ABSTRACT. Mining companies have long had aquestionable reputation for social responsibility, espe-cially in developing countries. In recent years, miningcompanies operating in developing countries havecome under increased pressure as opponents haveplaced them under greater public scrutiny. Miningcompanies have responded by developing global cor-porate social responsibility strategies as part of theirlarger global business strategies. In these strategies, aprominent place is given to their relationship withlocal communities. For business ethics, one basic issueis whether such an approach to corporate responsi-bility is likely to effectively address the developmentconcerns of local communities in developing coun-tries. This paper addresses this question by investi-gating how the corporate social responsibility agenda

of a major minor company has been implemented byone of its subsidiaries in South Africa.

KEY WORDS: corporate social responsibility, miningethics, Rio Tinto

At the Rio Tinto head quarters in StJames Square, London, an anthropologyprofessor and his research assistant advisethe Rio Tinto mining operations aroundthe world on community affairs. Theycomment on the company’s relationswith “the community”, scrutinise five-year community development plans andprovide direction for engaging with thecommunity on sensitive cultural issues andadvice on resettlement. On their desks sitvarious reference books including JamesFerguson’s “The Anti-Politics Machine”,“Civil Society” by Hann & Dunn andliterature dealing with mine – aboriginalrelations in Australia, as well as internetweb site printouts from the BritishInstitute for Development Studies library.They maintain files for storing articlesfrom the media about the operations atdifferent mine sites and actively “surf theweb” examining sites that campaignagainst Rio Tinto.

On the northern KwaZulu Natal coast inSouth Africa, Richards Bay Minerals(RBM), a Rio Tinto subsidiary, is busypreparing to relocate a number of house-holds situated within the demarcated100 m mining zone. The team of com-

Mining, Corporate Social Responsibility and the “Community”: The Case of Rio Tinto, Richards Bay Minerals and the Mbonambi

Paul Kapelus

Journal of Business Ethics

39: 275–296, 2002.© 2002 Kluwer Academic Publishers. Printed in the Netherlands.

Paul Kapelus is a co-founder of the African Institute ofCorporate Citizenship (The views presented in thispaper are personal). Paul has been working in the fieldof social responsibility for the past ten years. Initialresearch began in the migrant workers hostels ofJohannesburg and continued whilst working on platinummine in Organisational Development. Consultancy inthe field of social and environmental impact assessmentallowed Paul to work in a number of African countrieson projects ranging from greenfields exploration throughto privatisation. Paul undertook a BA (HONS) in socialanthropology at the University of the Witwatersrand,South Africa, and a Masters in the Anthropology ofDevelopment at Sussex University, UK. On his returnfrom the UK he co-founded the African Institute ofCorporate Citizenship, a consultancy and advocacyorganisation. His work has focussed on corporate citi-zenship strategy, social management plan development,tri-sector partnerships and socially responsible investment.

munity development workers goes outeach day to support community develop-ment projects in the adjacent Mbonambicommunity. The projects are displayed tothe world in the Rio Tinto corporatereports and magazines, on the RBM website and on billboard signs next to thedevelopment projects.

Enlightened corporations, including those in themining industry, have long been aware that itmay be in their interests to address issues ofconcern to the local communities in which theyoperate. The pragmatic logic involved in thisnotion is quite simple. Local communities areoften in a position to impose costs on corpora-tions, with their ability to do so being a functionof the resources they command and their abilityto organize themselves. What this has meant his-torically is that corporations have tended to paymore attention to those communities which havemore resources. More specifically, corporationshave paid more attention to the concerns ofcommunities in developed countries in whichthey operate than to those in developing coun-tries.

With recent processes of economic globalisa-tion this simple truth has become more compli-cated. For one thing, as corporations increasinglyshift their production to developing countries,they are finding that they are not the only oneswho are going global. Civil society, and morespecifically, environmental and corporate watch-dog groups, are also globalising and collaboratingwith civil society groups in developing countries.As a result, corporations are facing increasedsurveillance and criticism of their activities indeveloping countries, as well as increased pressureto operate in a socially responsible fashion. Fortheir part, corporations are responding. Asthe vignettes above indicate, large transnationalmining companies are changing as a result of badpress, production delays and campaigns instigatedby civil society groups. By way of response, thesecorporations are developing global corporatesocial responsibility (CSR) strategies – whichemploy the vocabularies of business ethics,human rights and development – as part of theirlarger global business strategies.

For business ethics, one basic issue that arisesin this context is whether such an approach bycorporations to this situation is likely to effec-tively address the development concerns that thelocal communities in developing countries have.It is this question that this paper investigates. Iexamine this issue by way of a case study.Specifically, I look at the global CSR agenda setout by the mining giant Rio Tinto and how ithas been implemented by its subsidiary RichardsBay Minerals (RBM) in the Mbonambi TribalAuthority of South Africa. The case studyanalysis is based in part upon a series of inter-views with key figures in Rio Tinto, RBM andthe local communities in and around RichardsBay conducted in 1999.1

In adopting a case study analysis in this paper,my goal is primarily heuristic, that is, to explorethe tensions that appear in the process andthe concerns that arise (rather than providing adefinitive evaluation of the effectiveness of theparticular policies and their implementation andconcrete steps to be taken to address shortcom-ings). Key aspects of the analysis involve theinvestigation of how the company conceptualizesand employs the notion of “community” andhow its approach to these tasks is contested bystakeholder groups.

I. Context – transnational mining corporations and their critics

The transnationalization of (the mining) industry

Over the last couple of decades transnationalcorporations (TNCs) have experienced unprece-dented growth. While in 1970 there wereapproximately 7000 TNCs, by 1994 the counthad risen to some 39 000 parent TNCs and20 000 affiliate TNCs (Nelson, 1998). Varioustechnical, organizational and political factors haveprovided the opportunities for the increasedfinancial investment across the globe. Theseinclude privatisation policies, liberalised invest-ment policies, the reregulation of mining activ-ities, new technology for global operations,traditional concerns about spreading financialrisks and more effective production processes.

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Like TNCs generally, mining TNCs havealso been growing in recent years. As Reed doc-uments in his paper in this issue, the transna-tionalization of the mining industry is notnew. Commercial mining has been expandingthroughout the globe for more than 150 years, aprocess that has largely been linked to the dom-ination of colonial powers. In recent years,however, mining companies have stepped uptheir operations in developing countries. Theprimary reasons for this are the liberalizing ten-dencies in the new global economy, noted above,as well as depletion of resources in developedcountries.

The transnationalization of opposition

The mining industry has always provokedreaction to its operations, especially from localcommunities. While this is true in both devel-oped countries and developing countries, oppo-sition groups in developing countries havetypically enjoyed advantages in making theirdemands heard due to greater resources, betterorganization and more effective political repre-sentation. The organizational advantages indeveloped countries have included more activeand better resourced social movements andNGOs (operating around such concerns ashuman rights, the environment, the rights ofindigenous people, corporate responsibility,etc.).

As mining TNCs are increasingly becomingglobal corporations, so has opposition to thembecome increasingly global. While many estab-lished NGOs in the developed world have longbeen international in perspective, they have beentaking a greater interest in issues related tomining. As well, many new NGOs have beenestablished over the last couple of decades,including a variety with a specific focus onmining concerns. Both newer and more estab-lished NGOs have shown a strong propensity tocollaborate, not only amongst themselves, butwith organizations and local communities in thedeveloping world. The result has been the estab-lishment of networks of opposition to miningfirms.

Particularly significant among the oppositionto mining TNCs in developing countries hasbeen the emergence of increased activism byindigenous communities, who are frequentlyamong the groups most directly and adverselyaffected by mining activities. Large numbers ofindigenous peoples are entering into conflictwith mining companies (Fabig and Boele, 1999;Burger, 1987). Indigenous communities are chal-lenging mining companies on a wide range ofissues including profit-flows, headquarters’decision making procedures, representation onthe company board, rights to extract minerals,compensation measures, reporting proceduresand long-term strategies. Almost every aspect ofa business is scrutinised from a social responsi-bility perspective.

These indigenous communities have benefitedgreatly from the globalisation of opposition tomining TNCs. In recent years a global networkof indigenous peoples organisations has emergedas a result of this larger opposition movement.Members of the larger movement provide impor-tant services, such as reporting on negotiationsbetween mining firms and local (indigenous)communities. Such negotiations are oftenrelevant for other indigenous groups, even if theyare being held on another continent, as dealsstruck between one group and a miningcompany can be used as reference points orbenchmarks for other groups (Broad, 1997).Reports on such negotiations help to ensureindigenous communities the best possible price(in both financial terms and other considerations)for their granting of mining rights (Crowson,1998).

The efforts of indigenous peoples to organizehave been paying off in other ways, as well.Indigenous peoples are starting to have more oftheir land claims officially recognized, as inthe 1992 “Mabo ruling in Australia” (whichprovided for native title of land if historical andcontinuous links with the land could be demon-strated). Indigenous people are also having theirrights recognized in other fora. In 1989 theInternational Labour Organisation (ILO) adoptedConvention 169, “Concerning IndigenousPeoples and Tribes in Independent Countries.”For its part, the United Nations Human Rights

Mining, Corporate Social Responsibility and the ‘Community’ 277

Commission has formed a Working Group onIndigenous Populations and developed a draftDeclaration of the Rights of Indigenous Peoples.The UN has also been active specifically withrespect to indigenous peoples’ relations with themining industry, promoting the concepts of freeand informed consent, participation in thebenefits of development, compensation, and mit-igation of adverse impacts.

II. Corporate social responsibility(mining) and the community

CSR as a programmatic response to critics

While corporations have always been involvedwith CSR programs to some degree in one formor another, the last couple of decades have seenan explosion in terms of the effort and resourcesthat corporations have been expending on CSR.Mining and other resource sectors have been inthe forefront of this new surge of interest. Thereare a couple of overlapping reasons for this newemphasis on CSR. Perhaps, the major factor, asdiscussed above, is the fact that NGOs, socialmovement and indigenous peoples have increasedtheir organizational capacity and cooperationtremendously over the last twenty years or so.This has allowed them to exert much greaterpressure on corporations, both directly (throughactions against their production facilities andcampaigns directed at shareholders and con-sumers) as well as indirectly (through the polit-ical system).

In addition the pressure from civil societyorganizations and indigenous peoples, TNCs arealso encouraged to become more responsible andtake up CSR programs by pro-business organi-zations, such as the World Business Council forSustainable Development (WBCSD), the Princeof Wales Business Leadership Forum (PWBLF),the Centre for International Private Enterprise(CIPE), etc. A recent initiative by the WBCSD,for example, is directed specifically at the miningindustry and represents an effort to confront thepoor ethical reputation of the mining industryand the resultant pressure placed on the industry

to transform. Entitled “Mining Minerals andSustainable Development” (MMSD), this globalprogramme is being administered by theInternational Association of Environment andDevelopment (IIED). The stated intention of theproject is “to identify how mining and mineralscan best contribute to the global transition tosustainable development” (IIED, 2000). TheWBCSD hopes that the project will help topublicize the serious attempts of the miningindustry to construct an agenda for CSR andencourage all members of the industry to liveup to the highest standards. Major researchthemes of the project include human rights issues(conflict, abusive practices, corruption), concernsof indigenous peoples, access to markets, worldtrade and globalisation and finally designing asustainable future. The findings of MMSD willbe presented to the Rio +10 World Summit onSustainable Development (WSSD) in 2002 inSouth Africa.

In addition to civil society pressures, there arenumerous international treaties and agreementsthat attempt to promote more responsible activityby TNCs with respect to their social and envi-ronmental impact.2 Environmental awareness inparticular has intensified in recent years, espe-cially after the convening of the 1992 EarthSummit in Rio. One key issue that has emergedwith respect to international regulation is howTNCs might be encouraged to apply their homestandards abroad, when they move to locationswith lower labour costs and less stringent envi-ronmental regulations. Mining companies, inparticular have been an object of concern, as theyhave not only not fulfilled their promises of beingengines of local economic growth, but frequentlyadverse social and environmental impacts of theiractivities have far outweighed the economicbenefits that have accrued (Anderson, 1996, citedin Carter, 1997).

A final source of pressure has to do with thepragmatic interests that firms have with respectto operating with a minimum of governmentregulation. The problem is that as TNCs haveshifted their investment more to the developingworld in recent years, they have opened them-selves up to criticism for not maintainingadequate minimum standards. Underlying this

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charge is the notion that either existing standardsare not adequate or that they are not effectivelyenforced. Such charges potentially pave the wayfor more stringent regulation of TNCs (eitherat the national level or internationally). CSR pro-grammes represent one possible method forTNCs to dampen any pressure for increased reg-ulation that may arise as the result of suchcharges.

In taking up CSR programmes and respondingto concerns about sustainable development,mining companies readily acknowledged thatthey are responding to social pressure and thatsuch a response is no longer optional. MarcGonsalves, the Corporate Affairs manager of theBilliton mining group, for example, states thatin the future, “undertaking corporate socialresponsibility programmes will be the same ashaving to print annual corporate reports. It iswhat business is about” (Gonsalves, 1999).Similarly, the Canadian mining company, PlacerDome has come to accept that “its ability towork within the sustainability framework will bethe key to getting good projects and developingsuccessful mines in many parts of the frontierzones of the world” (Wilson, 1999, p. 48).

Forging a CSR agenda

TNCs have taken up the CSR agenda in a majorway recently. One aspect of the CSR agendainvolves TNCs publicly proclaiming their values.This may be done through any or several of anumber of types of documents produced by thefirm (e.g., mission statements, code of ethics,code of conduct, etc.). Increasingly, TNCs havealso been signing on to statements produced byother groups, including: business organizations,e.g., WBCSD, PWBLF; multilateral bodies, e.g.,the OECD (principles of corporate governance),the UN (Global Compact) and; human rightsorganizations and NGOs, e.g., TransparencyInternational. There has been a proliferation ofsuch codes and statements over the past decade,much of it embracing the language of “sustain-able development.” A second related aspect ofCSR involves TNCS establishing appropriatestandards to operationalise their values in their

business activities. This may involve such areasas labour standards, environmental standards, etc.A third key aspect, and the one probably mostclosely associated with CSR, involves designingand implementing social-economic developmentprograms and services.

In undertaking CSR initiatives, TNCs haveengaged a variety of non-business experts to helpdevelop their initiatives, including explicatingtheir values and principles developing standards,and designing programs. These include anthro-pologists, ethicists, health professionals, develop-ment workers, etc. They have not forgotten,however, to also hire a range of business profes-sionals, especially in the media and publishingworld. Their function is to ensure that the worldknows what the values and commitments of thefirm are and how these are expressed throughtheir CSR projects. Indeed, the intensity of theagenda and the number of policies and pro-grammes in place has contributed to the CSRglobal agenda becoming a business in its ownright. Consultancy groups, public-relations com-panies, management and accounting firms areemployed in generating a virtual flood of paper-work in the form of conference material,brochures and reports and, as Fabig and Kapelus(2000) argue, are beginning to set the agenda anddefine the discourse of CSR.

The prominence of the “community” in CSR

As corporations have taken up CSR programs,one theme has tended to dominate. That is thecommitment of the firm to the local communi-ties in which they operate. The corporate liter-ature on CSR is permeated with references tohow corporations perceive themselves to be partof the community. Such commitments are typi-cally fleshed out both in terms of principles thatdefine the basis of the relationship and guidelinesthat provide more practical instructions formanagers on how to establish good relations with“the community.”3

It is not only the corporations themselves thatprovide the community a place of prominence inthe CSR agenda. International financial organi-zations also highlight the importance of rela-

Mining, Corporate Social Responsibility and the ‘Community’ 279

tionships with local communities. The WorldBank, for instances, hosted two conferences in1998 entitled “Mining and the Community,” thefirst in April in Quito, Ecuador and the secondin July in Madang, Papua New Guinea. TheBank is concerned that as a result of the rapidglobalisation of the mining industry and increasedinvestment in developing countries conflictsbetween indigenous communities and the miningindustry are likely to increase. In line with thissituation, the Bank joined with the miningindustry in expressing the belief that “propermanagement of relations with communities isgoing to be the biggest challenge in the nextten to twenty years” (McMahon, 1998, p. 10).Discussions at the conference highlighted the factthat the rights of indigenous people and localcommunities are increasingly being recognisedaround the globe. It was urged that consultationby communities be recognized as a right and thattraditional values and customs of the communitybe taken seriously in the decision-makingprocesses.

That the “community” has emerged as thedistinctive narrative in the strategy of the miningsector for promoting CSR should not be sur-prising. An emphasis on community in the devel-opment literature extends back to the Britishcolonial office, whose approach reflects anorganic conception of the state – widely held inthe nineteenth century – as being composed ofsocial parts (Strathern, 1992). As noted above,communities have always been important to themining sector to some degree. In the miningindustry, the narrative of community hascommonly been associated with the category of“culture.” Usually, this category had a negativeconnotation for the industry as traditionalcultures were seen as an impediment to devel-opment generally and a potential constraint onmining activities, as it could lead to oppositionto mining by the community and raise concerns(by others) about the impact of mining on thelocal community.4 Typically, to get around thesituation, the industry would undertake “culturalappraisals” to ensure that projects could proceedwithout adversely impacting the culture and thecommunity.

In recent times, the role of the “community”

has become even more prominent. From a prag-matic perspective, the reason for this would seemto be quite obvious. The operations of miningfirms almost inevitably adversely affect (somemembers of ) the local communities (e.g., bydegrading the environment, diminishing liveli-hood prospects, displacing people form theirhomes, etc.) in ways that are likely to evokeopposition. While adverse effects and oppositionare not necessarily limited to the local commu-nity, especially in our current global context (e.g.,regional, national and foreign politicians, NGOs,social movements, shareholders etc., may all raiseconcerns about firms’ activities), it is the localcommunity that is most directly affected and itis their claims that have the most credibility. If,for their part, companies can convincingly makethe claim that the local community is benefitingfrom their operations (e.g., though communitydevelopment programs), then it provides themwith a cloak of legitimacy that serves to protectthem from charges by other groups (e.g., envi-ronmentalists, labour organizations) and enablesthem to continue on with their activities (witha minimum of disruption and cost).

Defining the community – a complex and controversial task

Increasingly firms want to be able to claim thatlocal communities are benefiting from theirpresence (and that where there are negativeimpacts on communities these are under control).The logical first step in making such a claim isto “identify” the community in question. Asnoted above, the understanding of this need toidentify a community is not new. One way oranother mining firms have been identifying thecommunity ever since they first began to spreadthrough the “frontier” zones. Typically, the keystep in identifying the community involvedrequesting permission to mine from “the chief ”or other traditional authority, an act that implic-itly set the boundaries of the community alongthe lines of the (de facto) authority of the chief.More recently, the process of identifying thecommunity has become much more explicit innature, being designated a key task of CSR. It

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has also become much more sophisticated,involving the entire machinery of CSR,composed of community affairs, public relations,social impact assessments, and public involvementprogrammes.

Identifying a community, however, is acomplex and contested task, especially in con-temporary societies. There are several reasonswhy this is so. For one, communities can beidentified on the basis of any number of sharedtraits such as geographic territory, religion,culture, history, kinship, etc. For another, peoplecan have multiple, overlapping identities andthese identities can change overtime.5 This meansthat any definition of a community is always aconstruct, an imposing of order that does notnecessarily fit the lived experience of the peoplein question. For this reason, it is also the case thatdefinitions of community are necessarily opento contestation, both in terms of the limits andthe structure of the community.6 With respectto the limits, different definitions based upon dif-ferent criteria include and exclude differentpeople. As the choice of criteria is largely asubjective matter, any one choice is inevitablygoing to be challenged, especially when excludedindividuals feel they should be included. Withrespect to the structure, the key question iswho (if anyone) can represent the community.Historically, it was generally assumed that tradi-tional leaders could represent the community,both de facto and in terms of having some degreeof (moral) legitimacy. It is much more problem-atic to make these assumptions today, as tradi-tional authorities have frequently lost much oftheir decision-making power (to democraticallyelected representatives), while their moral legit-imacy is also increasingly under attack.

CSR, ethics and the community

CSR programs can have either of two functionsand, correspondingly, may be undertaken foreither of two forms of motivation. From the per-spective of business ethics, CSR programs canhelp corporations to discern and fulfil their oblig-ations to stakeholder groups. From the perspec-tive of business strategy, however, CSR programs

may be viewed as a method for minimizing costs.With respect to motivation, TNCs can under-take CSR programs either because they have astrong moral commitment or because they havepragmatic interests in doing so (as indicatedabove). These two forms of motivation are, ofcourse, logical extremes. In actual practice, dueto the wide variety of people and issues involved,both forms of motivation are likely to come intoplay.7 Generally, however, it is possible to talkabout corporations as operating closer to onepole than the other.

The function of CSR and the motivation offirms would not be an issue (at one level)8 if itwere universally true that being socially respon-sible is good for business. Under these circum-stances, TNCs would always be sociallyresponsible (except when they make errors instrategy), as this would help them to maximizeprofits (and shareholder value). It seems naïve,however, to assume that this condition alwaysholds.9 This is only likely to be the case to thedegree that stakeholders can effectively imposecosts on the firm.

The function and motivation underlying CSRprograms have practical implications with respectto communities. If firms tend to be more morallymotivated, then they will employ CSR as a toolof moral discernment. Under these circum-stances, firms will be willing to live up to theirobligations to stakeholders, even when it involvescosts in terms of shareholder value. If, on theother hand, firms are primarily guided bypragmatic interests (i.e., profits), then CSR canbecome exclusively a business tool rather than anapproach to discerning moral responsibility.Under these circumstances firms will be inter-ested more in the appearance of social responsi-bility than actually being socially responsible. Inthis scenario CSR programs are ultimately con-cerned with minimizing disruption to the firm’s(processing, transportation, marketing, etc.) activ-ities and, thereby, minimizing costs. This has twobasic implications with respect to the definitionof communities.

The first implication of firms adopting a prag-matic approach to CSR relates to how they arelikely to understand the structure of the com-munity. For purposes of maximizing profits, it is

Mining, Corporate Social Responsibility and the ‘Community’ 281

in the interest of firms to be able to present thecommunity as having an uncontested, legitimateauthority. When such a legitimate authorityexists, and is in agreement with the firm, thenthe firm’s plans can proceed in a smoothermanner (and responses to any objections that mayarise by dissenters can be more effectively devel-oped and implemented). The need for agreementby authorities, in turn, can lead to a tendencyto designate local (economic and traditional)elites as the legitimate authorities or the com-munity. Typically, it would not be in the inter-ests of firms to raise the question of the criteriaby which such authorities could be consideredlegitimate. Nor is it generally in their interests tonote any disagreements within the community(unless the dissenters can impose significantcosts), as this may undermine the legitimacy ofthe leaders of the community and the firm’s claimto be socially responsible. Similarly, firms mightnot want to investigate the distribution ofbenefits deriving from their activities among localcommunities.

Second, to the extent that the firm is inter-ested in limiting costs, it will want to limit thesize of the community as this will limit the claimsthat can be made upon it. What restricting thesize of the community means practically can beunderstood with reference to the concept of an“ecological footprint” (Wackernagel and Rees,1996). The ecological footprint, a device whichecologists commonly employ to investigate therange of effects of the firms’ operations, is impor-tant in pointing out that many of the (adverse)effects of firms are diffuse, wide-ranging and fre-quently not immediately evident. When firmsuse the community as their basic unit of analysis,then the more they restrict the notion of com-munity, the more they restrict their vision oftheir “ecological footprint.” More specifically,they limit the number of people who they willsee as affected by their operations and the fail toacknowledge the different ways in which peoplemight be (adversely) affected. Such a restrictionon their vision will function to limit theirresponsibilities and costs.

The CSR agenda – global and local

In the contemporary economy, TNCs in themining sector are inevitably both global and localin their organization. As multinational, theiroperations around the globe are becomingincreasingly integrated (e.g., in terms of strategy,marketing, etc.) and subjected to centralizedcontrol. As mining operations, however, theiroperations are inevitably local. They must extractresources from specific sites with specific char-acteristic in specific contexts that generatespecific problems. This global-local dynamic isalso at play with respect to the CSR agendas ofmining TNCs. At the level of the global head-quarters, CSR agendas get worked out in termsof abstract principles and general guidelines,which are to apply to the firm’s operationsworldwide. At the level of individual projects andsites run by subsidiaries, however, the CSRagenda of mining TNCs becomes much moreconcrete. Here, actual projects must be developedand implemented in accordance with the guide-lines. Similarly, the notion of community at thelevel of the global agenda can remain ratherabstract, which at the local level actual commu-nities need to be defined in concrete ways.

As was noted above, there may be a strongtension between firms maximising profit andbeing socially responsible. This potential tensioncan be reflected in different ways and to differentextents at the global and local levels. At theglobal level, it may be more possible to pave overthe tension. Here it is easy for firms to make theassumption of a harmony of interests betweenthe company and local communities.10 At thislevel of the global CSR agenda, where firmsembrace general principles (e.g., participation,human rights, etc.) and guidelines for CSR activ-ities (e.g., community economic developmentprograms) and do not identify specific commu-nities, they do not have to make concrete oblig-ations or calculate the costs of being sociallyresponsible in individual locations. Moreover,they can easily portray (past and current)problems primarily in terms of misunderstand-ings and organizational problems at local levels.From this perspective, the challenge of CSR isprimarily to translate global commitments into

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the specific contexts of individual communities.Nelson (1998, p. 11) refers to this as “the art ofbeing local world-wide,” a process whereby “thecommunity” becomes an all-important focus ofattention which verifies the global firm’s status asa good local corporate citizen.

At the local level, firms do have to makespecific obligations with specific communitiesand confront specific claims about their behav-iour. It is here where CSR principles and guide-lines are implemented that the potential costs ofbeing socially responsible can be measured againstthe potential profits of operations. In situationswhere the costs of being socially responsibledo not help keep total costs down, then localmanagers will have to confront the tensionbetween being socially responsible and increasingshareholder value. Here it is not as easy to facilelystate that, “good ethics is good business.” Froma pragmatic perspective, local managers will wantto find some way to (at least appear to) ease thistension. Probably the most effective method theyhave for doing this is to shape the definition ofthe community in ways that restrict the numberof claims upon them. As noted above, this mayhelp firms to limit costs and proceed in a moreexpeditious manner – if they are not effectivelychallenged.11

Such assumptions about the community,however, can be challenged (both by members ofthe community and their allies). In what follows,we will examine how a company like Rio Tintodevelops its CSR agenda around the notion ofcommunity – both at the global level and at thelocal level through its subsidiary Richards BayMinerals – and how its account of CSR and thecommunity is contested.

III. Rio Tinto’s global CSR agenda

We did not just give help as we thoughtfit but consulted with the community whodecided what the priorities were. Thecommunity also worked to achieve ourjoint objective. We are now members ofthe community – for mutual benefit.

– Leader of Ecuador exploration team(Rio Tinto, 1999, p. 6).

Rio Tinto’s story

Rio Tinto was originally founded in 1873 tomine copper in Spain. Over the years it has beenrestructured several times through mergers andacquisitions. In 1954, two thirds of the Spanishoperations were sold, with the remaining onethird being divested later. In 1962, the RioTinto-Zinc Corporation (RTZ) was formedthrough the merger of two British firms, the RioTinto Company and the Consolidated ZincCorporation. At the same time an Australianfirm, Conzinc Rio Tinto of Australia (CRA)was formed through the merger of Australianinterests of the Rio Tinto Company and theConsolidated Zinc Corporation. In 1995 RTZand CRA were unified through a dual listedcompanies structure. In 1997, RTZ became RioTinto plc and CRA became Rio Tinto Limited.The dual listed company is based in the UK andin Australia, with control being exercised by theparent company in London.

Over the course of its history, Rio Tinto hasnot only grown substantially, but has also diver-sified. In the period immediately after the 1962merger, its diversification was limited to themining sector, as it opened up new operationsin uranium, tin and borax. Between 1968 and1985, however it moved beyond mining intosuch areas as cement, oil and gas, chemicals andeven manufacturing parts for the automotiveand construction industries. Following a reviewof the companies operations in 1987–1988,however, the decision was made to refocus thefirm’s efforts on mining and related industries.This led not only to the divestment of its non-mining operation, but a whole new series ofacquisitions within the mining sector. As a result,Rio Tinto is now one of the world’s largestprivate mining company with assets of over £7billion.

Throughout its history, but in particular inrecent decades, Rio Tinto has been the subjectof criticism with respect to a range of environ-mental, social and labour issues. In response tothe accusations and activities of its critics, RioTinto has undertaken steps to become (criticswould say “appear”) more socially responsible.It has developed, in effect, a global corporate

Mining, Corporate Social Responsibility and the ‘Community’ 283

responsibility strategy. This strategy has two basiccomponents: a declaration of its values and theelaboration of policy guidelines for the imple-mentation of these values. These values andguidelines are set forth in policy documents thatwere produced by the company, and its anthro-pology advisor, at the head office in London.They are intended to provide each of theparent firm’s operating companies, subsidiariesand contractors with a programme for becomingsocially responsible enterprises. The companyemphasises that because it operates in diversecultural and social environments, each location isrequired to design a unique social responsibilityprogramme.

Conceptually, the first part of Rio Tinto’sstrategy is to clearly state the company’s valuesand principles. The primary place where thishappens is in a document entitled “The Way WeWork” (1998). Rio Tinto affirms a commitmentto widely accepted norms such as human rights.It looks to the United National UniversalDeclaration of Human Rights as well as thehuman rights provisions of the countries inwhich they operate to guide them in theirresponsibilities. It also identifies other values towhich it is committed. Most notable in thisregard are three principles that it proclaims willprovide the basis for its relationships with localcommunities, viz., mutual respect, active part-nership, and long-term commitment. Mutualrespect, it is argued, is essential if relationshipsare to be lasting, beneficial and interactive.Mutual respect entails “continuing and effectivetwo way communication and realistic expecta-tions on both sides” (1998, p. 8). Active part-nership defines the way Rio Tinto hopes to workwith local communities, regional and nationalgovernments and other affected parties. The aimof such partnership is to seek “mutual commit-ment and reciprocity based on trust and opennessso as to reach agreed objectives and sharedinvolvement” (1999, p. 8). Finally, long-termcommitment is “sought so that social andeconomic well being is safeguarded and, wherepossible, enhanced throughout the mine’s life andbeyond” (1999, p. 8).

The second aspect of Rio Tinto’s strategy isto develop practical guidelines that can facilitate

the implementation of its values. This task itprimarily takes up in an internal corporatedocument entitled “Community Policy Guide-lines” (1997). The goals of these guidelines areto help the firm to build long-term relationshipsof mutual benefit between the operations andtheir host communities, to enhance access toexisting and new opportunities and to avoidcostly disputes, higher project financing andinsurance costs. The reason for having companywide-guidelines is not only to ensure that stan-dards are maintained throughout the company,but also to facilitate that lessons learned can beshared and the company can build on the suc-cesses of its individual components.

In line with the discussion in the previoussection, several points need to be highlighted.First, Rio Tinto clearly defines its CSR com-mitment in terms of its relationships to localcommunities. This emphasis not only runsthroughout its documents, but is the organizingprinciple of many key documents such as the“Community Policy Guidelines”.

Second, Rio Tinto seems to allow for a broadunderstanding of community and a diversity offorms of community. The former characteristicis indicated in its definition of “community” as“anyone who is impacted in any way, socially,economically and environmentally by the oper-ations of the mine” (Pettifer, 1998, p. 3). Thelatter trait is reflected in its recognition of a widevariety of possible bases for communities,including “the nature of attachment to a terri-tory; self identification by others as members ofa distinct group; the culture or common beliefs,attitudes and work interests of the group; alanguage or dialect, which may be different fromthe national language; the presence of uniquereligious, political or cultural beliefs” (Rio Tinto,1997, p. 8). In principle this broad, flexibleapproach to defining community would seem toallow for wide ranging responsibilities on thepart of the corporation and might be taken toimply that the firm views CSR more in termsof moral commitment than as a pragmaticbusiness strategy.

In other places, however, the documentssuggest a narrower understanding of communityand more limited responsibilities. Thus, for

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example, when the company proclaims its com-mitment to protecting the dignity, well-being andrights of people with whom they are “directly”involved, it identifies these people as employeesand their families and people in “neighbouring”communities. Such passages reflect a more prag-matic approach to CSR, as do passages empha-sizing the firm’s aims of enhancing access toexisting and new opportunities and avoidingcostly disputes, higher project financing andinsurance costs. Such pragmatism is alsoexpressed by the non-business experts RioTinto hires. Professor Glynn Cochrane, the com-munities and anthropology advisor to RioTinto, for example, states that the relationshipbetween the company and the community has tobe business-like (rather than philanthropic). Thesituation is one in which, “Rio Tinto is undera microscope and if we screw up we cannotaccess goods. The time taken to license, insure,secure and finally start production has increasedby 300 per cent. Good relations can cut downon lead time, disputes and delays” (Cochrane,1999).

The ambiguity over community in the docu-ments makes it unclear whether the firm viewsCSR primarily in terms of moral responsibilityor business strategy. The fact that there mightbe a tension between these two approaches isnever addressed. Rather the firm seems to assumea harmony between its moral responsibilities andits business interests. This assumption is statedquite clearly in passages where the firm asserts itsconviction that its “competitiveness and futuresuccess depend not only on our employees andthe quality and diversity of our assets but alsoon our record as good neighbours and partnersaround the world” (Rio Tinto, 1998, p. 1). Thisassumption of harmony also gets expressedless directly, such as in the strong emphasis thatRio Tinto places on the “value” of mutualbenefit.

The counter-narrative: international trade unions

Rio Tinto has come under criticism over awide variety of issues (e.g., human rights, theenvironment, labour relations, treatment of

local communities, etc.) from a range ofgroups including environmentalists (e.g., TheEarth Times), corporate watchdogs (e.g.,Corporate Watch), mining activists (e.g., ProjectUnderground), human rights groups (e.g., Asia-Pacific Human Rights Network) and labourorganizations.12 Here I focus on the criticismsabout Rio Tinto’s CSR agenda. I will limit myinvestigations to criticisms made by labour orga-nizations, in particular the Belgium basedInternational Federation of Chemical, Energy,Mine and General Workers’ Unions (ICEM) andthe International Confederation of Free TradeUnions (ICFTU), as these are representative ofthe nature of the claims brought against RioTinto.

As labour organizations, ICEM and ICFTUare obviously concerned about Rio Tinto’sapproach to industrial relations. The ICEM hastargeted Rio Tinto as a special object of concerndue to “the extreme actions of the company inseeking to de-unionise its operations and torestrict the bargaining rights of its workers”(ICEM, 1998a, p. i). In response to this situation,ICEM affiliates met in South Africa in February1998 to form the Rio Tinto network of tradeunions with the aim of pressuring Rio Tinto toimprove its standards with respect to humanrights, workers’ rights and environmental pro-tection. Part of the ICEM’s concerns, however,relate directly to the CSR agenda of Rio Tinto,which it tends to see as a somewhat cynicalattempt by the firm to gain legitimacy byclaiming to represent the interests of local com-munities. This skepticism about Rio Tinto’sintentions and concern about their practices isclearly expressed in the titles of two documentsthat the ICEM has released on the firm, viz.,“Rio Tinto – Tainted Titan” (1998a) and “RioTinto – Behind the Façade” (1998b).13

The unions have two basic criticisms of RioTinto’s global CSR Agenda. First, with respectto its principles and guidelines, the ICEMbelieves that Rio Tinto does not go far enough.More specifically, “The Way We Work” iscriticised as being too weak to be able to effec-tively bind the company to responsible behav-iour. Apart from making reference to theUN Declaration on Human Rights, the ICFTU

Mining, Corporate Social Responsibility and the ‘Community’ 285

(1998) argues, “The Way We Work” doesnot refer to the two most authoritative interna-tionally agreed definitions of responsible behav-iour. These are the International LabourOrganisations’ (ILO) Tripartite Declaration ofPrinciples Concerning Multinational Enterpriseand Social Policy, and the OECD Guidelines formultinational enterprises. ICEM suggests that theomission of the international treaties and guide-lines from “The Way We Work” discredits RioTinto’s claim that “their processes aim to providethe required level of control, transparency andaccountability in line with worldwide bestpractice” (1998b, p. 9).

The second basic criticism that the labourorganizations put forth is that Rio Tinto is notadequately accountable for the implementationof its principles and guidelines. The ICEMargues, for example, that there are no clear linesof responsibility between London and the localoperating companies with respect to the over-sight of the guidelines, a situation that leads toinconsistencies in the implementation of RioTinto’s global CSR agenda. The ICEM (1998b,p. 8) states that “Rio Tinto itself knows thatimplementation may most certainly not be uni-versal,” the implication being that Rio Tintoeither does not care about or actually prefers thisstate of affairs. ICEM’s position is that, whilesome of its subsidiaries may live up to theglobal CSR agenda, this is not sufficient. Untilall of its operations (including both whollyand partially owned subsidiaries) are managedin a socially and environmentally responsibleway, Rio Tinto is a valid target of criticismand can rightfully be judged to be sociallyirresponsible.

IV. Richard Bay Mine’s local CSR agenda

Just as the end products which come fromthe minerals extracted from the sandenhance the lives of millions of peoplethroughout the world, so the fruits ofmining are enhancing the lives of thepeople who walk that ground. – ManagingDirector, RBM 1999.

Context – CSR and the politicaleconomy of South Africa

CSR in South Africa has in the past beenrestricted to the domain of paternalistic giftgiving, making charitable donations to variousorganisations, and securing patronage fromtraditional chiefs (with the metaphorical bottleof whisky). This situation began to change withthe crumbling of “apartheid” in the late 1980sand early 1990s. Many analysts consider thespeech made by former President De Klerk onFebruary 2 1990 to be the watershed formore responsible business in South Africa.14 Thecountry was pushed into a new environment inwhich the old rules and norms no longer applied.Initially, without any set of rules or norm toconform to, business was a bit lost. It had todesign a new strategy for engaging with the newsocial order and shift from a “racial capitalism”(policies based on racial ideology) to a “socialcapitalism” (policies based on developmentideology). Business had to rethink how it was tobehave responsibly.

A shift from corporate giving to a totalsocial and political strategy was engaged, withbusiness starting social upliftment programmesand poverty alleviation and supporting the polit-ical negotiation process. Since the 1994 elections,legislation has forced business to start workingdifferently on many fronts. New labour relations,environmental management, affirmative action,black empowerment and corporate governancehave become the accepted standards ratherthan exceptional practices that go beyond “thecall of duty.” International standards and decla-rations have also become integrated, especially byleading business sectors, a process that has servedto help integrate South African business into theglobal economy (Innes, 1992; Botha, 1994).

Within the mining sector, the CSR initiativeshave been impressive in some quarters (althoughit could still be argued that they are insufficientcompared to the profits generated, especially inthe most profitable sectors such as platinum andtitanium). One of the more impressive examplesis the Anglo American and De Beers Chairman’sFund, which has an annual budget of R50million (£5 million). The Fund has adopted an

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“interactive partnership approach,” where “own-ership” and “choice” are the two fundamentalprinciples driving all initiatives (Keaton, 1997b,p. 17). The Fund operates across the spectrumof CSR – from being a charity and donorthrough to acting as an implementing agency.The Billiton Development Trust, establishedby the Billiton company (now BHP Billiton),provides another example of a substantial devel-opment programme. The Trust understands itselfas a development catalyst or facilitator rather thanan implementing agent of development. TheTrust provides funds to NGOs so that they may,for example, “go and promote women’s issuesunder the Billiton banner” (Sepeei, 1999).

While social intervention has always beena practice of mining companies in SouthAfrica and elsewhere, such assistance largelyremained within the confines of the immediate“mining community,” namely employees andtheir families. In South Africa, such a practicehas been fraught with racist policies underlinedby the laws of the apartheid government, whichregulated among other things social infrastruc-ture, housing, transport, separate amenities andeducation. For a number of years before the newdemocratic government came to power in 1994,various mining companies began to acknowledgetheir role in the socio-economic hardships expe-rienced by both urban and rural communities.Recognising that the labour sending areas in thehomelands suffered through migrant labourpolicies, companies such as Anglo American,Johannesburg Consolidated Investments (JCI) andGencor (now known as BHP Billiton) instigatedsocial investment programmes. Subsequently,the events leading up to the first democraticelections, the election victory of the AfricanNational Congress (ANC) and the instatementof Nelson Mandela as President of South Africawould lay the foundation for a more concertedCSR drive on the part of mining companies.

After the elections, the new Reconstructionand Development Programme (RDP), theplatform from which the government launchedtheir poverty alleviation drive, quickly becameseen as important programme for business tosupport, in part due to the government’s activeencouragement of private sector participation. In

1994, Godsell wrote in an article in the SouthAfrican Labour Bulletin “[b]usiness is ready toparticipate in the reconstruction and develop-ment of South Africa,” suggesting that socialinvestment could contribute to the growth ofSouth Africa which “ultimately is the engine ofpoverty relief ” (1994, p. 7). But working withthe new government required shifts in attitudewith respect to managing development programs– a shift from a heavy-handed, controllingapproach to engaging with multiple stakeholderswith different interests. In 1997 the miningindustry presented their official commitment tocommunity development to the South AfricanParliament in Cape Town. In an effort to high-light the shifts that mining companies have gonethrough with regard to environmental and devel-opment challenges Margie Keeton of AngloAmerican stated:

Mines and their communities are confrontingtogether, in a spirit of common purpose andresolve, many of the country’s critical developmentchallenges. Their efforts are making a real contri-bution to the search for effective interventionsbringing new hope and opportunity to those mar-ginalised from the mainstream of growth andadvancement (1997, p. 6).

Mining companies recognize that there is somelegitimacy to be gained in South Africa todayfrom being involved in social and economicreconstruction. This is due in large part to thegovernment’s plea for assistance from the privatesector,15 including a greater emphasis on public-private partnerships. Yet, understanding howto engage in such co-operation is not alwayseasy for an industry that historically has not setparticipation with diverse actors with differentideologies as a top priority. Mining companieshave generally wielded the power to implementcommunity development policies (within limitsset by government) that allowed them to get onwith their core business, namely the extractionof minerals. Now, having to undertake moreparticipatory, democratic approaches to develop-ment, which demand a more professional andconsultative approach, companies are adoptingdifferent models. Some mining companies havehanded over their CSR to non-profit organisa-

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tions to manage, others have established an inde-pendent trust, while others retain the initiativewithin the company structures. The basis forthese individual decisions in not entirely clear.Nor, given the complexity of factors involved indetermining CSR performance, is it yet certainthat any one model is to be preferred over theother.

RBM’s story

Richards Bay Minerals (RBM) is a leadingproducer of titania slag, high purity pig iron,rutile and zircon. Jointly owned by Rio Tintoplc. and BHP Billiton plc., RBM is situated onthe coast of the Indian Ocean in northernKwaZulu Natal province, approximately 20 kilo-meters from the town of Richards Bay. The townis host to at least five major industries, includingfertilizer manufacturing, aluminum smelting andpaper and pulp manufacturing. The immediatearea in which RBM is situated, the MbonambiTribal Authority (MTA), is considered a ruralarea. Mining, commercial forestry, subsistencefarming and basic retail activities dominate theeconomic landscape (URC, 1999). The largerregion surrounding Richards Bay, includingthe dunes in Mozambique to the north andMadagascar to the east, is rich in mineralresources and host to a number of explorationcompanies assessing the feasibility of openingnew mines.16

For its part, RBM has also been seeking toexpand its operations. In particular, RBM hopedto establish a new mine at St. Lucia, just northof Mbonambi. This plan was halted however, asthe South African government – after months ofnegotiations, studies and consultations – decidedto exploit the eco-tourism potential rather thanthe heavy mineral sands. This decision by theSouth African government may have been relatedto the tremendous amount of attention that theproposal for mining drew from environmentallobby groups, NGOs and activists (Solomon,1997). This attention placed not only theSouth African government under the spotlight,however, but also RBM and forced RBM torealign its CSR strategy.

RBM first became involved with communityissues shortly after the mine was established in1976. This initial engagement came about as aresult of the introduction of the SullivanPrinciples (the forerunner of the Sullivan Code).Developed by the Rev. Leon Sullivan – anAfrican-American Baptist minister, a civil rightsleader and a member of the Board of Directorsof General Motors – these principles weredesigned to ensure that American companiesimproved the conditions of their black workers(and their families) both at work and in the homeenvironment (O’Brien, 1998, p. 110). RBM’sinvolvement with community affairs at this time,however, can be best described as limited and adhoc in nature.

It was only during events around the St. Luciaproposal that RBM came to pay more system-atic attention to CSR. The reaction surroundingthe St. Lucia proposal demonstrated to thecompany that undertaking community socialinvestment was good for business and reputationmanagement. The St. Lucia episode highlightedthe need for RBM to professionalise and marketits CSR initiatives. O’Brien states:

[T]he company tried to convince its detractors ofthe fact that RBM would invest in the underpriv-ileged St Lucia communities . . . as it had done inthe Richards Bay area . . . [an] advertising and pub-licity campaign launched [but] it was too late. Thetide of public opinion had swung firmly againstRBM and ultimately the battle for St Lucia waslost by RBM (1998, p. 190).

It is hoped that successful marketing of the CSRprojects will help to encourage the governmentto revisit the issue of allowing mining operationin St. Lucia and to ensure RBM is well placedto take advantage. Investing in “the community”through CSR programs is viewed as investing inthe financial future of the company.

A key step that RBM took in the wake of theunsuccessful St. Lucia proposal was to work moreclosely with the local community through theCommunity Development Council (CDC). Thestated goals here were to help ensure not onlyan effective co-ordination of development ini-tiatives in the MTA but more local participation.RBM now organizes their efforts around a five-

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year plan, which claims to embed the notion of“partnership” in its approach to consultation andto stress a “bottom-up” approach to develop-ment. These principles are supposed to enablethe community to dictate the pace of efforts andpromote community ownership and long-termself-sufficiency of projects. For its part, theeleven-member RBM community developmentteam engages with the surrounding communityon a constant basis about development projectsand negotiations over resettlement of homesteadsand graves and expropriation of grazing andfarming land. RBM now prides itself on thepartnerships that it has established with the localcommunity through its community affairs oper-ation and sees itself as exemplifying the globalpolicies of Rio Tinto on CSR.

RBM’s pride is not without foundation. RBMsupports a variety of CSR projects in such areasas education (e.g., assisting local schools, pro-moting, technical education, teacher training,promoting life skills), health care (e.g., ruralclinics, a 24 hour clinic for employees, anHIV/AIDS program) and community develop-ment (e.g., gardening and cooking clubs, supportfor small businesses, support for a RuralDevelopment Centre). In 1999 it funded its com-munity projects to the tune of R10 million (£1million), a sum that dwarfs the funding that thegovernment has been able to provide. As a result,RBM is the primary agent of development in theMTA.

RBM has not been shy about publicizingits efforts locally. The Mbonambi communityprojects are easily recognisable by large signs indi-cating that RBM either sponsors or assists theproject, whether it be a school, crèche or clinic.RBM also has a share of local supporters whopraise its efforts. Prominent among these is Inkosi(Chief ) Mthiyane of Mbonambi, who has fre-quently expressed his strong appreciation of theefforts of RBM, whom he sees not only “as aneighbour, but also as a friend” (Titania, 7 May1999).17

The counter-narrative – dissenters and the largercommunity

While RBM undoubtedly contributes to localcommunity development through its CSRprojects, it is not without its detractors, bothwithin and beyond the Mbonambi “community.”While within the Mbonambi community oppo-sition is probably muted to a significant extentby the relatively generous levels of spending thatthe company provides, there are still concerns.The major concerns can perhaps be best under-stood in terms of how the company operates itsCSR programs. While institutions like the WorldBank, picking up on the vocabulary or recentdevelopment thinking, advocate a “partnership”model for CSR (e.g., the “Business Partners forDevelopment” programme), developing partner-ships requires trust, learning and an ability tohand over control in a flexible manner. Thisapproach typically goes against the normalproblem solving approach employed in miningfirms like RBM, e.g., establishing what theproblem is and solving it in a technocratic, linearmanner. As a result, local communities like theMbonambi can feel alienated, even when theyare enjoying relatively generous benefits.

Outside of the Mbonambi community, RBMalso has its detractors. As noted above, RBM islocated in the Mbonambi Tribal Authority. TheMTA, however, is but a small part of the Imfolozisub-district, which comprises sixteen tribalauthorities (see Figure 1). The Imfolozi sub-district, in turn, is but a fraction of the largerUthungulu district, which comprises a total ofsixty-nine tribal authorities (Uthungulu RegionalDevelopment Plan, 1998). While each tribalauthority is the legal authority in its own localarea, it is the Uthungulu Regional Council(URC) that is responsible for developmentplanning in the Uthungulu district.

With regards to regional developmentplanning and activities, its relationship withRBM has placed the MTA in a unique, andsomewhat tense, position vis-à-vis its neighbours.In effect, its relationship to RBM, which servesas the de facto development agency for the MTA,has made the Mbonambi community an “islandof development” in a URC sea of underdevel-

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opment. It is an island in two senses. On the onehand, it is much better funded, as is evidentwhen one compares the RBM budget of R10million (£1 million) for community projects inthe MTA with the budget of the URC (approx-imately £4.6 million), which has to be spreadout over 69 tribal districts. On the other hand,the MTA has few external linkages and networks.Most significantly, perhaps, is the fact thatRBM does not share its community developmentplan with the URC. As RBM states, they“have nothing to do with the URC unless it isrequested” (O’Brien, 1999).

For its part, the URC feels somewhat frus-trated with (and a bit resentful of ) the MTA andRBM. As they do not have the communitydevelopment plan from RBM, they cannot inte-grate the MTA into its regional developmentplan (For its part, RBM has not seen the URCregional development plan.) The council officialsinterviewed suggest that the council “takes ahands off approach to Mbonambi” (Marais,1999). Accordingly, the URC, which commonlyrefers to the Mbonambi as the “RBM commu-nity,” does not take the MTA into account whenit comes to the allocation of funds. There is astrong feeling that greater integration of RBMand the MTA into the URC would make formore effective regional development policy. TheURC, however, has no way to force such par-ticipation, nor does such participation seem tobe of interest to the RBM or the leadership ofthe MBA (which is provided with a great dealof local autonomy and political influence by itsrelationship with RBM).

V. Conclusion – two tales of CSR

Rio Tinto and its subsidiaries such as RBMhave committed themselves in recent yearsthrough their CSR agendas to being moresocially responsible. They have expressed thiscommitment primarily in the language of rela-tionships with and responsibilities to local com-munities. Rio Tinto, however, is not without itsdetractors. Such critics differ with the firm at anumber of different levels, viz., basic assump-tions, the understanding of community, local

development practices and the approach to publicpolicy and development strategy. Their differ-ences around these various points, discussedbelow, constitute two different tales of CSR.

Basic assumptions. It is commonly held thatbusiness has an obligation to maximize share-holder value. To the extent that businesshas obligations to stakeholder groups (e.g.,local communities) as well, a tension may arisebetween it meeting these two forms of obliga-tion. There are two basic dimensions to thistension. At a moral theoretical level, the basictension is one of competing moral claims (e.g.,between shareholders and stakeholders), whichmust be resolved on the basis of moral argumentsand analysis. At a practical level (when stake-holder claims are deemed to take precedence),the tension involves the ability of the firm’s boardand management to exercise their moral will totake decisions that go against their own interests(and those of shareholders).

For their part, Rio Tinto and RBM seem tomake assumptions that deny the existence of anytension. At the moral theoretical level, as we haveseen, they tend to assume a harmony betweengood ethics and good business. At the practicallevel, they also seem to assume that the companyis committed to the values that it expresses andthat their managers can act upon them.

These assumptions contrast with those oftheir detractors. Such opponents argue that RioTinto’s efforts to maximize shareholder value doimpinge on its obligations to stakeholders. Theyalso raise the question of whether Rio Tinto hasthe moral will to implement decisions that arenot in the interests of its shareholders. RioTinto’s failure to effectively implement its globalCSR agenda across its subsidiaries, for example,could be interpreted as such a failure of will.

The understanding of community. As was notedabove, defining the notion of community is acomplex and controversial task. It is also the casethat different definitions of community can servedifferent interests. We have seen that at the levelof its global corporate agenda, Rio Tinto doesallow for some flexibility in defining communi-ties which could, in principle, allow for a wide

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range of stakeholder obligations. In the case ofRBM, however, we have seen how a Rio Tintosubsidiary adopts a notion of community thattends to restrict the firm’s obligations. In termsof boundaries, as we have noted, RBM definesthe community as the MTA rather that the largersub-district or district in which it operates. Interms of structure, RBM tends to make simpli-fying assumptions about the community (e.g.,that the local authority is legitimate, that thereare no significant conflicts of interests, etc.).These assumptions about the nature of the com-munity serve to reduce RBM’s costs (by allowingthem to streamline decision-making, not takeinto account certain issues and claims, etc.).

In contrast to Rio Tinto’s definition, it ispossible to understand community more broadly(e.g., as the Uthungulu community). It is alsopossible to acknowledge that the community isat times divided by different interests, values andstrategies. This is the approach that is taken bythe various opponents of Rio Tinto. Doing so,however, is likely to increase the demands onRBM and Rio Tinto and, thereby, increase theircosts (and decrease profits).

Local community development. As noted above, cor-porations can engage in CSR programs (and localcommunity development projects) either out ofmoral or pragmatic motivation. These two moti-vations, however, are not necessarily compatibleand do not necessarily lead to the same results.To the extent that corporation are primarilymotivated by pragmatic considerations, they areseeking to reduce costs (related to disruptions,protests, shareholder action, etc.). To reduce coststhey need to target different audiences. One isthe local community, which may be both a directsource of costs (by initiating lawsuits, demon-strating, etc.) and an indirect source of costs(when portrayed by others as being adverselyaffected by the firm’s operations). Anotheraudience is comprised of potential financiers(e.g., shareholders, banks, multilateral lendingagencies, etc.), which may be reluctant to investfor either moral or pragmatic reasons (whichmight involve issues of costs, fiduciary responsi-bilities, etc.). Another possible audience that mayneed to be placated is made up of NGOs and

social movements. In order to promote theirultimate goal of profit maximization, firms willhave to take into account the costs and benefitsof addressing the concerns of each of thesegroups, in the process ignoring the interests andclaims of some (e.g., small NGOs) and payingclose attention to those of others (e.g., multilat-eral financial institutions).

As we noted above, Rio Tinto and RBM tendto make the simplifying assumption that being a“good neighbour” is good for business. In doingso, they do not have to address the issue of whoseinterests they need to address and what the costsof doing so are. Similarly, by supposing a limitedand undifferentiated concept of community andthe legitimacy of local elites, they can claim thattheir projects are promoting the form of devel-opment that the local community wants andthat they are fulfilling their responsibilities. IfNGOs or other groups disagree with them, thenRio Tinto can always point to its support fromthe local community (as Rio Tinto/RBM hasdefined it).

Rio Tinto’s detractors, on the other hand,have a different story to tell. They argue that tothe degree that companies like Rio Tinto areoperating on the basis of pragmatic motivation(i.e., profits), they are basically engaging in apublic relations program. As such, they willgenerally want to finance high profile projects(which will put them in good stead with poten-tial financiers and local elites) and to maintainsignificant control over the nature of the projects(so as to be able to choose and promote themeffectively). However, firms like Rio Tinto areconstrained (for PR reasons) by their “commit-ment” to good development practices (includingsuch values as participation) and their need toget cooperation from local elites and passiveacceptance by the local population. Under thesecircumstances, the most logical options for a firmare to: 1) try and restrict the number of itsprojects and the area over which it operates, soas to make its impact appear more impressive (ona per capita basis); 2) to try and retain controlover the projects selected (to make certain thatthey are high profile and provide good PR valuefor the money spent); 3) to limit participationto symbolic participation (so as not to impose

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excessive costs) and; 4) to ensure that the inter-ests of the local elites (in terms of selection ofprojects, public acknowledgment, etc.) are met.This, critics will argue, is what Rio Tinto hasdone. This is not to claim that Rio Tinto’s –and in particular RBM’s – efforts have not hadany positive development impact, as they clearlyhave. Rather, it is to claim that Rio Tinto hasnot fully lived up to its responsibilities (i.e., itshould be providing more resources to morepeople, it should be respecting labour standards)and that it has not effectively promoted devel-opment (i.e., the resources that it has used couldhave been allocated more efficiently, albeit inways that probably would have had less PR valuefor the firm).

Public policy and development strategy. Rio Tinto’sand RBM’s CSR agendas operate in a largerpolitical economy context. This is constituted bydifferent programs of economic liberalization(e.g., trade, financial markets, etc.) as well as areduction in the various roles of the state (e.g.,as economic agents, as providers of health, socialand educational programs, etc.) in countriesaround the globe. In addition to being scepticalabout the wisdom of this liberalisation for thepromotion of economic development generally,many critics of economic liberalization have amore specific concern that relates directly toCSR. The concern is that the CSR agendas ofTNCs do not only serve to help local commu-nities (and reduce TNC costs), but also functionto justify liberalization policies. By taking overfunctions that have traditionally been seen as therole of the state, CSR programs may operate tolegitimate government cutbacks and the privati-sation of social programs. This in turn, it isfeared, is resulting in decreased social spending,inappropriate priorities and the creation of“islands of development” (centered around cor-porate sites) in a larger sea of underdevelopment(as it could be argued is the case of the MTA andthe Uthungulu district).

While there is little reason to doubt that CSRcan function to legitimate liberalization and theprivatisation of government functions (Crookeand Manor, 1998), it could be argued that thisis not necessarily the case. While Rio Tinto does

not address this claim directly, others have devel-oped conceptualisations and languages that allowfor alternative explanations of the role of TNCsin providing services vis-à-vis the state. Ferguson(1998), for example, believes that the positionstated above involves a conceptualisation ofTNCs as typically operating “below” the state,but at times (and more and more) entering thestate’s domain. He suggests that an alternativewould be to view TNCs as an “integral part ofa new transnational apparatus of governmen-tality” (1998, p. 21). In this new apparatus, thelines between business and government maybecome more blurred, but it does not necessarilymean a withdrawal by the state. Rather, ifbusiness takes on a larger responsibility thanit previously had, this would allow the govern-ment to target it’s development programs moreeffectively.

These two stories of CSR (and the concep-tions of community that underlie them) areclearly contradictory. The story that Rio Tintotells, is obviously the one that works to its advan-tage. This is not to say, however, that it could notalso be the one that works to the best advantageof local communities. Rio Tinto’s case remainsshaky, however, weakened by its own failure toeffectively and consistently implement its ownglobal CSR agenda. While some of its operationslike RBM have served as “showpieces,” otherscontinue to lag much further behind (not onlywith respect to local development projects, butalso in terms of human rights, environmentalissues and labour relations). More consistent (andtimely) implementation would go a long way inmaking Rio Tinto’s story more convincing.Whether this would result in a practical refuta-tion of the alternative story is unclear, however.These narratives collide in the context of thelarger disputation about processes of economicglobalization. Yet, while it may not be possibleto envisage any resolution between the com-peting sides in this debate, companies like RioTinto can (and should) continue to take steps thatat least make their stories more consistent inter-nally.

292 Paul Kapelus

VI. Epilogue

Since the research for this paper was done (in1999), there have been some developments. Mostsignificantly, perhaps, RBM has taken some stepsto try and work more closely with regionalplanning authorities. I have not yet been able totry and evaluate the reaction by local communi-ties to these recent efforts, nor do I know ofother attempts to do so. For its part, Rio Tintocontinues to refine its global CSR Agenda. Thishas included the publication of “Human RightsGuidance: Guidance for managers on imple-menting the human rights policy in ‘The WayWe Work’ ” (2001), efforts to ensure that its non-managed companies also comply with appro-priate CSR principle and practices, expandingpartnerships (e.g., with Earthwatch), as well assigning on to the United Nations’ “GlobalCompact.” To this extent, it is attempting tomake its own story more consistent.

Despite its on-going efforts, Rio Tinto con-tinues to come under criticism. In 2000, forexample it was sued in a US court by residentsof Bougainville, Papua New Guinea (who allegethat the firm is responsible for environmental dis-asters, toxin exposure, and the murder or resi-dents committed in complicity with the localdefence force). Rio Tinto’s operations in Brazilhave also come under attack for human rights,environmental and health and safety violations.Similar complaints continued to be launchedregarding Rio Tinto’s PT Kelian Mine inIndonesia (Drillbits and Tailings, 2000). Suchpractices, critics claim, are not only unacceptable,but constitute violations of the commitmentsthat Rio Tinto made when signing on to theUN’s Global Compact (Kennedy, 2001). Nor isit only stakeholders who are concerned. Seniormanagement has also come under criticismby (some) shareholders, who are upset, amongother things that management did not supportshareholder resolutions at the March 2000Annual General Meeting, which called for RioTinto: 1) to become more accountable to share-holders through the appointment of an inde-pendent Deputy Chairman, and; 2) to implementa code of labour standards “based on the inter-nationally agreed core human rights conventions

of the United Nations’ International LabourOrganisation” (Asia-Pacific Human RightsNetwork, 2001). Both resolutions were easilydefeated. Thus, while Rio Tinto’s story may bebecoming internally more consistent, it wouldseem that it is still far from convincing its criticsthat this is the proper story to be told.

Acknowledgements

The author would like to acknowledge thesupport and assistance offered by Richards BayMinerals, Uthungulu Regional Council and res-idents of Mbonambi, which made the researchfor this paper possible. He would also like toexpress his appreciation for the support providedby the Mining and Energy Research Network(MERN), University of Warwick and Dr. RalphBrillo at Sussex University.

Notes

1 These interviews and this paper are based onan MA Dissertation at the University of Sussex(Kapelus, P., 1999. Mining and the Community: AnEthnography of Transnational Corporations and“Corporate Social Responsibility”), written withsupport from MERN.2 Among these are the Universal Declaration ofHuman Rights, International Labour Organisation(ILO) conventions and Tripartite Declarations ofPrinciples concerning Multinational Enterprise andSocial Policy, the International Covenant on Civil andPolitical rights, and the Organisation for EconomicCo-operation and Development (OECD) Guidelinesfor Multinational Enterprise. Various environmentalguidelines such as Agenda 21, International StandardsOrganisation, certification standards and environ-mental and social impact assessments have emergedout of international conferences and environmentalagreements.3 Despite all the time and resources put into buildingcommunity relations, it would appear that the miningindustry is still struggling in its efforts. A vice presi-dent of Orvana Minerals put the situation this way,“The point of contact and potential conflict betweencommunities and mining interests over social, socio-economic and environmental issues has been drawnforward from the mining phase into the exploration

Mining, Corporate Social Responsibility and the ‘Community’ 293

phase . . . the industry collectively is ill equipped tohandle this reality” (Thomson, 1997, p. 1).4 For a discussion on culture as a constraint to devel-opment, see Grillo (1997) and Crewe and Harrison(1998).5 Societies charcacterised by refugee movements maybe particularly susceptible to having their traditionalidentities questioned and having to take on multipleidentities.6 For their part, corporate leaders are certainly notunaware of the contested nature of “the community.Marc Gonsalves (1999) of Billiton plc (one of the co-owners of Richards Bay Minerals) states the situationthis way, “the community is like a wheelbarrowpushed around by different political forces.”7 This is a complex question as firms are themselvescomplex organizations and operate within a largerbusiness system. In such a system, business firms haveto operate within the constraints of profitability. As aresult, CSR projects and budgets also have to operateunder constraints. Insofar as firms have obligations toshareholders and other stakeholders (e.g., consumers,employees) as well as stakeholders commonly associ-ated with CSR programs (e.g., local communities),then discussion about the constraints that have to beplaced upon CSR programs do not necessarilyindicate only a pragmatic motivation (although theymay), but may also have a strong moral component. 8 It would, of course, be an important issues fordeontologists, virtue theorists and others who placea strong emphasis on motivation in moral analysis. 9 Cragg et al. (1995) have argued that if firms onlyoperate out of pragmatic motivation, they are notlikely to act in a responsible fashion.10 Not only firms, but pro-business groups like thePWBLF also readily make this assumption. ThePWBLF, for example, declares that being responsibleto communities and cultures will “add value” to bothshareholders and society (Nelson, 1998). 11 Another argument that may help to ease thistension, relates to the notion of “dependency.”Companies and their CSR experts may express moralconcerns that in undertaking CSR there is some riskof creating dependency on the company and localauthorities. This could relate to situations in whichfirms are fulfilling legally required or voluntary oblig-ations (e.g., ensuring workers have adequate accessto health and education services, community devel-opment projects, etc.). Such dependency, it could beargued is not good for the “beneficiaries” of theseservices in the long run. As well, from the perspec-tive of the pragmatic interests of firms, such depen-dency may also be undesirable as they may increase

long term liabilities and undermine shareholdervalue.12 Among the areas in the developing world whereRio Tinto has come under harsh criticism are PapuaNew Guinea, Indonesia and Namibia. In Papua NewGuinea, Rio Tinto’s Bougainville mine has becomesynonymous with environmental damage and associateproblems. In Indonesia, the company’s operations(e.g., the Kelian mine) during the time of the Suhartodictatorship were not only charged with extensiveenvironmental and labour abuses, but also with majorhuman rights abuses, including numerous murdersinvolving paramilitary organizations. During theapartheid era in South Africa, Rio Tinto was violatingbasic international standards by illegally mininguranium in Namibia. In direct violation of UNresolutions, the company extracted uranium,according to the United Nations Council forNamibia, “by virtual slave labour under brutal con-ditions” (Asia-Pacific Human Rights Network, 2001).13 It is interesting to note that the layout, type face,pictures, paper quality and cover images of thesedocuments reveal the same attention to aestheticconsiderations as the Rio Tinto corporate documents,brochures and magazines.14 This speech indicated that there would be ahandover of power through democratic elections andthat Nelson Mandela would be released from prisonafter 27 years of incarceration.15 Such appeals have been made by various membersof government as well as during the Truth andReconciliation Commission (TRC), where BishopTutu called upon business to recognise it’s role inapartheid and participate in the development of SouthAfrica.16 These include Kenmare (Irish), Billiton (SouthAfrican), Southern Mining (South African) and QIT(Canadian), among others. 17 It is interesting to note that some RBM officialsclearly express their commitment in moral terms.Mr. Jabu Khubeka (General Manager, Public &Community Affairs), for example, states that thevarious CSR projects are being undertaken because“what we believe in is human rights” and “we cannotsleep if our neighbour is dying of hunger, we havegot to look in our cupboard” (interview, Mr. J.Khubeka, 23/06/99).

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