Resources Policy xxx (xxxx) xxx–xxx

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Resources Policy
journal homepage: www.elsevier.com/locate/resourpol

Corporate social responsibility, risk and development in the mining industry

Tomas Frederiksen
University of Manchester, Global Development Institute, 1.007 Arthur Lewis Building, Oxford Road, Manchester M13 9PL, United Kingdom

ARTICLE INFO ABSTRACT

Keywords: In this article I examine how metals mining companies understand and act upon CSR as risk management and the
Corporate social responsibility consequences for community CSR projects. I begin by exploring the literature on CSR and development in the
Mining mining industry, motives for CSR engagement in the industry, and risk and risk management. I then draw on my
Risk research data to map how CSR programmes are seen as an important method of managing strategic challenges to
Development
firms — categorised here as reputational, operational or regulatory ‘risks’—and note how competition for capital
Accountability
and recent changes in the legal environment have furthered this process. A focus on CSR as risk management can
illuminate the poor development outcomes of community CSR projects, despite recent rises in spending. ‘CSR as
risk management’ introduces immanent limitations including treating CSR as PR, targeting those that pose the
greatest threat rather than those with the greatest need, excessively simplifying complex processes and focussing
on maintaining the status quo. In risk management thinking, CSR activities may be a high organisational
priority, integrated into central decision-making processes and subject to a great deal of investment, but still see
little progress towards inclusive development for those living closest to mining operations. I conclude by re-
flecting on what this means for future action and research.

1. Introduction: CSR, development and mining Contrasting these international and policy efforts, research on the
local development impacts of the mining industry's CSR activities
Corporate social responsibility (CSR)1 and development have had a paints a bleak picture. Decades of empirical research argue that these
rocky history in the mining industry. At the international level, since CSR activities almost never live up to their aims and can have per-
the 1992 United Nations Conference on Environment and Development nicious effects (Slack, 2012). Many empirical case studies of corpo-
in Rio, the mining industry has moved to reorient itself through a series rate-community relations and the impacts of CSR programmes for
of global initiatives which elaborate ways mining can and does con- those living with mining operations critique the ambiguous or out-
tribute to sustainable development (Dashwood, 2012). Adopting global right negative environmental and social impacts of mining in the
standards of CSR is a key signifier of responsible behaviour in the developing world, (Bebbington, 2012; Bury, 2013; Hilson, 2012;
mining industry. These standards, and a series of policy and other Himley, 2014). For critics, the contrast between the high promises
pronouncements, offer CSR as an important way for the private sector and limited development benefits (e.g. improved health and well-
to deliver development, linking economic and social goals to produce being for local populations) from CSR programmes is evidence of
‘win-win’ outcomes (DFID, 2011). Mining is central to debates on the duplicity by mining companies; that CSR is a PR stunt, empty of
role of CSR in promoting development with CSR in the extractive sector content (Kuyek, 2006; Slack, 2012). In these critiques, companies are
“arguably the most extensive of any corporate sector” (Slack, 2012, p. simply continuing in their previous modus operandi but with more
180). The literature is near-unanimous on the growing engagement sophisticated public relations techniques. Critics argue companies are
with CSR in the mining industry and beyond, noting changed corporate unwilling to change their behaviours or invest the resources needed
structures, increased staffing in CSR teams, greater reporting and in- to improve their impacts and development outcomes (e.g. improved
vestment in remedial and community development programmes health and wellbeing for local populations) (Banerjee, 2001).
(Blowfield and Murray, 2011; Franks, 2015; Kemp, 2009). Changed behaviour, according to these critiques, requires greater

E-mail address: [email protected].

1
For this paper, CSR is an ‘umbrella term’, taking in the voluntary and quasi-voluntary actions undertaken by mining companies to mitigate their environmental or
social impacts or improve the social or environmental wellbeing of the areas in which they operate (e.g. community investment, CSR programmes, mitigation and
compliance programmes); the extent and manner in which companies engage local, national and international stakeholders (e.g. corporate-community relations and
shareholder or stakeholder relations) and the actions taken by companies to either live up to or shape expectations society has of them (Blowfield and Frynas, 2005,
p.503; Carroll, 1979).

https://doi.org/10.1016/j.resourpol.2018.09.004
Received 6 March 2018; Received in revised form 31 August 2018; Accepted 12 September 2018
0301-4207/ © 2018 The Author. Published by Elsevier Ltd. This is an open access article under the CC BY license
(http://creativecommons.org/licenses/BY/4.0/).

Please cite this article as: Frederiksen, T., Resources Policy, https://doi.org/10.1016/j.resourpol.2018.09.004
T. Frederiksen Resources Policy xxx (xxxx) xxx–xxx

corporate accountability (Blowfield and Frynas, 2005; Levy and companies in the industry have changed their approach and level of
Kaplan, 2009; Utting and Marques, 2010). investment in CSR.
A growing literature on the mining industry grapples with this ap- CSR programmes and behaviours hope to support development in
parent contradiction: on the one hand new policy and apparent effort, areas of operation. Both those studying development (Blowfield and
on the other little improvement on the ground. There are many reasons Frynas, 2005; Utting and Marques, 2010) and from the mining in-
CSR programmes, like other development interventions such as aid dustry (Harvey, 2014) have met the entry of private sector actors into
programmes, may not produce inclusive development including in- the sphere of development with trepidation. Much of this unease
appropriate design of programmes, community resistance and adverse comes from concern around how private actors in the development
political contexts.2 The interest here, however, is in the immanent sphere bring approaches, logics and goals which either preclude or
limitations of the CSR agenda in the mining industry – those factors are incompatible with the justice and equity aims of much develop-
within the understandings and practices of CSR in the metals mining ment work (Blowfield and Frynas, 2005; Utting and Marques, 2010).
industry which undermine the ability of CSR spending to improve the In the literature, development is understood as a multifaceted process
lives of those who live closest to mine sites. In a competitive industry of changing economic, social, political and environmental conditions
with companies under great pressure to keep costs down, research has to sustainably enhance wellbeing and capabilities. The conceptions of
pointed to how notions of risk are central to justifying CSR expenditure development adopted by mining companies are much narrower than
(Campbell, 2012; O'Faircheallaigh, 2010). A highly risky industry, this this (Banks et al., 2016). In one sense—that of what Hart (2001) terms
literature connects growing CSR engagement to the range and severity ‘little ‘d’ development’ of the unfolding of capitalist processes across
of risks mining companies face (Hamann and Kapelus, 2004; Kemp space and time—mining companies have always been development
et al., 2016). actors. It is their entry into big ‘D’ Development of planned inter-
In this article I examine how metals mining companies understand ventions to improve the wellbeing of specific groups that has sparked
and act upon CSR as risk management and the consequences of this for debate and is the focus here (Banks et al., 2016; Hart, 2001). The
the development potential (i.e. potential to support inclusive develop- interest in this study is how mining company CSR activities support
ment) of community CSR projects. I begin by exploring the literature on inclusive development rather than simply economic growth or redis-
CSR and development in the mining industry, motives for CSR en- tributing wealth from mining companies to surrounding commu-
gagement in the industry, and risk and risk management. I then draw on nities.3 Mining company CSR activities seek to support development
my research data to trace the logic of how CSR programmes are seen as through a range of means discussed below. These include skills
an important method of managing strategic challenges to firms—cate- training, giving of agricultural inputs and activities closely aligned
gorised here as reputational, operational or regulatory ‘risks’—and note with mining firm activity such as local content policies that support
how competition for capital and recent changes in the legal environ- purchasing services and goods from local businesses. The breadth of
ment have furthered this process. In the next section, I analyse how this activities undertaken by many large mining companies to promote
framing has made CSR central to the operations of many mining com- wellbeing in their areas of operation through their CSR departments
panies in recent decades and also limited the development potential of is often remarkable.
these resources. Linking CSR and risk management prioritises specific This increased engagement and resourcing for corporate social re-
aims, targets and modes of CSR which undermine the capacity of this sponsibility activities has frequently not translated into improved social
spending to promote inclusive development. I conclude by reflecting on and environmental outcomes for those living near mining operations in
what this means for future action and research. the developing world. Most analysts locate blame for this in the internal
dimensions of mining company behaviour. For example, Slack argues
2. Corporate social responsibility, mining and risk: the literature that the gap between the rhetoric and reality of CSR exists because
“companies have not fully integrated CSR … into their business models”
In this section I introduce the literature on CSR and development in (Slack, 2012, p. 179) while Kuyek dismisses CSR as rhetoric aimed at
the mining industry before summarising the different drivers for in- “legitimating plunder” (Kuyek, 2006, p. 203). Both call for increased
creased engagement with CSR and research on the sociology of ‘risk’ accountability of companies to produce ‘genuine’ behavioural change.
and its role in the mining industry. Those more sympathetic to the efforts of the mining industry too argue
that the development prospects of the industry depend on “the extent to
2.1. CSR and development in the mining industry which the private sector internalizes the environmental and social
consequences of development into business decision making” (Franks
The literature is unanimous on mining companies’ rising engage- et al., 2014, p. 7581; Kemp, 2009). This echoes the influential argument
ment with CSR since the 1980s (Franks, 2015; Kemp, 2009). Hevina that “fragmented” approaches to CSR are behind many of its failings
Dashwood (2012) charts the rise of CSR in Canadian mining firms (Kramer and Porter, 2007, p. 80). These studies reasonably assume that
showing how in the 1990s, reporting on environmental and social motives drive behaviours adopted and resources committed by com-
issues began, policies developed and finally board level positions with panies; that factors internal to companies have an important effect on
responsibility for CSR were created. Several studies report increased the development potential of CSR in the mining industry. They argue
investment in CSR within the industry and attendant changes in that greater internalisation or integration of CSR into mining company
corporate structure (including new personnel and teams), decision- thinking will lead to improved corporate behaviour and local devel-
making (including using new forms of expertise) and increased opment. Motives, then, have become a key area for understanding the
community investment (Dashwood, 2012; Franks, 2015; Kemp, role and impact of CSR in the mining industry.
2009). Today, medium and large mining companies without board
members responsible for CSR are the exception. A particular focus has
been programmes to promote local development around mining op-
erations. In 2012 the 15 largest mining companies spent a combined 3
Hickey (2013, p. 3) sees inclusive development “as occurring when social
$1.7 billion on community investment (Franks, 2015). Budgets have and material benefits are equitably distributed across divides within societies
increased the scale and scope of activities undertaken by mining (across income groups, genders, ethnicities, regions, religious groups and
companies under the banner of CSR. While not universal, most others). These benefits necessarily comprise not only economic and material
gains but enhanced wellbeing and capabilities as well as social and political
empowerment being widely experienced.” For surveys of different approaches
2
I explore some of these in Frederiksen (2018). to development see Kothari and Minogue (2001) and Peet and Hartwick (2015).

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2.2. Drivers of CSR in the mining industry accommodate” (Francis and Armstrong, 2003, p. 376).4 Many re-
searchers are critical of how the shift to risk management privileges
The dominant literature on understanding increased company en- certain forms of knowledge and actors in ways which exclude wider
gagement with CSR activities has focussed on its relation to ‘the busi- groups from decision-making or narrows the terms under which debates
ness case’. Much discussion about CSR and its rise argues that it sup- can take place (Beck, 1992; Lidskog and Sundqvist, 2012; Power,
ports the goal of profit maximisation within companies; that there is a 2007). This is a voluminous literature. Here I note four tendencies with
clear ‘business case’ for CSR (Crane, 2008; Kotler and Lee, 2005). This the shift to risk thinking and management relevant to the current ar-
understanding is contentious. Despite the popularity of normative gument: (1) The recent growth in impact and scope of risk management
concepts such as ‘creating shared value’ that argue that CSR activities in the private sector has its origins in the finance and insurance sectors
are in businesses’ economic interests, ironically, the clear cut business (Emel and Huber, 2008). From these roots, risk analysis — the process
case argument is undermined simply by its being debated for so long of comprehending the nature of risk and determining risk levels (ISO,
without conclusive evidence (Kramer and Porter, 2007; Margolis and 2009) — in the private sector brings a tendency to abstraction, quan-
Walsh, 2003). David Vogel argues that what business case there is for tification and “non-field specificity” which obscures or plays down the
CSR remains “niche,” e.g. for companies targeted by NGO campaigns context-specific nature of risks and responses to them (Power, 2007, p.
(Vogel, 2006, p. 3). This is a ‘niche’ into which much of the mining 13). (2) Risk management, though ostensibly about managing things
industry would fit. While it is often difficult to make a clear cost/benefit external to organisations, often leads to more insular, internally fo-
argument for CSR expenditure, it is clear that “profit-making now has cussed forms of decision-making (Power, 2007). (3) Risks may reflect
broader prerequisites” and that mining companies take these factors real-world phenomena but they are socially constructed through risk
into account (often through the lens of risk—discussed below) analysis and management. Risk identification and response selection is
(Trebeck, 2008, p. 351). a matter of human choice and thinking and shaped by power relations.
Researchers have argued these ‘broader prerequisites’ driving in- This process of social construction takes place within specific contexts
creased CSR engagement are a range of strategic challenges for the which give the risks identified and the responses to them context-spe-
mining industry: a changing governance context, legitimacy (noted cific attributes and consequences (Lidskog and Sundqvist, 2012). What
above by Vogel) and conflict. One strand of research traces increased constitutes a risk and how it is managed varies from sector to sector
engagement with CSR in the industry to a changing governance context. with important consequences. Much as the language conceals this, there
This can be in response to ‘governance gaps’ at the global or local level are distinct genealogies and constellations of risk and risk management
where the private sector takes on the role of providing public goods and that the literature has mapped (O'Malley, 2012). (4) Private sector risk
coordination where states are unable or unwilling to act (Blowfield and analysis's “aura of scientificity” and aims of objectivity and making the
Frynas, 2005; Levy and Kaplan, 2009; Newell, 2005; Scherer and uncertain tractable and manageable have given it considerable man-
Palazzo, 2011). At the local level, particularly in developing countries, agerial appeal and widespread adoption (O'Malley, 2012; Power, 2007,
the CSR programmes of large mining companies can fill gaps in weak p. 29). This cultural authority and “political power is often invisible”
states’ public service provision such as supplying infrastructure with research seeking to illuminate the justice and distributive impacts
(Blowfield and Frynas, 2005; Campbell, 2012; Szablowski, 2007). An- of the rise of risk management thinking and behaviours in the private
other large strand of research sees increasing investment in CSR as a and public sectors (Beck, 1992; Lidskog and Sundqvist, 2012; Power,
response to challenges to the legitimacy of the mining industry. Subject 2007, p. 15).
to decades of civil society critique, in this view, CSR in the mining in- Since the 1990s, ‘strategic risk management’ — taking in a wide
dustry can be a rhetorical exercise to improve the image of a tarnished range of risks, managing them at the highest echelons of companies —
industry (Hilson, 2012; Jenkins, 2004; Moody, 2007). At the local level, has become central to corporate governance in the mining industry
legitimacy has been recast within the mining industry as having a ‘so- (Boatright, 2011; Power, 2007).5 Strategies for managing risk have long
cial licence to operate’ from host communities and nations (Morrison, been at the heart of the industry as mining is a risky business: long-
2014; Owen and Kemp, 2013). If legitimacy or the ‘social licence’ de- term, large, geographically fixed capital investments that are subject to
teriorate, CSR is a way to ameliorate conflicts. Several studies see CSR fluctuating global commodity prices and create substantial social, en-
as an effort to reduce conflicts and maintain security around mine sites vironmental and political impacts (Emel and Huber, 2008;
(Hilson, 2012). Here, CSR initiatives effectively ‘buy off’ critics of O'Faircheallaigh, 2010). Owen and Kemp (2013, p. 34), for example,
mining or those who have been ‘excluded’ from their land and resources argue that “mining company decision-making is motivated by profit
because of industry expansion. In this understanding, the wider trend maximisation and control of risk.” Many authors have noted that risk
towards increased CSR spending is a response to growing conflict sur- management features in how mining companies think about CSR and
rounding mine sites globally (ICMM, 2015). that this link has raised CSR on mining company agendas (Dashwood,
2012, 2007; Emel and Huber, 2008; Franks et al., 2014; Gilberthorpe
2.3. Risk and the mining industry and Banks, 2012; Graetz and Franks, 2015; Kemp, 2009). Much of this
work critiques mining companies for linking CSR and risk management
An important strand of research seeks to understand how mining and argues that doing so is inimical to promoting development (Kemp
companies respond to these changed circumstances and demands and et al., 2016; Kemp and Owen, 2013; Owen and Kemp, 2014, 2013;
integrate them into business decision-making through the lens of risk. Trebeck, 2008). There are several threads to this critique in the lit-
This draws on a wider literature on ‘risk’—understood here as “the erature. For some, this focus on risk management prevents the main-
effect of uncertainty on objectives” (ISO, 2018, p. 1) — across the social streaming of CSR concerns within company decision-making (Slack,
sciences. This literature examines how risk has become a pervasive 2012). For others, the conceptions of risk used by mining companies are
concept in modern society, reshaping organisational and personal be- flawed as they conflate risk to people and risk to projects in a vague
haviour, and its effects, particularly for public decision-making (Beck,
1992; Hoffman, 2001; Husted, 2005; Kytle and Ruggie, 2005; Lidskog
and Sundqvist, 2012; Power, 2007). In the private sector, risks are 4
There is also an important discourse around risk also including opportu-
largely seen as threats posed to corporations’ operations and profit- nities rather than just threats in risk management thinking—that managing
ability and risk management is “the application of policies and proce- risks well, or better than others, presents opportunities for profitability (Emel
dures to the tasks of identifying, analysing and assessing risks, de- and Huber, 2008; Kytle and Ruggie, 2005).
termining the degree of exposure to risk that organisations can 5
For Thomson, this process intensified after 2008 when competition for ca-
pital increased (pers. comm.).

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T. Frederiksen Resources Policy xxx (xxxx) xxx–xxx

category of ‘social risk’, focussing on the latter (Kemp et al., 2016). A 252 people were interviewed in the course of the two projects, in-
key critique is that framing CSR within the business case or risk man- cluding large metals mining company employees at all levels (97 in-
agement curtails what resources can be used for and risks damaging or terviewees across 18 companies), government officials (31), local
limiting consequences (Blowfield and Frynas, 2005; Kemp et al., 2016). community members and leaders (61), civil society organisations em-
Several authors critique this risk management approach—along with ployees (27), academics (7), consultancies and industry bodies (21) and
the linked terminology of ‘social licence’—as being short term and thus, international organisations and donors (8). I conducted interviews in
in the long run, increasing risk for mining companies (O'Faircheallaigh, Ghana (81 interviewees), Zambia (47), Peru (95), Canada (27) and USA
2010; Owen and Kemp, 2013). For those keen to expand a company's (2). The quotes and examples in this paper draw primarily on a subset
engagement with CSR for moral reasons, the threat of external ‘risks’ of these which were audio recorded and transcribed—102 confidential
can be used to advance their arguments (cf. Prakash, 2000). Franks semi-structured interviews, 32 with employees of six Case Study Com-
et al. (2014) have sought to improve companies’ CSR performance by panies (CSCs, detailed below). Notes were taken in all interviews and
showing how conflict translates environmental and social risk into analysed. I coded transcriptions of audio recorded interviews and select
business costs. interview notes in Nvivo using an iterative, partially theoretically in-
Despite its noted prevalence, company perceptions of risk and their formed coding strategy (Bazeley and Jackson, 2013). Interviews were
application remain under-explored in the literature. Studies regularly named with an initial anonymised code at the time of interview later
note but rarely interrogate risk, with most adopting the industry's own replaced with a numerical code when imported in Nvivo. Interviews
generic language of ‘social risk’. One study which sought to interrogate examining corporate behaviour focussed on business strategy, regula-
risk noted that “a key challenge of exploring the mining industry's ap- tion, CSR decision-making and the impacts of CSR programmes. Inter-
plication of social risk assessment is the paucity of empirical studies on view data were supplemented by analyses of corporate plans, reports,
this topic” and drew on published material to fill this gap (Kemp et al., policy briefs and the grey literature—focussed on CSCs. These data
2016, p. 22). This useful analysis stops short of mapping the linkages were analysed to identify drivers of and debates around CSR at different
between risk thinking and CSR in the industry. In this paper I use in- levels of company decision-making and across the industry. CSCs ex-
terview data to analyse how mining companies framed a range of amined in depth were chosen in Zambia, Ghana and Peru. Two inter-
pressures and processes as different types of risk and positioned CSR national mining companies were chosen per country as CSCs; one with
activities as the central strategic response to them. I summarise the a good, and one with a weaker reputation for CSR and community
logic which links risk thinking and CSR activities, an initial step in engagement. As a proxy for engagement with international CSR stan-
understanding the configuration of risk in the mining industry. In the dards, one was also a member of the ICMM and one not. Interviews with
next section I examine the concepts of risk used by the mining com- CSCs traced decision-making on CSR issues and their reception by local
panies studied—identifying three central interrelated strands of op- communities. Access was secured with guarantees of organisational and
erational, reputational and regulatory risk—and explore how CSR is individual anonymity. Early findings were presented at academic con-
understood to manage these. I build on previous work on the role of risk ferences and discussed with key informants to improve accuracy and
in mining company decision-making to link the increasing prioritisation test theses.
of CSR as risk management to two post-2008 dynamics in the industry:
(1) increased competition for capital (and ongoing integration of con-
4. Findings: CSR as risk management in the metals mining
cepts from the financial sector into mining company management
industry
thinking); (2) rising legal risks faced by mining companies. Both trends
tie CSR behaviours to important lines of accountability for companies.
CSR engagement in the mining industry is growing. Almost all in-
As a result of these trends, current literature can underestimate the
terviewees within and observing the mining industry reported in-
prioritisation of CSR within mining companies. The companies I studied
creased spend on CSR in the last decade. Mining companies studied
had committed to using CSR, integrated it into central decision-making
described this adoption and expansion of CSR as part of a wider risk
processes, and assigned substantial resources to CSR teams and pro-
management strategy. Every interviewee at the corporate level framed
grammes, but this appeared to have limited impact on local develop-
pressures facing the industry as risks and CSR as a way of managing
ment. In Section 5, I suggest that the poor results of CSR spending are
these. One vice president for corporate affairs described their job as
not due to low organisational commitment or lacking coordination and
being “responsible for non-financial risk management” another said, “in
integration but that the limitations of ‘CSR as risk management’ see
my field, everything we do is about risk management” a third described
resources used in ways which do not support wider development in
CSR as being “100% about risk.” Risk thinking pervades the mining
areas of operations and note two ways this may be changing. I conclude
industry. EY and KPMG—leading global consultancies—frame their
by summarising and pointing to future directions for research.
annual outlooks for the industry in terms of risks. BHP Billiton,
Glencore, and Vale too, describe their CSR and sustainability activities
3. Methods in the language of risk management (BHP Billiton, 2015; Glencore,
2015; Vale, 2015). In this section I begin the process of sketching out
These findings are based on research undertaken in Canada, USA, how respondents in metals mining companies talked about risks and
Ghana, Zambia and Peru between 2014 and 2018. This research was connected this to CSR activities. I have systematised three main ways
undertaken for two research projects which explored (1) the impact of respondents talked about non-technical and non-financial risks—as
international voluntary CSR standards on mining company behaviour reputational, operational and regulatory risks.7 These risks are inter-
and (2) the role of politics in mining and CSR.6 Both projects examined related and not mutually exclusive; instead the risk categories proposed
mining companies’ contribution to inclusive development in developing reflect how respondents parsed complex phenomena through the lens of
countries. Those interviews focussed on corporate behaviour form the risk. Table 1 summarises how these categories link to a range of risks
basis of this paper though I also draw on findings from the second and examples of CSR responses undertaken by CSCs. The rest of the
project to understand community reception and development impact. section explores these categories of risk in turn and traces the logic of
how CSR activities were seen as a way of managing these risks. Map-
ping these linkages is a first step in analysing the role of risk
6
This second project sought to comparatively explore the politics of natural
resource extraction over time in developing countries, see (Frederiksen, 2017,
7
2018). Countries were chosen for their comparable long experience of metals While arrived at independently, this categorisation parallels that of Kemp
mining. et al. (2016) and Boatright (2011).

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T. Frederiksen Resources Policy xxx (xxxx) xxx–xxx

Table 1
Risks and CSR Responses - Evidence from Cases.
Category Risk CSR response Examples from case study companies and countries

Operational Operational disruption by Community engagement and Case study company (CSC) 1 held monthly community meetings while the others held
local community (e.g. road or consultation them either quarterly, biannually or annually. All CSCs held regular (usually monthly)
mine blockades, protests, meetings with local leaders, had community liaison officers who regularly met local
property or vehicles attacked, leaders and offices in local towns where community members could contact the mine.
mine site invasions) 4 of 6 CSCs spoke of systematic stakeholder mapping and used this information to target
engagement and investment.
Reduce disruption to local CSC 5 sought to reduce impact by trucks by setting tight speed limits for company and
communities subcontractor vehicles and equipping police with speed guns and training them.
CSC 2 adjusted blasting times following complaints from local communities
Community investment All CSCs funded infrastructural investments in new schools (e.g. new buildings, teaching
materials) and medical facilities (e.g. new clinics, upgrading facilities, adding new wards)
and supported scholarships. Investment levels were up to $1mn p.a. during operations.
Support local security CSC 1 bought 2 new vehicles for the local police and supported the establishment of a
services local fire service.
CSC 6 provided local police with free fuel for vehicles.
Support for local elites CSC 1 awarded contracts for some community investment projects to companies owned
by local community leaders.
CSCs 1 and 5 used local leaders to recruit ad hoc unskilled labour (offering patronage
opportunities).
Support local and alternate All CSCs had local content policies to support purchasing services and goods from local
(non-mine) livelihoods businesses.
All CSCs offered agricultural modernisation programmes to support local farmers
increased income generation. These included access to credit, advice and (sometimes free)
agricultural inputs.
After protests demanding jobs, CSCs 1 and 3 increased employment quotas for local
unskilled labour.
CSCs 1, 3 and 5 offered entrepreneurship and skills (e.g. hairdressing) training to local
communities.
Reputational Limited access to new areas/ Community investment Four CSCs invested large amounts during permitting and construction phase e.g. CSC 6
deposits wanted to open a pit in a new area so focussed investment to build goodwill in
community, community asked at consultations: “What's in it for us?”
Companies in Zambia and Ghana are regularly involved in spraying to combat malaria
around mine sites
Consultation with local CSC 1 after being rejected by local community set up a weekly consultation forum with
communities local leaders which ran for over two years before permission was granted - resulted in
detailed written agreement, substantial community investment, local employment quotas
and a development foundation funded by the company.
Support for local elites CSCs in Ghana and Zambia had budgets to support Traditional Leaders’ festivals.
All CSCs had local content policies to support purchasing services and goods from local
businesses.
High visibility projects All CSCs were involved in funding local children's sports tournaments.
CSCs branded public infrastructural investments e.g. a CSC involved in funding road
improvements in Peru painted corporate logo on roads.
Limited access to capital Reporting/transparency All CSCs include CSR and environmental issues prominently on their websites and
reference international standards. Five CSCs published separate CSR and sustainability
reports with the sixth including them prominently in its annual reports.
Demonstrate proactive All CSCs have adopted some international standards and mention them in their
approach promotional materials and annual reports.
Two CSCs explicitly mention risk management as part of their CSR approach in public
materials.
Political/ Resource nationalism and Publicise existing efforts All CSCs publicise their CSR activities through local and national media and their own
regulatory increased regulation promotional materials.
Improve environmental All CSCs have adopted ISO140001 and made public commitments to improving the
impact environmental impact of their operations.
Adopt international standards All CSCs have adopted some international standards and mention them in their
promotional materials and annual reports.
Proactively go beyond All companies went beyond legal compliance in some social and environmental areas and
compliance worked to ‘appear to be good’.
Future litigation Proactively go beyond CSCs 1, 3 and 4 sought to implement industry ‘best practice’ after coming under
compliance regulatory and legal pressure at some mine sites.

management in shaping CSR outcomes in the mining industry. to the heart of mining business models. Mining companies work
wasting assets; future company success depends on access to new
4.1. Reputational risk sources of supply. Thus, as far as poor reputation reduces access to
future resources, the public perception of a company is vital. Poor be-
A range of CSR programmes promote a positive image of the mining haviour in one area of a company's operations is seen as a threat to the
industry and its activities. Reputation, respondents argued, is central to overall company. As one executive said, “reputation stays with you …
the survival of mining companies. While shielded from direct consumer when [company] looks at expanding”, while others talked about poor
pressure by the structure of the metals industry (most metals are sold reputation blocking access to some jurisdictions (see also
through intermediaries, not directly to consumers), reputation can cut O'Faircheallaigh, 2010; Trebeck, 2008). CSC 6 reported “do[ing] more”

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T. Frederiksen Resources Policy xxx (xxxx) xxx–xxx

in areas marked for expansion to generate community support. CSC 3 which the future of the company depends in the court of public opinion
spent millions of dollars in three years of consultation and investment (their ‘social licence’). Vedanta, for example, has found itself the target
to overcome resistance, linked to its history of community conflict, to a of an international social media campaign to protect the rights of an
planned new mine. CSC 6, unable to overcome its poor reputation, indigenous group whose land blocked access to a bauxite project in
spent millions seeking to build goodwill to expand in a new area but Orissa, India (Kirschke, 2013b). Publicly listed mining companies are
local resistance thwarted progress. All CSCs had funded or built medical required to disclose details of the social and environmental impact of
and education facilities in their operating areas and all engaged in some their operations to investors. For example, the Toronto Stock Exchange
form of infrastructure development (e.g. roads). (TSX), one of the world's largest mining stock exchanges which 5 CSCs
A good reputation is key in another competitive area for mining were listed on, maintains stringent disclosure standards. Companies
companies: access to capital. Pressure is uneven, but many respondents must disclose any ‘material information’ which would “be expected to
described increasing investor interest in CSR strategies (cf. Banerjee, result in a significant change in the market price or value of any of the
2001). One executive described how previously investor interest was company's listed securities” including environmental and social risks
“all about the ounces … the social stuff, that for a long time wasn’t even (TSX, n.d.). Taken together, these requirements for doing business on
there,” but now “we really look into that stuff”; while another described an important mining stock exchange lead to substantial disclosure re-
investors asking, “are you checking boxes and keeping risk down?” All sponsibilities across the gamut of mining activities.9
CSCs had developed CSR strategies and adopted international voluntary Collectively, the reputational risks to individual companies are high.
standards to demonstrate commitment to managing and minimising Respondents reported that CSR, by portraying companies in a positive
risk to shareholder value. One interviewee talked of “pressure from the light, was a key tool for improving company reputation across multiple
international investor community” for increased CSR engagement and arenas. Senior corporate respondents saw CSR as an area where com-
adoption of standards. Another described how companies do not “do panies can differentiate themselves by, as one put it, “demonstrating
this [adopt international standards] voluntarily” as “companies that leadership” in competitive capital markets while simultaneously al-
actually go towards this are the ones that are trying to get funding.” For laying investor fears of risks. For other audiences, such as wider publics
a growing number of institutions, particularly those signed up to the and company employees, CSR programmes and reports highlight
Equator Principles,8 CSR strategies had effectively become a require- mining's positive contribution, contrasting decades of reports on the
ment for project lending. One respondent said “we can’t afford that damaging impacts of mineral extraction.
reputational hit to say you, you know, you’ve been kicked out of the
code or you’re non-compliant here. That affects everything, our share 4.2. Operational risk
price, local stakeholders, everything.” Where mining companies had
lending conditions requiring comprehensive risk management plans, For large mining operations, disruption by local communities is
respondents saw these strategies and activities as compulsory, and often potentially costly. It can be hard to imagine what threat rural com-
subject to annual independent monitoring. Interviewees in two com- munities in the developing world pose multinational companies.
panies reported that while they may fail audits and still maintain loans, Mining company respondents, however, stressed the potential power of
lenders required continuous improvement: “it's not an automatic you… local communities over operations. One executive described how “a bad
don’t score, you’re out, can we have our money back” one executive put quarter won’t stop us but losing the social licence will break you.”
it. Instead there was a “very rigid corrective action plan” with strict Forceful community reaction creates serious headaches for operations.
monitoring. Another interviewee described how “the financing process One senior CSR manager interviewed asked operations managers across
really held us accountable.” Interviewees described lending require- his/her company “How much would it cost if the local community
ments as on a trajectory of increasing stringency and saw adopting blocked the road?” The average answer was around $1 million per
international standards of CSR as a way of demonstrating a proactive day.10 Disruption around the Fenix project in Guatemala (discussed
approach to these challenges. below) cost Hudbay Minerals at least $212 million in lost asset value,
Interviewees described the internet and social media and increasing excluding the costs of ongoing litigation, its impact on share prices and
demands for transparency from stock exchanges and regulators as po- possible future pay outs (Hudbay Minerals, 2011).11
tential sources of reputational risk. Companies have less control over CSR programmes offer important tools for managing operational
how and what information about their operations circulates. The rise of risks. As an industry which often operates in complex ‘frontier’ en-
the internet, social media and the globalisation of communication has vironments and under sustained attack from civil society, CSR offers a
increased transparency in the mining industry as information flows framework with which extractive companies can engage local com-
more freely between sites of production and consumption and across munities and legitimise their operations. All CSCs had seen community
different sites of production. Interviewees felt themselves to be under agitation against their mines—most commonly blockades, but also pe-
greater scrutiny with less control over information flows than in the titions to government to revoke their licence and attacks on company
past. As one executive put it, “when we go into a new community, the property—and all sought to use CSR programmes to improve relation-
first thing they do is Google us.” Another described how “the bar has ships with local communities. An initial investment in CSR projects to
been raised… through internet and improved communications, all the minimise future risks of operational disruption was an attractive pro-
communities now are well aware of what's happening in every project” position to respondents. A good CSR programme can, as one CSR officer
and the standards companies are expected to comply with. When the put it, “win… hearts and minds” in local communities. One Ghanaian
Engineering and Mining Journal launched a CSR column in 2013 it
opened by highlighting the threat of social media to the industry
9
(Kirschke, 2013a). One respondent reported that “companies are much Though these disclosure requirements do not necessarily drive more
more aware of the consequences of being perceived to ‘off side’ even transparent behaviour and practice or produce effective accountabilities.
with voluntary standards,” even when they are legally compliant—that Interviewees pointed out that, while activists have reported companies to the
TSX for insufficiently disclosing issues at their mines, in the four cases to 2011,
they may lose rights to access land and, with it, the resources upon
none had been sanctioned by the TSX.
10
Similarly, Franks et al. put the cost of a conflict with the local community
at “roughly US$ 20 million per week of delayed production” for a large-scale
8
Private standards for project finance directly based upon the IFC mining operation (2014, p. 7576).
11
Performance Standards adopted by 90 large banks and finance institutions Going back further, O’Faircheallaigh lists projects that failed after billions
globally which, between them, provide “over 70% of international project fi- of dollars investment following opposition and conflict including, Rio Tinto's
nance debt in emerging markets” (Equator Principles, n.d.). Bougainville mine (O'Faircheallaigh, 2010).

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T. Frederiksen Resources Policy xxx (xxxx) xxx–xxx

executive argued CSR investment led to “a much lower chance of social and human rights concerns (cf. Dupuy, 2014). Changing ex-
community uprisings and… disruptions in your operations”; a Zambian pectations of corporate behaviour had effectively introduced new steps
respondent talked of minimising “backlash.” Mining operations are into the permitting and lending processes for new mining projects.
under constant development and community relations managers re- Respondents described regulators requiring increased engagement with
ported a near-constant concern that these activities would spark con- the potential social and environmental impacts of operations and, for
flict. In the words of one CSR officer at CSC 3, “we are being paid to some private funding (including the IFC and Equator Principles), an-
avoid crises.” Some communities—particularly in Peru—were clear nual third-party monitoring.13 One respondent described government
about using the threat of disruption to extract benefits from companies. investigations of their social and environmental impact: “They audit in
One Peruvian community leader described “my job is to make sure quite a lot of detail. It's not cursory by any sense.” Another described
[mining company] delivers on its promises” to provide tangible benefits the regulator “taking a keen interest on community issues.” Re-
for his community members. He then threatened “we’re calm here, but spondents in Ghana, Peru and Zambia described how allotting financial
at any time we can make a radical claim.” Community demands fo- compensation for displaced communities was previously enough. Now,
cussed on jobs. Unable to meet this demand without undermining both lenders and host governments expected substantive community
profitability, many CSCs sought to boost community income without consultations and detailed resettlement action plans as part of the
offering jobs directly. For example, CSCs promoted farming moder- permitting and due diligence procedures of project planning. In Ghana,
nisation and livelihood improvement activities, providing training, the Environmental Protection Agency (EPA) insisted on being on re-
credit and inputs, to enable farmers to move into more lucrative areas settlement planning committees to discuss which communities should
such as livestock (e.g. chickens, fish, guinea pigs) or cash crops (e.g. oil be compensated and the terms of the compensation. One company re-
palm, sugar cane, avocados). Another common approach was to use settlement described how for one group they had opted for financial
activities to generate support from local elites. All four African CSCs “compensation, but the EPA said, “resettle them,”” so they resettled the
maintained budgets to support local traditional leaders’ ceremonies; group. Respondents described using CSR activities to avoid future li-
three CSCs used local leaders to recruit ad hoc labour and three ac- abilities, should environmental regulation continue to become stricter.
knowledged using companies owned by local political leaders as con- One manager spoke of “operating in a way that will be seen as accep-
tractors. While many mining companies have survived without ex- table this year, seen as acceptable next year, and in five years is the way
tensive CSR programmes for decades — and history is replete with you need to operate.” Adopting and implementing international CSR
examples of mining companies, if they have national governmental standards here was a strategic move to reduce future risks of increased
support, riding out local opposition — respondents saw serious conflict costly regulation and maintain operational freedom.
with communities as a failure of effective CSR which would carry Notably, recent civil prosecutions in British and Canadian courts for
substantial financial and reputational costs (cf. O'Faircheallaigh, 2010). actions conducted by subsidiary companies overseas has produced new
risks affecting mining company behaviour. These cases are, in the words
of one industry representative, “very attentively watched”. The most
4.3. Regulatory (or political) risk
watched in Canada is the Choc v. Hudbay suit before Ontario courts. In
the UK, Tanzanian claimants are suing Acacia Mining (formerly African
Investment in CSR can be a proactive response to the threat of in-
Barrick Gold). In both these cases, the mining companies are accused of
creased regulation or legal action. Being seen as good corporate citizens
negligence in human rights abuses. Hudbay Minerals is alleged to have
can be a strategy to avoid increased regulation of the industry which
committed human rights abuses during evictions around its Fenix mining
could be costlier and stricter than self-regulation. The challenge ex-
project in Guatemala. Acacia Mining is accused of pollution and human
pressed by one consultant at the 2012 PDAC conference was: “change
rights abuses against illegal artisanal miners at its North Mara site in
or be changed”—that the mining industry either clean up its own act or
Tanzania (Business and Human Rights Resource Centre, n.d.). These
be forced to do so. The public relations function of CSR here is plain. By
cases present a substantial financial risk to the mining companies in-
demonstrating moral virtue—‘winning hearts and minds’—respondents
volved. Hudbay sold the Fenix property after the suit began at a $212
sought to allay pressure to regulate company behaviour and gain access
million loss (Hudbay Minerals, 2011). In the immediate days after news
to and build goodwill amongst regulatory authorities with the power to
of the North Mara abuses reached the Canadian media, Acacia Mining
impose costs (cf. Dashwood, 2007; Prakash, 2000). Mining company
had the fastest falling share prices on the FTSE250. They continued to fall
managers were mindful of the political risks of resource nationalism
by 30% in the following 3 months, wiping around $500 million off the
and saw CSR as an important way to show that mining was contributing
market capitalisation of the company.14 Similar cases are being brought
to national development. One Zambian industry insider described CSR
by civil society groups against Nevsun Resources (Eritrea), Tahoe Re-
as a response to rising resource nationalism by “appearing to be good”
sources (Guatemala) and Vedanta (Zambia) (Hasselback, 2014). The
to influence national debates about minerals regulation and taxation.
number of prosecutions is growing. Though none of the recent wave have
Some companies target their CSR projects at improving their standing
reached their conclusion, Monterrico Metals (Peru) settled out of court in
with regulators. In Zambia, Glencore-owned Mopani opened and staffed
2011 for an undisclosed amount (BBC, 2011).
two cervical cancer screening centres after the First Lady made a speech
While these are not the first time the courts have been used to
on the topic (ZANIS, 2012). While cervical cancer screening is lacking,
change mining company behaviour, these cases set two important
and is a cruel illness, it is hard to see it as the most pressing health
precedents in London and Ontario courts—key global centres of mining
challenge for women in Zambia.12 The choice of focus, and to name the
finance. First, they establish the principle that mining companies
clinics after the First Lady, later invited to open them, point to other
headquartered or listed in the UK and Canada can be held accountable
motivations.
for actions committed overseas by subsidiaries.15 Previously the
Widespread changes in mineral policy and the institutionalisation of
Environmental Impact Assessments (EIAs) within mineral permitting
have seen elements of CSR become effective regulatory requirements in
some areas and lending requirements for many banks. Not necessarily 13
This not to argue that the rise of the use of EIAs automatically leads to
formally codified by regulators (though often by lenders), EIAs in improved practice. With poor monitoring capacity in many developing coun-
Ghana and Peru and more widely, are increasingly required to include tries, EIAs can become paper exercises. Though, treating them as such is a risky
strategy.
14
Share prices recovered after the parent company Barrick Gold changed its
12
Zambia has high maternal mortality rates, low levels of maternal health- corporate structure and practices.
15
care and poor healthcare access in rural areas (Ensor et al., 2013). This principle was established in Australian courts through proceedings

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T. Frederiksen Resources Policy xxx (xxxx) xxx–xxx

‘corporate veil’ of operating mine sites through owned but legally se- similar pressures (cf. Trebeck, 2008).17 Instead, I am outlining a per-
parate entities was thought to be enough to protect the parent company vasive approach to understanding CSR adopted across the higher
from many forms of liability. Second, these cases directly reference echelons of decision-making of mining companies studied, an approach
international voluntary standards which the mining companies have which has consequences for its ability to promote inclusive develop-
either adopted or engaged with (Webb, 2015). These cases are based ment.
upon tort of negligence: that the companies were negligent in their
duties and that this had negative outcomes for the claimants. Proving
5.2. Risk, CSR and inclusive development
negligence involves establishing a ‘standard of care’, a standard against
which negligent behaviour can be measured. These cases used inter-
As far as risk management is a key motivation for adopting CSR
national standards the companies claimed to follow. The Monterrico
practices within mining companies I suggest it helps explain why (a)
Metals case, for instance, focussed on implementation of Voluntary
substantial resources may be committed to CSR projects and (b) why
Principles on Human Rights and Security. Thus, if a company adopts
this does not translate into improved development outcomes for those
CSR standards but does not implement them, and following the stan-
living closest to mining company operations. I see four reasons for this:
dards would have prevented abuses, courts can find companies negli-
First, there is still ample room within this understanding for CSR to
gent. Adopting international standards for public relations purposes
be primarily a public relations strategy aimed at presenting the industry
without implementing them and changing company behaviour creates
and specific operations in a good light. For many of the pressures dis-
risks for mining companies.16 In the companies studied, risk manage-
cussed in Section 4—particularly reputational, but also regulatory,
ment captured a range of pressures and tensions for the mining industry
risks—there is an economy of images at work: it remains easier to
and posits CSR standards and behaviours as coherent strategic response.
change image than practices, and being seen to take CSR seriously can
alone achieve some corporate objectives (Utting, 2005). As has been
5. Analysis: CSR, risk management and inclusive development amply argued in the literature, and elaborated above, companies
commit resources to high profile CSR projects but not those with the
In this section I consider the rise of risk thinking in mining company greatest potential to support development (Banks et al., 2016;
decision-making and how this curtails the ability of CSR spending to Campbell, 2012). Indeed, companies may commit resources simply to
promote development before reflecting on how this might be changed. be seen to be committing resources, rather than responding to com-
munity needs. When CSR programmes are public relations tools, the
5.1. Risk, CSR and decision-making context in which they occur matters little, along with accurate needs
assessment, expertise in development project delivery, and effective-
The rise of understanding CSR and international standards as risk ness. The resulting programmes are supply- rather than demand-driven
management in mining companies has emerged, I suggest, in part from (cf. Gilberthorpe and Banks, 2012).
its usefulness in corporate decision-making and coordination and re- Second, within risk thinking, the priorities being acted upon are not
levance to influential stakeholders. Firms are not unitary actors, CSR those of the poorest or those with the most potential to benefit from
often means different things at different levels of a company hierarchy CSR programmes. The risks being measured and acted upon are those to
(Rajak, 2011). Despite this, the language of risk translates well across investors. As Blowfield and Frynas (2005, p. 508) put it, “a stake-
disparate elements of a company. Risk management frames a wide range holder's recognition is contingent upon the business case for that re-
of issues and pressures and helps coordinate responses. It enables the cognition.” The targets of CSR spending driven by risk manage-
messy world of social, environmental and political pressures to speak an ment—particularly for operational risk—are those who pose the
economic tongue of impact and probability. In an industry with few se- greatest risk to the operations of mining companies and those with the
nior figures trained in the social sciences, risk and CSR frequently be- greatest ability to reduce this risk (O'Faircheallaigh, 2010; Scherer and
come proxies within mining companies for processes outside of pro- Palazzo, 2011). Many of the intended audiences of CSR are not at the
duction. Concepts of risk play an important role in the most important local level. Resources spent this way are less likely to lead to inclusive
decision-making fora within companies. As one executive put it, risk development. As noted above, CSR resources in the six CSCs were fre-
management is the language which “works in the boardroom.” Pioneers quently targeted at local elites. In a generous assessment, this could be
of changed industry practice in the 1990s drew on the language of risk seen as directing resources to communities through local elites, but
management to sell the benefits of increased engagement with CSR to even this raises ample opportunity for elite capture of the resources and
doubtful companies and boards. Risk links the targets and tools of CSR there is evidence of this (Frederiksen, 2018; Banks et al., 2013).
with important lines of accountability in companies — to the board and Third, the propensity towards simplification concurrent with the
shareholders. As the understanding that dominates centres of authority managerial language of risk (and the related concept of the ‘social li-
within mining companies, ‘CSR as risk management’ comes to pervade its cence to operate’) can undermine the development effectiveness of re-
expressions, funding, and measures of success. sources committed (Kemp et al., 2006; Owen and Kemp, 2013). CSR
I am not suggesting here that framing CSR as risk management and risk management represent archetypal moves to render messy de-
explains all corporate behaviour in the extractive sector, or that it velopment problems technical and amenable to action (cf. Li, 2007;
produces a uniformity of approaches to CSR and actions. There remains Scott, 1998). Mining companies can do great damage on the basis of
a diversity of reasons for adopting and approaches to, CSR in the mining poor understanding of local communities in the developing world as
industry. If CSR practice is linked to finance mechanisms, then there is a experiences like Hudbay's Fenix mine demonstrate (Hilson, 2012; Slack,
variety of these. Not all CSCs engaged in the same kinds of project fi- 2012). As Kemp et al., (2016, p. 398) argue, “many operations do not
nance to the same extent. Further, different institutions have different seek external input in the risk assessment and ranking process” leading
organisational histories and capacities which shape how they react to to flawed and inadequate analyses. While effective decision-making
relies on simplification, this is frequently taken too far. Multiple officers
spoke of needing “to speak a language they [senior managers] under-
(footnote continued) stand” and conform to company communication norms. As one puts it
against BHP Billiton's OK Tedi mine in the 1990s (Kirsch, 2014).
16
Civil prosecutions have yet to be successful in Canada, though they have
17
led to out of court settlements in the UK and Australia. Respondents reported a Indeed, my own research has highlighted how local conceptions and his-
sense amongst many in the industry that these cases are unpredictable and will torical experiences of development shape mining company practices in Ghana,
eventually succeed—a threat respondents described as influencing behaviour. Peru and Zambia (Frederiksen, 2017).

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starkly in a related study, “I have to turn everything into a pie-chart or a becoming less tolerant of environmental and social risk. Many fund-
histogram or it doesn’t even get considered, it's just words” (Kemp, s—including the world's largest, Blackrock—are increasingly interested
2009, p. 10). In the mining companies I saw, the dominant tendency in ‘ESG’ (environment, social, governance) issues when investing
was the simplification of the social world to fit the understandings of (Kynge, 2017). Further, adopting international standards has created
trained engineers and geologists rather than increasing their social new criteria against which mining company behaviour can be assessed
understanding (cf. Franks et al., 2014). Predominantly unilinear moves and used in courts. As one litigant involved in the civil cases described
towards simplification and quantification undermine efforts to improve earlier put it, “my main job is to create risk”, seeking to use civil liti-
the social and environmental impact of mining operations. gation to regulate the companies through risk. Both the risks and the
Finally, we should question whether CSR projects that understand opportunities to shape mining company behaviour in ways which may
beneficiaries as “disruptive threats” and operational risks can deliver support inclusive development are changing, though the challenges
inclusive development (Boatright, 2011, p. 167). Framings of risk and remain great.
CSR produce a governable terrain, a sphere of action for mining com-
panies which makes local community concerns more visible and
amenable to intervention, but in ways which can marginalise their 6. Conclusion
ability to make radical claims and demand inclusive development.
Owen and Kemp (2013, p. 32) raise a similar objection to the industry's In this article I have offered an overview of how CSR is understood
use of the term ‘social licence to operate’: “read through the lens of a and acted upon in the metals mining industry within risk management
sector under continued ‘threat’ from external stakeholders, the in- thinking and discussed the consequences of this for supporting inclusive
dustry's use of the term is interpreted here as an effort to disguise or development through community CSR projects. The article opened by
silence opposition.” What space is there for development when the posing the conundrum of the apparent growing effort around CSR and
measure of project effectiveness is the absence of disruption to opera- the prevalence of criticism in the literature that the development po-
tions? The danger here is that CSR within risk management thinking tential of CSR remains unrealised. This leads to criticism that companies
becomes a tool for pacification and maintaining the status quo around are being duplicitous when they say they are taking CSR seriously or
mining operations, rather than an opportunity to share the wealth and have integrated it into their decision-making. I then explored the lit-
benefits of extractive enterprise. If development requires social change, erature on CSR and development in the mining industry, motives for
and CSR spending is directed towards maintaining the status quo, then CSR engagement in the industry, and risk and risk management. In the
‘CSR as risk management’ can be regressive for development. following section I examined three main ways mining companies con-
ceptualised a range of social and political processes as reputational,
5.3. CSR and risk management and justice operational and political risks to be managed through CSR activities.
The role of competition for capital and new legal challenges in driving
CSR as a risk management practice does not paint an encouraging CSR engagement were noted. Wrapped in the strategic vagueness and
picture for justice and inclusive development. This is despite re- apparent calculability of risk, many mining companies have adopted
configured, or increased, accountabilities for mining companies. Two expanded CSR programmes as part of their risk management strategies.
key themes identified in the previous section—connection to the fi- The discussion then turned to how a focus on CSR as risk management
nancial sector and growing legal challenges—both produce or increase can illuminate the poor development outcomes of community CSR
accountabilities for mining companies. For critics of mining company projects, particularly after recent years have seen a rise in spending.
engagement with CSR, the absence of accountabilities prevents CSR ‘CSR as risk management’ introduces immanent limitations to its de-
being more than ‘window dressing’ (e.g. Blowfield and Frynas, 2005; velopment potential including treating CSR as PR, targeting those that
Slack, 2012). Instead, here, I suggest there is good reason to believe pose the greatest threat rather than those with the greatest need, ex-
these financial and legal accountabilities are driving increased en- cessively simplifying complex processes, and focussing on maintaining
gagement with CSR within the industry. The companies I studied were the status quo. In risk management thinking, CSR activities may be a
engaging substantially with CSR and meaningfully integrating it into high organisational priority, integrated into central decision-making
their decision-making processes at the highest levels. However, they are processes and subject to a great deal of investment, but still see little
doing so through the rubric of risk management. progress towards inclusive development for those living closest to
If risk is a language with currency amongst corporate decision mining operations. I then discussed how activists are using logics of risk
makers, then exploring ways in which this same language can be de- around access to capital and court cases to shape corporate behaviour.
ployed without falling into the traps discussed above is important. This initial analysis of risk in mining company CSR decision-making
There is a “general absence of justice in … CSR narratives” and apoli- raises many questions. No claim is made here as to whether these efforts
tical understandings of risk perpetuate this (Hamann and Kapelus, to manage risks work as intended. Mining companies believe they do
2004, p. 87). Under what conditions can ‘talking risk’ produce more just but the literature remains sceptical and systematic study has not been
outcomes? Charting its current formations and logics—as I have begun attempted. Further, questions remain of why some things come to be
above—is a necessary first step to opening up space for inclusive de- seen as risks to be managed and others do not. As Garsten and
velopment within a framework of risk. Activists may be ahead of re- Hasselström (2003, p. 252) remind us, “those in charge of defining risks
search here. MiningWatch Canada, for example, framed their recent are in key social and political positions” and should therefore be in-
report critical of Northern Dynasty Minerals’ Pebble mine in Alaska, as terrogated. Equally, it is not clear how similar ‘risk management’ is in
a report for investors on hidden risk (Kuyek, 2018). The report opened: different organisations. Companies use the same terminology, but my
“Investors are strongly advised to fact-check the information published initial enquiries reveal a diversity of practice. Risk is a polyseme and
by Northern Dynasty Minerals” (p.i). By targeting existing lines of ac- there is reason to believe ‘risk management’ is too. The justice im-
countability, activists aim to reshape corporate behaviour through plications of this move towards framing CSR as risk management in the
language and appetite for risk. Jody Emel (2002) noted similar tactics mining industry are potentially profound and merit further research.
in the 1990s campaigns against Freeport McMoRan's Grasberg mine and Could some approaches to risk management and CSR decision-making
remains pessimistic about their ability to fundamentally change beha- be more or less likely to produce unjust outcomes? Might the semiotic
viour. However, there are reasons for some optimism. Timing is im- slipperiness of risk and CSR not be inherently antipolitical? Future re-
portant. MiningWatch are applying pressure before project permitting search must equally be alive to the space opened up for engagement
has completed, rather than after it has generated returns for investors, and influence by ‘CSR as risk management’ as much as it charts the
as at the Grasberg mine. There is also evidence that investors are possibilities foreclosed.

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T. Frederiksen Resources Policy xxx (xxxx) xxx–xxx

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Fellowship, University of Manchester School of Environment, mining sector in Ghana, Zambia and Peru. ESID Work. Pap. 74, 1–41.
Frederiksen, T., 2018. Political settlements, the mining industry and corporate social
Education and Development Seed funding, the DFID/ESRC funded responsibility in developing countries. The Extractive Industries and Society.
Effective States and Inclusive Development Research Centre [grant (Forthcoming). 〈https://www.doi.org/10.1016/j.exis.2018.07.007〉.
number PO5113] and Hallsworth fund at the University of Manchester Garsten, C., Hasselström, A., 2003. Risky business: discourses of risk and (ir)responsibility
in globalizing markets. Ethnos 68, 249–270. https://doi.org/10.1080/
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