Case of Acacia Mining.1.1 IntroductionIn efforts to address socio-economic and ecological issues as a result of mining activities in the least developed countries (LDCs), the concept of corporate social responsibility (CSR) has taken a new dimension in the recent decade. Although the understanding and practice have differing insights and interpretations, CSR, which can simply be defined as companies being socially responsible in order to increase their market share (Cramer, 2006). It can also be seen as a way of supporting the community efforts to solve social issues such as unemployment, low education, diseases, food supplies and decent shelter in the area where they operate (Lungu & Mulenga, 2005; Banks et al, 2013; Gilberthorpe 2013).
Effectively engaging with local communities is as important to any other part of the business. Open, honest and respectful communication is essential to developing long-term, mutually beneficial partnerships. Strong partnerships, in turn, facilitate permitting and approvals, and promote a more stable operating environment (Barrick CR policy, 2017).
Just as Visser et al. (2007) argued that CSR is a form of good corporate citizenship which means extending the relationship between business and society to include social, political and environmental responsibilities of a business.
In Tanzania in late1990s, the country introduced new mining legislation, the Mining Act of 1998 and the Mining Regulation Act of 1999 in order to harmonize investment relations between FDI and local interests. This was to bridge what was obtained as profits and local development, social issues and benefit the country. Tanzania is also a member of NEPAD in African Mining Partnership (AMP) in 1990s with global corporations such as Acacia Mining to mention but a few. Acacia Mining undertakes extractive gold mining activities in the Lake region of Tanzania, namely Mara, Geita, Kahama and Kagera regions. It changed its name from Barrick Gold to Acacia Mining in 2014. It operates in Bulyanhulu, Buzwagi and North Mara.It has faced several challenges in implementing its country’s strategy and these are attributed to corruption and weak institutional capabilities to enact or enforce the democratic, transparent and agreed-upon rules and laws that governed the operation and taxation of mining activities were a source of ongoing problems. Also, some local communities did not see the potential benefits of large corporations in their communities. Thus, analyzing its Barrick’s CSR strategy in Tanzania is important.
Acacia Mining operations in Tanzania: ACACIA MINING CO. CSR STRATEGY IN TANZANIA
Barrick invested in Tanzania in 1999, following the completion of exploration activities that had started in 1995. The company’s initial mining activities were limited to Bulyanhulu in Kahama District until 2004, when it expanded to other areas surrounding the Lake Victoria Zone. It changed its name from Barrick Gold to Acacia Mining in 2014. Acacia Mining plc (LSE: ACA) is the UK holding company of the Acacia Group, Tanzania’s largest gold miner and one of the largest producers of gold in Africa. The Acacia Group has three mines, all located in north-west Tanzania: Bulyanhulu, which is owned and operated by Bulyanhulu Gold Mine Limited, Buzwagi, which is owned and operated by Pangea Minerals Limited and North Mara, which is owned and operated by North Mara Gold Mine Limited.The company follows global corporate social responsibility standards as part of its larger global business strategies, using business ethics, human rights and development. Among these strategies, the company places significant emphasis on its social relationships with local communities and the right to operate in their land.
For instance, donations, infrastructure development, community initiatives ad regional purchase of goods and services Acacia Mining Mine has also committed to establish a community department for its CSR strategy to cater for entrepreneurship programs, healthcare accessibility and corporate ambassadors. For Acacia Mining sustainability entails; Developing community and Government relationships Protecting the environment Safeguarding safety and health in the workplace Creating development and training opportunities for our employees Respecting human rights.
The Acacia (Barrick Gold) Community Relations Management System (CRMS) helps sites build and sustain strong relationships by providing guidance and tools on engagement best practices, identifying the key outcomes Acacia seeks to achieve, and measuring the effectiveness of its engagement activities.These best practices include: Mapping stakeholders and assessing their priorities and concerns; Establishing a culturally appropriate way for people to communicate directly to the company; Developing two-way dialogue in order to build trust; Providing methods for stakeholders to raise concerns and grievances; and Documenting engagement activities for internal and external audiences.Acacia (Barrick Gold) has mandatory requirements related to the implementation and management of grievances. Where all sites have a grievance mechanism approved by the Executive Director and General Manager for receiving, documenting, tracking, reporting, and responding to complaints and grievances. The grievance mechanisms are accessible to a wide range of stakeholders, including women and vulnerable people, and be culturally appropriate.
In 2017, Barrick sites received 259 grievances and resolved 244 grievances, including cases carried over from the previous year. As of December 31, 2017, they were working to resolve 34 outstanding grievances at Barrick-operated mine sites.After an analysis of the company’s sustainability reports for 2010 to 2018 the following are the key areas where Acacia Mining engages with local community in the Lake Zone region, Tanzania, the following are focus engagement areas;In Education, part of its Human Resources department policy each of its mining site has a training department. Acacia Mining recruited university graduates from University of Dar es Salaam and other institutes that have mining, extraction training, who work on administrative activities in corporate offices, learn from the mining operation and provide advice.Barrick has also been working closely with local communities in expanding education. For instance, in 2008, Barrick had committed to working closely with eight villages before expanding to another eight villages along the Bulyanhulu-Kahama road in Bulyanhulu. Seven of the eight villages were in the Bugarama ward and one was in the Mwingilo ward, but all were located in the Bulyanhulu mining area.
For instance, in 2008, the corporation established a locally based mining institution in Moshi, Kilimanjaro Region. The aim of the institute was to provide training skills and opportunities for Acacia’s mining sites in the country.In Health, Acacia committed itself to upgrading the Sungusungu Health Centre into what became called the Nyamongo Hospital in the Bulyanhulu area organized by the Evangelical Lutheran Church in the area, several NGOs had entered into an agreement with the local District Office and the Village Councils to provide health care that was affordable to the many local residents to treat diseases such as malaria, waterborne diseases, typhoid, yellow fever and other epidemiology problems. The community trust committed 30,000 dollars towards beds and fittings and for a general upgrade to the hospital.
Acacia’s overall objective was to make health services available to many disadvantaged communities, and to attempt to curb the number of deaths that occurred among pregnant women when they travelled from the poor communities to the district hospital. In 2018, Acacia Mining continued its US 1 million dollars investment in the Bugarama Health Centre near Bulyanhulu and supported the construction of a surgical theatre, general and specialized maternity wards, an outpatient department, and mortuary facilities. The health center currently provides care for 58,000 people living in the 14 villages in Kakola and its surrounding areas. Upon completion in 2019, the center could, potentially, be designated as a district referral facility and would then cater for over 100,000 community members.At North Mara the construction of the Nyamwaga Health Centre was completed in April 2018.
The center boasts critical medical infrastructure including a surgical theatre, pharmacy and a maternity ward, as well as staff housing and rainwater harvesting tanks. Since its renovation, the health center can treat 60 percent more patients (800 each month) thanks to the wider availability of services. Besides the development of crucial infrastructure, North Mara conducted its annual eye screening initiative which has seen over 3,000 patients tested annually and the distribution of free spectacles. During the year North Mara also partnered with the Medical Women Association of Tanzania (MEWATA) for breast and cervical cancer awareness and testing for women reaching over 1,200 women.In Environmental Protection and Conservation, Acacia, in cooperation with local government authorities, had been working to provide opportunities to the residents of the mining areas to orient themselves with mining operations. The company has been creating environmental awareness by creating local ambassadors who then go out and speak positively about the mining sites to other communities.
On Employment Opportunities, to foster local employment Acacia Mining assigned manual laborers to mining sites to work along with expatriates and locals who have experience in mining activities. Also, the company was involved in developing the Integrated Mining Technical Training (IMTT) program, a joint project with the Tanzania Chamber of Minerals and Energy (TCME) and the Tanzanian Government. The goal is to offer locals the skills they need to participate in the country’s burgeoning mining sector and improve their livelihoods.In Community-based entrepreneurship, in collaboration with local community authorities, Acacia went on to assist several community groups that already possessed local skills and entrepreneurship initiatives and which had local resources to generate business activities. Other community development projects had also been started and were engineered under the same procedure of governance.In Water Access and Sanitation services, at Bulyanhulu, construction began on a 55-kilometre pipeline to carry water from Lake Victoria to 100,000 residents in the Lake Zone. Under the Joint Water Project Partnership (JWPP) the company is investing around US 2 million dollars to provide vital water supply and sanitation services to local communities. The pipeline will pass through 14 villages located in the vicinity of the mine and is scheduled to be completed in mid-2019.
In Agriculture sector, At Buzwagi, Acacia began the development and implementation of a three-year US 1.1 million dollars agricultural improvement project in partnership with Farm Concern International (FCI). Agriculture is an important economic mainstay for the local communities around Buzwagi and the project seeks to substantially increase farmers’ incomes through greater productivity and improved links to market.In enhancing Local Economy and spend, Acacia has always maintained a policy of sourcing from local suppliers first, where viable, and the plans form part of our continued efforts to grow our annual local spend. Acacia has partnered with Tanzanian-owned businesses on goods and services ” including construction materials, fuel and lubricants, as well as internet and security services ” to approximately US 140 million dollars in 2018/2019 financial year. Consider the following figure to illustrate CSR strategy by Acacia in Tanzania; Source: Acacia Mining PLC Sustainability Report 2014
A Comprehensive Analysis of Acacia Mining CSR Strategy
Despite the CSR contribution of Acacia Mining in the Lake Zone, the CSR efforts have been perceived negatively especially in justifying its investment by balancing profit maximization objectives and minimizing negative impacts on local communities, these has been among community leaders and NGOs, there was clear discontent regarding the various foreign companies in the Lake Zone. This was followed by community tensions with Acacia (then Barrick Gold) between 2007 and 2009, a different strategy was developed. Implementing a locally based interaction model that promoted mutual partnership with communities seemed like the best strategic legitimacy approach. In early 2009, Barrick encountered discontent from the local communities, as well as from the local media, activists’ groups and lobby groups, who felt that the company had not done enough to promote sustainable and inclusive development in the communities where it operated, example North Mara. Acacia Mining decided to enhance its CSR activities to reduce tensions and social hostility by increasing welfare of local residents, its long-term sustainability (profits) and cooperative working environment thus leading to higher productivity. In its sustainability report 2018, Acacia Mining contributed over US 127 million dollars in taxes and royalties, spent over US 273 million dollars with local suppliers in Tanzania, achieved a rate of 97 percent local employees and invested US 8.8 million dollars in their sustainable communities’ strategy to improve the lives of those living near the mine sites.
Acacia Mining CSR strategy is based on three pillars that include health, environment and social and community, these will help Acacia develops a deep understanding, integration and builds a trusting relationship with local communities.Protests from so-called secondary stakeholders that included local communities, artisanal miners, small-scale farmers and their families, and local not-governmental organizations (NGOs) had occurred to address specific social, environmental, and land heritage and resettlement issues. All these stakeholders had widely varying claims, interests and rights. In addition, subgroups and individuals with multiple and changing roles and interests existed. They included manual mining workers who felt they had been unfairly dismissed from their jobs with little or no compensation, and felt unjustly treated by either Barrick or the Tanzanian labor court system. Local communities also had expressed anger at the level of noise caused by heavy machines during mining explorations at night and the extent of the company’s impact on land in their neighborhoods. There were also individuals, mainly unemployed youths, who were engaged in intrusion, vandalism and theft at the mining sites.
However, the behavior of the Field Force Unit (FFU), security used by Acacia, the weak government institutional system, and the loyalty of administrative workers to Barrick had increased anger, frustration, and resentment among communities, small-scale artisan miners and NGOs. The FFU had been regarded by local communities as brutal and uncompromising during confrontations.Although significant progress and successful collaborations had evolved across local communities at its mining sites, Acacia Mining still faces serious, unique problems and increased pressure to manage conflicts and reconcile stakeholders demands in places such as North Mara. For instance, in January 2019 NEMC issued an Environmental Protection Order (EPO) directing Acacia Mining in North Mara to pay USD 130,000 for breaching environmental regulations in Tanzania. Acacia Mining paid the fine. Also a payment of 300 million to the Government of Tanzania to resolve outstanding tax claims, to be paid over time on terms to be settled by the parties.For year 2017, here is a summary of its performance in terms on CSR group strategy; Source: Barrick Gold Sustainability Report, 2017. Sustainability Report for Barrick Group in 2017
Conclusion and Recommendations
In order for Acacia Mining to gain from its CSR strategy, that envisions emphasis on sustainability that will benefit the government and communities from the extraction of their resources by committing to local hiring and contracting, investing in community priorities, and paying our fair share of taxes. Acacia has to change its engagement behavior and adopt a transformational corporate stance by involving community leaders in a two-way communication with frequent interactions, involve more stakeholders and partners in the conversations.
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Cite this essay
Corporate Social Responsibility in Tanzania. (2019, Aug 20). Retrieved from https://studymoose.com/corporate-social-responsibility-in-tanzania-essay