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The mining industry needs to extend its corporate responsibility efforts beyond well-trodden areas such as community support and do more to improve governance at national and local levels.
That’s the key finding from the latest research into why some developing countries gain from exploiting their mineral resources while others instead suffer the so-called ‘resource curse’.
Conventional corporate responsibility activities, such as support for community, healthcare and educational programmes, ‘are important and necessary’, says the research. But they are not sufficient to ensure that natural resource exploitation results in economic growth and broad-based socio-economic improvements. There may still be disappointing outcomes ‘if insufficient capacity and fragile institutions cannot also be changed and improved.’
Mining companies and the countries where they have operations will both benefit greatly from a new governance-based approach, according to the Resource Endowment Initiative, which was set up in 2004 by the International Council on Mining and Metals with UNCTAD and the World Bank as partners. The countries will derive social and economic benefits and the industry will secure revenue streams, in some cases providing the ‘critical kick-off for growth.’
The study is the first to attempt to identify what the successful countries have in common. Of 33 ‘mineral-dependent’ countries, around half were judged successful on 12 socio-economic indicators ranging from child mortality to GDP growth. In the latest research phase of the Resource Endowment Initiative, four countries felt to be doing relatively well were found to have CSR initiatives allied with relatively good governance standards in national and local institutions.
The four countries were Chile, Ghana, Peru and Tanzania. The best results were in Chile, largely because of the ‘commitment of successive governments to economic, policy and institutional reform’ (see graph below).
To bring this change about, mining companies must engage more with governments and local authorities, lobbying them to introduce reforms that will allow the economic benefits of mining to be more widely felt. In particular, they need to 'build capacity at the local level', according to the ICMM.
ICMM chair Paul Mitchell said: ‘The fundamental theme is quality of institutions.’
The third phase of the work will look at the contribution that partnerships between companies, governments and civil society can make.
That’s the key finding from the latest research into why some developing countries gain from exploiting their mineral resources while others instead suffer the so-called ‘resource curse’.
Conventional corporate responsibility activities, such as support for community, healthcare and educational programmes, ‘are important and necessary’, says the research. But they are not sufficient to ensure that natural resource exploitation results in economic growth and broad-based socio-economic improvements. There may still be disappointing outcomes ‘if insufficient capacity and fragile institutions cannot also be changed and improved.’
Mining companies and the countries where they have operations will both benefit greatly from a new governance-based approach, according to the Resource Endowment Initiative, which was set up in 2004 by the International Council on Mining and Metals with UNCTAD and the World Bank as partners. The countries will derive social and economic benefits and the industry will secure revenue streams, in some cases providing the ‘critical kick-off for growth.’
The study is the first to attempt to identify what the successful countries have in common. Of 33 ‘mineral-dependent’ countries, around half were judged successful on 12 socio-economic indicators ranging from child mortality to GDP growth. In the latest research phase of the Resource Endowment Initiative, four countries felt to be doing relatively well were found to have CSR initiatives allied with relatively good governance standards in national and local institutions.
The four countries were Chile, Ghana, Peru and Tanzania. The best results were in Chile, largely because of the ‘commitment of successive governments to economic, policy and institutional reform’ (see graph below).
To bring this change about, mining companies must engage more with governments and local authorities, lobbying them to introduce reforms that will allow the economic benefits of mining to be more widely felt. In particular, they need to 'build capacity at the local level', according to the ICMM.
ICMM chair Paul Mitchell said: ‘The fundamental theme is quality of institutions.’
The third phase of the work will look at the contribution that partnerships between companies, governments and civil society can make.
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