operating companies, subsidiaries costly disputes, higher project financing and
and contractors with a programme for becoming insurance costs. The reason for having company
socially responsible enterprises. The company wide-guidelines is not only to ensure that stan-
emphasises that because it operates in diverse dards are maintained throughout the company,
cultural and social environments, each location is but also to facilitate that lessons learned can be
required to design a unique social responsibility shared and the company can build on the suc-
programme. cesses of its individual components.
Conceptually, the first part of Rio Tinto’s In line with the discussion in the previous
strategy is to clearly state the company’s values section, several points need to be highlighted.
and principles. The primary place where this First, Rio Tinto clearly defines its CSR com-
happens is in a document entitled “The Way We mitment in terms of its relationships to local
Work” (1998). Rio Tinto affirms a commitment communities. This emphasis not only runs
to widely accepted norms such as human rights. throughout its documents, but is the organizing
It looks to the United National Universal principle of many key documents such as the
Declaration of Human Rights as well as the “Community Policy Guidelines”.
human rights provisions of the countries in Second, Rio Tinto seems to allow for a broad
which they operate to guide them in their understanding of community and a diversity of
responsibilities. It also identifies other values to forms of community. The former characteristic
which it is committed. Most notable in this is indicated in its definition of “community” as
regard are three principles that it proclaims will “anyone who is impacted in any way, socially,
provide the basis for its relationships with local economically and environmentally by the oper-
communities, viz., mutual respect, active part- ations of the mine” (Pettifer, 1998, p. 3). The
nership, and long-term commitment. Mutual latter trait is reflected in its recognition of a wide
respect, it is argued, is essential if relationships variety of possible bases for communities,
are to be lasting, beneficial and interactive. including “the nature of attachment to a terri-
Mutual respect entails “continuing and effective tory; self identification by others as members of
two way communication and realistic expecta- a distinct group; the culture or common beliefs,
tions on both sides” (1998, p. 8). Active part- attitudes and work interests of the group; a
nership defines the way Rio Tinto hopes to work language or dialect, which may be different from
with local communities, regional and national the national language; the presence of unique
governments and other affected parties. The aim religious, political or cultural beliefs” (Rio Tinto,
of such partnership is to seek “mutual commit- 1997, p. 8). In principle this broad, flexible
ment and reciprocity based on trust and openness approach to defining community would seem to
so as to reach agreed objectives and shared allow for wide ranging responsibilities on the
involvement” (1999, p. 8). Finally, long-term part of the corporation and might be taken to
commitment is “sought so that social and imply that the firm views CSR more in terms
economic well being is safeguarded and, where of moral commitment than as a pragmatic
possible, enhanced throughout the mine’s life and business strategy.
beyond” (1999, p. 8). In other places, however, the documents
The second aspect of Rio Tinto’s strategy is suggest a narrower understanding of community
to develop practical guidelines that can facilitate and more limited responsibilities. Thus, for
 Mining, Corporate Social Responsibility and the ‘Community’ 285

example, when the company proclaims its com- local communities, etc.) from a range of
mitment to protecting the dignity, well-being and groups including environmentalists (e.g., The
rights of people with whom they are “directly” Earth Times), corporate watchdogs (e.g.,
involved, it identifies these people as employees Corporate Watch), mining activists (e.g., Project
and their families and people in “neighbouring” Underground), human rights groups (e.g., Asia-
communities. Such passages reflect a more prag- Pacific Human Rights Network) and labour
matic approach to CSR, as do passages empha- organizations.12 Here I focus on the criticisms
sizing the firm’s aims of enhancing access to about Rio Tinto’s CSR agenda. I will limit my
existing and new opportunities and avoiding investigations to criticisms made by labour orga-
costly disputes, higher project financing and nizations, in particular the Belgium based
insurance costs. Such pragmatism is also International Federation of Chemical, Energy,
expressed by the non-business experts Rio Mine and General Workers’ Unions (ICEM) and
Tinto hires. Professor Glynn Cochrane, the com- the International Confederation of Free Trade
munities and anthropology advisor to Rio Unions (ICFTU), as these are representative of
Tinto, for example, states that the relationship the nature of the claims brought against Rio
between the company and the community has to Tinto.
be business-like (rather than philanthropic). The As labour organizations, ICEM and ICFTU
situation is one in which, “Rio Tinto is under are obviously concerned about Rio Tinto’s
a microscope and if we screw up we cannot approach to industrial relations. The ICEM has
access goods. The time taken to license, insure, targeted Rio Tinto as a special object of concern
secure and finally start production has increased due to “the extreme actions of the company in
by 300 per cent. Good relations can cut down seeking to de-unionise its operations and to
on lead time, disputes and delays” (Cochrane, restrict the bargaining rights of its workers”
1999). (ICEM, 1998a, p. i). In response to this situation,
The ambiguity over community in the docu- ICEM affiliates met in South Africa in February
ments makes it unclear whether the firm views 1998 to form the Rio Tinto network of trade
CSR primarily in terms of moral responsibility unions with the aim of pressuring Rio Tinto to
or business strategy. The fact that there might improve its standards with respect to human
be a tension between these two approaches is rights, workers’ rights and environmental pro-
never addressed. Rather the firm seems to assume tection. Part of the ICEM’s concerns, however,
a harmony between its moral responsibilities and relate directly to the CSR agenda of Rio Tinto,
its business interests. This assumption is stated which it tends to see as a somewhat cynical
quite clearly in passages where the firm asserts its attempt by the firm to gain legitimacy by
conviction that its “competitiveness and future claiming to represent the interests of local com-
success depend not only on our employees and munities. This skepticism about Rio Tinto’s
the quality and diversity of our assets but also intentions and concern about their practices is
on our record as good neighbours and partners clearly expressed in the titles of two documents
around the world” (Rio Tinto, 1998, p. 1). This that the ICEM has released on the firm, viz.,
assumption of harmony also gets expressed “Rio Tinto – Tainted Titan” (1998a) and “Rio
less directly, such as in the strong emphasis that Tinto – Behind the Façade” (1998b).13
Rio Tinto places on the “value” of mutual The unions have two basic criticisms of Rio
benefit. Tinto’s global CSR Agenda. First, with respect
to its principles and guidelines, the ICEM
believes that Rio Tinto does not go far enough.
The counter-narrative: international trade unions More specifically, “The Way We Work” is
criticised as being too weak to be able to effec-
Rio Tinto has come under criticism over a tively bind the company to responsible behav-
wide variety of issues (e.g., human rights, the iour. Apart from making reference to the
environment, labour relations, treatment of UN Declaration on Human Rights, the ICFTU
286 Paul Kapelus

(1998) argues, “The Way We Work” does Context – CSR and the political
not refer to the two most authoritative interna- economy of South Africa
tionally agreed definitions of responsible behav-
iour. These are the International Labour CSR in South Africa has in the past been
Organisations’ (ILO) Tripartite Declaration of restricted to the domain of paternalistic gift
Principles Concerning Multinational Enterprise giving, making charitable donations to various
and Social Policy, and the OECD Guidelines for organisations, and securing patronage from
multinational enterprises. ICEM suggests that the traditional chiefs (with the metaphorical bottle
omission of the international treaties and guide- of whisky). This situation began to change with
lines from “The Way We Work” discredits Rio the crumbling of “apartheid” in the late 1980s
Tinto’s claim that “their processes aim to provide and early 1990s. Many analysts consider the
the required level of control, transparency and speech made by former President De Klerk on
accountability in line with worldwide best February 2 1990 to be the watershed for
practice” (1998b, p. 9). more responsible business in South Africa.14 The
The second basic criticism that the labour country was pushed into a new environment in
organizations put forth is that Rio Tinto is not which the old rules and norms no longer applied.
adequately accountable for the implementation Initially, without any set of rules or norm to
of its principles and guidelines. The ICEM conform to, business was a bit lost. It had to
argues, for example, that there are no clear lines design a new strategy for engaging with the new
of responsibility between London and the local social order and shift from a “racial capitalism”
operating companies with respect to the over- (policies based on racial ideology) to a “social
sight of the guidelines, a situation that leads to capitalism” (policies based on development
inconsistencies in the implementation of Rio ideology). Business had to rethink how it was to
Tinto’s global CSR agenda. The ICEM (1998b, behave responsibly.
p. 8) states that “Rio Tinto itself knows that A shift from corporate giving to a total
implementation may most certainly not be uni- social and political strategy was engaged, with
versal,” the implication being that Rio Tinto business starting social upliftment programmes
either does not care about or actually prefers this and poverty alleviation and supporting the polit-
state of affairs. ICEM’s position is that, while ical negotiation process. Since the 1994 elections,
some of its subsidiaries may live up to the legislation has forced business to start working
global CSR agenda, this is not sufficient. Until differently on many fronts. New labour relations,
all of its operations (including both wholly environmental management, affirmative action,
and partially owned subsidiaries) are managed black empowerment and corporate governance
in a socially and environmentally responsible have become the accepted standards rather
way, Rio Tinto is a valid target of criticism than exceptional practices that go beyond “the
and can rightfully be judged to be socially call of duty.” International standards and decla-
irresponsible. rations have also become integrated, especially by
leading business sectors, a process that has served
to help integrate South African business into the
IV. Richard Bay Mine’s local CSR agenda global economy (Innes, 1992; Botha, 1994).
Within the mining sector, the CSR initiatives
Just as the end products which come from have been impressive in some quarters (although
the minerals extracted from the sand it could still be argued that they are insufficient
enhance the lives of millions of people compared to the profits generated, especially in
throughout the world, so the fruits of the most profitable sectors such as platinum and
mining are enhancing the lives of the titanium). One of the more impressive examples
people who walk that ground. – Managing
is the Anglo American and De Beers Chairman’s
Director, RBM 1999.
Fund, which has an annual budget of R50
million (£5 million). The Fund has adopted an
 Mining, Corporate Social Responsibility and the ‘Community’ 287

“interactive partnership approach,” where “own- 1994, Godsell wrote in an article in the South
ership” and “choice” are the two fundamental African Labour Bulletin “[b]usiness is ready to
principles driving all initiatives (Keaton, 1997b, participate in the reconstruction and develop-
p. 17). The Fund operates across the spectrum ment of South Africa,” suggesting that social
of CSR – from being a charity and donor investment could contribute to the growth of
through to acting as an implementing agency. South Africa which “ultimately is the engine of
The Billiton Development Trust, established poverty relief ” (1994, p. 7). But working with
by the Billiton company (now BHP Billiton), the new government required shifts in attitude
provides another example of a substantial devel- with respect to managing development programs
opment programme. The Trust understands itself – a shift from a heavy-handed, controlling
as a development catalyst or facilitator rather than approach to engaging with multiple stakeholders
an implementing agent of development. The with different interests. In 1997 the mining
Trust provides funds to NGOs so that they may, industry presented their official commitment to
for example, “go and promote women’s issues community development to the South African
under the Billiton banner” (Sepeei, 1999). Parliament in Cape Town. In an effort to high-
While social intervention has always been light the shifts that mining companies have gone
a practice of mining companies in South through with regard to environmental and devel-
Africa and elsewhere, such assistance largely opment challenges Margie Keeton of Anglo
remained within the confines of the immediate American stated:
“mining community,” namely employees and
their families. In South Africa, such a practice Mines and their communities are confronting
has been fraught with racist policies underlined together, in a spirit of common purpose and
resolve, many of the country’s critical development
by the laws of the apartheid government, which
challenges. Their efforts are making a real contri-
regulated among other things social infrastruc- bution to the search for effective interventions
ture, housing, transport, separate amenities and bringing new hope and opportunity to those mar-
education. For a number of years before the new ginalised from the mainstream of growth and
democratic government came to power in 1994, advancement (1997, p. 6).
various mining companies began to acknowledge
their role in the socio-economic hardships expe- Mining companies recognize that there is some
rienced by both urban and rural communities. legitimacy to be gained in South Africa today
Recognising that the labour sending areas in the from being involved in social and economic
homelands suffered through migrant labour reconstruction. This is due in large part to the
policies, companies such as Anglo American, government’s plea for assistance from the private
Johannesburg Consolidated Investments (JCI) and sector,15 including a greater emphasis on public-
Gencor (now known as BHP Billiton) instigated private partnerships. Yet, understanding how
social investment programmes. Subsequently, to engage in such co-operation is not always
the events leading up to the first democratic easy for an industry that historically has not set
elections, the election victory of the African participation with diverse actors with different
National Congress (ANC) and the instatement ideologies as a top priority. Mining companies
of Nelson Mandela as President of South Africa have generally wielded the power to implement
would lay the foundation for a more concerted community development policies (within limits
CSR drive on the part of mining companies. set by government) that allowed them to get on
After the elections, the new Reconstruction with their core business, namely the extraction
and Development Programme (RDP), the of minerals. Now, having to undertake more
platform from which the government launched participatory, democratic approaches to develop-
their poverty alleviation drive, quickly became ment, which demand a more professional and
seen as important programme for business to consultative approach, companies are adopting
support, in part due to the government’s active different models. Some mining companies have
encouragement of private sector participation. In handed over their CSR to non-profit organisa-
288 Paul Kapelus

tions to manage, others have established an inde- RBM first became involved with community
pendent trust, while others retain the initiative issues shortly after the mine was established in
within the company structures. The basis for 1976. This initial engagement came about as a
these individual decisions in not entirely clear. result of the introduction of the Sullivan
Nor, given the complexity of factors involved in Principles (the forerunner of the Sullivan Code).
determining CSR performance, is it yet certain Developed by the Rev. Leon Sullivan – an
that any one model is to be preferred over the African-American Baptist minister, a civil rights
other. leader and a member of the Board of Directors
of General Motors – these principles were
designed to ensure that American companies
RBM’s story improved the conditions of their black workers
(and their families) both at work and in the home
Richards Bay Minerals (RBM) is a leading environment (O’Brien, 1998, p. 110). RBM’s
producer of titania slag, high purity pig iron, involvement with community affairs at this time,
rutile and zircon. Jointly owned by Rio Tinto however, can be best described as limited and ad
plc. and BHP Billiton plc., RBM is situated on hoc in nature.
the coast of the Indian Ocean in northern It was only during events around the St. Lucia
KwaZulu Natal province, approximately 20 kilo- proposal that RBM came to pay more system-
meters from the town of Richards Bay. The town atic attention to CSR. The reaction surrounding
is host to at least five major industries, including the St. Lucia proposal demonstrated to the
fertilizer manufacturing, aluminum smelting and company that undertaking community social
paper and pulp manufacturing. The immediate investment was good for business and reputation
area in which RBM is situated, the Mbonambi management. The St. Lucia episode highlighted
Tribal Authority (MTA), is considered a rural the need for RBM to professionalise and market
area. Mining, commercial forestry, subsistence its CSR initiatives. O’Brien states:
farming and basic retail activities dominate the
economic landscape (URC, 1999). The larger [T]he company tried to convince its detractors of
region surrounding Richards Bay, including the fact that RBM would invest in the underpriv-
ileged St Lucia communities . . . as it had done in
the dunes in Mozambique to the north and
the Richards Bay area . . . [an] advertising and pub-
Madagascar to the east, is rich in mineral licity campaign launched [but] it was too late. The
resources and host to a number of exploration tide of public opinion had swung firmly against
companies assessing the feasibility of opening RBM and ultimately the battle for St Lucia was
new mines.16 lost by RBM (1998, p. 190).
For its part, RBM has also been seeking to
expand its operations. In particular, RBM hoped It is hoped that successful marketing of the CSR
to establish a new mine at St. Lucia, just north projects will help to encourage the government
of Mbonambi. This plan was halted however, as to revisit the issue of allowing mining operation
the South African government – after months of in St. Lucia and to ensure RBM is well placed
negotiations, studies and consultations – decided to take advantage. Investing in “the community”
to exploit the eco-tourism potential rather than through CSR programs is viewed as investing in
the heavy mineral sands. This decision by the the financial future of the company.
South African government may have been related A key step that RBM took in the wake of the
to the tremendous amount of attention that the unsuccessful St. Lucia proposal was to work more
proposal for mining drew from environmental closely with the local community through the
lobby groups, NGOs and activists (Solomon, Community Development Council (CDC). The
1997). This attention placed not only the stated goals here were to help ensure not only
South African government under the spotlight, an effective co-ordination of development ini-
however, but also RBM and forced RBM to tiatives in the MTA but more local participation.
realign its CSR strategy. RBM now organizes their efforts around a five-
 Mining, Corporate Social Responsibility and the ‘Community’ 289

year plan, which claims to embed the notion of The counter-narrative – dissenters and the larger
“partnership” in its approach to consultation and community
to stress a “bottom-up” approach to develop-
ment. These principles are supposed to enable While RBM undoubtedly contributes to local
the community to dictate the pace of efforts and community development through its CSR
promote community ownership and long-term projects, it is not without its detractors, both
self-sufficiency of projects. For its part, the within and beyond the Mbonambi “community.”
eleven-member RBM community development While within the Mbonambi community oppo-
team engages with the surrounding community sition is probably muted to a significant extent
on a constant basis about development projects by the relatively generous levels of spending that
and negotiations over resettlement of homesteads the company provides, there are still concerns.
and graves and expropriation of grazing and The major concerns can perhaps be best under-
farming land. RBM now prides itself on the stood in terms of how the company operates its
partnerships that it has established with the local CSR programs. While institutions like the World
community through its community affairs oper- Bank, picking up on the vocabulary or recent
ation and sees itself as exemplifying the global development thinking, advocate a “partnership”
policies of Rio Tinto on CSR. model for CSR (e.g., the “Business Partners for
RBM’s pride is not without foundation. RBM Development” programme), developing partner-
supports a variety of CSR projects in such areas ships requires trust, learning and an ability to
as education (e.g., assisting local schools, pro- hand over control in a flexible manner. This
moting, technical education, teacher training, approach typically goes against the normal
promoting life skills), health care (e.g., rural problem solving approach employed in mining
clinics, a 24 hour clinic for employees, an firms like RBM, e.g., establishing what the
HIV/AIDS program) and community develop- problem is and solving it in a technocratic, linear
ment (e.g., gardening and cooking clubs, support manner. As a result, local communities like the
for small businesses, support for a Rural Mbonambi can feel alienated, even when they
Development Centre). In 1999 it funded its com- are enjoying relatively generous benefits.
munity projects to the tune of R10 million (£1 Outside of the Mbonambi community, RBM
million), a sum that dwarfs the funding that the also has its detractors. As noted above, RBM is
government has been able to provide. As a result, located in the Mbonambi Tribal Authority. The
RBM is the primary agent of development in the MTA, however, is but a small part of the Imfolozi
MTA. sub-district, which comprises sixteen tribal
RBM has not been shy about publicizing authorities (see Figure 1). The Imfolozi sub-
its efforts locally. The Mbonambi community district, in turn, is but a fraction of the larger
projects are easily recognisable by large signs indi- Uthungulu district, which comprises a total of
cating that RBM either sponsors or assists the sixty-nine tribal authorities (Uthungulu Regional
project, whether it be a school, crèche or clinic. Development Plan, 1998). While each tribal
RBM also has a share of local supporters who authority is the legal authority in its own local
praise its efforts. Prominent among these is Inkosi area, it is the Uthungulu Regional Council
(Chief ) Mthiyane of Mbonambi, who has fre- (URC) that is responsible for development
quently expressed his strong appreciation of the planning in the Uthungulu district.
efforts of RBM, whom he sees not only “as a With regards to regional development
neighbour, but also as a friend” (Titania, 7 May planning and activities, its relationship with
1999).17 RBM has placed the MTA in a unique, and
somewhat tense, position vis-à-vis its neighbours.
In effect, its relationship to RBM, which serves
as the de facto development agency for the MTA,
has made the Mbonambi community an “island
of development” in a URC sea of underdevel-
290 Paul Kapelus

opment. It is an island in two senses. On the one development practices and the approach to public
hand, it is much better funded, as is evident policy and development strategy. Their differ-
when one compares the RBM budget of R10 ences around these various points, discussed
million (£1 million) for community projects in below, constitute two different tales of CSR.
the MTA with the budget of the URC (approx-
imately £4.6 million), which has to be spread Basic assumptions. It is commonly held that
out over 69 tribal districts. On the other hand, business has an obligation to maximize share-
the MTA has few external linkages and networks. holder value. To the extent that business
Most significantly, perhaps, is the fact that has obligations to stakeholder groups (e.g.,
RBM does not share its community development local communities) as well, a tension may arise
plan with the URC. As RBM states, they between it meeting these two forms of obliga-
“have nothing to do with the URC unless it is tion. There are two basic dimensions to this
requested” (O’Brien, 1999). tension. At a moral theoretical level, the basic
For its part, the URC feels somewhat frus- tension is one of competing moral claims (e.g.,
trated with (and a bit resentful of ) the MTA and between shareholders and stakeholders), which
RBM. As they do not have the community must be resolved on the basis of moral arguments
development plan from RBM, they cannot inte- and analysis. At a practical level (when stake-
grate the MTA into its regional development holder claims are deemed to take precedence),
plan (For its part, RBM has not seen the URC the tension involves the ability of the firm’s board
regional development plan.) The council officials and management to exercise their moral will to
interviewed suggest that the council “takes a take decisions that go against their own interests
hands off approach to Mbonambi” (Marais, (and those of shareholders).
1999). Accordingly, the URC, which commonly For their part, Rio Tinto and RBM seem to
refers to the Mbonambi as the “RBM commu- make assumptions that deny the existence of any
nity,” does not take the MTA into account when tension. At the moral theoretical level, as we have
it comes to the allocation of funds. There is a seen, they tend to assume a harmony between
strong feeling that greater integration of RBM good ethics and good business. At the practical
and the MTA into the URC would make for level, they also seem to assume that the company
more effective regional development policy. The is committed to the values that it expresses and
URC, however, has no way to force such par- that their managers can act upon them.
ticipation, nor does such participation seem to These assumptions contrast with those of
be of interest to the RBM or the leadership of their detractors. Such opponents argue that Rio
the MBA (which is provided with a great deal Tinto’s efforts to maximize shareholder value do
of local autonomy and political influence by its impinge on its obligations to stakeholders. They
relationship with RBM). also raise the question of whether Rio Tinto has
the moral will to implement decisions that are
not in the interests of its shareholders. Rio
V. Conclusion – two tales of CSR Tinto’s failure to effectively implement its global
CSR agenda across its subsidiaries, for example,
Rio Tinto and its subsidiaries such as RBM could be interpreted as such a failure of will.
have committed themselves in recent years
through their CSR agendas to being more The understanding of community. As was noted
socially responsible. They have expressed this above, defining the notion of community is a
commitment primarily in the language of rela- complex and controversial task. It is also the case
tionships with and responsibilities to local com- that different definitions of community can serve
munities. Rio Tinto, however, is not without its different interests. We have seen that at the level
detractors. Such critics differ with the firm at a of its global corporate agenda, Rio Tinto does
number of different levels, viz., basic assump- allow for some flexibility in defining communi-
tions, the understanding of community, local ties which could, in principle, allow for a wide
 Mining, Corporate Social Responsibility and the ‘Community’ 291

range of stakeholder obligations. In the case of social movements. In order to promote their
RBM, however, we have seen how a Rio Tinto ultimate goal of profit maximization, firms will
subsidiary adopts a notion of community that have to take into account the costs and benefits
tends to restrict the firm’s obligations. In terms of addressing the concerns of each of these
of boundaries, as we have noted, RBM defines groups, in the process ignoring the interests and
the community as the MTA rather that the larger claims of some (e.g., small NGOs) and paying
sub-district or district in which it operates. In close attention to those of others (e.g., multilat-
terms of structure, RBM tends to make simpli- eral financial institutions).
fying assumptions about the community (e.g., As we noted above, Rio Tinto and RBM tend
that the local authority is legitimate, that there to make the simplifying assumption that being a
are no significant conflicts of interests, etc.). “good neighbour” is good for business. In doing
These assumptions about the nature of the com- so, they do not have to address the issue of whose
munity serve to reduce RBM’s costs (by allowing interests they need to address and what the costs
them to streamline decision-making, not take of doing so are. Similarly, by supposing a limited
into account certain issues and claims, etc.). and undifferentiated concept of community and
In contrast to Rio Tinto’s definition, it is the legitimacy of local elites, they can claim that
possible to understand community more broadly their projects are promoting the form of devel-
(e.g., as the Uthungulu community). It is also opment that the local community wants and
possible to acknowledge that the community is that they are fulfilling their responsibilities. If
at times divided by different interests, values and NGOs or other groups disagree with them, then
strategies. This is the approach that is taken by Rio Tinto can always point to its support from
the various opponents of Rio Tinto. Doing so, the local community (as Rio Tinto/RBM has
however, is likely to increase the demands on defined it).
RBM and Rio Tinto and, thereby, increase their Rio Tinto’s detractors, on the other hand,
costs (and decrease profits). have a different story to tell. They argue that to
the degree that companies like Rio Tinto are
Local community development. As noted above, cor- operating on the basis of pragmatic motivation
porations can engage in CSR programs (and local (i.e., profits), they are basically engaging in a
community development projects) either out of public relations program. As such, they will
moral or pragmatic motivation. These two moti- generally want to finance high profile projects
vations, however, are not necessarily compatible (which will put them in good stead with poten-
and do not necessarily lead to the same results. tial financiers and local elites) and to maintain
To the extent that corporation are primarily significant control over the nature of the projects
motivated by pragmatic considerations, they are (so as to be able to choose and promote them
seeking to reduce costs (related to disruptions, effectively). However, firms like Rio Tinto are
protests, shareholder action, etc.). To reduce costs constrained (for PR reasons) by their “commit-
they need to target different audiences. One is ment” to good development practices (including
the local community, which may be both a direct such values as participation) and their need to
source of costs (by initiating lawsuits, demon- get cooperation from local elites and passive
strating, etc.) and an indirect source of costs acceptance by the local population. Under these
(when portrayed by others as being adversely circumstances, the most logical options for a firm
affected by the firm’s operations). Another are to: 1) try and restrict the number of its
audience is comprised of potential financiers projects and the area over which it operates, so
(e.g., shareholders, banks, multilateral lending as to make its impact appear more impressive (on
agencies, etc.), which may be reluctant to invest a per capita basis); 2) to try and retain control
for either moral or pragmatic reasons (which over the projects selected (to make certain that
might involve issues of costs, fiduciary responsi- they are high profile and provide good PR value
bilities, etc.). Another possible audience that may for the money spent); 3) to limit participation
need to be placated is made up of NGOs and to symbolic participation (so as not to impose
292 Paul Kapelus

excessive costs) and; 4) to ensure that the inter- not address this claim directly, others have devel-
ests of the local elites (in terms of selection of oped conceptualisations and languages that allow
projects, public acknowledgment, etc.) are met. for alternative explanations of the role of TNCs
This, critics will argue, is what Rio Tinto has in providing services vis-à-vis the state. Ferguson
done. This is not to claim that Rio Tinto’s – (1998), for example, believes that the position
and in particular RBM’s – efforts have not had stated above involves a conceptualisation of
any positive development impact, as they clearly TNCs as typically operating “below” the state,
have. Rather, it is to claim that Rio Tinto has but at times (and more and more) entering the
not fully lived up to its responsibilities (i.e., it state’s domain. He suggests that an alternative
should be providing more resources to more would be to view TNCs as an “integral part of
people, it should be respecting labour standards) a new transnational apparatus of governmen-
and that it has not effectively promoted devel- tality” (1998, p. 21). In this new apparatus, the
opment (i.e., the resources that it has used could lines between business and government may
have been allocated more efficiently, albeit in become more blurred, but it does not necessarily
ways that probably would have had less PR value mean a withdrawal by the state. Rather, if
for the firm). business takes on a larger responsibility than
it previously had, this would allow the govern-
Public policy and development strategy. Rio Tinto’s ment to target it’s development programs more
and RBM’s CSR agendas operate in a larger effectively.
political economy context. This is constituted by These two stories of CSR (and the concep-
different programs of economic liberalization tions of community that underlie them) are
(e.g., trade, financial markets, etc.) as well as a clearly contradictory. The story that Rio Tinto
reduction in the various roles of the state (e.g., tells, is obviously the one that works to its advan-
as economic agents, as providers of health, social tage. This is not to say, however, that it could not
and educational programs, etc.) in countries also be the one that works to the best advantage
around the globe. In addition to being sceptical of local communities. Rio Tinto’s case remains
about the wisdom of this liberalisation for the shaky, however, weakened by its own failure to
promotion of economic development generally, effectively and consistently implement its own
many critics of economic liberalization have a global CSR agenda. While some of its operations
more specific concern that relates directly to like RBM have served as “showpieces,” others
CSR. The concern is that the CSR agendas of continue to lag much further behind (not only
TNCs do not only serve to help local commu- with respect to local development projects, but
nities (and reduce TNC costs), but also function also in terms of human rights, environmental
to justify liberalization policies. By taking over issues and labour relations). More consistent (and
functions that have traditionally been seen as the timely) implementation would go a long way in
role of the state, CSR programs may operate to making Rio Tinto’s story more convincing.
legitimate government cutbacks and the privati- Whether this would result in a practical refuta-
sation of social programs. This in turn, it is tion of the alternative story is unclear, however.
feared, is resulting in decreased social spending, These narratives collide in the context of the
inappropriate priorities and the creation of larger disputation about processes of economic
“islands of development” (centered around cor- globalization. Yet, while it may not be possible
porate sites) in a larger sea of underdevelopment to envisage any resolution between the com-
(as it could be argued is the case of the MTA and peting sides in this debate, companies like Rio
the Uthungulu district). Tinto can (and should) continue to take steps that
While there is little reason to doubt that CSR at least make their stories more consistent inter-
can function to legitimate liberalization and the nally.
privatisation of government functions (Crooke
and Manor, 1998), it could be argued that this
is not necessarily the case. While Rio Tinto does
 Mining, Corporate Social Responsibility and the ‘Community’ 293

VI. Epilogue of the United Nations’ International Labour

Organisation” (Asia-Pacific Human Rights
Since the research for this paper was done (in Network, 2001). Both resolutions were easily
1999), there have been some developments. Most defeated. Thus, while Rio Tinto’s story may be
significantly, perhaps, RBM has taken some steps becoming internally more consistent, it would
to try and work more closely with regional seem that it is still far from convincing its critics
planning authorities. I have not yet been able to that this is the proper story to be told.
try and evaluate the reaction by local communi-
ties to these recent efforts, nor do I know of
other attempts to do so. For its part, Rio Tinto Acknowledgements
continues to refine its global CSR Agenda. This
has included the publication of “Human Rights The author would like to acknowledge the
Guidance: Guidance for managers on imple- support and assistance offered by Richards Bay
menting the human rights policy in ‘The Way Minerals, Uthungulu Regional Council and res-
We Work’ ” (2001), efforts to ensure that its non- idents of Mbonambi, which made the research
managed companies also comply with appro- for this paper possible. He would also like to
priate CSR principle and practices, expanding express his appreciation for the support provided
partnerships (e.g., with Earthwatch), as well as by the Mining and Energy Research Network
signing on to the United Nations’ “Global (MERN), University of Warwick and Dr. Ralph
Compact.” To this extent, it is attempting to Brillo at Sussex University.
make its own story more consistent.
Despite its on-going efforts, Rio Tinto con-
tinues to come under criticism. In 2000, for Notes
example it was sued in a US court by residents
1
of Bougainville, Papua New Guinea (who allege These interviews and this paper are based on
that the firm is responsible for environmental dis- an MA Dissertation at the University of Sussex
asters, toxin exposure, and the murder or resi- (Kapelus, P., 1999. Mining and the Community: An
dents committed in complicity with the local Ethnography of Transnational Corporations and
defence force). Rio Tinto’s operations in Brazil “Corporate Social Responsibility”), written with
have also come under attack for human rights, support from MERN.
2
Among these are the Universal Declaration of
environmental and health and safety violations.
Human Rights, International Labour Organisation
Similar complaints continued to be launched (ILO) conventions and Tripartite Declarations of
regarding Rio Tinto’s PT Kelian Mine in Principles concerning Multinational Enterprise and
Indonesia (Drillbits and Tailings, 2000). Such Social Policy, the International Covenant on Civil and
practices, critics claim, are not only unacceptable, Political rights, and the Organisation for Economic
but constitute violations of the commitments Co-operation and Development (OECD) Guidelines
that Rio Tinto made when signing on to the for Multinational Enterprise. Various environmental
UN’s Global Compact (Kennedy, 2001). Nor is guidelines such as Agenda 21, International Standards
it only stakeholders who are concerned. Senior Organisation, certification standards and environ-
management has also come under criticism mental and social impact assessments have emerged
by (some) shareholders, who are upset, among out of international conferences and environmental
other things that management did not support agreements.
3
Despite all the time and resources put into building
shareholder resolutions at the March 2000
community relations, it would appear that the mining
Annual General Meeting, which called for Rio industry is still struggling in its efforts. A vice presi-
Tinto: 1) to become more accountable to share- dent of Orvana Minerals put the situation this way,
holders through the appointment of an inde- “The point of contact and potential conflict between
pendent Deputy Chairman, and; 2) to implement communities and mining interests over social, socio-
a code of labour standards “based on the inter- economic and environmental issues has been drawn
nationally agreed core human rights conventions forward from the mining phase into the exploration
294 Paul Kapelus

phase . . . the industry collectively is ill equipped to long term liabilities and undermine shareholder
handle this reality” (Thomson, 1997, p. 1). value.
4 12
For a discussion on culture as a constraint to devel- Among the areas in the developing world where
opment, see Grillo (1997) and Crewe and Harrison Rio Tinto has come under harsh criticism are Papua
(1998). New Guinea, Indonesia and Namibia. In Papua New
5
Societies charcacterised by refugee movements may Guinea, Rio Tinto’s Bougainville mine has become
be particularly susceptible to having their traditional synonymous with environmental damage and associate
identities questioned and having to take on multiple problems. In Indonesia, the company’s operations
identities. (e.g., the Kelian mine) during the time of the Suharto
6
For their part, corporate leaders are certainly not dictatorship were not only charged with extensive
unaware of the contested nature of “the community. environmental and labour abuses, but also with major
Marc Gonsalves (1999) of Billiton plc (one of the co- human rights abuses, including numerous murders
owners of Richards Bay Minerals) states the situation involving paramilitary organizations. During the
this way, “the community is like a wheelbarrow apartheid era in South Africa, Rio Tinto was violating
pushed around by different political forces.” basic international standards by illegally mining
7
This is a complex question as firms are themselves uranium in Namibia. In direct violation of UN
complex organizations and operate within a larger resolutions, the company extracted uranium,
business system. In such a system, business firms have according to the United Nations Council for
to operate within the constraints of profitability. As a Namibia, “by virtual slave labour under brutal con-
result, CSR projects and budgets also have to operate ditions” (Asia-Pacific Human Rights Network, 2001).
13
under constraints. Insofar as firms have obligations to It is interesting to note that the layout, type face,
shareholders and other stakeholders (e.g., consumers, pictures, paper quality and cover images of these
employees) as well as stakeholders commonly associ- documents reveal the same attention to aesthetic
ated with CSR programs (e.g., local communities), considerations as the Rio Tinto corporate documents,
then discussion about the constraints that have to be brochures and magazines.
14
placed upon CSR programs do not necessarily This speech indicated that there would be a
indicate only a pragmatic motivation (although they handover of power through democratic elections and
may), but may also have a strong moral component. that Nelson Mandela would be released from prison
8
It would, of course, be an important issues for after 27 years of incarceration.
15
deontologists, virtue theorists and others who place Such appeals have been made by various members
a strong emphasis on motivation in moral analysis. of government as well as during the Truth and
9
Cragg et al. (1995) have argued that if firms only Reconciliation Commission (TRC), where Bishop
operate out of pragmatic motivation, they are not Tutu called upon business to recognise it’s role in
likely to act in a responsible fashion. apartheid and participate in the development of South
10
Not only firms, but pro-business groups like the Africa.
16
PWBLF also readily make this assumption. The These include Kenmare (Irish), Billiton (South
PWBLF, for example, declares that being responsible African), Southern Mining (South African) and QIT
to communities and cultures will “add value” to both (Canadian), among others.
17
shareholders and society (Nelson, 1998). It is interesting to note that some RBM officials
11
Another argument that may help to ease this clearly express their commitment in moral terms.
tension, relates to the notion of “dependency.” Mr. Jabu Khubeka (General Manager, Public &
Companies and their CSR experts may express moral Community Affairs), for example, states that the
concerns that in undertaking CSR there is some risk various CSR projects are being undertaken because
of creating dependency on the company and local “what we believe in is human rights” and “we cannot
authorities. This could relate to situations in which sleep if our neighbour is dying of hunger, we have
firms are fulfilling legally required or voluntary oblig- got to look in our cupboard” (interview, Mr. J.
ations (e.g., ensuring workers have adequate access Khubeka, 23/06/99).
to health and education services, community devel-
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