Corporate social responsibility (CSR) is increasingly becoming institutionalised, with a growing number of stakeholder bodies seeing it as a necessity not an option, Minelife founder and chief executive of the VM Group Jessica Cross told the 2008 Mining Indaba on Monday.
Organisations who were accepting the necessity for CSR ranged from communities to financiers, from governments to shareholders, she said.
“There are still people who quote Milton Freedman that the responsibility of management is to generate profits. This is business logic at its narrowest and most myopic,” said Cross. “It might have held water in the 1970s, but today this logic is being rendered more moribund day by the day.”
However, Minelife was not at odds with profit maximisation, added Cross. A healthy workforce drawn from a healthy community and a better educated workforce strengthened firms.
“But it’s not only about health issues and building schools,” she said.
It was also about building capacity in local communities to provide the mines with their procurement needs. In many instances, communities around the mine can be used more effectively to provide for the mines needs than providers a long distance away.
In addition, “companies without good CSR will lose resources,” she said.
Not only governments, but also banks are increasingly scrutinising CSR before granting mineral rights or financing mining operations.
Minelife is a joint initiative supported by VM Group, Barrick, Gold Fields, Platinum Group Metal, Implats, Harmony and Xstrata aimed at sharing best practice, facilitating the co-funding of the projects and promoting industry-wide CSR progress.
Minelife is unique in the private sector since it runs counter to the established business practice of companies competing in the social development agenda.
The Minelife Alliance has a unique funding strategy, structured to ensure the transfer of all funds directly into projects, concluded Cross.
© 2009 Virtual Metals. All Rights Reserved. Logos by Shen Schubert
CONTACT US: firstname.lastname@example.org