Sorry, you need to enable JavaScript to visit this website.

Development for Whom? The Foundations of Corporate Social Irresponsibility

Jamie Kneen Communications and Outreach Coordinator responsible for: strategic research, social media, and public engagement; our Africa program, environmental assessment, and uranium mining.

Notes for a presentation by Jamie Kneen of MiningWatch Canada as part of the Studies in National and International Development Speakers Series, Queen’s University

When Joan Kuyek spoke to this gathering last year, she discussed the need to regulate Canadian mining companies operating internationally, using examples from Tanzania, Romania, Guatemala, the Philippines, New Caledonia, and Ghana documenting a pattern of human rights and environmental abuse.

I regret to report that this is still going on.

Just last November in two separate parts of Ecuador Canadian mining companies were ordered to cease work by the government in the wake of riots, hostage-takings, and military and mercenary attacks on villagers.

In northwestern Ecuador, mercenaries and thugs working for Ascendant Copper assaulted a blockade that local people have maintained for two years to keep the company from entering and destroying their community forest reserves. Villagers managed to capture a number of the contractors and held them until they could be turned over to authorities. The company was ordered to cease its activities, but has not complied, and the area has been under police supervision ever since.

In south-eastern Ecuador, it was the military – we think; they were wearing balaclavas – that moved to protect Corriente Resources’ operations from local indigenous Shuar people, backed by national and international observers, who tried to enforce a presidential cease-work order issued after a series of protests and demonstrations against the company’s operations. One person was shot, several were badly beaten, and a Senator – chair of the indigenous affairs committee – was kidnapped and tortured.

Between last November and this January in El Estor, in eastern Guatemala, army and police forced hundreds of families off of land they had occupied, 40 years after their grandparents were forcibly evicted to make way for INCO’s Exmibal nickel mine.

Meanwhile, in Guatemala’s western highlands, Goldcorp’s Marlin mine continues to be a source of conflict. Last year 11 of 13 villages in the municipality of Sipakapa voted that the mine should not proceed, but it did, and the company is still fighting the referendum in court. The project made news in January 2005 when the Guatemalan army and police attacked a blockade set up by the peasants of Sololá to stop equipment being transported to the mine and protestor Raúl Castro was killed.

In Papua New Guinea, at Barrick Gold’s Porgera mine, 14 people have been killed and hundreds injured over the past few years by mine security trying to keep them off mine property. Many were small scale miners; others were just local people walking across the property to get to the other side.

  • Growing resistance as mining exploration and development pushes into new areas
  • Growing public awareness & concern – efforts underway to control perceptions and channel and control public information, public concern, and public involvement.
  • Round Tables: set up in response to 2005 report by Parliamentary ctte., gov’t response in October, ran July to November 2006, contents of Advisory Council report still being negotiated.
  • Disillusionment and anger with industry; industry fighting back eg. propaganda films on Youtube
  • Happens in Canada too: Platinex – one year ago – arrests, jail
  • Lillian Moyer, a Tahltan grandmother, was arrested protesting bcMetals’ Red Chris project last September

What I want to do today is to look at the roots of these abuses – the conflict of interests that leads to conflict on the ground, the clash of values and priorities that leads to physical clashes. It is my assertion that unless we can understand the underlying values and power relationships we have little hope of achieving more than an illusory improvement. I will look at the fundamental conflict over resources and the relationship between corporations, governments, and society.

Mining: extraction of non-renewable resources

  • environmentally damaging and sometimes disastrous – deforestation, diversion and contamination of water
  • dangerous to health of workers and neighbouring communities
  • economically harmful to incompatible land uses

Creation of wealth for directors, brokers, and shareholders – including us!

  • boom in commodity prices – and consumption
  • 15% of CPP investment in Canadian stocks is in mining, including some of the most problematic companies; CIFA, pension funds, mutual funds

Creation of poverty for others

  • low to no resource rent, no to minimal reinvestment (usually directed by company, not govt or community
  • loss of lands, water supplies, housing

Source of conflict, especially where entering new and sometimes remote areas

  • mining interests backed by power of the State whether in Canada or elsewhere
  • sometimes harsh conflict with indigenous peoples, peasants, small-scale miners

What kind of development?

  • economic restructuring and trickle-down, or building on existing foundations
  • mobilise capital – foreign direct investment, large loans vs. local
  • experts vs. autonomous decision making
  • exports vs. self-sufficiency

Resolving conflict

People injured by corporate malfeasance may not be able to rely on legal protection for a variety of reasons. Corruption at various levels from legislators to prosecution to judiciary and lack of capacity for enforcement can mean that legal protection is dysfunctional or one-sided. They may appeal to international bodies to enforce international standards, but these tend to be ineffective without specific enforcement powers. They may appeal to the corporations themselves, or, since the corporations are mostly transnationals, work with groups in the companies’ home countries, including shareholders, to pressure them to change their behaviour. This tends to have a minimal effect, since it often runs counter to their mandate to create wealth for their shareholders, and if they can rewrite laws or violate them with impunity, why would they stop?

Corporate accountability

Corporations are set up to gather and apply capital, provide returns for shareholders. Governments have decided this is a good way to do things. They have privileged corporations’ role in society and policy-making, as well as restricting corporations’ legal personhood. They have the legal ability to make contracts and pay taxes, but are less responsible for their acts than individuals; with rare exceptions, their officers are protected from both criminal and civil liability. That governments are often made up of business people and lawyers who work for business people must surely be coincidental.

Whether the corporation is the best way to mobilise capital, it is obvious that its interests are very focused. There is no impetus to do anything for the rest of society beyond what is necessary to preserve its profitability. Therefore there are only two real means of controlling its behaviour: costing it money, or regulating its behaviour by law.

Conclusion

Corporate Social Responsibility is an oxymoron, a public relations exercise intended to deflect public criticism so that business can continue as usual. Corporations are created to be responsible to their shareholders, not to society. Governments are created to be responsible to their citizens, or at least some of them. It’s society that has to make corporations accountable, and the only way to do that is to make governments accountable for what their policies.