Corporate Social Responsibility

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Corporate Social Responsibility

• What is it and how does it work?

Jim Rader, Associate Montreal June 11,, 2008

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Canadian Business for Social Responsibility (CBSR)

• Canadian but work internationally
• Non-profit association of member companies
• Work with members to improve their social
  responsibility
• Focus across industrial sectors retail,
  manufacturing, finance, telecommunications, oil,
  gas, mining

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Extractive Membership Sample List
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Areas of Expertise

• Aboriginal peoples
• Social risk assessment for projects
• Conflict resolution negotiation
• Social audits eg. Equator Principles
• Community Investment
• Stakeholder Engagement
• Performance measurement reporting

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What is Corporate Social Responsibility (CSR)?

• CSR goes beyond meeting legal obligations
• CSR means meeting the social, ethical and/or
  cultural values or expectations of the society in
  which a company operates

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Always existed with capitalism

• Social riots in England in 19th century
• Milk quality in rural Nevada in early 1900s

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But which social values is a company expected to
meet?

• World is no longer just about local values
• Globalization of values going on eg.
• Human rights
• Womens rights
• Environment protection

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Not meeting social expectations has real
consequences

• Local, national or international protests
• Reputation suffers
• Legal challenges
• Pressure on investors
• Share price suffers
• Risk insurance prohibitive
• Investment capital dries up

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So, CSR is about Controlling Risk

• If CSR doesnt have a business case, it wont be
  done or wont be done well
• But also means real behavioural change in the way
  a company does business

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Why has CSR become so important for Mining
Companies?

• Lack of trust in governments to protect the best
  interests of its peoples
• Weak regulatory frameworks
• Few direct benefits from mining activity in
  impact area of the mine
• Legacy issues

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Case Study 1 Uranium, Northern Saskatchewan,
Canada

• Background Mining in Northern Sask.

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Case Study 1 Uranium Mine

• The Challenge
• Local population 90 Indigenous Peoples
• Below Grade 8 education
• Poor subsistence economy based on fishing and fur
  trapping
• Drug and alcohol abuse

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Case Study 1 Companys Response

• Focus on employment services
• Adapted employment criteria to reality of
  aboriginal population
• Started on-the-job training apprenticeship
  programs
• Allowed general educational upgrading
• Internal company goals to drive process
• Worked closely with govt to access existing
  training/education programs
• Forced local sourcing with established companies
• All voluntary. Impacts and Benefits Agreement
  (IBAs)
• 20 years later
• 65 employees are aboriginal of approximately
  2,5000 total
• Major bulk fuel, catering, house cleaning,
  environmental services and air service providers
  are multi-million dollar aboriginal-owned
  businesses

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Case Study 2 Gold Company, Guatemala

• Communities
• Afraid of water contamination
• No trust in government
• Lack of understanding of western science
• Major local, national, international campaign
  against mine

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Example 2 Companys Response

• Focused on Community
• Created community environmental monitoring
  committee
• Reps chosen by communities
• Independent technical advice USAC
• Independent testing at Canadian lab
• Mine tours open to anyone who wants to come

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Example 3 Gold Mine, Peru

• Concerns
• Lack of economic benefit to local population
  (185,000)
• Lack of local sourcing
• Little preferential hiring or training
• Lack of alternative economic activities

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Example 3 Company Response

• Community Foundation
• 10 month consultation process
• Focus on local sourcing
• Focus on alternative economic activities
• Attuned to community priorities

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Lessons Learned for CSR

• Respond to felt need or value of community
• Dont replace governments enhance capacity
• Dont create dependency on company enhance
  capacity of community
• Sign an IBA

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END
www.cbsr.ca