Corporate Social Responsibility in South Africa and Ghana: a Comparison of Successes, Failures and Futures in a “Developed” and an “Undeveloped” African Country

Corporate neighborly Responsibility in southeast Africa and atomic number 79 coast a comparison of successes, failures and futures in a essential and an undeveloped African country Few industries come to the neighborly, economic and environmental sectors to the extent that the excavation effort does. As taprals suppuration expanded, so the international aw atomic bod 18ness of its impacts grew. excavation-related legislation, both internationally and nationally, has evolved significantly in the past two decades, actively aimed at ensuring Corporate Social Responsibility (CSR), where companies be held accountable for their actions.In develop countries like southwest Africa and gold coast that atomic number 18 heavily dependent on gold trade and the associated international investment, the challenge is to ensure that environmental and social impacts of mining are mitigated, that non-renewable resources are converted into national wealth and that mining-generated reve nue is claimed and disbursed. In this paper the evolution of CSR in South Africa, a more developed African Nation, and Ghana, a less developed African nation, are compared.Recommendations are do as to potential avenues for CSR progression. The objectives of international mining policy reform stir changed dramatically in the past some decades. During the 1970s the aim of mining policy was to growing governance control. During the mid-eighties the aims of reform became to increase investment and to mitigate the socio-economic impacts of mining. This was attempted through the Growth Employment and Reconstruction political program in SA (Fig, 2005), and the Economic Recovery Plan in Ghana (Hilson, 2002).Both plans advocated more privatization, trade relaxation behavior and deregulation. Although the general international trend was to redefine the role of the state, particularly in industrial areas, the guideion of this competition by African countries has proven detrimental. B iersteker (1990) argues that the reduction of the state greatly reduced its function to govern, particularly undercutting its restrictive ability, its function as a mediator in civil disputes and its ability to regulate and collaborate with the offstage sector.Campbell (2005) poses that this is beca spend the legislative and regulatory reform espouse by many a(prenominal) a(prenominal) an(prenominal) maturation mining-dependent African countries during the past few decades has undermined the role of the state and has proved incompatible with the challenges of the countries concerned. This has impaired the ability of these presidential terms to exert CSR push on mining companies. CSR in Africa has grown parallel to these changes in the role of the state, and international mining legislation has had varying impacts on SA and Ghanaian regulations.Despite existence based on a non-renewable resource, the main theme in changing international legislation is that of sustainable d evelopment, particularly in exploitation countries in which a large parcel of mining is done by foreign companies. It is, however, the sovereign right of a state to exploit its inhering resources. This sovereignty was vehemently upheld by post-colonial developing nations that rely on mineral resources, two prominent examples of which being SA and Ghana.It has become apparent, however, that mining has far-reaching impacts that often have transboundary degrading effects, resulting in international attempts at regulation. CSR in South Africa The formal terms of CSR in SA were originally raised in 1972 and the view taken by many businesses was that they should not have to take responsibility for Apartheid, but should rather improve social standards within their several(prenominal) businesses.These concepts were formalized in the Sullivan Principles, which were aimed at entrenching non-discrimination in the workplace into the core business activities, particularly in SA-based US com panies (Visser, 2005). Although other CSR groups formed, like the Consultative Business Movement, the move away from philanthropy only really became apparent(a) after the first democratic elections in 1994, and when the B leave out Economic Empowerment Programme (BEE) was introduced. The aim of BEE is to put up equal racial ownership, education, training and local economic development.In 2002 the goal for b wishing ownership in the mining sector was set at 26% within 10 years (Fig, 2005). BEE was particularly all important(p) in the mining sector, as in order to obtain mining rights, businesses had to meet the requirements of a BEE carte. A number of principles have been introduced to target human rights, a major CSR concern in SA. These admit Voluntary Principles on Human Rights and Security and the OECD Risk Awareness Tool for Multinational Enterprises in shadowy Governance Zones (Hamann, 2009).Another important milestone was the moguls Report, released in 2002, which outli ned the CSR requirements for companies, including recognizing that stakeholders such as the friendship in which the company operates, its customers, its employees and its suppliers amongst others need to be considered when developing the strategy of a company (Visser, 2005). It also requires that businesses report p.a. on their social, transformation (including BEE), ethical, safety, health and environmental management policies.A positive and innovative spinoff of the Kings Report was the introduction of a Kings Index on the Johannesburg Stock Exchange. Companies are required to meet the criteria of the Kings Report in order to list with the JSE, providing a fiscally competitive incentive to adopt CSR principles (Dale, 2005). This progressive legislation forms the beginnings of a seemingly sound CSR spuework. But the SA organization struggles to maintain the twinge indispensable to enforce all of its requirements. As in Ghana, SAs dependence on the mining industry makes the gov ernment loathe to confront deviant companies for fear of disinvestment and job losses.Firms often run philanthropic programmes merely as an attempt to maintain business as usual, satisfying the bare minimum for CSR. The lack of government capacity is most prominent in environmental requirements. Many mining companies have introduced more soused environmental management regulations and have increased CSR spending, but Fig (2005) shows that due to lack of governmental pressure and effective sustainable reporting, many of the claims of these companies do not match their actions.In recognition of its weaknesses, however, the SA government has adopted provision for voluntary conflict resolution within its environmental legislation (Fig, 2005). As an example of a developing country embracing CSR, SA has proven itself relatively forward-thinking and successful. SA is at the forefront of CSR legislation in Africa. It is in the inability to enforce these laws that the clearest CSR similarit ies, and failures, with Ghana, a less developed African nation, can be seen. CSR in GhanaFor the past 1000 years Ghana has enjoyed a thriving gold trade. However, due to political fervour and changing mining and economic policy, by the beginning of the 1980s the gold-mining industry was virtually stagnant, and became the focal question in the countrys Economic Recovery Programme in 1983 (Campbell, 2005). Ghana also accepted assistance from the World Bank, the conditions of which resulted in the elimination of most barriers to entry for foreign investors, including reducing corporate taxes, royal line payments, foreign exchange taxes and import duties.The company retention amounts negotiated by foreign investors were far above ordinary and signify the extentto which the Ghanaian government was prepared to go to stimulate the industry (Campbell, 2005). This also indicates the extent to which the government was and is prepared to turn a blind eye to companies exploitation of the co untry. Liberalized legislation resulted in an approximate 800-fold egress of the predominantly foreign-controlled gold mining industry in the past 20 years.But this growth has been accompanied by very little change in the quality of life of the Ghanaian people. In 2006 the global Council on mine and Metals claimed that gold mining has not only kick-started Ghanas economy, but that many of the large-scale mining companies are committed to CSR. In contrast, Hilson (2007) argues locals lives have been worsened by the increased use of set ashore, relocations and environmental dilapidation. Because of the lax policies adopted by the government, the nations share of the mineral development earnings has been minimal.Despite the 40% contribution of total merchandise export earnings that gold-mining in Ghana represents, the contribution to GDP is only 2-3% (Hilson, 2002). Thus the government lacks fiscal control, and as such cannot re submit funds efficiently towards development proje cts. The most formal adoption of international policy in Ghana was that of the global Mining Initiative (GMI) in 1998. Ghanaian mining companies claimed that a series of dynamic and innovative community development projects empowering rural communities and improving quality of life were to be initiated (Garvin, 2009).But others report that the mines are encroaching on indigenous land, resulting in cultural dislocation, poverty, displacement and environmental damage. Promises of jobs and adequate compensation have been broken. This is evident in the relatively small number of Ghanaians employed by mining companies, a mere 20 000, in spite of the immensesize of the industry (Garvin, 2009). An interesting response to growing unemployment is the intensification of small-scale, artisanal mining, nicknamed the galamsey.The galamseyhave become an important means for support for many subsistence farmers who have been displaced, but their illegal status has led to them being labelled hazar dous and environmentally damaging by the Chamber of Mines (Bush, 2008). There is potential for both large and small scale miners to collaborate, as they have diametrical methods and it is uneconomical for one to do what the other does. This has been proven by Goldfields, who have leased small portions of land to groups of galamsey. Most large-scale gold ines refuse to license their unused land for work, so the galamseyare forced to mine illegally in order to eke out a living. Hilson (2007) accuses the large mining companies of supporting a colossal military sweep aimed at eradicating the galamsey, which resulted in human rights violations and many forced removals. Instead of taking good of collaborative opportunities major mine operators in Ghana have resorted to the most common CSR endeavours amongst extractive mine companies the construction of schools, clinics and libraries. These CSR projects are simmer down predominantly philanthropic and unsustainable.Garvin (2009) determi ned, through a series of surveys, that although many locals perceived an increase in social welfare, they reported a decline in security, increased crime, cyanide-poisoned water, and other environmental hazards resulting in a lack of useful agricultural land. Notwithstanding the urgings from the World Bank Industries Review, Departments for multinational Development, the UN, and limited pressure from the Chamber of Mines, most CSR programmes that go beyond philanthropy emphasize the expansion of existing practices such as pig-rearing, livestock and activities.These give little opportunity for advancement, provide little more than subsistence wages and definitely do not contribute to sustainable economic growth (Hilson, 2007). One of the largest problems with CSR in Ghana, and similarly in SA, is the lack of communication between government, companies and public. Mining companies enter into agreements with the national government, paying royalties of 9%, of which 3% go towards commu nity development (Hilson, 2007). These monies pass through many layers of government and administration, and often very little reach the locals they are meant to compensate.Inhabited land is often designated for mining with little or no consent from the inhabitants. Under the Minerals and Mining Act (2006) mining companies are required to compensate displaced people for their crops and use of land, but these payments are still woefully undervalued (Hilson, 2007). Locals value their land quite differently from the value placed on it by mine employees and the lack of communication only worsens these discrepancies. The regulatory and reporting systems in Ghana are very poor, in effect making the situation for many locals worse than that seen in SA.There have been few legal efforts made to legislate mining activities, thus the improvement of CSR practices is dependent on international legislation, NGOs and pressure groups. Changing the CSR benefit There are certain drivers of CSR that are significantly different in developing countries than in developed countries like Europe and the US. Existing models must(prenominal) be adapted to fit the individual needs of developing countries. One such model is Carrolls pyramid, consisting of 4 tiers economic, legal, ethical and philanthropic responsibilities. drawframe drawframe drawframe Figure 1 Pyramid models for CSR drivers (adapted from Visser, 2006) Visser advocates thatto adapt Carrolls pyramid to developing countries, economic responsibilities are given the highest priority, followed by philanthropic, legal and ethical. The economic tier represents the need for businesses to not only ensure that direct foreign investment increases, alleviating poverty and unemployment, but that further investment is generated, goods and services produced and stable infrastructure built.Visser argues that the violence on philanthropy is necessary because of the dire situation and poor quality of life in many developing countries th athave become reliant on donor assistance. Philanthropy has become ingrained in developing country CSR. The legal responsibilities are of lower priority because the pressure to adhere to legislation in developing countries is less than in developed countries. In order to elicit response, both nationally and internationally, sustainable indicators must be developed allowing more accurate reporting of CSR successes and failures.Efficient and diverse indicators allow for better sustainable reporting and transparency. These indicators serve two main functions providing guidelines for company policy and government policy (Danegard, 2005). Increasing the number of indicators increases the scope for surveys or investigations. Data collected from these is usually validated by companies and government, and is, as yet, not mandatory. Although these inquiries may provide useful data, Danegard (2005) suggests that the use of third party verification may be necessary where governments lack the capacity for collection and evaluation.References Biersteker, T. J. , 1990. Reducing the Role of the State in the Economy A Conceptual geographic expedition of IMF and World Bank Prescriptions. International Studies Quarterly, 34(4), 477-492. Bush, R. , 2009. Soon there will be no-one left to take the corpses to the mortuary Accumulation and abjection in Ghanas mining communities. Resources Policy, 34, 57-63. Campbell, B. , 2005. The Challenges of Development, Mining Codes in Africa and Corporate Responsibility. 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