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Sustainability 2012, 4(2), 257-277; doi:10.3390/su4020257
Abstract: Reporting on contributions to community development is one way gold mining companies communicate the expanse and depth of their commitment to social responsibility. These projects are intended to provide the mine-proximate communities with some of the wealth and other benefits generated by mine development in their locales. We raise questions about reporting and evaluation of community development projects undertaken by AngloGold Ashanti in the two communities of Nyakabale and Nyamalembo, near its Geita mining projects in the Lake Victoria goldfields of Tanzania. We use archival data and data obtained from field research conducted during different periods throughout 2005, 2007 and 2010 to compare what the company reports to have done with what is found on the ground. Our findings revealed that the corporate reporting is misleading, ambiguous, and omissive. Much of the effort labeled “community development” benefited the companies directly via infrastructure development, food supplies to the mine cafeteria, and worker health. We argue that, if Corporate Social Responsibility (CSR) projects are to be the primary way local people directly benefit from mine development, the relationship between the value of those projects and the wealth taken from the location should be considered, community projects should be well defined and differentiated from company-oriented projects, and community representatives should participate in monitoring the success and impact of community development projects.
The new wave of corporate social responsibility in the global mining industry aims to reduce some of the more egregious ills of mining, and one of the many dimensions of this governance effort involves community development projects. As mineral economist Phillip Crowson  points out, this is not a new set of ideas—paternalistic philanthropy has accompanied wealth accumulation in mining for centuries. Excellent studies of industrial paternalism in the mining sector illustrate the labor control and reproduction achieved through company built schools, hospitals, potable water supplies, sanitation, churches, policing and entertainment (see, especially, [2,3]). The new wave is intended to go beyond the “workers” and to produce “development” in a more “sustainable” manner, with benefits for “communities” beyond the mine . It is now commonplace to reveal these projects and practices through annual financial reports, special standalone responsibility reports, company presentations to financial analysts, and other web-based issuance. The audience for these reports purportedly comprises “stakeholders”—those who have an interest in or are impacted by a company. Both financial and non-financial disclosures are presumed to reflect value along the supply chain and many large companies consider the “triple bottom line” (people, planet and profit) to be the next competitive battlefield . Often, these reports are the only source of information about what a mining company is doing in or for a host community. They disclose the measure of a company’s accountability to the communities which are both positively and negatively impacted by them. While the goals of these reports (and the projects on which they report) depend upon transparency in order for the corporations to be rewarded according to their “triple bottom lines”, we find that partial truths, ambiguity, and dissembling are more representative of what occurs. Our research in the Lake Victoria goldfields of Tanzania identifies multiple problems with reporting: projects are made to seem better than they are, many local people are disappointed with these projects, and the projects seem paltry compared with the wealth being taken out of the area and the environmental and social costs borne by local people [6,7]. Our findings regarding the latter two problems are representative of mining Corporate Social Responsibility (CSR) in sub-Saharan Africa and elsewhere according to studies by Himley  (Barrick Gold in Peru), Mensah  (multiple companies in Ghana), Newenham-Kahindi  (Barrick in Tanzania), and Dashwood and Puplampu  (Golden Star in Ghana) . Fine tuning the voluntary reporting requirements and adding third party assurance may solve some but not all of these problems, the majority of which are social justice or political problems. Nevertheless, clarity and conciseness of reporting could force reevaluation of the real benefits of CRS-based community development projects.
This paper raises questions about the reporting and evaluating of community development projects in the mining sector. CSR reports, and the ethos and practices they communicate, are assessed by scholars and others in multiple ways. One approach is to evaluate the reporting comprehensiveness. This is the most common assessment method and researchers and other institutions have developed multiple analytics for such “scoring” [12,13,14]. An alternative is to compare what is found “on the ground” with what corporations report—the approach we have emphasized in this research. Some basic problems exist in comparing the material with the narrative. First, what should be counted as a CSR community development project? Mining companies need roads and ports; they need water and energy supplies; they need food, housing, schools and health facilities for workers and their families. Should projects developed to satisfy these requirements be identified and reported as community development projects? In an essay on corporate communication failures and law, Siebecker  calls this problem one of “definitional ambiguity” and while he is not referring to community development projects or the mining industry per se, the term does capture the situation where “development projects” serve two masters, with the benefits for the non-mining community undifferentiated.
Second, of what type and magnitude should the impacts of these projects be and how can they be measured? Blowfield  claims there are significant deficiencies in measuring the impact of “developmental interventions” relevant to CSR. He contends “the moral high ground can be captured (and conversely lost) without there necessarily being any hard evidence of actual impact on those it is intended to benefit” (see also Muthuri ). Simply to name or describe a project in text or image suggests certain impacts—impacts which are not necessarily felt. Third, as the types of projects produced by companies become pro forma, we may want to ask how they compare with corporate philanthropy in corporate home countries or in other places with which companies or their CEOs have allegiance. For example, Peter Munk, chairman and founder of Barrick Gold, the largest gold miner in the world, donates millions to the University of Toronto, Toronto General Hospital and the Technion University in Israel. Should the value of those philanthropic projects be compared with the school additions and village water supplies that constitute Barrick’s CSR projects in the Tanzanian goldfields? Or, how do the values of CSR projects compare with the value of the ore deposit and the profits made by the corporation? A rough guideline for mining companies is that 1% of before-tax profits should be spent in the “local community”. Is this enough and how can it be measured? And fourth, just as important as the “positive” project reporting is the full reporting of negative impacts on the host community. How do CSR project values compare with the multiple negative impacts that mining produces for local communities? Are the negative impacts reported in full measure as the mining project unfolds? Obviously, there is more interest in reporting the positives than the negatives.
We explore these questions by comparing the community development project descriptions produced by a major mining company, AngloGold Ashanti, with the material projects on the ground in Geita District, Tanzania. We consider AngloGold Ashanti to be representative of the larger international gold mining companies—neither better nor worse. The first section of this paper briefly summarizes our research methods; we then provide an introduction to mining CSR and CSR reporting. In the third section we examine two programs of community development near the Geita Gold Mine (GGM): water supply and education, comparing company discourse with our own and local citizens’ observations. We discuss our findings in the final section of the paper, proposing possible remedies to the issues raised.
2. Research Methods
Our research took place during different periods throughout 2005, 2007 and 2010 in the Lake Victoria goldfields. We chose to do our research on corporate gold mining in Tanzania because such mining has largely taken place following the new wave of “corporate sustainability” in the extractive industries. We were eager to see how the new emphasis and energy on CSR would play out in this relatively new mining arena. In particular, we focused on the CSR projects implemented by AngloGold Ashanti near its Geita Gold Mine. Anglo Gold Ashanti (AGA) was 42% owned by Anglo American (which also holds majority ownership of AngloPlatinum and DeBeers) until 2009 when the larger company sold its final shares; its headquarters are in Johannesburg, South Africa. Listed on the JSE and the NYSE, the company operates in ten countries and is the third largest gold miner in the world. It is one of three large gold mining companies in Tanzania; the others are Barrick Gold, the largest gold miner in the world, and Resolute, an Australian operator with only three mines in total. AngloGold Ashanti was recognized by the Dow Jones Sustainability Index as a sustainability leader at the end of 2001 and won an excellence in corporate reporting award in 2009 from the South African Institute of Chartered Secretaries. Yet, it has also received considerable negative attention from civil society groups like Greenpeace, garnering 2011’s Public Eye Global Award. This is a “name and shame” award given to two corporations per year through a process of jury selection from nominations. AGA received the award for the “contamination of land and poisoning of people from gold mining in Ghana” . The Geita Gold Mine (GGM) was officially opened in 1999 and now includes a special mining license area of 175 km2 with seven open pits and multiple tailings piles and ponds.
We identified the specific projects to visit through annual reports and reports to financial analysts. AGA Reports to Society from 2004-2007 and one presentation by the managing director of GGM to financial analysts from 2005 were the sources of the reported projects [19,20,21,22,23]. While we investigated four of the main projects—water supply, education, health, and agroforestry—we chose to remark on only the first two because of space limitations and because we found the same trends in all four. We used a combination of interviews with key informants, focus groups and heads of households at wards, village and hamlet levels to obtain information, opinions and perceptions. We also visited the sites, took pictures and filmed. The focus group sessions, lasting from two to four hours, were held at Nyakabale and Nyamalembo Villages near the Geita Gold Mine. The groups were organized by the village leadership. We visited the Geita site three times (2005, 2007 and 2010). These visits lasted from two to fourteen days and involved from one to six research team members. Twenty interviews of heads of household were obtained in the two villages and multiple key informants were interviewed at various levels of government. The “heads of household” and key informant interviews generally took from one to two hours. Most interviews were conducted in Swahili; a few key informant interviews were done in English. Our questionnaires were roughly based on a livelihoods framework to assess the impacts of the CSR projects . We also held focus groups near the two Barrick Gold mining sites of Bulyanhulu and Buzwagi in Kahama District. The villagers in these focus groups came from Busindi, Bugarama, and Mwendakulima.
3. Mining CSR
Current mining CSR is arguably a form of global environmental and economic governance intended to stabilize neoliberal accumulation strategies through technologies of voluntary regulation incorporating standards, audits, and protocols or “regimes of accountability” [8,25]. Like other stabilizing strategies such as industrial paternalism or corporate welfarism, CSR involves historically produced and located practices. Spector  claims it has roots in the early years of the cold war when companies were encouraged to show why private economic development produced better results than socialist alternatives. Others argue that CSR is but the newest manifestation of business ethics . Indeed, in the mining industry, CSR appears to us as an extension of the old practices of local philanthropy and industrial paternalism. One can still visit the company towns (old and new) in Montana, South Dakota, Arizona and Pennsylvania, or Siberia and the Atacama Desert, and witness the baseball fields, clinics, churches, cemeteries, housing, libraries and so forth built by big mining companies. Environmental protection and reclamation are relatively new concerns, as are dialogue with mining affected communities not providing labor to the mines, protection of indigenous rights, and other dimensions of the UN Global Compact and other types of agreements (see below). Yet, unquestionably, there are many similarities between the older practices and the new CSR community development efforts.
This new round of CSR in the mining industry was a direct response to the increasingly vocal and multiplying campaigns of local communities and other anti-mining organizations that occurred during the 1980s and 1990s ([28,29,30,31,32]; see Sethi  for an excellent history of the current sustainable development initiative in mining). The success of NGOs like the Montana Environmental Information Center which orchestrated a state-wide initiative banning cyanide-based mining, the World Bank’s Extractive Industries Review which maintained that oil and gas development should not be financed by the Bank, and MiningWatch Canada’s success at “following the money” promising long, drawn out permit processes, illustrated there were significant problems with existence practices and that extractive industries could be shut out of particular geographical spaces and sources of finance if they failed to change their ways [33,34]. Increasing numbers of shareholder actions against extractive industry corporations also revealed the growing strength of civil society groups opposing the destructiveness and disregard of the industry . A recent example is the Norwegian government’s withdrawal of its investment in Barrick, Rio Tinto, Freeport McMoran, Vedanta and DR Gold. CSR purportedly reduces risk, at least reputational risk, and helps produce the “social license” (as opposed to the regulatory license) to mine or extract. But many NGOs and researchers have raised questions about the significance of what CSR efforts are turning into, with more than a few stating that they (and the reporting of them) are simply public relations management .
Increasingly, a template of CSR-based community development projects is developing in the mining industry, both in terms of the types of projects and reporting [8,37,38]. Mining companies in Africa generally make contributions to microcredit schemes; water, utility, and road infrastructure development; health, and education . These initiatives are voluntary, albeit increasingly expected by stakeholders. Companies may partner with NGOs to undertake projects, employ experts in local culture and community development, and adopt standards or guidelines proffered by international associations. Studies of CSR in African mining generally indicate community disappointment with corporate efforts, and authors disagree on the reasons for the outcomes and on the proffered solutions [39,40].
4. Reporting Corporate Social Responsibility
It is common practice for larger mining companies to present what they are doing in terms of CSR in their social responsibility or sustainability reports. These may be documented as part of their annual financial report (in the US, their 10-K) or as standalone reports, often called “report to society”, generally found on the corporate website. CSR reporting is a recent practice which, because it is voluntary, is executed in a variety of ways. Behrendt , working for the World Economic Forum’s Governor’s Meeting on Metals and Mining, identified 30 voluntary principles and networks relevant to the sector. These include the frameworks of Accountability 1000, Business for Social Responsibility, Dow Jones Sustainability Index, Equator Principles, Extractive Industry Transparency Initiative, the Global Mining Initiative, the Global Reporting Initiative (GRI)-Mining and Metals Supplement, International Council on Mining and Metals (ICMM), the International Cyanide Management Code for the Gold Mining Industry, and the International Finance Council (IFC) Performance Standards. Most have reporting guidelines and some require assurance (albeit voluntary). The GRI is generally agreed to be the most common approach, even considered “soft law” by some researchers .
The reporting of CSR is part of the audit culture which anthropologist Marilyn Strathern argues involves a set of :
practices confined to no single set of institutions and to no one part of the world. Recognizable in the most diverse places, these practices also drive very local concerns. They determine the allocation of resources and can seem crucial to the credibility of enterprises; people become devoted to their implementation; they evoke a common language of aspiration. They also evoke anxiety and small resistances, are held to be deleterious to certain goals, and as over demanding if not outright damaging. And old name is used for the new phenomenon: accountability. Its dual credentials in moral reasoning and in the methods and precepts of financial accounting go back a long way  (p. 1).
These procedures are then modes of governance and practices of public accountability. Particular expectations are induced whereas others are ignored or neutralized. In The Audit Society, Michael Power argues the audit phenomenon has its roots in political demands for accountability and control . It is a particular form of accountability and control wherein the investors rather than the “state” provide oversight. Power argues that “audit is an emerging principle of social organization which … constitutes a major shift of power: from the public to the professional”  (p. 47). He claims these initiatives “share a programmatic optimism about the potential for reflexive approaches to regulation and organizational control”  (p. 46). But there are clearly problems with these audits and one of them is integrity. Numerous incidents suggest that corporations may engage in “deception in the absence of external monitoring and verification, e.g., the structuring of corporate disclosures so as to maximize perceptions of legitimacy”  (p. 253).
Sarbanes-Oxley, signed into law 2002 and claimed to be the most far-reaching securities law in decades, is a direct response to corporate malfeasance in reporting . The fraud perpetrated across industrial sectors in the early part of the new millennium constituted the largest in monetary value in corporate history; accounting fraud and manipulation played a large role (ibid). Enron’s artful and fraudulent financial reporting was reputedly the driving force behind the new legislation.
Despite the precarity of both financial and non-financial reporting, information provision is viewed as an important tool for managing public relations and influences allocation of billions of dollars of “socially responsible investment”. Large social research organizations like KLD (Kinder, Lydenberg, Domini) systematically collect and sell data on the social performance and stakeholder-related issue practices of most large firms. KLD uses a combination of surveys, financial statements, articles in the popular press, academic articles (especially law journal papers), and government reports to rate companies along 11 dimensions. Based on this, KLD constructs the Domini Index 400—the first social ratings index established in the US . The methods used by these ratings institutions are heterogeneous, and even when they use the same reporting guidelines (like GRI for example), they interpret the reports in different ways [48,49]. And most, if not all, do not assess actual performance, only claimed performance. A commonly acknowledged problem is the inability to assess whether the CSR performance is under- or over-reported [48,50]. As an antidote to this uncertainty, increasingly, corporations have their reports “assured” by third parties although this is an even more vaguely developed voluntary process with less transparency .
As Power claims, “the audit explosion is to do with the need to install a publicly auditable self-inspecting capacity which attempts to link ideals of accountability to those of self-learning”  (p. 67). Yet the internal control or self-inspecting has proved problematic and in need of deeper levels of external auditing capacity. Now the company audit requires yet another “independent” audit—the assurance statement. An assurance statement portends to examine the veracity and completeness of a CSR report. The International Council of Metals and Mining (ICMM) Assurance Procedure was released in May 2008. It outlines the commitment of ICMM company members to obtain independent external assurance of the other two elements of ICMM’s Sustainable Development Framework: implementing and measuring performance against the ten ICMM SD principles and public reporting of performance in line with GRI’s Sustainability Reporting Guidelines and the Mining and Metals Sector Supplement. The requirement to fully implement the Assurance Procedure comes into effect for member companies producing sustainability reports for 2010 and thereafter.
Assurance providers are also encouraged to refer to the good practice guidelines set out in existing global assurance and auditing standards including the International Standard on Assurance Engagements (ISAE 3000); AccountAbility 1000 Assurance Standard (AA1000 AS); and ISO 19011 Guidelines for Quality and Environmental Management Systems Auditing.
AngloGold Ashanti (AGA) has signed many of the voluntary principles cited by the World Economic Forum (see Berendt ) including the Global Compact and also the International Cyanide Management Code. The company has used the reporting guidelines of the Global Reporting Initiative (GRI) at least since 2003 and is a founding member of the International Council on Mining and Metals. AGA has performed Extractive Industries Transparency Initiative (EITI) reporting since 2006. Since 2002, AGA has used a third party consultancy (either PricewaterhouseCoopers (PwC) or Ernst and Young) to provide an independent review and opinion of their report and associated website information. No information is available as to what was actually done other than to say that the assurance was in accordance with the International Standards for Assurance Engagements 3000. ISAE 3000, initially released in 2000, was designed to provide a basic framework for large scale audits concerned with non-financial data process monitoring. It seems that most of the focus of PwC in the AGA reports was on “verifying” the graphed data for various reported analyses. Since 2008, the company has claimed to follow the ICMM Assurance Procedure but even in the 2010 report, the third party assurer gave only “limited assurance” on most counts.
In sum, CSR reporting does not “share many of the core ‘certainties’ of traditional accounting”  (p. 47). CSR is not legislated; it is self-reporting by companies and therefore not systematic. While the Global Reporting Initiative (GRI) and Sustainability/UNEP offer guidance and recommendations for disclosure, there are no requirements or regulations for reporting. Where AngloGold Ashanti possesses and wants to provide data for the GRI indicators, they do. Otherwise, they simply say the data are unavailable (see, for example, AGA ). GRI standards and other reporting assessors allow for comparability and establish principles for good reporting (i.e., accuracy) but they do not demand verification [13,14]. Some third party assurance providers make site visits (such as Bureau Veritas for Barrick in 2009) but these are not elaborated upon nor do they identify the specifics of the particular places, projects, or interviewees. Layers of audit and assurance still call for more verification and information. In the end, the geographic distance between most report readers and the mining sites makes it impossible to actually verify what is happening on the ground.
5. Comparing the Reported to the Observed (and Perceived)
Unquestionably there are many who claim that CSR is whitewash and greenwash [53,54]. Studies do show that public CSR disclosures are not representative of the actual CSR performance . Generally, only a portion of the company’s practices are disclosed—they may not report on the environmental damage they cause, particularly in developing countries where state or third-party monitoring is scant. Companies tend to disclose mostly positive information. And of course we know from the problems of Enron, Parmalat, WorldCom, ImClone, Global Crossing, and Shell that companies are not always transparent or “truthful” in auditing. Laufer argues that it is “increasingly naïve of those inside and outside the SRI (socially responsible investment) community, particularly in the wake of the recent accounting scandals in the United States” to rely on the integrity of corporate representations  (p. 254). To doubt mining companies’ veracity is not surprising: mining corporations have not been bastions of integrity and good will-in fact infringements upon human rights and ecological processes are legion and well documented [28,29,30,56,57,58,59].
Reading attractive annual reports with stories about community projects leads one to believe that mining CSR programs have depth and presence. In our interviews with villagers, however, we generally found disappointment with the CSR projects advertised by the companies. We were also disappointed at what we found. Why? Because somehow in the reporting, the projects seemed bigger or more useful than they actually were. To use the language of Owen and Swift , a “specious gloss” characterized the projects. Second, the reporting said little about the negative impacts the companies had on infrastructure, natural resources or education, and third-given the amount of money the companies were taking out of the place, the projects seemed quite miserly. What is not reported or disclosed is quite as important as what is disclosed. In the following sections we turn to specific projects to illustrate.
The first project we comment upon is the water supply pipeline from Lake Victoria. In his 2005 presentation to financial analysts, Peter Turner, then managing director of AGA in Africa, claimed under the rubric of “community development”, that water was one of the things AGA offered the communities . The first slide about water says “Investment in the Community” and has “Water” under the two pictures shown here (see Figure 1).
The notes on the slide states: “2.736 million (Tanzanian shillings) used in water projects; a pipeline was built from Lake Victoria at a cost of 2 billion Tanzanian shillings; the pipeline has 11 off takes that directly benefit the communities in which it passes” . Another picture we found advertising the water provision showed a Masai man taking water—something one would not see given this is Sukuma territory. We visited the off takes at Nyakabale to see what benefit the water provided to the village. When we saw the pipeline in summer of 2007, there were two spigots that worked; a third and fourth were not operating. According to the villagers, GGM does not pump everyday so water is not always available . There was no storage to speak of-just 2 foot by 3 foot concrete spillover (see Figure 2a). People are supposed to take the water home (but see Figure 2a) as it is meant only for drinking and washing. It has to be boiled before drinking, unlike the local spring water (see Figure 2b). Livestock are not permitted to drink at the spigots and irrigation is forbidden. Someone tried to irrigate but the company stopped him (ibid.). The distance to the water points for the local people is about 0.5-6 km but we estimate the average is 3 km. The school and town center are 2-3 km from the water. People who live closely to those points which were not functioning have to go 2-4 km to get the water.
On the other hand, the Nyamalembo Primary School which is very close to the mining site, about one km, and in desperate need of water, but is given none. At Nyamalembo Primary School, we noted that part of the school land was actually taken by AGA, and the school’s only toilet was inside the mining property. The mining company helped finance the building of a new water—based modern toilet that however, due to lack of water supply at the school, it could not be used by the time we visited the school.
5.1.1. Livestock Water
Providing untreated water that allows for few uses is only one water issue. A primary grievance which does not get reported became clear during the focus group session in Nyakabale. The company apparently reneged on promises to provide livestock watering points. The village’s livestock watering pond was taken by GGM with the promise to build another one in the village. That promise had not been fulfilled by our last visit in 2010, yet there are scant water resources, particularly in the dry season. Sixteen cows belonging to the Nyakabale Village chairman, Mr. Lufungulo, died in 2001 drinking from a water resource on or near the mining property. He was given 70,000 Tshs per cow as a “neighborly gesture”. They told him that they were going to do a test and bring the results to show why the cows died but “they never came with the results”. In summer of 2007, 19 more cows died from drinking from one of the contaminated ponds on the mining site near Nyakabale. The company told us the cows trespassed, while the owner, with whom we also met, denied it. This issue with livestock grazing land and watering spots was also a problem at Buzwagi, the Barrick mine near Kahama. The resettlement and compensation plans for the Buzwagi affected area did not include grazing and water replacement or compensation . When asked about this at the Kahama District level, the District Secretary just stated that “people care too much about their livestock” . Compensation throughout the Tanzanian goldfields involves only housing, crops, and possibly mining claims—not common resources like grazing land and water.
5.1.2. Further Pollution Fears
Villagers also complained of water pollution runoff from the tailings piles (see Figure 3). They are concerned that water is seeping from the tailings into Mtakuja River (one of two rivers in the area). The Mtakuja River is actually dammed at the mine site (Nyankanga Dam) but there is diversion and runoff from the slopes and tailings piles does make its way into the river which flows toward Lake Victoria.
We were shown a spring that still functions (see Figure 2b) but it is uncertain for how long because of the water level drawdown from mine dewatering and changes in recharge due to the damming of Mtakuja River (not to mention blasting) . (Kitula reported 52 cases of housing collapse resulting from blasting in Nyakabale by June 2000 .) A report done by one of Anglogold’s consultants stated in 2004 that the cone of depression around the mining site was about one kilometer and expanding . The woman who was collecting water at the spring (see Figure 2b) told us that the community had experienced a greater number of miscarriages in recent times. The hydrogeology of the site could very well mean that the spring is ultimately contaminated by water traveling through the tailings piles which loom up behind the village. The villagers were quite concerned because the Mtakuja River (one of the two rivers in the area) receives runoff from the mine site. We also saw artisanal miners working in the river, producing high levels of sediments as they sieved the material looking for gold.
These fears of contamination were confirmed through a study undertaken by Bitala and others at the University of Dar es Salaam . Bitala found heavy metal concentrations of 36-6,000 times the acceptable WHO standards in soils and plants in the Nyakabale area. Artisanal mining is also common in the area. But the scale of heavy metal contamination in the soils and plants in the area suggest that runoff from the tailings piles is indeed poisoning the lands below, where villagers farm and graze their cattle. A study performed by Almas et al  confirmed that tailings erosion is polluting water supplies downstream from the tailings piles. In particular, a pond identified as sample site number 8 in the report had metals concentrations many times the WHO recommended standards. This pond is not fenced and is possibly where the cows were poisoned.
AngloGold Ashanti is the only monitor of the water quality in the area. The water quality samples from some 50 monitoring sites are sent to a company owned lab in South Africa for analysis. There is some review of the results of these samples by SRK Consulting in the UK . During the period we worked in the area (2005-2010) the government of Tanzania did not sample water quality in the area and if there were reported problems, the typical practice is for the mining companies to pay for a government representative to visit the site. Only the work of academics like Bitala provides independent monitoring.
Our experience with the water supply reporting was echoed with the education-oriented contributions of the mining company. The 2005 presentation made by Peter Turner (then managing director of Geita Gold Mine) shows the Nyamalembo Primary School in the education portion of the powerpoint presentation .
The 2005 presentation to analysts made by Peter Turner claimed that 210 million Tanzanian shillings were spent every year on education . A picture of this same primary school appears in the AGA 2006 Country Report .
Beginning in 2002, GGM management claimed to channel 150 million TShs to the District Council every year for community development programs, education being one of them. The company allegedly provided funds to the District Council for five secondary schools at Busolwa, Bukwimba, Kamena, Katoro and Kamhanga. Each school was to have received 15 m TShs . The company also was to have constructed 4 classrooms, 2 teacher’s offices and a store at Nyakabale Primary School at the cost of 32 m TShs (ibid.). They also were to have provided 46 desks at Nyakabale Primary School at a cost of 10 m TShs. Construction of 3 classrooms was to have occurred at Nyamalembo Primary School at the cost of 10 m TShs. According to Francis Killenga, a priest of the Geita Catholic Diocese, these projects were not completed. The money allegedly was given to the District Council but it did not result in the aforesaid projects being implemented. Instead, it went into the “special projects” of those who received the GGM money (the District Commissioner, the District Executive Director, three members of parliament, the Chief Councilor, and the Human Relations Officer of GGM) .
Following this debacle, the company decided to build the projects themselves rather than give money through the District Council. Beginning 2005, the District Consultative Committee (DCC) decided that AGA should only focus on one project: to build and finish the Girls Secondary School at Nyankumbu Village, the first all girls’ school in the District. The decision to build a girls’ secondary school came as a solution to first avoid tension between representative members of the DCC each wanting the company to support a project within their constituents, and second, the project aimed at improving the condition of women (a marginalized group) in the district. We interviewed the then new district commissioner (Philemon Shelutete), and though he was very optimistic about the contribution of the mining company to the surrounding community, he confirmed to us that the Geita Girls’ Secondary School was not yet finished as planned and that his office had to push the mining company to finish it . Nyankumbu Village is one of the company’s regional exploration sites.
5.2.1. Classroom Conditions
We concentrated our attention on the primary schools at Nyakabale and Nyamalembo, the two remaining villages closest to the mining area (Mtakuja and Katoma Villages are gone because of pit and facilities extension).The other five secondary schools GGM claims to have supported are far away from these communities. This makes it difficult to associate these secondary schools with company’s CSR programs although we were told in 2005 that GGM sees the entire district as its CSR “area of influence”.
Nyakabale Primary School is about 4 km north of core mining activities, 1.2 km west of a tailings pond and 1.5 km southeast from tailings piles. Nyamalembo Primary School is about one km from AGA core mining activities. The primary schools within each village are within walking distance for most of the villagers. The closest public secondary school is a ward secondary school at Mpomvu, constructed by village volunteer efforts. This ward secondary school is about 4 km southwest of Nyamalembo, and about 8 km southeast of Nyakabale (going through the Geita forest). The secondary school is within the reach of the Nyamalembo students using bicycles, the primary means of transport in the area. It is a lengthy ride for the students from Nyakabale as they would have to go around the forest on the highway.
According to our focus group interview in Nyakabale, AGA helped build two classrooms and an office for the village primary school, and furnished desks. The Government and the villagers built the rest of the school. However, the school does not have enough teachers—in 2007 there were 7 teachers for 465 students. Several teachers resigned because of transportation problems. While the distance from the school to Geita used to be only 7 km; now they must go around the mine, and the distance is more than 20 km. The teachers had to go into Geita to get their salaries and other services and it was too difficult to manage. Teachers don’t have gate passes to go through the mining area and were frightened using the long route especially when they had to go get their salaries (because of robberies in the forest). The only people with “anytime” passes are the chairman, secretary and the commander of the village army (Kamanda wa Sungusungu).
Our observation of the two primary schools closest to the mining site presented information contrary to the GGM’s claims of its assistance in improving education of its closest neighbors. At Nyamalembo Primary School, we noted that part of the school land was actually taken by AGA, and the school’s only toilet was inside the mining property. We observed overcrowded class rooms (see Figure 4b) that contradict the claim (and the picture) put forward by mining company of providing basic furniture to the schools. We witnessed students sitting on the floor, and those who were able to have a desk were sitting 5 or 6 in one desk, instead of the required number of 3 students per desk (as shown in Figure 4a).
In an interview with the school head-teacher at Nyamalembo, she complained that AGA refused to cooperate with school on matters concerning the students’ poor study environment caused by mining activities. Increased class size was caused by the addition of Mtakuja Village primary school children when Mtakuja was “erased” for mining purposes. As part of resettlement plan, AGA was supposed to transfer furniture and equipment from Mtakuja to Nyamalembo primary school, however, the head-teacher argued none of the furniture came to her school and she did not know where it was taken. AGA also was required to replace buildings demolished at Mtakuja by re-building them at Nyamalembo to avoid student overcrowding and provide accommodation of staff at their new location. Mtakuja primary schools had a headteacher house, while at Nyamalembo the school does not have even a single house for its staff.
The school also suffers from dust and noise from mining blasts. These are examples of negative impacts that are not reported to stakeholders. The school is very close to the mining blasting sites, about 1 km in 2007, and we observed cracks on the class building and were told of the problems of dust and noise when the company starts blasting. The head teacher at Nyamalembo Primary School told us that they have to ask students to be outside the classroom every time they hear blasting for fear of building collapse and of course with the noise itself students cannot hear what the teachers are saying. She argued that complaints have been made to the mining company and nothing was being done. She lamented, “it is like they are doing this on purpose, as they cannot even respond to a simple request we ask of them to let us know of the time and day that they will be blasting so that we can be aware in advance.” She asked “Why are they doing this to us?”
5.2.2. Other Educational Issues
Analysis of household respondents revealed that 14 out of 20 heads of households in the two villages claimed that the corporate mining presence has contributed nothing toward the education of their family, instead it has increased the distance to the school, caused class congestion, increased poverty and resettlement all of which have affected student stability in learning. (Only one respondent claimed a positive benefit resulting from his part-time employment at the mine.) Other issues raised by heads of households echoed what the focus groups and the teachers claimed—that teachers are too few, blasting and dust are problematic, distance to the secondary school is inconvenient, and the learning environment is difficult. One respondent highlighted the problem of student drop-outs due to reduced family income from the loss of assets (including artisanal mining opportunities) and need for children (especially girls) to find low paying jobs (such as “housegirl”).
Our household interviews revealed that the status of education in the affected communities has not improved since large scale mining began. Families are required to pay annual tuition fees, and those who cannot afford the fees are not provided with their children’s end of year academic progress report. Other problems cited on our household interviews were: lack of enough books, lack of enough teachers, lack of electricity, lack of internet (or computer), no hospital near school (not even a school medical practitioner such as a nurse), no sort of scholarship from the mining company for students who cannot afford to pay fees, no breakfast/lunch provided to students, etc. While mining companies are not required to resolve these issues, there is definitely a sense that with the wealth being taken out of the region, they could do more for local people than they do. And Nyakabale and Nyamalembo Primary Schools are clearly at a disadvantage from schools within the region that are not close to the mining site due to the obvious mining impacts on study environment and the tensions that exist between the mining company and these local communities.
5.3. “Overreporting” and Disappointment
At base, we found reporting to be misleading on all fronts. The reporting was not overtly fallacious but it promised much more than was delivered. We found the happening similar situation at Bulyanhulu (BGM), a mine owned by Barrick Gold Corporation (also see Tessier ). Villagers interviewed at Busindi claimed there was considerable “overreporting” of accomplishments by Barrick . Their village is the second nearest to the mine but all the development activities went to Illogi and Bugarama Villages where the workers are staying. Busindi villagers are not working at BGM (ibid.). After they introduced themselves, the first speaker agreed that there are some changes since the mining started. They (Barrick) have built the Bugarama Secondary School. But he said “the company normally gives information that is not true. The mining company says they have built the school 100 percent. But this isn’t true because the villagers have also helped. They collected stones (even for the primary school).” “They (Barrick) have good environment, they have good roads, they have electricity, they have water but not in the village. Nevertheless, the company says they are good neighbors to the village” (participant, ibid.). Most of the company sponsored projects support the interests of workers and are focused on Bugarama and Illogi.
Our conclusion from visiting the multiple sites of CSR projects was that much of the effort labeled “community development” benefited the companies directly via infrastructure development, food supplies to the mine cafeterias, and worker health. The types of projects sponsored sound much like what former mining legend Anaconda’s vice president Harry Guggenheim supported in Chile: “Guggenheim was well aware that labor control demanded attention far beyond the workplace. He outlined a comprehensive community development plan that included schools, hospitals, social clubs, potable water supplies, sanitation, churches, markets, amusements, and policing”  (p. 87). Our research suggests if the proximate community requires these to control or reproduce labor, then they will be developed. For those communities that do not supply labor, the projects are undeveloped or only minimally so.
CSR practices and reporting are evolving. Since the beginning of the millennium, the big gold mining companies like AGA and Barrick Gold have embraced GRI G3 and ICMM guidelines. These reporting guidelines do contain important guidelines and suggestions for managing “sustainability” (see [31,75]). The reporting guidelines prompt company practice/experience with respect to “child labor”, “water volume”, and so forth, but they do not specify what sorts of community development projects should be undertaken. The ICMM merely suggests that the mining company should “Contribute to the social, economic and institutional development of the communities in which we operate” . And while there is agreement on some labor, environment and community relations processes and practices, and reporting has become more substantial and uniform, we find the community development projects to be vaguely defined, primarily in the interest of labor reproduction, and otherwise minimal. Our perception that the efforts are minimal is shaped by the knowledge that a vast amount of wealth is being taken out of the area .
We do know that CSR based community development work is dynamic in the Lake Victoria goldfields. Mining companies like AGA and Barrick have learned from past mistakes, hiring new sustainability or community relations directors over the past 5 to 6 years, partnering with different NGOs, and shifting from gifts or donations to government representatives to programs which may be economically sustainable in future. We realize we have observed a specific temporal period and that things may well have improved. Certainly the non-financial annual reports are longer, more uniform in following ICMM and other guidelines, and more “assured” by independent accountants. Of course, the constant shifting of community liaisons, NGO partners, and project orientation is confusing and frustrating for community members attempting to monitor and manage relationships. Even though improvements have been made, there continues to be too much ambiguity about defining company contributions. Although the annual reports-while better than they were a decade ago-continue to paint a rosier picture than what is occurring. These problems can be remedied and must be if FDI-based resource development is to lead to peaceful development for host communities (see Newenham-Kahindi  for a comparable conclusion).
The misrepresentations we found in these reports serve the purpose of communicating company image, credibility, and compliance to consumers, shareholders, financial analysts, and governments. This is why mining companies, despite the negative socio-environmental impact in local communities, win various national and international awards. For instance GGM is twice winner of the Tanzanian Presidential Environmental Excellence award in 2006 and 2008. Internationally GGM has retained international certification such as the ISO 14001 and won a number of awards and recognitions . On one hand, the fact that these reports are not available locally or in languages understood to local people proves the point that the reports are not intended for them, and that local people lack the information to contest the company’s intentional misrepresentation in their reporting. On the other hand, consumers of these reports believe that mining companies are doing a good job and are actually going beyond the national and international statutory requirements to voluntarily work with local communities to bring about sustainable development.
The problems with existing Tanzania government oversight are significant and although they cannot be addressed in this paper, in our experience, it appears the national and regional governments do little to protect the interests of those people disenfranchised by the mining projects. Most of the local people in mining communities do not have political or economic leverage. They depend upon local leadership to represent their interests. In some of the villages we visited, there was evidence of corruption. In other cases, leadership is honest and dynamic but unheard by higher levels of government. As Schroeder, a long time researcher in Tanzania expressed, “under such conditions, the prospects for voluntary and equitable sharing of benefits are minimized”  (p. 55). Yet these same communities do bear many of the negative costs of mining, costs which are generally not made transparent in annual reports and other social responsibility reporting as we have seen.
Our research suggests that if CSR community projects are the primary way the local people directly benefit from mine development-only one person we interviewed was employed by the mining company—we might more straightforwardly consider the relationship between the value of those projects and the wealth taken from the location. A general rule of thumb in the mining industry suggests “local” projects should represent about one per cent of “pre-tax” profits of the mine . The derivation is unclear but it seems to be a common philanthropic measure employed by large US corporations (although some give a much higher percentage). If this rough measure were implemented, auditing it would require that community development initiatives be carefully defined and bounded—separated from what also benefits the company. For example, the water pipeline and other measures such as the school classrooms might only have a portion of value allocated to community development. The rest would be simply a production cost. At the moment, however, reported pre-tax gross profits are not geographically segmented enough to allow for an independent calculation from most annual reports. Careful specification of actual community oriented beneficial projects, precise valuation of those projects and honest reporting of pre-tax profits would enable all stakeholders to assess the distribution of benefits. Comprehensive analysis of environmental and social costs to these local communities and honest reporting thereof would allow all stakeholders to consider the real costs of mining to these communities. As a result, compensation and resettlement could be more fairly undertaken as well.
Unless a real shift in corporate thinking occurs regarding sharing the wealth, more monitoring and accountability are in order. Perhaps international organizations could provide third party certification with the requisite oversight. Another route, in our case, would be for the Tanzanian government to step in and provide management and inspection. Finally, there might be a way to actually encourage local community participation in monitoring the success and impact of community development projects (see for example, Booth et al. ).
The misleading claims, ambiguity, and lack of attention to asset losses (like grazing and water resources) provide a rosier view of what happens in proximate mining communities than is perceived by outsiders, like ourselves, and insiders, like those we interviewed. Consumers and shareholders may believe from these reports that modern mining companies are actually becoming good corporate citizens and helping communities proximate to the mine. Although both reporting and community development projects are becoming more normalized within the mining industry, the substance and validity of those projects and reports requires considerably more attention and integrity. AngloGold Ashanti is not an exceptional mining company—our work at Barrick sites in Tanzania and in other countries suggests that AGA is quite typical. While there may be some minor improvements in company efforts to improve local community economies and so forth, in general, our findings suggest a disappointing level of effort. The solution to this problem could lie in third-party certification, an increased involvement of government inspection and fines, citizen involvement in monitoring and reporting, or in stricter accounting standards.
This research was funded by the US National Science Foundation, Grant No. 0452152. We are very grateful for the comments of the anonymous reviewers.
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