Médecins Sans Frontières analysis of extractive industry Corporate Social Responsibility (CSR) in low income countries.
Médecins Sans Frontières has witnessed first-hand the impact that extractive industries can have on local communities. In 2010, MSF began treating the victims of the Zamfara lead poisoning crisis; the worst of its kind ever recorded. In gold mines like the one in Bagega village, Northern Nigeria, thousands of children have been diagnosed with acute lead poisoning, which can cause severe brain damage or death.
A recent publication in ‘The Extractive Industries and Society’, authored by Jonathan Jennings, Sarah Lamb and Philippe Calain in collaboration with Médecins Sans Frontières (MSF) Canada and MSF Switzerland’s Research Unit, analyses the health-related Corporate Social Responsibility activities of Canadian mining companies and questions whether in fact health-focused CSR is having a measurable impact on local communities, and suggests a framework for how this impact could be better assessed.
The questions this report raises are important for weighing the significance of CSR claims in the health area, which should concern Australian policymakers, thought-leaders and decision-makers. These questions are all-the-more important given that Australia is now the biggest international miner on the African continent, with 139 ASX companies operating in 34 countries as of September 2017.
Brief Outline of the Study
The study examined 102 Canadian extractive companies with operations in ‘Low Human Development’ countries, and the health-related CSR policies of these companies were subsequently located through both the Global Reporting Initiative (2016) and through a detailed ‘web-search’. Just 27 of these companies listed community health-related CSR activities in ‘low-development’ countries.
The key findings of the study were as follows:
- ‘Explicit’ achievements in relation to set community-health goals were listed by just 2 companies.
- The ‘timescale’ of health-related CSR activities and ‘target population’ were not clearly specified by any company.
- One-time infrastructure or materials-based donations were made by a majority of companies, with some supporting NGO-led activities or public services.
- CSR policies were limited to ‘intentions’ rather than specified actions in 11 instances.
- Canadian companies in the extractive industries demonstrated a limited level of engagement in CSR, and an even more limited role in community health activities.
The central problem, and perhaps the main reason for the above findings (as Jennings, Lamb and Calain see it), is that there is no ‘analytical framework’ that can be used to evaluate and examine the effectiveness of CSR policies, and as such, there is no binding obligation for extractive companies to ensure that their CSR practices are aligned with ‘international commitments to sustainable development.’
The Paris Declaration on Aid Effectiveness and the Sustainable Development Goals (SDGs), it is argued, offer a potential framework for health-related CSR evaluation, namely through the former’s ‘five core principles to improve aid effectiveness’ and the latter’s 13 targets and 14 core indicators of SDG 3. Whilst the study found that a number of health-related projects had been supported amongst the 27 companies, an examination of these programs using the SDG 3 targets reveals that CSR activities made a very limited contribution to the ‘prevention of substance abuse’, ‘prevention of non-communicable diseases’ and ‘family planning’. Moreover, target 3.9 – ‘To substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination’ – was, astonishingly, not matched by any CSR activity of any of the 27 companies.
Whilst the SDG 3 targets are useful in the sense that they give an indication of the ‘thematic distribution’ of CSR activities, The Paris Declaration on Aid Effectiveness can be used as a framework for assessing the effectiveness of these activities.
The authors then conclude that current CSR practices within extractive industries – at least, amongst Canadian companies – do not align with existing sustainable development frameworks, and that voluntary self-reporting acts as a barrier to transparency, making it difficult to develop ‘relevant and clear conclusions’ regarding CSR activities.
Given that the ‘resource curse’ – the result of an over dependence on gas/oil revenues – has in many instances been linked to corruption, conflict, poor governance and reduced macro-economic growth within low-income countries, it is surely reasonable to assert that extractive companies have a responsibility to ensure that their operations, at the very least, aim to mitigate negative impacts on local communities. The evidence raised by Jennings, Lamb and Calain suggests that, in fact, existing CSR policies amongst Canadian extractive companies make a very limited contribution to health outcomes in these affected communities.
The Australian Context: Extractive Companies in Africa
At this year’s annual Africa Down Under Conference, held in Perth, The Hon Julie Bishop MP spoke encouragingly about the opportunity that Australian investment in the extractives sector presents to the African economy. The Hon Tanya Plibersek MP – in a speech to the same conference in 2015 – echoed these sentiments and also spoke of finding the ‘right policy settings’ to encourage greater transparency amongst extractive companies, whilst Bishop’s concluding remarks directly addressed the need to consider the true ‘impact’ on these communities: “Our collective challenge is to ensure that we circulate best practice, in business, in relations with government and in social and environmental impact.”
The conclusion of the report perhaps provides guidance for improving best practice – at least in terms of social impact. An assessment of the effectiveness of health-related CSR policies, in accordance with existing international development frameworks/standards, should be an essential component of that attempt to ‘circulate best practice’.
The assertion made by Jennings, Lamb and Calain, that “The motivations for CSR should be directly linked to community benefits, with improved coherence between needs assessments and CSR interventions”, would certainly suggest a basis of an appropriate framework – both for Australian policymakers and Australian extractive companies.
In Zamfara an estimated 400 children died of lead poisoning as a result of goldmining pollution, and thousands more have been treated by MSF. This crisis serves as a grim reminder of the inherent community health risks of extractive industries; and of the devastating impact that a lack of robust health-focused procedures can have. If CSR is to play a truly positive role in preventing such tragedies then all stakeholders must do more to ensure that better accountability mechanisms are found and followed.