Beyond business : evaluating the drivers for and effects of corporate social responsibility policies of multinational corporations in the non renewable resources extractive sector

Abstract

This study examines the existing regulations of corporate social responsibility (CSR) of multinational corporations (MNCs) in the non-renewable resources extractive sector (NRRES) as well as discerning how companies who choose to engage in socially responsible behavior can design their policies to include provisions for human rights and development. Current guidelines for CSR are for the most part non-binding or aspirational initiatives and are therefore not complied with by a significant number of companies in the NRRES and other sectors. MNCs who do choose to practice CSR and extend their policies to include human rights and development most often do so to improve their corporate image or because of pressure from shareholders or other stakeholders. In the Katanga Province of the Democratic Republic of the Congo (DRC), there is a large concentration of multinational mining companies with extractive operations in the region, which is infamous for underdevelopment and inadequate human rights. Of the multinational mining companies operating in Katanga, many of them have developed CSR policies that include funding for local development projects. The most common types of projects funded by companies in the study are infrastructure, healthcare, education and other training, and employment. Unfortunately, many of these programs are wholly dependent on corporate funding to keep them afloat and are often unsustainable beyond the period of MNC involvement in the region. It is clear that without binding international legislation, not all MNCs will be dedicated to responsible business practices and even fewer will include provisions for human rights and development in their broader CSR agendas. The current global economic crisis has had the surprising effect of mainstreaming CSR concerns as citizens and organizations around the world call for increased transparency and accountability from banks, corporations and other institutions, which may be the catalyst needed to make CSR mandatory rather than optional.