From: Issue 41
Too close for comfort
When mining companies partner with NGOs focused on lifting poor communities out of poverty, it may come at a cost to the environment
Barrick Gold, the world’s largest gold mining company, has made big commitments to improve the lives of Chileans living in the country’s Atacama region, the location of its controversial Pascua-Lama project. The company has funded a wide variety of projects, including development of a rehabilitation centre for handicapped children, a housing project, and the delivery of wireless Internet access to the area’s remote villages.
The company isn’t spearheading these projects on its own. Instead, it has relied on developing close partnerships with non-governmental organizations (NGOs) and local institutions in the affected communities. “What we recognize, by using this approach, is that we are good miners, but when it comes to meeting needs in terms of education or of health, we do not have this expertise,” said Rod Jimenez, Barrick Gold’s vice-president of corporate affairs for South America, during an interview at his office in Santiago, Chile’s capital. “It is better to go with NGOs who have this expertise.”
By working with local organizations that are familiar with the situation on the ground, Barrick says it ensures that the projects it funds are adapted specifically to the needs of these communities, thus increasing the projects’ chances for success, and, in the end, improving the reputation of the corporation itself.
“From a business perspective, that is what ensures the sustainability of a business model,” added Jimenez. “We’re not in the business of building one mine; we’re in the business of building many mines. If you do the right thing, then when you go and build the next mine, that legacy follows you.”
But the “legacy” that follows Barrick Gold might not exactly be the one Jimenez has in mind.
Indeed, the business model – increasingly shared by North American mining companies – has become a matter of intense concern for local observers. Many fear that as the number of partnerships between the industry and local organizations increase, NGOs, who have traditionally represented civil society as a crucial counterweight to government and private sector interests, might soften their stance in the public debate on the social and environmental impacts of large-scale mining. Such partnerships are often perceived as a form of “co-optation” – a way for companies to more easily navigate through the more than 160 environmental conflicts currently registered on the South American continent. Through these partnerships, mining multinationals ensure that the NGOs and municipalities they financially support will be more inclined to stand alongside their decisions, effectively severing civil society from its main spokespersons.
Lucio Cuenca, director of the Latin American Observatory of Environmental Conflicts (OLCA), shares this concern. He points to Barrick’s Pascua-Lama project, which instigated one of the most widely covered environmental conflicts in the media over the last decade. “What Barrick did is block an entire sector of the population’s potential for mobilization, and to co-opt other sectors, through promises of employment, economic benefits, sums allocated to the municipality for local projects, and establishing parallel aboriginal organizations from those which oppose the project,” he said.
Cuenca deplores this tendency for mining companies to convert their public image to one of a “social actor” through such partnerships. It’s a conversion made possible by the confusion between philanthropy and economy, as suggested by University of Buenos Aires professor Diana Mutti, who with colleagues published a study on the issue this summer in Resources Policy journal. It specifically addressed the corporate social responsibility (CSR) initiatives of mining companies in Argentina.
“There are complexities in identifying whether contribution to local development is part of economic or philanthropic responsibilities of companies,” the authors wrote. “Mining companies substitute contribution to local economic development by increasing philanthropic activities, as managers admitted.”