The Corporate Social Responsibility in the Peruvian Mining Industry: Future Challenges

By Lozada, Edwin Bustinza | Denver Journal of International Law and Policy, Spring 2018 | Go to article overview

The Corporate Social Responsibility in the Peruvian Mining Industry: Future Challenges


Lozada, Edwin Bustinza, Denver Journal of International Law and Policy


"Corporate Social Responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it because it is good for our business."--Niall Fitzerald, Former CEO, Unilever

I. INTRODUCTION

What is the future of "Corporate Social Responsibility"? Is the mining industry the lifeline of this initiative? Does "Corporate Social Responsibility" need to become law as part of the International Law? This Comment will review the current position of Corporate Social Responsibility (CSR) in the Peruvian mining industry, understand its implementation by mining companies, and determine what challenges lie ahead. Additionally, this Comment will address the primary concerns regarding the implementation of CSR standards in mining policies and plans and the steps necessary to improve the mining industry's relationship with stakeholders and local communities.

To begin, Section II "Corporate Social Responsibility under International Law" will explain the current legal framework of CSR standards and policies, which consists of international guidelines, principles, and treaties, as part of international "soft law."

Section III will detail the connection of the Peruvian mining industry and CSR. Particularly, this section will evaluate current instances of CSR in the Peruvian mining industry, and the key strengths and weaknesses involved.

Section iii will also address the Extractive Industry Transparency Initiative (EITI) in Peru extractive industries, primarily in mining. Moreover, this section will discuss the flipside of CSR, or "Inverted CSR" in the mining industry which manifests as social and socio-environmental conflicts.

Then, Section IV will introduce "Future CSR Challenges" for the mining industry. This section will evaluate new trends, such as the "Triple Bottom Line" model, in order to determine applicability in the mining industry. Likewise, this section will present interesting CSR case studies and analyze the programs and plans of certain Peruvian mining companies. Furthermore, this section will consider whether CSR is losing its presence and credibility in the mining industry's corporate activities and operations.

Finally, Section V will reinforce that CSR programs in the mining industry are effective in reducing economic and social disparities while minimizing conflicts that are common in the extractives industries.

II. THE CSR UNDER INTERNATIONAL LAW

The definition of Corporate Social Responsibility is broad, contested, and often times industry-specific. Milton Friedman, an economist and Nobel Laureate of Economy, made a controversial statement regarding CSR when he answered the question "[w]hat are a corporation's 'social responsibilities?'" by responding: "a corporation's responsibility is to make as much money for the stockholders as possible." (1) On the other hand, more modern approaches, such as the viewpoint of the European Commission, consider CSR as referring "to companies taking responsibility for their impact on society." (2)

Thus, CSR requires corporations, also known as Multinational Enterprises (MNEs), to consider the full impact of their activities on different stakeholders, to look beyond the bottom line of profit and loss. (3) In addition, MNEs should consider implementing internal procedures and policies that target and benefit CSR areas such as sustainability, competitiveness, and innovation. (4) Professor Ilias Bantekas, of Brunei Law School in London, offered another important definition of CSR, expressing that "corporations are not only responsible to their shareholders, but owe, or should owe, particular duties to persons or communities directly or indirectly affected by their operations." (5) This definition includes non-traditional participants in the execution of MNEs' CSR activities, and it seeks to create a more sustainable environment.

Although CSR is quite expansive, this Comment will focus on CSR as it operates under international law. …

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