A General Overview and Analysis of Mining
Companies' Behavior in Developing Nations
Kristin G. Beyard, Drew University (USA), intern analyst, Covalence SA, Geneva, 1 August 2005
Mining of minerals and jewels has always been a business notorious for
detrimental environmental damage as well as poor human rights and labor
standards. However, with the bad comes the good. And that good is
economic prosperity for the thousands of miners who would not be
employed otherwise. For example, in Madagascar, Rio Tinto, who is the
world's second largest diversified miner, has a concession in the region
to develop a 350 million dollar mine. Despite the company's poor
environmental and social history, the people and government of
Madagascar are extremely excited for the chance to improve the nations
struggling economy. Three quarters of its citizens live on less than a
dollar a day and a large mining operation would bring many jobs and
social sponsorship to the struggling nation (Planet Ark, March 30,
2005). Often a mine will turn a whole village or country around so that
they are able to heighten their standard of living and become
competitive players in the world market.
That's why in many third world countries that attract big mining
corporations and lack adequate environmental restrictions and labor
standards, there is little opposition from governments or individuals. I
have noticed through my research that the damage these companies make
are not often visible until the mines have moved out and the economy and
social structure of a community have been destroyed.
It has been interesting to see that most of the recent articles document
an increase in corporate responsibility among mining corporations. It
seems like the phase of horrible violations has passed and the majority
of the companies are now in the process of cleaning up their act and
moving out of affected areas where they have been targeted by NGOs,
activists, and consumer criticism. In the past 5 to 10 years mining
corporations have been shutting down mines in Indonesia, Papa New Guinea
and countries in South America, claiming that they wish to end their
years of social and environmental wrong doings. I believe that there are
several reasons why this phase is occurring. The international community
has become aware of the mining corporations poor ethical behavior, and
have brought the public eye to developing nations where there was no one
to watch before hand. I believe that our job at Covalence and others
like it have really helped to publicize and aid this issue. For instance
Tiffanys & Co. petitioned to close a mine down in Montana and a new
source of information, No Dirty Gold, part of Oxfam Group has been
publishing material and reports that have drawn continuous awareness to
the issue. This is obviously a positive step in the fight for greater
corporate responsibility.
Another reason for the increase in positive behavior is most likely due
to the realization by mining companies that economic prosperity and
ethical awareness go hand in hand. From the economic standpoint,
companies are receiving more business and investments by becoming more
responsible. Therefore, the extra investments in safety standards,
environmental precautions and fairer salaries, to name a few, have been
worth it. For instance, The CEO of Placer Dome stated recently that they
would not be as successful as they are today without an increasing
concern for responsibility and sustainability.
This leads, however, to something very problematic that should be
considered in the way the media and organizations analyze and report on
corporate behavior. As I mentioned earlier, communities thrive off of a
huge mining structure in all aspects of their society. Once the
companies have 'cleaned up and moved out,' communities are seeing the
worst of the destruction that often doesn't materialize until years
later: uranium that leaks into the environment, a disintegrating waste
container or system, health problems, a lack of tax base, the closing of
schools and hospitals it once created, and poverty. Apart from for a few
exceptions, where communities have been successful in fighting back, the
international community is doing little to mitigate these problems. Once
the mines are out, many feel that they have helped to bring justice to
the small communities. In Shawn Taylors article, Dirty Gold? for
example, the author focuses on the corporate responsibility of mining
companies rather than mentioning any of the effects on the communities.
I believe that the real test of responsibility is how a corporation
handles a mine closure. The companies also believe that they are acting
positively by cleaning up and leaving, but as many environmentalists
will say, this is called green washing, or drawing positive attention
away from negative behavior. Although the companies have provided an
offer by ending their current abuses and fixing their mistakes in newer
mines, I believe that the damage left behind should be more visible to
the public and a specific way of identifying and documenting the
destruction should be taken on by the media and organizations like
Covalence.
Many mining corporations, like Placer Dome who is refusing to
compensate a community in Indonesia whose way of life was destroyed due
to a mine and its closure, are easily escaping the responsibility of
their damage. It is easy for the mining companies to argue that they are
not responsible for social, environmental and economic devastation when
governments and affected people in the developing nations do not have
the funds or resources to prove otherwise. Thus, more should be done by
the international community to see past the lies and distractions of
multi-national mining corporations and attribute blame, so they may pay
for their actions.
Covalence SA, Av. Industrielle 1, 1227 Carouge, Geneva, Switzerland tel:
+41 (0)22 800 08 55 ; Fax: +41 (0)22 800 08 56 US
Representative Office,
143 Dudley Street, Cambridge MA, 02140, USA, tel +(1) 617 429 4758
Scandinavian Rep.Office, Lokföraregatan 7C, 222 37, Lund, Sweden, Tel:
0046 (0) 46 14 97 15 Website
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