Corporate Social Responsibility in Developing Countries

The extractive industry has never been out of the crosshairs of the CSR discussion and controversy. This could be attributable, at the very least in part, to the contentious nature of many mining investments as well as the social and environmental concerns that so frequently appear to follow mining activity. The shutting down of mines and the subsequent loss of economic activity can have disastrous consequences, including the creation of environmental damage, the loss of jobs that can lead to an increase in local unemployment and other related issues, repercussions for the value of the residential property, and an impact on the infrastructure that was initially supplied by the enterprise. Heavy reliance on mining is highly connected with various socioeconomic problems, including extreme poverty, a lack of education, and inadequate medical care. These problems are also substantially correlated with heavy reliance on mining. Repressive regimes, civil wars, insurgencies, corrupt governments, and interethnic violence are all factors that have a negative effect on the operations of businesses. These issues also create obligations and liabilities for global corporations in human rights. Those who operate in the extractive industry should therefore regard the decision to join a nation and engage in commerce with a particular government to be a core worry on their list of concerns. Should multinational businesses conduct business in countries governed by authoritarian governments? Is it reasonable to draw a line between working with governments with human rights records that are merely “tough” and dealing with countries that have been called pariah regimes by the international community? If so, what exactly should that line look like? Therefore, this chapter analyzes corporate social responsibility challenges in the extractive industry.

The COVID-19 pandemic, the worst threat to world health in a century, has unavoidably resulted in social and economic stress in all countries where companies in the extractive sector operate businesses, especially in developing countries. The extractive sector is crucial to the economy of many countries with a wealth of natural resources. The sector can improve people’s lives in developing countries by helping to alleviate poverty, boost economic growth that benefits everyone, and improve living standards. However, the sector has felt the effects of COVID-19 outbreaks similar to those felt by other economic sectors. Thus, people’s ability to earn a living in many countries was affected because those countries enacted disaster management laws and regulations and state of emergency laws and regulations, such as imposing nationwide lockdowns, to combat the ability of the virus to spread. Even though the focus is now on restoring stability and getting ready for economic recovery, human rights still hold significant importance. These rights include freedom from harm, a healthy environment, and a decent working environment for people in hazardous environments such as those operating in the extractive sector. In times of emergency, such as when there is a pandemic or a crisis, it is a common practice to place the welfare and rights of workers and communities lower on the priority list, raising the ethical consciousness of companies doing business in poor communities. Therefore, the extractive industry’s role in its corporate social responsibility mandate during the COVID-19 pandemic has been questioned. This chapter seeks to discuss this issue in detail.

Responsible leadership focusing on sustainable community development (SCD) is a relatively new area of scholarly inquiry that goes beyond traditional leadership approaches and focuses on people, institutions, and societies. The antecedents and responsible leadership strategies of corporate social responsibility (CSR), particularly for extractive industries and their SCD programs, have received little attention in the CSR literature. This book chapter discusses how and why responsible leadership needs to be considered for CSR effectiveness to uphold SCD for developing nations. Based on a comprehensive literature review and the author’s extensive research, this chapter identifies a range of interconnected drivers and theories for responsible leadership, the importance of CSR implementation for developing nations, and SCD, highlighting the United Nations’ 2030 Sustainable Development Goals (SDGs). It then focuses on the matrix and influence of responsible leadership, CSR, and SCD in emerging countries. Finally, this chapter refers to responsible leaders as the key facilitators and promoters of CSR for SCDs to clarify their actions and expectations. This chapter describes the scholarly literature on explicit and implicit CSR forms of extractive industries and the entire concept of responsible leadership based on stakeholder theory from the point of view of developing nations. In this way, it clarifies the role of the responsible leader in implementing and institutionalizing CSR. This chapter facilitates dialog and a constructive debate among educators, students, stakeholders such as universities, governments, corporations, news media, policymakers, and future researchers about SCD through CSR for responsible extractive industries. Developing nations’ perspectives on responsibility, CSR, and SCD have been overlooked and lack evidence. This proposed chapter outlines these relationships for future research and theory development.

Recently, the natural environment has been at the forefront of discussions concerning global warming and climate change. The negative ramifications of mining, oil, and gas industries have attracted international attention. Stakeholders are more aware and concerned about human activities and their negative impact on the natural environment. In particular, the extractive industry, such as mining, oil, and gas, contributes heavily to environmental pollution, degradation, and resource depletion. Corporate social responsibility is tasked with ensuring that all industries implement best practices to ensure the safety of humans and the natural environment. Therefore, industries are seeking ways in which they can positively contribute to combating climate change and saving the planet. Hence, the adoption of 4IR technologies, namely, artificial intelligence, the Internet of Things, machine learning, and robotics, is critical to helping the extractive industry reduce environmental degradation. This chapter highlights the importance of adopting 4IR technologies in the extractive industry to help reduce the negative impact on people and the natural environment while simultaneously fulfilling organizational corporate social responsibility.

Extractive multinational corporations perform corporate social responsibility (CSR) activities for their host communities in the form of community development (CD). Consequently, the functions and roles of CSR in CD in developed and developing countries are very large and therefore cannot be overemphasized. This chapter points out the CSR activities and CD engagements of multinational corporations in the extractive mineral sector in Africa. Mineral extraction takes place in many communities in Africa. It is, therefore, imperative for organizations in the extractive industry to demonstrate their commitment to CSR by making important contributions to CD. Furthermore, the paper highlights the long-term community development of multinational mining corporations toward communities near them, which equally enhances goodwill and harmony with the adjacent communities. A content analysis of sustainability reports of firms in the extractive industry in Africa revealed that CSR efforts toward CD are in the areas of education, health, employment, skills development, water, and sanitation. It is envisaged that recommendations that will be put forward will enable policy makers and the extractive industry actors to ensure good relations between them and the communities.

This chapter analyses the place of corporate social responsibility (CSR) in Kenya’s mining sector. The extractive industry engages in corporate social responsibility (CSR) not only to obtain the social license needed to mine but, ostensibly, also to develop the communities within which they carry out their operations. The Kenyan Mining Policy 2016, new Kenyan Mining Act 2016 and Petroleum Act 2019 suggest various ways through which players in the mining industry (especially mining corporations) can develop local communities. The Local Content Bill 2018 also spells out how communities can benefit from mining projects through arrangements bearing on the promotion of value addition through local expertise. The Petroleum Act 2019 itself already provides a comprehensive framework that guides the development of regulations to implement local content and has a suggestion on how mining communities can be assisted. These legal instruments thus focus on how communities can be assisted through CSR activities. While this may be the aim of these regulations, others have argued that these legal instruments only suggest how CSR may be carried out without offering specifics. This thus will only create regulatory confusion to the detriment of communities (as major multinational mining companies tend to overwhelm weak governments in developing nations by ignoring these regulations).

Corporate social responsibility (CSR) has become a standard practice employed by corporate organizations in both extractive and nonextractive industries to address human rights concerns in their business environment. In developed countries, industries view CSR as a social service provided by a social actor in that environment to the community. However, in the developing countries of Africa, there has been little or no commitment to CSR by the companies in the extractive industries, especially the oil industry. Against this background, this article explores the evolution of the concept of corporate social responsibility in human rights discourse in the Niger Delta vis-à-vis the activities of oil multinational corporations. With the aid of in-depth interviews and secondary materials, the article investigates the factors militating against the implementation of CSR policies by the oil MNCs operating in the region. The chapter’s main argument is that little or no implementation of CSR policies by oil MNCs in the region is a major cause of the increased volatility in the area. This is because it emboldens more youths to engage in rights violation protests, which engenders more insecurity in the area. Hence, the paper concluded that a practical and greater commitment to CSR by oil companies is an investment and a measure that can improve the human rights profile in the region for a sustainable business environment.

Botswana is an unequal society, which has a bearing on social relations. The country’s economy is highly dependent on mining, which takes place in areas that are located far away from major populations and economic centers. This has resulted in the establishment of mining towns that have unique economic and social characteristics. Mining towns usually perform better on social and economic outcomes than average nonmining settlements in Botswana. Despite the benefits of living in a mining town, inequality is also high in these areas. This brings into focus the social structures and social relations in these enclave economies and how mining companies use corporate social responsibility to build socially cohesive societies in these economic outposts. Social cohesion is a social process that must continually be natured to create a sense of belonging and shared purpose among members of society or a specific community. It is based on trust and reciprocity that is self-reinforcing. If natured, it is very important in small, geographically isolated communities, such as mining towns. This chapter explores the corporate social responsibility of diamond mining companies in Botswana and how it is used to build social cohesion in mining towns.

While Bikita Minerals Limited (BML) is undertaking life-changing corporate social responsibility (CSR) projects, very few of these projects focus on environmental protection and the direct impacts of the mine’s activities on the mining community and are informed by pieces of legislation with provisions that can promote corporate social environmental responsibility (CSER). Using a qualitative research approach, this study explores the implications of BML’s CSR on the environmental protection and environmental rights (ER) of mining communities in Bikita district, Zimbabwe. The objectives of this research study were to analyse the inclusion of environmental issues in BML’s business philosophy and explore the contribution of BML’s CSR to broad-based ERs. Research findings show that BML invested much in CSR projects that focus on community problems extrinsic to the firm’s activities, although its operations are assaulting both ecocentric and anthropocentric ERs in the mining area. In view of this, if CSR is to realize one of its main objectives (promotion of nature and human-centred ERs), Zimbabwean authorities should promulgate a comprehensive piece of legislation that spells out CSER programmes if ERs are to receive equal attention given to other rights. This research, therefore, recommends future research on assessing how CSR contributes to the ER of future generations since most projects seem to be targeting persons in the now despite mining destroying the environment that we ‘borrowed from our children’.

Several studies have examined the impact of the mining industry on economic performance. However, only a few studies have attempted to systematically examine the effectiveness of corporate social responsibility (CSR) as a tool for sustainable development. It is, therefore, not clear how and to what extent CSR initiatives have contributed to improved development in areas of operations. This chapter discusses CSR practices in the mining sector and their role in sustainable development at the local level in Tanzania. The chapter explores the CSR practices in the Tanzanian context, analyzes the policy environment for the CSR practices in the mining sector, examines the performance of implemented CSR initiatives on sustainable development, and finally identifies the existing challenges and way forward toward the realization of CSR benefits. To achieve this, the study reviewed and examined practices in the mining sector in Tanzania. This study finds that the adoption of CSR strategies in the mining sector has been shaped by broader norms relating to CSR. However, evidence shows that there is a mismatch between policy statements, legal provisions, and reality on the practical experience on the ground. This study calls for the need to take into account the interests and rights of local communities to improve their well-being and minimize conflicts.

Nigeria’s oil and gas industry has been impacted negatively by the activities of multinational corporations (MNCs) predominately located in the Niger Delta region and worsened by the lack of political will of the Nigerian government to effectively regulate the extractive industry. The extractive industry is also beset by other problems not limited to lack of accountability and transparency, human rights violations and environmental degradation, amongst others.

This chapter argues that reliance on whistleblowing regulatory frameworks can be utilised in promoting disclosures of wrongdoing in the Nigerian extractive industry. The role whistleblowing plays today in different sectors in many parts of the world cannot be overlooked. Whistleblowers play a critical role in exposing wrongdoing by virtue of their proximity and access to information. Whistleblowers are a key element of accountability and transparency measures within and outside the workplace, as they are most likely to witness incidences of fraud, corruption and unlawful conduct first-hand and possess sufficient information to report the incident. Regulation of whistleblowing and the protection of whistleblowers has an impact on corporate transparency, accountability and culture. In disclosing wrongdoing in the Nigerian extractive industry, whistleblowers may be uncertain of how to properly raise their concerns using the right disclosure channels. The presence of a regulatory framework by way of a whistleblower protection framework plays an important role in solving this dilemma. This is because an effective whistleblower protection framework paves the way for good corporate governance by providing the modes and channels of making disclosures including protection from retaliatory measures.

This chapter suggests that whistleblowing laws can be used as one of the strategies to improve accountability and transparency in the extractive industry in Nigeria. This chapter also suggests that a standalone whistleblowing protection law or policy should be enacted in the extractive sector in this regard.

Nigeria is notorious for corruption. Series of Corruption Perceptions Index prepared by Transparency International have always rated Nigeria higher in corrupt activities. The corruption in the oil sector as the dominant source of revenue for the country is endemic and perhaps responsible for the environmental mess being experienced in the Niger Delta and other oil-producing communities. Despite various interventions by government and oil companies, the situation even continued to degenerate to one of environmental catastrophes and increasing poverty. This study examines the role of corporate social responsibility (CSR) in bridging the developmental gap in oil-producing communities. However, while oil companies have been engaging and providing CSR, the paper’s argument is that the challenge of endemic corruption has affected any impact that such CRS intervention could provide. Corruption in Corporate Social Responsibilty, which if done within such communities concerned, the paper’s arguement amounts to connivance in criminality, which certainly distorts the very objectives of any CSR activities in the oil-producing communities.

Signaling the fundamental tensions in the conceptualization of corporate social responsibility (CSR) and corruption has simply lost its capacity to inspire. Like an emperor without clothes, both concepts are estranged from comprehension. This paper therefore examines these deeply contested conceptions of corruption and CSR frameworks as they relate to Nigeria’s oil-rich Niger Delta. It seeks to test the competing notions within institutional and operational corruption on the one hand and CSR frameworks on the other hand. The idea is to establish a fundamental nexus between the inconsistent narrative conception of the above forms of corruption and the incoherent framing of CSR within institutional settings in Nigeria. This paper maintains the view against the voluntarist conception that sees corruption as the offshoot of cultural disposition wrapped into the logical frames of CSR. As a result, the study seeks to resolve the question of whether corruption is incidental to or a function of framework and systems design. The aspects of relativist, nonrelativist, and communalist analytical methods provide a context for an examination of the competing notions of corruption and its relationship with the incoherent CSR framework in Nigeria’s oil and gas sector. It argues that the intentionality of gaps created within the CSR framework provides the basis for corrupt activities. Initial findings reveal a strong connection between defective systems design and a high tendency for institutional and operational corruption within the CSR framework in Nigeria’s oil and gas sector. This has implications for associated and connected institutional systems in Nigeria, Africa, and across the world.

Social agitation for resource control seems to dominate the Nigerian economic space for a long time. This agitation has been a topical issue in any economic and political forum. This is particularly true among all the oil-producing communities in Nigeria. The agitation revolves around the amount being given to these communities as derivation revenues as insignificant compared to what they give to the larger Nigerian state vis-à-vis the environmental damage being caused by oil exploration and refining. Thus, the communities want to control their resources. Communities also demand increased corporate social responsibility (CSR) as one way of extending the resource control debate. This is a method through which the communities hold oil companies responsible and accountable to address their developmental plight and demand. The paper argues that while this agitation is plausible and genuine, it must be institutionalized and formalized to ensure that oil companies and government take responsibility for their action and address such responsibilities by increasing the rate of their CSR investment to the host communities.

Corporate social responsibility (CSR), as a concept, idea, and practice explaining the duty owed by a corporate organization to its immediate and extended environment or society, is not new among business owners, researchers, practitioners, academicians, and public administrators. This idea is more significant in the extractive industry due to the deteriorating effect of their activities on the community of operation. Despite the extensive literature on corporate social responsibility (CSR), much has not been written on government agencies’ and bureaucrats’ (public “administrators”) roles in the practice. This chapter examines the role of public administrators in Nigeria in ensuring good corporate social responsibility practices in the extractive industry. Drawing on theoretical and empirical research, the study explores the roles of public bureaucracies in influencing corporate behaviors and whether their activities support corporate behavior for the benefit of host communities and corporate organizations for the implementation of community support projects. The study sheds light on the activities of public bureaucracies that will improve or impede corporate social responsibility in Nigeria’s mining and extractive industries.

The mining sector is the backbone of South Africa’s economy and one of the largest employers in mining communities. The extractive industry plays a significant role in the economic, social, and environmental sustainability of the communities in which they operate. Consequently, corporate social responsibility (CSR) must be accounted for to ensure sustainability, and labor policies must be adhered to. This chapter aims to discuss the CSR and labor policies in the South African mining industry. Through a desktop review, the study revealed that South African mining companies are guided by numerous labor legislations and policies. Despite the presence of these policies, the sector has been hit by rampant strike actions, which have caused huge loss of lives and livelihoods. This study confirmed that human resource management plays a pivotal role in ensuring that CSR and labor policies are adopted in the sector and that the challenges faced by mining companies are alleviated if trade unions and employers work closely for the betterment of the communities and country at large. Furthermore, this chapter confirmed that the 2012 Marikana incident proved to provide lessons to the sector that long strikes and bargaining in bad faith can damage the industry.

Over the last few decades, both academic and business entities in the West and East have been attracted to the concept of corporate social responsibility (CSR). The modern-day definition of CSR has transcended beyond the philanthropic notion with the inclusion of CSR into core business operations. In developing societies, corporations, along with the state, are also entrusted with societal development, particularly toward the upliftment of the marginalized sections. Thus, CSR delineates a socially responsible behavior in business operations. CSR encourages the extractive industries to think beyond profits and to give equal importance to the social and environmental issues upon which they are responsible as well. Unlike the established paradigm of CSR in the West that focuses on the moral and social obligations of corporations, this chapter perceives corporate sectors as agents of socioeconomic development. Therefore, contemporary understanding of CSR should focus on the responsibilities of corporations to support the state in socioeconomic development as a stakeholder. Corporations in developing societies, in contrast to the West, are less concerned with their social performances. Weak regulations coupled with a high level of corruption restrict corporations’ engagement in socioeconomic activities. Thus, in developing countries, such as India, the state plays a pivotal role in ensuring the success of CSR. In developing societies, the state not only is entrusted with making regulations related to CSR but also ensures social welfare while challenging the profit maximization of corporations. Following the Companies Act, 2013, India made CSR spending mandatory, posing challenges to the extractive industries. Hence, this chapter is an attempt to understand the systematic transformations of CSR policies in India. Unlike the neoliberal maxim of rolling back the state, this chapter rejuvenates the importance of the state in promoting CSR. For that purpose, neoinstitutionalist methodology has been employed.

The concept of corporate social responsibility is of the utmost importance when developing relationships between businesses and the communities in which they are based. By engaging in corporate social responsibility (CSR) activities, businesses and the communities in their immediate neighbourhood can foster an environment conducive to peaceful coexistence. The need for CSR has been felt during the COVID-19 pandemic. The COVID-19 outbreak has presented a unique opportunity for governments and mining companies to rethink their priorities for achieving their continent’s socioeconomic goals. The conventional approach is out of the question. Before the coronavirus pandemic, there had been much violence, greed, inequality, exploitation, and tyranny. Today, there is a shared obligation between governments and mining companies to learn from the industry’s past mistakes and create a new “normal” that puts the safety of workers and the public first. Now, more than ever, countries need to do bigger and deeper reforms to build fast-growing economies that everyone can participate in. Like any other business, mining firms are responsible for addressing the human rights and environmental concerns of their employees and the communities in which they are based and operate. This includes incorporating nonexploitative practices into their business models. Therefore, this chapter summarises the corporate social responsibility challenges in the extractive industry.