Corporate Social Responsibility and Sustainable development in Resource-Rich Countries in Africa

A Worker of First Quantum Mine in Akjoujt, Mauritania

During the last decades, most of the major International oil and mining companies have rushed to Africa to look for new extractive opportunities. Shell, an American oil company, has been interested to develop the huge petroleum resources in the Niger Delta in Nigeria; Areva, a French mining company, installed in Niger, became one of the biggest uranium producers in the world; Tullow, a British oil company, is present in the petroleum sector of most of the African countries. The abundance of resources coupled with the growing economic liberalization in the developing countries has led many International Mining Companies (IMCs) to be interested in investing in Africa. In order to manage the expectations of the different stakeholders, mainly the local communities and the work-force, the IMCs introduced a new concept called Corporate Social Responsibility (CSR). At the beginning, it seemed obvious for most of the stakeholders that the extractive companies had the obligation to help the host countries facing development challenges by investing in socioeconomic projects. They were considering that corporations

should satisfy all the requirements of the local communities through Corporate Social Responsibility. One of the most popular definitions in support of this idea presents CSR as “the continuing commitment by business to behave ethically and contributing to economic development while improving the quality of life of work-force and their families as well as of the community and society at large.” (Watt and Holmes cited in Pesmatzoglou, Nikolaou, Evangelinos, & Allen 2014). This definition of CSR, which integrates the social, the economic, and the environmental concerns of the host countries, seems to be very close to what is considered by many researchers as sustainable development. However, most of the civil society activists and governance organizations consider that International companies’ corporate social responsibility has neither contributed to economic development nor improved the life of the communities in the majority of the resource-rich countries. In this article we will first of all present the context of resource-rich countries in Africa, then analyze the relation between CSR and sustainable development in these particular countries, and finally propose a viable solution where the resources contribute more efficient to sustainable development in host countries.

International Mining companies (IMCs) have introduced CSR as a magic tool for resolving all the development problems that the communities are facing. This approach which is favored by most of the traditional stakeholders, has made “the corporation take the roles and responsibility of the governments”(Pesmatzoglou et al., 2014). Through CSR, the corporations are then building school and hospitals, constructing roads, supporting development initiatives and providing funds to income generating activities. This approach increases the expectations of the communities over the companies’ corporate social responsibility programs and “make the corporations taking the role and responsibility previously assumed only by governments”(Pesmatzoglou et al., 2014). This practice confines the local populations in a total dependency towards what they consider as a generous gift from the international corporations.

In parallel to this holistic approach which presents CSR as the solution to all the development problems in a particular area, other International extractive corporations use this tool in a completely different way. They consider that CSR should be devoted only to the improvement of the company’s image and reputation. This idea is highlighted by Schouten and Remme, cited in an article published in the Journal of International Development, when they sustain that , “the business of business is business”(Pesmatzoglou et al., 2014).This approach privileges the relations with the political leaders or the regimes and care a little about the communities and the work-force concerns like the examples of Angola and South Africa. Its main objective is to improve the image and the reputation of the corporation throughout the international public opinion for the sake of increasing the market value of the project and influencing the local governments to get more incentives. Corporate social responsibility becomes then, a public relations tool for securing the social licensei and allowing their make business to thrive as peacefully as possible.

Despite the promotion of fancy corporate social responsibility programs through high quality videos and glowing media reports, most of the resource-rich countries are still experiencing drastic decrease in economic growth, an increase of the poverty rate added to political instability and social unrest. Through their CSR programs, most of the corporations have increased the expectations, created misunderstandings between communities, and led to social conflicts in resource rich-countries. The case of Nigeria, as reported by Boele et al (2001), cited in the Journal of International Development, where “oil companies neglect has transformed the Niger Delta into a region where poverty and conflicts are now endemic” seems to be a perfect illustration. Corruption issues are common place in Nigerian petroleum sector. Acording to Idemudia, corporate social programs have benefited to some political leaders and military officers rather than to the local communities. This situation has led the Ogoni community to ask for more right in regards to the spoliation of their natural resources and their environment in the Ogoniland. But the Nigerian government has repressed them, killing one of the most famous Ogoni leaders Ken sara Wiwa.

In Mauritania, despite the vibrant CSR programs of the different oil and mining companies, mainly the Canadian Kinross, the British Tullow and even the National Mining Company (SNIM), throughout the national and international media, the extractive revenues didn’t have a real impact on the living conditions of the majority of the Mauritanians. In 2011 the contribution of the extractive sector to the national budget represented 392 million dollars (Links, 2013). This represents a huge amount of revenue for less than 3 million people that the country counts.

However, in 2014, when the workers of the National Mining Company were claiming theimplementation of a convened agreement, the responsible of the company fired the leaders while the company was engaged in building a huge five stars hotel in the center of the capital city. This situation has led many researchers like Hamann and Kapelus, to consider that CSR is nothing else but a management strategy to avoid criticism of the civil society on the companies’ misconduct ((Pesmatzoglou et al., 2014). Instead of assisting the communities to be proactive agents of development, Frynas (2005), reported by an article published in Sustainable Development, fears that CSR will lead to clientelism with some political leaders and aggravate tensions and social conflicts within the host communities(Idemudia, 2014). This common use of CSR maintain the local communities in a total dependence vis a vis the corporations. In Mauritania, as an example, the city of Akjoujt has been producing minerals since 1960, but whenever a company closes up, the city becomes like a cemetery. If Corporate Social Responsibility does not contribute even to the communities’ welfare, in a particular region, how can it lead to sustainable development in a country?

In fact, through Corporate Social Responsibility, IMCs can sometimes contribute in themitigation of the impacts of their own activities in relation to local environment and workforce concerns, but it will be naive to think that CSR can lead to sustainable development even in a particular area. To address this particular issue of sustainable development, the Norwegian government has developed a solution which will take into account the augmentation of government take in the resources, the welfare of the majority of the population, and the integration of the coming generations ‘concerns. In the management of their petroleum resource, the Norwegian government has designed efficient policies in the domain of research, taxation, transfer of technology, local procurement and further transformation of the resources to create added value in terms of employment and revenues. This best practice known as the “local content” approach favors a government steered development strategy through national private sector in opposition to the company steered CSR programs. This why “the management of the

Norwegian petroleum sector is admired worldwide” like to remind Farouk Al Kassim, the Former Director of the Norwegian petroleum Agency (Farouk Al Kassim, 2013). Norwegian

government has understood from the beginning, that the international companies’ single priority is to make profit and that any country shouldn’t rely on them for its own development. Instead of counting on IMCs corporate social responsibility programs, the Norwegian government has set up clear strategies and efficient policies to maximize the government profit in terms of taxes and creates conditions for the national private sector and the local communities to promote industrial development, create more jobs, prepare for future export of goods and services and maximize national income for present and future generations (Farouk Al Kassim, 2013).

Experience has shown that in most of the resources rich-counties in Africa that CSR is rather a management tool used by the companies to secure their social license. Sometimes it also contributes to mitigate the direct impacts of its own activities in partnership with the local communities. But in order to ensure sustainable development, the resource-rich countries should be able to rely on sound policies to monitor their resources, develop their capacities, engage profitable contracts with the corporations, create new jobs through transformation and encourage linkages with the other productive sectors through a clear local contentii approach. Then the resource rich countries will avoid falling in the curse of abundance and social conflicts and share the benefits of the resources with the coming generations. This approach which has been successfully implemented by the Norwegian government can be considered as sustainable development.

In the context of Africa, so far, It is clear that the governments have a lot of challenges in terms of human resources and governance but one of the most efficient way for them to get rapidly out of poverty and conflicts will be the adoption of the Norwegian resource management strategy.

For this purpose, IMCs, as experienced partners, can assist African governments to build the capacities of the communities, the civil society organizations, and the private sector in order to be able to contribute efficiently to the implementation of the national policies in the sector(Fitzpatrick, Fonseca, & McAllister, 2011). The newly elaborated African Mining Vision, developed in Addis Ababa in partnership with the UN Economic Commission for Africa can be a prelude, for the resource rich countries in Africa, to develop resource management policies which favor a more sustainable development.

Even though Corporations can sometimes help to resolve certain problems related to their operations, it seems to be obvious that Corporate Social Responsibility can never ensure sustainable development in a resource-rich country. In order to reach this ultimate goal, the leaders of these countries should count on themselves. They should then acquire enough capacities in order to control efficiently the whole management process of the resources from the exploration to the refining and capitalize the benefits not only in terms of revenues for government and the localities, but also in terms of welfare for the communities and the workforce, and employment and transfer of skills for the young generations.

Ba Aliou Coulibaly

Kansas University