Brexit, mining and CSR

All this recent news about Brexit has reminded me of this article in The Times (behind a paywall – apologies). It tells the story of one of the areas which voted for Brexit. As we now know, these were often rural areas which are relatively poor for whom foreign labour threatens wages, jobs and services. This article was one of many in the weeks following the vote where the London-centric media tried to figure out what the hell had just happened to them by dispatching unsuspecting correspondents to far flung corners of the nation (to which they never then returned, but it’s the thought that counts, right?). What stood out to me though was that this story was based in the formerly prosperous (and oddly famous) town of Grimethorpe, South Yorkshire. Prosperous that is, until the mines closed.

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The Grimethorpe Colliery Band

The story of mine closure leading to decline and poverty, as friend of the blog Dylan McFarlane tweeted recently, is a global one. Dylan was pointing to a recent article on The Conversation telling the story of mining towns in Guinea. These towns had seen limited prosperity and a great deal of inequality as the benefits of Bauxite extraction had not been widely shared.

So far, so familiar. Mine closure, it turns out, is one of the thorniest issues facing mining companies looking to improve their social and environmental impact. One answer I saw in Ghana is the creation of foundations which pay a percentage of company profits into a fund a proportion of which only pays out when the mine closes. Even these, I suspect, will only slightly soften a very sharp drop in economic prosperity.

In Europe, sudden drops in economic prosperity have historically been associated with a shift towards populist, nationalist leaders and rhetoric that we are currently witnessing. As surprising as Brexit was for London-based elites, its seeds were sown in the industrial and mining policy of the 1980s. This all raises the question of what difference might have well managed closures made? If today’s best practices had been adopted 30 years ago would things be different? Would Grimethorpe be prospering and actually in need of foreign labour? (My inner pessimist makes me think this is unlikely, CSR seems only to be able to do so much)

For those of us interested in mining and CSR, the Brexit vote should renew attention on the long term political consequences of mine closure. The effects of mine closure and decline are an important but under-researched area. The mining industry has just seen a marked global downturn as the decades-long commodities boom came crashing to a halt. Hundreds of thousands have been laid off and many mines closed. As a result, telling the story of Grimethorpes around the world is more pressing than ever.

Image from The Guardian.

Free working paper on mining, CSR and politics out now!

The Effective States and Inclusive Development Research Centre have just published a working paper by yours truly on ‘Corporate social responsibility and political settlements in the mining sector in Ghana, Zambia and Peru’. It’s really a first cut at some of the findings from my work in 2014 which I’m currently writing up into some papers and a book. The abstract reads thusly:

This paper explores and compares the political effects of corporate social responsibility in the mining sector in Zambia, Ghana and Peru. The paper adopts a political settlements approach to answer the question: How do the CSR practices of mining companies affect local and national political settlements? After setting out the main tenets of the political settlements approach, this is articulated with literature on the politics of natural resource extraction and CSR. The paper then sets the wider context of the international drivers of increased attention to CSR in the extractive sector and before exploring the impact of the CSR practices of mining companies on the political settlement in Ghana, Peru and Zambia at the national and local levels. The final sections offer a comparative discussion of what the findings mean for understanding CSR’s role in inclusive development and natural resource governance. The paper argues that recent increased CSR expenditure does not necessarily translate into development for those living near mining companies, particularly in contexts of exclusionary political settlements, of which all case studies exhibited characteristics. There are a great many institutional and contextual limitations placed on the ability of CSR to deliver development for affected communities. Across the case studies, the opportunities CSR programmes afford tended to aimed at those with the greatest capacity to disrupt operations rather than those with the greatest need. In concluding, I argue that, despite some obvious limitations, the political settlements approach can generate new insights through its focus on the politics of development, and, in particular, the politics of stability.

Available here – Go check it out! All feedback welcome.

My (2010) PhD thesis is now available online

Me, in a more innocent time

Me, in a more innocent time

When I submitted it, there was the potential that some journals would treat copies online as having already published and

therefore not accept my proposed articles.  I thus set it to have a 5 year embargo. This passed a few weeks ago but I still can’t find it in the University of Manchester repository so, taking matters into my own hands, I’ve added it to my publications page.

You can find it here.
My thesis quite different from my current work and looks at the historical rise of copper mining in colonial Zambia. I look at the advances within the mining industry and colonial state that were required to turn a bit of remote African bush into a global centre of commodity production.

The proper abstract is:

This thesis examines the co-production of social inequality and an extractive space on the Zambian Copperbelt in the early twentieth-century. The rapidity and scale of the development of world-leading copper mines on the Copperbelt was described at the time as “one of the greatest mineral developments ever experienced” and took many observers by surprise. This thesis examines the origins of this boom. It argues that the success of mining on the Copperbelt is not only a result of the decisions and actions of miners and colonial officials in the 1930s to 1960s, but largely a result of those taken in the decades prior to this ‘heyday’. The keys to understanding this rapid transformation lie in the political and economic interventions and innovations which colonialism brought to (what was then called) Northern Rhodesia in the decades preceding the advent of large-scale mining. In this earlier period, dozens of mining and other commercial enterprises failed, but in their ruins the seeds of commercial success were sown. In this period too, many of the structures which generated and perpetuated the inequality and poverty which characterise contemporary Zambia were created. The success of extractive capitalism in Northern Rhodesia rested on changing regimes of access to and control over resources. Interventions in socio-ecological relations were a focus of British colonial rule in Northern Rhodesia and created the political and economic ‘infrastructure’ which enabled mining to take off rapidly when rich ore was subsequently discovered. This thesis explores how the Northern Rhodesian Copperbelt was produced as a space for natural resource extraction in the colonial period through attention to the military, political and economic practices which produced regimes of access to, and control over, resources. These interventions were key to instantiating new capitalist relations and asserting British rule in colonial Zambia. To examine the conditions in which the Copperbelt boom was produced, this thesis draws on existing work on this transition. In drawing on this work, this research offers a political ecological critique of the development of Zambian Copperbelt. The thesis highlights the complexities of the struggle to produce both extractive capitalism and stable colonial rule and how the production of an extractive space on the Copperbelt had long-term consequences for the territory’s development.

Is the Canadian experiment failing?

News last week of another failed mediation for Canada’s Corporate Social Responsibility Counsellor for the Extractive Sector raises questions of whether this mechanism can ever really work in its current form.

Seen as a possible model for what other countries could do in this field it represents an interesting compromise between entirely self regulated CSR and law-based government regulation and is being watched around the world. This ‘Counsellor’ model was a watered down version of a previous recommendation for an independent ombudsman which had powers of independent investigation and reporting and could publish findings. The CSR Counsellor as constituted was primarily pitched as a mediation mechanism – if either party decided against being a part of the process, the CSR Counsellor could not proceed with the case. Which is what happened last week. Again.

The CSR Counsellor has become a compromise that pleases nobody.

On the surface, its harder to think of a better argument against voluntary CSR. Here is a pretty toothless mechanism for dealing with CSR issues arising from a nation’s mining companies overseas being repeatedly ignored or boycotted by mining companies. The mechanism awards veto power to either party and they use it. Mining companies eschew even modest oversight and accountability. MiningWatch Canada is calling for the counsellor to step down and replace the entire mechanism with something less fundamentally flawed.

There’s clearly something to be said for this but perhaps Canadian mining companies have reason to be skeptical. For a start, mining companies I have spoken to think the Counsellor will always side with the local community against the mining company with one executive saying that Marketa Evans (the Counsellor) had said as much in a meeting with mining companies. Whether or not this is true, it clearly reveals the deep suspicion with which mining companies treat the mechanism. Believing this to be true, no mining company in their right mind would enter into this process if they could possibly avoid it. It is pure liability and only likely to end in further antagonising community relations, bad press and their share price taking a hammering. We’re missing Silver Standard Resources’ explanation on why they backed out of the process, and they apparently see no need to mention it on their website, so we really don’t know what’s happened in this most recent case.

Maybe we do need a new CSR Counsellor who better commands the trust of the Canadian extractive sector but I don’t think we can pin the blame for the failure of the CSR Counsellor on Marketa Evans personally, as both sides seem keen to do. The problem is that the divisions in the mining companies/CSR debate are often so deep and bitter in Canada it is near impossible to imagine any person or institution which could satisfy all parties. Marketa Evans was clearly a choice aimed at assuaging the worries of the mining sector, with a background in banking and the Munk School of Global Affairs (funded by Barrick Gold Chair, Peter Munk). This was not enough to encourage mining companies to use the process. Anyone even more obviously sympathetic to the mining industry would likely face a barrage of criticism before they even began (as Marketa did) and do nothing to restore wider legitimacy to the mechanism.

Personally, I’m dismayed at this state of affairs. By most standards, the CSR Counsellor has failed in it’s mandate. No one will trust mining company accounts of conflicts, or their CSR reports and efforts, until they are subject to unbiased scrutiny. Mining companies running away at the first attempt at this in Canada just looks bad. This lack of engagement in the mechanism and no obvious improvement on the horizon really shows that more must be done to foster mining company engagement in the mechanism. Maybe a new hand at the wheel would help do that and help reshape the office into something more useful for all involved. I suspect however that what’s required is some real government backing to bring people to the table. That, and some teeth. If mining companies felt they had some real stake in how this mechanism operated, I suspect it would begin to look a lot more useful than it does now.

No really, what’s your research about?

Basically, I want to link global pressures on mining companies to be nicer with their local effects. For the British Academy the official (it’s on their website) title of the research is ‘Mining and Corporate Social Responsibility: Linking Global Drivers and Local Impacts’. The research abstract reads thusly:

This research will examine the global governance and development impacts of the extractive sector in Africa; specifically, relationships between emerging international governance regimes, mining companies and new multi-faceted community development corporate social responsibility (CSR) programmes in Zambia. Over the three years of the fellowship, this research will develop a multi-scalar analysis that links international governance (emerging international standards and norms) and changing mining company practice with the development impacts of extractive industry in Zambia. By linking these three elements together in a single study, this research will trace the effects of global pressures and dynamics in local communities in Africa. This case study offers insights into wider processes of global governance, the role of the private sector in development, the effects of new complex modes of governance in developing countries and the role of extraction in broader development.

Clear as mud, you might say. I’ll avoid too much academic jargon on this blog, but I just had to get that off my chest.

This all started when I was doing my PhD research in Zambia in 2008. The most interesting interview I did was with a mine manager who was coming to the end of his contract, unhappy with his employer, his mine and Zambia. He was fed up and just let rip. This man (it’s always men) is the only person I have met to date who said, “I am a neoliberal”. He was being provocative, but he was trying to say that he’s not one of those fluffy types who goes around and plays nice, he’s interested in profits and efficiency above all else. He was a miner’s miner. Oddly, however, in the midst of telling me all the dodgy practices of the mining company, he told me about the large sums of money they were spending to make the mine less polluting and more environmentally friendly. I followed this up with a bunch of other mining managers in Zambia and they all talked about the same thing: they were all spending money on cleaning up their act, and not because the Zambian government was pressuring them to do so. They tended to give one of two reasons:

1 – “You just can’t do that [pollute] anymore”
Or
2 – “If we had an accident, our share price would plummet”

The first indicates that norms around what mines can and can’t do are changing and that (at least some) miners are listening. The second points to the role international stock markets and investors in applying pressure on mining companies. Both struck me as very interesting. In 2010–11 I spent a year in Toronto looking at these changing norms and pressures and found a remarkable amount of activity around improving the CSR practices of mining companies in Canada and around the world. I’ll talk more about what I found in Canada in later post, but what struck me was that there was an awful lot of activity and things had been changing rapidly but few people could explain why, and why now. Further, there was very little (academic, non-partisan) information on what the impacts of this new activity were. There’s plenty of evidence that previous approaches to CSR by mining companies were woeful and effectively a poorly-executed PR exercise, but what about these new practices? All these people who have been in jobs in mining companies for just a few years (and there is a remarkable number of CSR professionals who fall into this category), have they not changed anything? That’s what I wan’t to find out – why? And what difference (if any) is this making? My hope is that if we can answer those questions, we can might find ways to answer the bigger question of how we make mining really work for development.