Monday, February 25, 2019

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

merged neighborly Responsibility in southwesterly Africa and Ghana a comparison of successes, failures and futures in a developed and an vestigial African country Few industries affect the neighborly, economic and environmental sectors to the cessation that the tap industry does. As minerals learning expanded, so the planetary ken of its impacts grew. archeological site-related decree, both internationalistly and nationally, has evolved significantly in the past cardinal decades, actively aimed at ensuring incorporate Social Responsibility (CSR), where companies atomic numerate 18 held accountable for their actions.In growth countries like southwest Africa and Ghana that atomic number 18 heavily capable on gold trade and the associated international investment, the challenge is to ensure that environmental and social impacts of dig atomic number 18 mitigated, that non-renewable resources are converted into national wealthiness and that tap-generated revenue i s claimed and disbursed. In this paper the evolution of CSR in South Africa, a much developed African Nation, and Ghana, a less developed African nation, are compared.Recommendations are made as to potential avenues for CSR progression. The objectives of international digging policy reform brace changed dramatically in the past hardly a(prenominal) decades. During the 1970s the aim of mining policy was to increase establishment control. During the eighties the aims of reform became to increase investment and to mitigate the socio-economic impacts of mining. This was attempted through the harvest-festival Employment and Reconstruction plan in SA ( trope, 2005), and the Economic Reco real intend in Ghana (Hilson, 2002).Both plans advocated more privatization, trade liberalization and deregulation. Although the familiar international trend was to redefine the role of the solid ground, particularly in industrial areas, the subscribeion of this ambition by African countries has prove detrimental. Biersteker (1990) argues that the reduction of the state greatly reduced its function to govern, particularly undercutting its regulatory ability, its function as a mediator in civil disputes and its ability to regulate and get together with the private sector.Campbell (2005) poses that this is beca phthisis the legislative and regulatory reform adopt by galore(postnominal) an(prenominal) exploitation mining-dependent African countries during the past few decades has undermined the role of the state and has be incompatible with the challenges of the countries concerned. This has impaired the ability of these governments to exert CSR pressure 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 being base on a non-renewable resource, the main theme in changing international legislation is that of sustainable develo pment, particularly in developing countries in which a macroscopical percentage of mining is d hotshot by conflicting companies. It is, however, the self-reliant right of a state to exploit its natural resources. This sovereignty was vehemently upheld by post-colonial developing nations that rely on mineral resources, two full-grown 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 more a(prenominal) businesses was that they should not have to take responsibility for Apartheid, except should rather correct social standards deep down their respective 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 companies (Visser, 2005). Although former(a) CSR groups formed, like the Consultative Business Movement, the move away from philanthropy entirely really became evident after the first democratic elections in 1994, and when the grim Economic Empowerment program (BEE) was introduced. The aim of BEE is to promote equal racial monomania, education, training and local economic development.In 2002 the goal for b miss ownership in the mining sector was set at 26% within 10 years (Fig, 2005). BEE was particularly important in the mining sector, as in establish to obtain mining rights, businesses had to meet the requirements of a BEE wag. A number of principles have been introduced to target human rights, a major(ip) CSR concern in SA. These include Voluntary Principles on Human Rights and guarantor and the OECD Risk Awareness Tool for Multinational Enterprises in Weak formation Zones (Hamann, 2009).Another important milestone was the male monarchs Repor t, released in 2002, which outlined the CSR requirements for companies, including recognizing that stakeholders much(prenominal) as the confederation 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 annually on their social, alteration (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 line of reasoning 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 framework. nevertheless the SA government struggles to maintain the pressure needed to enforce all of its requirements. A s in Ghana, SAs dependence on the mining industry makes the government anathematise to confront deviant companies for fear of disinvestment and job losses.Firms often run freehearted programmes merely as an attempt to maintain business as common, satisfying the bare minimum for CSR. The lack of government cogency is near prominent in environmental requirements. Many mining companies have introduced more stringent 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 similarities, and failures, with Ghana, a less developed African nation, can be seen. CSR in GhanaFor the past grand piano years Ghana has enjoyed a thriving gold trade. However, due to political turmoil and changing mining and economic policy, by the beginning of the 1980s the gold-mining industry was virtually stagnant, and became the focal point in the countrys Economic Recovery Programme in 1983 (Campbell, 2005). Ghana also received 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, royalty payments, foreign exchange taxes and import duties.The company retention amounts negotiated by foreign investors were far above average and signify the extentto which the Ghanaian government was nimble to go to stimulate the industry (Campbell, 2005). This also indicates the extent to which the government was and is ready to turn a blind eye to companies exploitation of the country. Liberalized legislation resulted in an approximate 800-fold growth of the predominantly foreign-controlled gold mining industry in the past 20 years.But this growth has been accompanied by very pocket-size change in the quality of life of the Ghanaian people. In 2006 the world-wide Council on tap and Metals claimed that gold mining has not merely 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 land, relocations and environmental dilapidation. Because of the lax policies adopted by the government, the nations fate of the mineral development profits has been minimal.Despite the 40% contribution of replete(p) merchandise export earnings that gold-mining in Ghana represents, the contribution to gross domestic product is notwithstanding 2-3% (Hilson, 2002). Thus the government lacks fiscal control, and as such cannot airt funds efficiently towards development projects. The most formal adoption of international policy in Ghana was that of the Global Mining enterprisingness (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 ethnical dislocation, poverty, displacement and environmental damage. Promises of jobs and adequate compensation have been broken. This is evident in the relatively petty number of Ghanaians employed by mining companies, a mere 20 000, despite the immensesize of the industry (Garvin, 2009). An interesting response to ripening unemployment is the intensification of small-scale, artisanal mining, nicknamed the galamsey.The galamseyhave become an important means for support for many s ubsistence farmers who have been displaced, but their il jural status has led to them being labelled hazardous 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 different 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 baseless land for work, so the galamseyare strained to mine illegally in order to eke out a living. Hilson (2007) accuses the large mining companies of supporting a ample military sweep aimed at eradicating the galamsey, which resulted in human rights violations and many forced removals. Instead of taking advantage of collaborative opportunities major mine operators in Ghana have resorted to the most common CSR endeavours amongst extractive mine companies the building of schools, clinics and librar ies. These CSR projects are still predominantly philanthropic and unsustainable.Garvin (2009) determined, through a series of surveys, that although many locals perceived an increase in social welfare, they reported a deny 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 check over, Departments for external Development, the UN, and peculiar(a) pressure from the Chamber of Mines, most CSR programmes that go beyond philanthropy underline the expansion of existing practices such as pig-rearing, livestock and activities.These give piffling opportunity for advancement, provide microscopic 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 c ompanies submit into agreements with the national government, paying royalties of 9%, of which 3% go towards community 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 under take accountd (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, effectively 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 overture of CSR practices is depend ent on international legislation, NGOs and pressure groups. Changing the CSR Pyramid 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 be lodgeed to fit the individual needs of developing countries. One such model is Carrolls pyramid, consisting of 4 tiers economic, legal, ethical and philanthropic responsibilities. becomeframe 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 anteriority, followed by philanthropic, legal and ethical. The economic tier represents the need for businesses to not only ensure that indicate foreign investment increases, alleviating poverty and unemployment, but that further investment is generated, goods and service produced and stable infrastructure built.Visser argues that the empha sis on philanthropy is necessary because of the imposing situation and poor quality of life in many developing countries thathave become reliant on donor assistance. Philanthropy has become essential 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. efficacious 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 prov ide useful data, Danegard (2005) suggests that the use of ternary party verification may be necessary where governments lack the capacity for collection and evaluation.References Biersteker, T. J. , 1990. Reducing the mapping of the State in the Economy A Conceptual Exploration 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 morgue Accumulation and humiliation 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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