According to Mainan & Ferrell, corporate social responsibility (CSR) can also be referred to as corporate citizenship or sustainable social business. CSR involves the activities undertaken by an organization in order to ensure that it complies with the ethical standards and law. Corporate social responsibility is an objective of an organization which entails the organization to participate in the well being of the surrounding community. For example, the organization can sponsor some students from the community within which it operates . Organizations engage in corporate social responsibility for various reasons such as a way of improving the human resource. Risk management and license to operate are also reasons as to why organizations engage in corporate social responsibility.
Barrick Gold Corporation carries out gold production and marketing. The corporation is located in Toronto, Canada. The corporation has extended its operations in Africa, Australia, South America and North America. The corporation has been charged with carrying out environmentally unsound practices which lead to environmental degradation. In 2009, Barrick Gold Corporation spent USD $89 million in environmental related issues.. Some of the practices that have been adopted by Barrick Corporation include mining practices and good relationship with the local population. Using renewable energy as a source of energy in the corporation is also a practice adopted by the organization.
Analysis of the issues identified
The primary issue reflected in the case is the social responsibility regarding the environment. The main goal of Barrick Corporation is to minimize environmental pollution and other related environment offences. The corporation aims at safeguarding the environment for the current and future generations.
The strategic objectives applied by Barrick Corporation in safeguarding the environment include materials management, air emissions management, reclamation of abandoned mines, management of waste rocks and biodiversity. Biodiversity involves conservation and management of the lands where the corporation carries out its mining activities. Barrick Corporation operates from different continents, and its main objective is to protect land in order ensure the life of the different species of plants and animals is not endangered.
Material management is another objective which is implemented by the management of Barrick Corporation towards corporate social responsibility on environmental issues. Barrick Corporation uses both process materials and raw materials which are used to produce the ore used in extraction of gold, copper and silver. Material stewardship is applied. This involves being socially responsible in the mining process and product delivery.
Barrick Corporation mainly uses fossil fuels and renewable sources of energy such as solar farms biodiesel and wind generated power. The main aim of using this type of fuels is to improve the organization efficiency in terms of operations. Water scarcity is a major problem affecting areas in which Barrick Corporation operates.
The stakeholders to be affected by the issue of corporate social responsibility regarding the environment include the employees, non-governmental organizations, community and local and the regional government. Stakeholders are the people who are directly or indirectly affected by the actions of the organization. They have an interest in the organization business.
A win-win situation is a situation where both parties gain from the contractual agreement between the two parties. Barrick Gold Corporation should ensure that it meets the expectations of its shareholders. The main objective of Barrick Corporation is wealth maximization of its shareholders. In order to meet this objective, the corporation should ensure it fulfills the corporate social responsibility objective. For example, it’s a government requirement for a company to engage in CSR. Failure to do so may lead to withdrawal of the certificate of operation or license which had been issued by the government. The company should not engage in illegal mining. The compensation of workers should be based on the prevailing market conditions.
Planning of the issues
The issues that were highlighted include materials management, air emissions management, reclamation of abandoned mines, management of waste rocks and biodiversity. Materials management involve using the right materials with fewer chemicals that are going to pollute the environment. Barrick Corporation should buy high quality materials that do not have a negative impact on the environment. This helps to meet the CSR goals. The proposal may, however, be expensive thus increasing cost of production.
Biodiversity involves conservation of land in all areas the organization carries out its operations. The organization should ensure that all mines, which are not, being used are used in other means. For example, the corporation can fill up old mines so that it can be used for agricultural activities. This helps to create land for agricultural activities. The proposal may be time consuming. The trade off would be between time and cost.
Reclamation of old mines is important in helping to achieve the corporate social responsibility. This involves making the mining land useful after the mining activities have been completed. Reclamation helps to ensure that the land can be used once the mining activities are completed. However, the land may not be as productive as before the mining activities started. The corporation should consider the benefits that will accrue as a result of reclamation and the cost involved in the reclamation process.
Reclamation of land would be the most suitable option of protecting the environment. Corporate social responsibility aims to make the environment useful to the community even after the mining activities have been carried out. Reclamation of old mines ensures the community land is productive after mining has been completed. This is important because it leads to improvement of the society welfare even after mining operations. The community can engage in agricultural activities as a source of income.
Evaluation and conclusion
Social quantifiable measures would be the improvement in standards of living of the community. The community would have increased amount of income from agriculture. The government, on the other hand, benefits from the tax paid by the farmers. According to McWilliams, corporate social responsibility is important. It has an impact on the organisation’s profitability. All stakeholders should be involved in execution of CSR objective. Corporate social responsibility is considered to be an ethical practise, apart from being an objective. The cost of production may be influenced by, the extent to which the corporation engages in corporate social responsibility. For example, a corporation, which does not, adhere to the environmental rules and regulations may be penalised by the government. The penalty increases the cost of production. The increase in cost of production increases the price of the product. Consumers are going to pay more than the required price.
Abagail McWilliams, Donald Siegel. "Corporate social responsibility and financial performance: correlation or misspecification?" Strategic Management Journal, 2000: 603-609.
Black Gold Corporation. Barrick Responsible Mining. Canada: Barrick, 2010.
D.Dixon-Hardy, J.Engels &. "CYANIDE MANAGEMENT: Porgera, Plutonic gold mines certified." Canadian Mining Journal, 2009: 10-46.
Maignan, I., and O Ferrell. ""Corporate citizenship as a marketing instrument." European Journal of Marketing 35 (3/4):, 2001: 457-484.
Schwartz, Mark S. Corporate Social Responsibility: An Ethical Approach. Peterborough, On: Broadview Press, 2011.