Responsible Mining: CSR in the Extractives Industry

The Massey explosion that killed 29 West Virginia miners has reinvigorated public consciousness about the social and environmental problems associated with mining. Just the other day, I received an inquiry from a woman interested in finding out how to determine the level of corporate responsibility associated with different mining companies. Are there ethical labels (like FairTrade) that signify responsible mining practices? Are there auditing companies which audit mines and certify their ethics and CSR practices? And who does due diligence on mining operations?

Where to start?! Mining is a messy industry rife with environmental, human rights, and safety issues, but there has been work done to define best practices. The Global Reporting Initiative (GRI) Mining and Metals Sector Supplement offers some perspective on international consensus surrounding the issues most material issues to this industry. The document's multi-stakeholder perspective defines the following as key indicators for the sector (Warning! This text is dense, as I have tried to stay true to the language and content in the original document):

Policies relating to communication of materials and product-related information up and down the value chain, overall approach to life-cycle assessment, collaborative efforts for groups such as product designers/manufacturers/consumers/local authorities, and support of scientific research activities.

Economic considerations such as percentage of goods/materials/services purchased locally, percentage of workforce from local communities, investment in public infrastructure and its maintenance, compensations to local communities, and value added disaggregated to country level.

Environmental considerations such as emissions from mobile and stationary sources, management of fugitive emissions such as dust from mining and processing activities, site waste, specific data relating to effects on biodiversity, percentage of products derived from secondary materials, policies for assessing the eco-efficiency and sustainability attributes of products, and approach to managing hazardous waste.

Social considerations such as how rules of conduct for security personnel support human rights principles and how rules of conduct apply to employee or contractor security personnel.

Societal considerations relating to community economic planning processes (e.g. sources of community income, community access to services and social infrastructure, access to capital and natural resources, and access to further education/skills/training), coordination with other agencies affecting livelihood (e.g. on poverty alleviation and environmental conservation activities), programs for training workforce drawn from local communities, and procedures for identifying and protecting subsistenc-related resources of local communities, including water, plants, and wildlife.

Additional considerations such as significant incidents affecting communities during the reporting period, resettlement policies and activities, percentage of operations with closure plans, processes for identifying local communities' land and customary rights (including those of indigenous peoples), approach for identifying/preparing for/responding to emergencies, and the number of new cases of occupational diseases by type.

So who are the most responsible performers in the messy mining industry and how can ethical investors weed out the Masseys of the world before disaster strikes? In the interest of space, I will leave that question to future CSR posts and welcome your comments in the meantime.