Corporate Social Responsibility – Csr in the Extractive Industry

About this Project

Outotec is selected as the company of choice to undergo an assessment of their CSR and sustainability agenda and performance.  Since Outotec operates in the extracting/mining industry, this paper will address CSR in the extractive industry (Outotec) which is centered around workers exploitation, environmental degradation, diminution of respect for human rights and global inequalities.  Performance indicators for Outotec will be sourced from their independent sustainability audit data.  In the end this paper will render an objective assessment of Outotec performance indicators followed by a conclusion.

Corporate Social Responsibility –CSR in the Extractive Industry

CSR is often viewed as a branch of philanthropy, public relations, corporate volunteerism or risk management.   However, former U.N. Secretary General Kofi Annan set it best that CSR must be defined “as a business concept embraced in the 1990s pursuant to which corporations seek to responsibly address social and environmental issues raised in the course of business through support for international norms and sustainable practices. Norms and sustainable practices of particular focus include broad-based human rights, labor rights, and the rights of indigenous peoples; environmental stewardship; and transparency.”  

Since CSR is not a mandate, there are a number of international initiatives and associations that promote best practices and corporate social responsibility in the extractive or mining sector.  These include; the United Nations Global Compact Initiative, in which companies self-evaluate and report their performances around 10 guiding principles.  There is also the European Commission’s Renewed EU strategy 2011-14 for Corporate Social Responsibility and Sustainable Consumption and Production and Sustainable Industrial Policy.  Another CSR body is the International Council on Mining and Metals (ICMM), which is organized by the largest mining companies in the world and has a variety of programs to enhance sustainable mining. ICMM makes its members accountable for the fulfillment of the 10 principles for sustainable development.  There are other international bodies such as ISO 14000 (environmental certification), SA 8000 (working conditions certification), and AA 1000 (accountability certification).

Outside of these self-reporting CSR guidelines, multinational companies operating in the extractive industry are held to higher standards of accountability and maybe also be responsible to host country governments, partners and contractors behavior.  Several multinational companies were brought before the courts under the Alien Tort Claims Act against acts of human rights abuses committed by the host governments.  Other international laws and standards like the Universal Declaration on Human Rights and conventions by the International Labor Organization, Voluntary Principles on Security and Human Rights (the "Voluntary Principles") and the Extractive Industries Transparency Initiative uphold best industry practices.