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Business Conduct in the Mining Industry Essay

Business ethics are defined as the collective values of a business organisation that can be used to evaluate whether the behaviour of the collective members of the organisation are considered acceptable and appropriate (ed. Campbell 2014). Many companies in the mining industry lack incentive to promote business conduct in line with ethical standards in regards to the fundamental principles encompassed in the Global Business Standard Codex (GBSC) (Paine et al. 2005). Such principles that should be encouraged include the principle of dignity in regards to contributing to the development of local communities and also the principles of transparency and citizenship in relation to environmental concerns.

Companies in the mining sector may be motivated to contribute and improve the economic and social development of locals, respecting the dignity of Indigenous communities (Paine et al. 2005). A publication by the Australian Human Rights Commission, suggests that corporate responsibility requires the incorporation of human rights principles pertinent to a sustainable relationship between Indigenous people and mining companies, including the protection and maintenance of traditional culture. There are many corporations that strive to respect the dignity of Indigenous people through acknowledging the customary rights of and engaging with local communities to ensure that their activities positively enhance the lives of those affected by their operations (Everinghim et al. 2013).

BHP Billiton is one company committed to working with local Indigenous communities by engaging frequently and openly with communities affected by their activities, and by taking the views and apprehensions of these communities into account in decision-making. The company acts diligently to avoid infringing on the rights and traditions of local communities, and has also established numerous education initiatives, such as the Warrae Wanni Pathways to School Program in Musswellbrook, NSW, Australia to help Indigenous children and children from disadvantaged backgrounds gain access to better education (BHP Billiton 2013).

By engaging with local communities consistently with human rights principles, mining companies are able to deliver enduring benefits to these communities with prospects of jobs and business from the mine, supporting a sustainable relationship with Indigenous communities and helping maintain their cultures (Cragg & Greenbaum 2012). Mining companies should create employment opportunities, promote education programs and engage in consultation processes with local communities in order to support the sustainable development of these communities (Paine et al. 2005). By cooperating with and respecting local communities and their cultures, mining companies are able to promote the sustainable development of these communities in line with the dignity principle of the GBSC.

Another issue within the mining industry is that companies may not be compelled to report on their consumption of environmental resources used in their operations when mining for raw materials (Paine et al. 2005). There are many businesses around the globe that do not have appropriate provisions in place in regards to disclosing information about their consumption of natural resources and enhancing biodiversity. In a report by Cambodians for Resource Revenue Transparency (2013), many of the locals interviewed were concerned that mineral exploration by Australian mining companies would intrude on their land, devastating spiritual forests and demolish culturally significant sites because the companies had little engagement with local communities and the disclosure of information was limited.

Numerous mines established in developing countries are usually more concerned with acquiring land to excavate in order to expand operations and produce profits, with little regard for the environmental impact they have on the land and surrounding communities, due to unethical decisions made with little governance (Cragg et al. 2002). Such decisions include diverting or damming rivers in order to operate the mine, moving local villages in order to exploit more land, and other unsustainable practices performed when mining raw materials (Siegel 2013).

Mining companies should be legally required to disclose how their activities impact the land on and around which they operate and be accountable for any adverse environmental issues that arise from such activities, leading to a dramatic decrease in unethical practices in the mining industry (Northcott 2012). A lack of emphasis on the principle of transparency in the mining industry may lead to the unsustainable use of resources and the degradation of land surrounding mines because companies are currently not required to disclose information about their operations.

Some companies in the mining industry, however, are seen to promote ethical practices regarding resource usage and environmental impact in line with the citizenship principle encompassed in the GBSC (Paine et al. 2005). These companies place a high regard for the protection and sustainable development of the natural environment on lands on which they operate and abroad. Mining companies operating in Australia are governed by stringent regulations on their operating activities and are encouraged to constructively engage in tackling greenhouse gas emissions, efficiently using energy and preserving the biodiversity of ecosystems (Siegel 2013). Mining giant, BHP Billiton is committed to being a responsible steward of natural resources by implementing energy efficiency and green-house gas reduction projects, and aiding the rehabilitation of disturbed areas used in operations (BHP Billiton 2013).

Through their interactions with natural resources, mining companies can act as responsible citizens of the community by aspiring to protect and deliver lasting benefits to the environment and communities through the improvement natural resource management and the reduction greenhouse gas emissions (Worrell & Appleby 2000). Mining companies should be activist on issues such as environmental impact, ensure their activities clean up any environmental damage caused by operations and strive for the sustainable management of natural resources (Paine et al. 2005). While there are numerous companies involved in mining that promote the responsible and sustainable use of land and resources, acting as responsible citizens of the nation in which they operate, there is growing need for the citizenship principle to be further enforced to offer guidance for other mining companies across the globe in regards to how their activities should not cause further environmental damage.

The promotion and implementation of ethical standards within the mining industry is essential in order to ensure corporate decisions are made to encompass moral values. Mining activities resulting from business decisions have a wide impact on not only themselves, but also on the wider community and the environment, spurring the need to adopt a code of conduct encompassing the principles outlined in the Global Business Standard Codex (Paine et al. 2005).

References

Type your reference list in alphabetical order author’s LAST/SURNAME below:

Appleby, MC Worrell, R 2000, ‘Stewardship of natural resources: definition, ethical and practical aspects’, Journal of Agricultural and Environmental Ethics, vol. 12, no. 3, pp. 263-277, viewed 31 March 2014,

Australian Human Rights Commission 2002, ‘Corporate Responsibility – Developing principles on Resource Development on Indigenous land: Human Rights Based Approach to Mining on Aboriginal Land’, viewed 25 May 2014,
BHP Billiton, BHP Billiton sustainability report 2013, viewed 25 May 2014,

Cambodians for Resource Revenue Transparency April 2013, ‘Transparency and minerals development in Cambodia: the cases of OZ Minerals and BHP Billiton,’ viewed 25 May 2014,

Cragg, W & Greenbaum, A 2002, ‘Reasoning about responsibilities: mining company managers on what stakeholders are owed’, Journal of Business Ethics, vol. 39, no. 3, pp. 319-35, viewed 31 March 2014,

Everingham, J, Rifkin, W, Collins, N 2013, ‘Indigenous enterprise initiative’, Centre for Social Responsibility in Mining, The University of Queensland, viewed 8 May 2014,

Northcott, MS 2012, ‘Artificial persons against nature: environmental
governmentality, economic corporations, and ecological ethics’, Annals of the New York Academy of Sciences, vol. 12491, no.1, pp. 104-17, viewed 8 May 2014,< https://vuws.uws.edu.au/bbcswebdav/pid-998577-dt-content-rid 12774999_1/courses/200336_2014_aut/1%20Assessments/Req%20Readings/Northcott%20%282012%29.pdf>

Paine, L, Desphande, R, Margolis, JD, Bettcher, KE 2005, ‘Up to code: does your company’s conduct meet world-class standards?’, Harvard Business Review, vol. 83, no. 12, pp. 122-33, viewed 8 May 2014,

Siegel, S 2013, ‘The missing ethics in mining,’ Ethics and international affairs, vol. 27, no. 1, pp. 3-17, viewed 8 May 2014, Vuws database, DOI 10.1017/S0892679412000731.

Stanwick, P & Stanwick, S 2014, ‘The foundation of ethical thought’, in N Campbell (ed.) Business academic skills, 5th edn, Pearson Australia, Sydney, pp. 48-58


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