Corporate Social and Environmental Responsibility (CSER) Practices of Mining Companies in Zambia
The Research Report
Mining operations, in general, account for 75% of Zambia’s export revenue. The mining industry is the largest private sector employer and accounts for an estimated 10% of all jobs in the formal economy. There are sustainability challenges to mining in Zambia, however, marked by claims by Government that the industry is not contributing adequately to socio-economic development in the country and counter claims by the industry that policy uncertainty created by Government has created volatility in the business environment. Meanwhile, foreign investors widely complain about low labour productivity and high costs of labour while workers stress poor working conditions and occupational safety and health concerns. The backdrop of strained industrial relations, mine accidents, incidences of worker abuse and environmental damage resulting from mine companies’ operations has increasingly turned public opinion against foreign direct investors.
Corporate social and environmental responsibility” refers to a company’s delivery of long-term value in financial, social, environmental and ethical terms. It covers all Ten Principles and issue areas of the United Nations Global Compact. In this vein, companies are increasingly looking beyond their traditional business models to integrate social and economic development imperatives into their business strategies and operations. Corporate social and environmental sustainability is of special significance for Chinese mining companies in Zambia who have borne the brunt of accusations of environmental degradation, worker abuse, social disruption and corruption. Earning the “licence to operate” is increasingly demanding public legitimacy and proactive societal engagement on the part of investors and managers in the mining and other sectors in Zambia.
China has shown a growing interest in the mining belt of central southern Africa, comprising Zambia, Tanzania, and Mozambique, which is well endowed with copper, iron, gold, manganese, and other base metals. Of these three countries, Zambia has the most advanced level of Chinese engagement involving direct equity interests in copper, coal, and manganese reserves. Politically, however, China’s engagement with Zambia has become an increasingly contentious issue with claims that “Chinese investments were exploitative” and that the Chinese mistreat Zambian workers. In response, the Chinese have worked tirelessly to strengthen their relationships with government regardless of party affiliation.
The Centre for Environment Justice (CEJ) with financial support from WWF Zambia, held a 5 days’ workshop to review the ᶦᶦReport on the Corporate Social and Environmental Responsibility (CSER) Practices of Chinese Mining Companies in Zambiaᶦᶦ which was followed up with a 2 days Validation workshop.
Research Report Background
The Report of the Auditor General on the Management of Environmental Degradation Caused by Mining Activities in Zambia (2014) noted that mining sector has faced challenges in achieving sustainable mining practices which cause minimum damage to the environment. Its motivation included public interest concerns raised by several stakeholders who cited issues such as lack of integrated mining policies, failure to disclose Developmental Agreements (DAs), failure by mines to mitigate effects of environmental degradation, air, land and water pollution, unfair resettlements. The main findings of the audit were that mining companies were failing to report their gas emissions to Government and that, as a result, Sulphur Dioxide (SO2), dust from stack emissions, Arsenic (As), Copper (Cu) and Lead (Pb) emitted into the air and environment were greatly in excess of the minimum limits set by ZEMA. This has resulted in the pollution of both surface and groundwater and is exacerbated by the mines’ poor management of slag dumps, tailings dams and storage facilities for used oil. The audit also found capacity limitations on the part of the Government in terms of policies, laws and regulations and the implementation framework.
The Zambian Government is on record for accusing foreign-owned mining businesses of “insufficiently contributing to socio-economic development in Zambia”, by expatriating the lion’s share of their profits, failing to give business to local companies and flouting existing tax regimes. For their part, mining companies have blamed Government for creating volatility in the business environment, by unilaterally decreeing minimum wage increases, introducing ad hoc statutory instruments to regulate exports, and allegedly openly encouraging industrial action among mine workers at one stage.
Meanwhile, foreign investors and workers have on different occasions been embroiled in protracted industrial conflict featuring illegal strikes and increasingly militant rhetoric from labour and business leaders. There were also isolated incidents of violence which led to the deaths of both workers and management representatives. Foreign investors widely complain about low labour productivity and high costs of labour while workers stress poor working conditions and occupational safety and health concerns. The backdrop of strained industrial relations, mine accidents, incidences of worker abuse and environmental damage resulting from mine companies’ operations has increasingly turned public opinion against foreign direct investors.
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