9 - Breaking new ground: the emerging frontier of CSR in the extractive sector

Summary

Introduction

Commodities like copper, gold, oil and gas can be both the source of enormous profits for the companies that extract them and a magnet for the scorn and criticism of environmental and human rights activists the world over. However, in the fourteen years since the international furore raised by Shell's attempt to sink the Brent Spar rig in the North Sea and its alleged collusion with the Nigerian government in ignoring the rights of the Ogoni people, multinational extractive firms have arguably come a long way in reforming their CSR performance. Today, in response to activist – and increasingly investor – pressure, nearly all the global oil and mining companies have a CSR programme in place and seem committed to environmental stewardship and human rights. In fact many take part in international voluntary initiatives like the UN's Global Compact. And while debate may still rage in some corporate circles about the linkage between CSR and profitability, indeed CSR has become a prerequisite for business sustainability in the extractive industry, where a reputation for corporate citizenship could arguably make the difference between winning or losing multi-million dollar concessions.

However, in spite of the ever-ratcheting levels of corporate accountability that activist pressure has spurred in the extractives sector, we observe that many companies still struggle to gain and maintain their social licenses to operate.