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Business and Politics

Editor-in-Chief: Aggarwal, Vinod K.


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Volume 14, Issue 3 (Oct 2012)

Issues

Multi-level corporate responsibility and the mining sector: Learning from the Canadian experience in Latin America

Kernaghan Webb
  • Corresponding author
  • Department of Law and Business, Ted Rogers School of Management, Institute for the Study of Corporate Social Responsibility, Ryerson University, 350 Victoria Street, Toronto, ON, Canada M5B 2K3
  • The author would like to express his appreciation to the editors of this special issue, as well as to participants in the workshop where an earlier version of this paper was presented, and to anonymous reviewers, for their helpful comments. The author gratefully acknowledges the support of the Social Sciences and Humanities Research Council of Canada for financial assistance concerning the background research for this article.
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Published Online: 2012-10-31 | DOI: https://doi.org/10.1515/bap-2012-0022

Abstract

The primary research question animating this article revolves around understanding how multinational mining corporations (MMCs) are responding to the twin pressures of globalization and localization to develop Corporate Responsibility (CR) approaches that apply at a global level and to their subsidiaries in various different jurisdictions, with particular attention being paid to the role of home, host and international factors in shaping the CR approaches of MMCs. The focus of attention is on the experience of Canadian MMCs in Latin America, using as an illustration the particular CR response of one Canadian MMC at its subsidiary Guatemalan mining operation. Research suggests that home country factors play an important role in shaping corporate CR approaches in a manner which take into account the circumstances extant at subsidiary operations in developing countries, as do transnational advocacy networks and global normative instruments.

References

About the article

Corresponding author: Dr. Kernaghan Webb, LL.B., LL.M., LL.D. Associate Professor, Department of Law and Business, Ted Rogers School of Management, Institute for the Study of Corporate Social Responsibility, Ryerson University, 350 Victoria Street, Toronto, ON, Canada M5B 2K3, Phone: 416-979-5000 ext. 2478, Fax: 416-979-5266, Website: www.ryerson.ca/csrinstitute


Published Online: 2012-10-31


For the purposes of this paper, norms are defined as collectively held understandings of acceptable behavior within a given realm. Finnemore 1996.

This paper will follow the approach of other scholars who use the terms “corporate responsibility” and “corporate social responsibility” (CSR) inter-changeably (e.g., Garriga and Mele 2004; Shamir 2004; Vogel 2005). CSR has been characterized by Okoye (2009) as meeting the criteria for an “essentially contested concept” (Gallie 1956). Okoye (2009) describes CSR as a complex and evolving phenomenon with a diversity of descriptive and normative justifications, addressing a dynamic relationship between corporations and different elements and levels of society. Dahlsrud (2008) has noted the considerable diversity of definitions of CSR employed by academics and others, but also concludes that there is fairly widespread agreement around the idea that CSR involves stakeholder and voluntary elements, pertaining to the ESE dimensions of corporate activity. Consistent with Dahlsrud’s analysis, and leading scholars such as Carroll (1999) this paper follows Prakash (2000: pp. 3–6) in defining CR as the obligations of companies towards their stakeholders in the areas of human rights, labor, and the environment, with compliance with law as the minimum acceptable behavior, and CR extending to encompass voluntary commitments or obligations that go beyond regulatory requirements.

See, e.g., Cragg and Greenbaum 2002; Kapelus 2002; Szablowski 2002, 2007; Bird 2004; Jenkins 2004; Puplampu 2004; Whiteman 2004; Imbun 2006; Pegg 2006; Dashwood 2007, 2011; Imai et al. 2007; Szablowski 2007; Sagebien et al. 2008; Campbell 2011; Lindsay 2011; Odell 2011; Sagebien and Lindsay 2011; Sosa 2011; Webb 2011.

KPMG 2006.

Dashwood 2007.

Baron 1995. The author states that for business managers, the challenge of understanding nonmarket forces – government, interest groups, activists, and the public – is frequently more difficult than understanding the market environment. He refers to this as the “nonmarket environment.”

Dashwood 2007: p. 50.

Campbell 2006: p. 926.

Campbell 2006: p. 926.

Campbell 2006: p. 931.

Keck and Sikkink 1998: p. 30.

Keck and Sikkink 1998: p. 9.

Hoffman 2001: p. 7.

Rosenzweig and Singh 1991.

Scott 1995.

E.g., Keck and Sikkink 1998.

Braithwaite and Drahos 2000.

Hillgenberg 1999.

It is also possible for intergovernmental instruments that originally might be characterized as “soft law” to evolve through state practice to be recognized as part of “customary international law,” and thereby develop a more binding status.

Prakash 2000 and Borzel et al. 2011.

Borzel et al. 2011; Prakash and Potoski (2012).

Ruggie 2008.

Russell et al. 2010.

Government of Canada 2009.

Mining Association of Canada 2009.

Elizalde 2010.

Elizalde 2010.

Sagebien et al. 2008.

Keenan 2010.

CCSRC 2009.

See e.g., Whiteman and Mamen 2002; Muradian et al. 2003; Odell and Silva 2006; Imai et al. 2007; Fulmer et al. 2008; Sagebien et al. 2008; CCSRC 2009; Keenan 2010; Maheandiran et al. 2010; North 2011. In terms of non-Canadian firms, incidents of alleged ESE misconduct at the Latin American operations of non-Canadian extractive sector firms have been discussed by a number of scholars (see, e.g., Olsen 2002; Whiteman and Mamen 2002; Fossgard-Moser and Bird 2004; Munoz et al. 2007; Bebbington et al. 2008; Zamprile and Llorente 2009; Collins 2011; Kemp et al. 2011).

CCSRC 2009.

House of Commons 2005.

Government of Canada 2009. A private member’s bill (Bill C-300) attempted to create such a new CR legal instrument but it was narrowly defeated in 2010 (Dagenais 2010). If Bill C-300 had passed it would have mandated that firms receiving funding from the Export Development Corporation and the Canada Pension Plan meet binding CR standards, with failure to do so preventing the company in question from further funding, and it would have included a mechanism for investigating complaints of non-conformance with the aforesaid CR standards, regardless of whether or not the company in question had consented to be the subject of the investigation (Dagenais 2010).

Goldcorp’s Guatemalan operations have been the subject of a complaint raised pursuant to the OECD MNE Guidelines, as discussed in Section 5.

In the BCE Inc. v. 1976 Debentureholders (2008), the Supreme Court of Canada held that directors owe a fiduciary duty to ensure the long-term best interests of the corporation viewed as a “good corporate citizen”, and in the course of their duties may consider a variety of interests including communities, consumers, shareholders, government, and the environment (Webb 2011).

Van Duzer 2003.

Government of Canada 2009.

Government of Canada 2009.

Krugel 2011.

Poppelwell 2010.

Dhir 2009.

Dhir 2009.

Webb 2011.

Webb 2011.

Auditor General of Canada 2009.

Social Investment 2009.

Rights Action 2011.

Doh et al. 2010.

Doh et al. 2010.

Doh et al. 2010.

Jantzi Research 2008.

Jantzi Research 2008.

Mining Association of Canada 2010.

For example, in 2010, the Canadian Network on Corporate Accountability made a submission to the Extractive Sector CSR Counsellor’s Public Consultation Process (Canadian Network on Corporate Accountability 2010). For the purposes of the submission the coalition acted on behalf of: Amnesty International Canada, Friends of the Earth Canada, the Halifax Initiative Coalition, KAIROS: Canadian Ecumenical Justice Initiatives, the Mennonite Central Committee Canada, MiningWatch Canada, Publish What You Pay – Canada, the Steelworkers Humanity Fund, and the United Church of Canada Process (Canadian Network on Corporate Accountability 2010).

See, Szablowski 2002; Odell and Silva 2006; Imai et al. 2007; Munoz et al. 2007; Szablowski 2007; Sagebien et al. 2008; Vasquez 2010; Odell 2011.

The Human Development Index provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and enrolment at the primary, secondary and tertiary level) and having a decent standard of living (measured by purchasing power parity). The index is not in any sense a comprehensive measure of human development. It does not, for example, include important indicators such as gender or income inequality and more difficult to measure indicators like respect for human rights and political freedoms. What it does provide is a broadened prism for viewing human progress and the complex relationship between income and well-being. Per: UNDP, nd.

UNDP 2011.

UNDP 2011.

Fulmer et al. 2008: p. 95.

Fulmer et al. 2008: pp. 95–96.

Fulmer et al. 2008: p. 96.

According to the World Bank Worldwide Governance Indicators (WGI) project, governance is defined as the set of traditions and institutions by which authority in a country is exercised. This includes (1) the process by which governments are selected, monitored and replaced, (2) the capacity of the government to effectively formulate and implement sound policies, and (3) the respect of citizens and the state for the institutions that govern economic and social interactions among them. Per World Bank 2010.

World Bank 2010.

World Bank 2010.

Fulmer et al. 2008: p. 98.

Fulmer et al. 2008: p. 98.

Fulmer et al. 2008: pp. 98–99.

Imai et al. 2007.

Imai et al. 2007: p. 125.

Imai et al. 2007: p. 127.

Imai et al. 2007: p. 127.

Imai et al. 2007: p. 127. All this having been said, Guatemalan court decisions have supported several community challenges to mining related laws, as discussed in Section 5.

Sosa 2011.

Sosa 2011.

Deisley 2011.

Deisley 2011.

The following account of the situation at the Marlin Mine in Guatemala is a composite based on information from Compliance Adviser/Ombudsman (CAO) 2005; Imai et al. 2007; Coumans 2008; Fulmer et al. 2008; Hoffman 2008; Jantzi Research 2008; Rights Action 2008; Dhir 2010; Goldcorp 2010b,d; Inter-American Commission on Human Rights 2010; International Labor Conference 2010; Maheandiran et al. 2010; On Common Ground 2010; Deisley 2011; MiningWatch Canada 2011; National Contact Point 2011; Sosa 2011.

Fulmer et al. 2008.

Sosa 2011: references omitted.

Keck and Sikkink 1998.

For an assortment of media articles and programs critical of Goldcorp’s Guatemalan activities, go to: https://www.miningwatch.ca/categories/main-categories/company/goldcorp.

Fulmer et al. 2008: p. 93.

CAO 2005.

CAO 2005: p. iii.

CAO 2005: pp. iii–iv.

McGee 2009.

McGee 2009.

Fulmer et al. (2008: p. 100), state that “[w]hile the Municipal Code attempts to respect “the particular standards of the customs and traditions” of indigenous groups (which presumably include consensus-based decision-making, including voting by show of hands), it establishes a higher standard of participation for such votes to be considered binding (50% of registered voters instead of 20%).” In the case of the Sipicapa referendum, participation was slightly <50%.

Imai et al. 2007: p. 126.

Maheandiran et al. 2010: p. 3.

E.g., Imai et al. 2007.

Jantzi Research 2008.

E.g., Coumans 2008.

E.g., Hoffman 2008.

Sosa 2011.

Imai et al. 2007. Another shareholder proposal was also initiated in 2008, initiated by an individual shareholder, calling for Goldcorp to halt any plans to expand the mine without the free, prior and informed consent of the affected communities (Sosa 2011). Goldcorp refused to circulate this resolution, arguing that it did not relate to the business of the corporation (Sosa 2011).

Coumans 2008.

National Contact Point 2011.

National Contact Point 2011.

Deisley 2011 and Sosa 2011.

On Common Ground 2010.

Deisley 2010.

On Common Ground 2010.

Goldcorp 2010b.

Deisley 2011.

Deisley 2010 and Goldcorp 2010a.

Deisley 2010 and Goldcorp 2010b.

Goldcorp 2010c.

Goldcorp 2010c.

Goldcorp, nd and Goldcorp 2010b. This approach appears to represent an effort by Goldcorp to secure a social licence to operate its Marlin mine (Gunningham et al. 2003), derived from expectations of economic, legal and social stakeholders, and as such the licence to operate concept is consistent with institutional perspectives (DiMaggio and Powell 1983; Scott 1995; Dashwood 2007) and theorists examining the importance of stakeholder relations (e.g., Freeman 1984; Donaldson and Preston 1995; Luceah and Doh 2011) in that it suggests that firms are dependent on various stakeholders to obtain access to resources, and that the activities of these stakeholders play roles in defining the nature of the licence.

Goldcorp 2010b.

Deisley 2011.

Goldcorp 2010b. Appendix A contains a listing of more than 25 international instruments referred to by Goldcorp in its CR Policy, Human Rights Policy, and in other Goldcorp documents.

Suchman 1995.

Goldcorp 2010d.

Deisley 2011.

While the focus of attention in this section has been on the Goldcorp shareholder proposal for an HRA and the actions and events that transpired thereafter, it is important to note that ESE issues at Goldcorp’s Marlin mine continue to be a focus of critical attention, and it is equally important to acknowledge that more changes are likely to transpire. Examples of recent ESE-related events at Marlin Mine largely taking place outside of the HRIA process include:

  • a 2010 ILO Committee of Experts request to the Government of Guatemala that it neither grant nor renew any licence for exploration and exploitation of natural resources while participation and consultation as per ILO 169 “are not being carried out” (International Labor Conference 2010);

  • a 2010 recommendation from the Inter-American Commission on Human Rights (IACHR) that the Government of Guatemala carry out “precautionary measures” (interim) re: alleged water contamination and wells drying up, including suspending the Marlin mine until such time as the IACHR adopts a decision on the merits (Inter-American Commission on Human Rights 2010);

  • in response to the 2010 IACHR recommendations, the initiation by the Guatemalan government of an administrative process to further investigate the claims, coupled with communications from the Guatemalan government to residents indicating that there is no evidence of water contamination (Mining Weekly 2010); and an unsuccessful 2011 shareholder proposal calling for suspension of the Marlin Mine (Sosa 2011).

Prakash 2002; Griffin and Koerber 2011.

Campbell 2006.

Keck and Sikkink 1998.

Campbell 2006: p. 932.

Campbell 2006: p. 931.

Dashwood 2011.

Baron 1995.

E.g., Kapelus 2002; Imbun 2006; Jenkins and Yakovleva 2006; Campbell 2011; Kemp et al. 2011.


Citation Information: , ISSN (Online) 1469-3569, ISSN (Print) 1369-5258, DOI: https://doi.org/10.1515/bap-2012-0022.

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