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Mining is an industry distrusted by many of its stakeholders and often under threat from opposition groups. In Africa mining operations are usually done by multinational corporations (MNC) who are viewed negatively by the local populace. The corporate social responsibility (CSR) of these MNCs is mainly focused on philanthropy through giving back to local communities and statements of sensitivity to the environmental impact of the mining operations.

That CSR for these companies has this focus is not surprising. Mining and oil and gas (MOG) industries exploit non-renewable resources and perforce have an environmental impact, most notably environmental degradation and pollution . The mining sector has been key to African economies dating back to pre-colonial times, precisely the Iron Age. Since then, CSR challenges have characterized both the colonial and the post-colonial periods. The early 21st Century has seen an increase of Chinese–African investment in the mining sector which is not ‘win–win.’ Chinese investment in Africa has not been mutually beneficial to most African partner economies. Very minimal economic development and economic welfare has been realized for the local economies. Marange Diamond Mines is one such joint venture between Chinese firms and Zimbabwe government .

CSR actions are influenced by global trends and standards but adapted to local context. In order to be effective, CSR must take into account local histories of the region, particularly with regards to consultation mechanisms of indigenous peoples (Pozas, Lindsay, & du Monceau, 2015). The indigenous people of Zimbabwe used to rely on the mining economy during the precolonial period from around year 1000. The mining included beneficiation and value addition with agricultural implements produced to support farming. The people considered themselves the rightful owners of the mineral resources. Colonization took away their ownership and rights whilst the postcolonial focus has been aimed at taking back their ownership rights albeit with little success.

In the early-1980s, a wave of multinational corporations began to champion the importance of CSR (Hilson, 2012). Companies in the MOG industries operate in diverse institutional contexts, across developed and developing countries . The companies face significant environmental and social challenges and must adhere to the requirements of—different national, international, and industry -wide institutional frameworks and standards (Raufflet, Cruz, & Bres, 2014). Historically, the mining industry has taken a ‘devil may care’ attitude to the impacts of its operations; operating in areas without social legitimacy, causing major devastation, and then leaving when an area has been exhausted of all economically valuable resources (Jenkins & Obara, 2006). In recent years the global mining industry has addressed its social and environmental responsibilities more closely. Advocacy from social and political groups, stakeholders’ involvement, and pressure from host governments have contributed to this change. Though issues of sustainability are crucial to all businesses the extractive industry is key in debates about social and environmental sustainability (Jenkins & Obara, 2006).

The effectiveness of CSR initiatives in the oil, gas and mining sectors has been increasingly questioned (Frynas, 2005). To be sure, the MNC faces many challenges in implementing successful operations. First, the company operating in a remote country seeks to gain legitimacy from its primary stakeholders which are typically based in its home market (e.g. customers , media ). This approach leads to a bias towards short-term projects with a high visibility rather than longer-term capacity-building initiatives (Barkemeyer, 2007).

Second, firms have limited management time and resources. Their greatest opportunities consequently will be chosen from areas where the business interacts with and has the greatest impact on society (Keys, Malnight, & Van Der Graaf, 2009). It is very important for firms to find mutual benefits between the company and the communities they operate especially in extractive industries. After all, the communities are, or ought to be, the owners of the natural resources in the areas and thus expect to benefit from the mining operations (Keys et al., 2009). CSR strategy needs to ensure that a company has built relationships with stakeholders which have a greater opportunity of being successful and sustainable. Opportunities for CSR include being closer to stakeholders so that a firm can easily build relationships (Sweeney, 2007).

CSR may also assist in the alignment of corporate and social values , which in turn may lead to the identification of new commercial opportunities (Bučiūnienė & Kazlauskaitė, 2012). Firms often respond to conditions of inadequate governance with CSR strategies (Aaronson, 2009). Firms operating in developing countries sometime have to provide a public good in response to a given social need, even though such a public good ought ideally to be provided by the government . If a company is sensitive to signals coming from the environment, this would enable the company to seize new opportunities (Flak & Pyszka, 2011). The implementation of CSR initiatives faces barriers such as competitive business practices, poor ethical decision making, corruption in the government , lax regulation, confused policy , excessive bureaucracy , lack of executive commitment and unprofessional management , and inadequate evaluation of CSR initiatives (Arevalo & Aravind, 2011).

1 Zimbabwe

Zimbabwe is a land-locked country in southern Africa. At over 150,000 square miles it is a little smaller than the US State of California. The population of Zimbabwe is approximately 16 million, about the size of metropolitan London and Paris combined. Yet beyond these data points, Zimbabwe is rich in natural resources and arable land.

Although organized societies have existed in Zimbabwe for over a millennium, most current reporting about the country centers on its colonial history under England , its ultimate independence in 1965 through the Unilateral Declaration of Independence (UDI), the attainment of black majority rule in 1980 and, most recently, the resignation of long-standing leader Robert Mugabe in 2017 (Fig. 1).

Fig. 1
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Source http://ian.macky.net/pat/map/afri/afriblk2.gif. Map is in the public domain

Africa .

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Zimbabwe is characterized by a weak institutional environment, poor governance structure and various social , economic and political challenges. Apart from review of diamond mining companies in Zimbabwe, it is worthwhile to examine a particular economic and political case of the country because it illustrates some of the challenges and pitfalls of CSR implementation.

Zimbabwe is a country that set out life as a jewel of post-colonial Africa and has become a basket case, a nightmarish kleptocracy sustained by violence , corruption and reverse racism/Its every failing was blamed on its former leader President Robert Mugabe . The problems of Mugabe’s rule have continued with the current government led by his former right hand man Emmerson Dambudzo Mnangagwa and the same political party ZANU-(PF). Mr. Mnangagwa has not escaped the corruption criticism. It is alleged that he was at the top of corruption tree when the army effectively took over the Marange diamond fields in the east of the country in 2008 when he was the Minister of Defense (Davies, 2017).

The perennial problem with Africa is political leadership. Corruption , incompetence, nepotism, external bank accounts and high leisure preference are all too common characteristics across the continent. Such behavior by leaders leads one to wonder if leadership lacks morals, values and integrity. Government is supposed to be a steward of the state resources , such as diamonds and platinum . Unfortunately in Zimbabwe the very same authorities are at the centre of looting these precious minerals. The late Prime Minister of the country 1964–1979 Ian Douglas Smith said “In truth, African custom has always been opposed to corruption , theft of other people’s money or property and denial of equitable distribution to all of the community .”(Smith, 2001). Mr. Smith was born, grew up and lived up in Africa. Because of his background, though he was a white man he understood the African customs and proudly referred to himself as ‘the white African.’ Though Mr. Smith is often criticised for his role during UDI, he proudly referred to Zimbabwe as his home. This background testifies the multi-racial nature of the Zimbabwean society (Fig. 2).

Fig. 2
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Source https://victoriafalls24.com/wp-content/uploads/2014/01/630px-Administrative_Divisions_of_Zimbabwe.jpg; map is in the public domain

Zimbabwe Administrative Divisions.

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Josiah Magama Tongogara, Zimbabwe African National Liberation Army (ZANLA) commander said, “What some of us are fighting for is to see that this oppressive system is crushed. We don’t care whether, I don’t even care whether I will be part of the top echelon in the ruling, I’m not worried but I’m dying to see a change in the system, that’s all, that’s all. I would like to see the young people enjoying together, black, white, enjoying together. In a new Zimbabwe, that’s all…” (Murori, 2016).

Tongogara’s family lived on the same farm as Smith. The two shared a childhood and a personal history. Tongora’s vision and dream of a prosperous non-racial society was never realised. The Robert Mugabe government which took over in 1980 continued with the repressive system of black minority oppressing the people with no regard for freedoms and human rights . In November 2017 President Mugabe resigned under military pressure the government Emmerson Mnangagwa took over and has presided over economic and political crisis whilst using excessive force to silence opposing voices which has resulted in loss of lives and human rights abuses.

Developing countries pose unique challenges for implementation and sustaining of Corporate Social Responsibility (CSR) principles compared to economically developed countries . CSR needs to be adapted to local issues, different cultural contexts and the weak institutional environments, such as in developing countries . There is also need to focus not only on what business has done or failed to do but on the complex relationships that inform the processes that link CSR initiatives and the desirable developmental outcomes (Idemudia, 2011). Arli and Lasmono (2010) suggest four rationales for focusing on CSR in a developing country as distinct from CSR in the developed world: (1) developing countries represent the most rapidly expanding economies, and hence the most lucrative growth markets for business ; (2) developing countries are where social and environmental crises are usually most acutely felt; (3) developing countries are where CSR principles or lack of them are likely to have the most dramatic social and environmental impacts (both positive and negative); and (4) developing countries present a distinct set of CSR agenda challenges which are collectively quite different to those faced in the developed world.

In developed countries , CSR complements a set of robust command-and-control regulations. In developing countries , however, where there are weaker institutions, weaker enforcement of legislation and rampant corruption , companies typically find themselves in positions to self-regulate, The lack of external, state-led monitoring and consultation often leads to a situation where the company becomes a de facto government (Hilson, 2012). Yet, when the governments of developing countries avoid or distort rules and incentives for business , for example, they penalize productive companies. Such countries are doomed to poverty , low wages, and selling off their natural resources (Hilson, 2012).

2 Marange Diamonds: A Brief Background

The focus of this volume is on the case of the Marange diamond mines. Zimbabwe’s wealth of natural resources is a source of national pride and also an economic asset. Therefore, natural resources are frequent lightning rod for conflict between business and community. The Marange diamond fields are an area of extensive small and large scale diamond mining in Manicaland Province on the eastern side of Zimbabwe. Alluvial diamond deposits in the Marange were discovered in June 2006 by African Consolidated Resources . Currently the Marange mines are among the largest producing diamond mines in the world. Since 2006 control of the mining has been a source of contention between various stakeholders including the developer, other business interests, the national government and the local villagers (Saunders & Nyamunda, 2016).

A brief chronology highlights some of the conflicts that have been noted in the 10 year history of the mines.

  • 2006 African Consolidated Resources (ACR ) discovered the deposits and developed them. ACR had claims taken from them by government .

  • 2006–2008 Zimbabwe’s President Robert Mugabe and a small group of insiders and generals, known as the Joint Operations Command (JOC) , took over mine and control operations.

  • July 2009, a Kimberley Process Review Mission visited Marange and concluded there were ‘credible indications of significant non-compliance’ with the minimum requirements of the Kimberley Process Certification Scheme (KPCS) . The major concerns were the evidence of government involvement in human rights abuses, smuggling and lax controls that compromised the entire chain of production (Fig. 3).

    Fig. 3
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    Source http://graphics8.nytimes.com/images/2009/06/27/world/0627-for-webZIMBABWEmap.jpg. Copyright: Global Witness , www.globalwitness.org; reproduced with permission

    Marange diamond mines.

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3 Marange Mines and the CSR Challenges

  1. (a)

    Economic

Businesses should contribute to sustainable economic development, working with employees , their families, the local community and society at large to improve their quality of life (Dahlsrud, 2008). Propelled by Zimbabwe’s deepening economic crisis , soon after this discovery of diamonds was made public, the Chiadzwa diamond fields were invaded by an avalanche of illegal diamond miners from diverse cultural and socio-economic backgrounds (Nyota & Sibanda, 2012). Marange ’s diamonds emerged as ‘conflict diamonds ’ in a period of intense political and social conflict inside and outside the state. In Zimbabwe, conflict diamonds have fuelled not rebel groups, but rather the militarization of the state from within (Saunders, 2009).

In 2016 the government of Zimbabwe did not renew diamond mining licenses for the firms and they went on to consolidate all mining operations under one mining firm owned and controlled by the state. President Robert Mugabe revealed that diamond worth US$15 billion dollars could have been spirited away by cartels which were working in cahoots with the seven mining firms for the past 6 years (Magaisa 2016). The firms which were mining in Marange had a 50% government shareholding. Manicaland has remained one of the poorest provinces in Zimbabwe despite vast diamond fields. The economic returns from the diamonds have accrued to diamond barons, state military, bureaucrats and foreign economies. There is increasing evidence of undercover trade and massive personalization of the diamond revenue by securocrats and henchmen loyal to the establishment (Chimonyo, Mungure, & Scott, 2013).

  1. (b)

    Political

The Marange diamond fields are estimated to hold between 25 and 30% of the world’s diamond deposits (Maguwu, 2013) . Diamonds were discovered in Marange in 2006 a period of political instability which culminated in the hyper-inflation of 2008. Underlying the economic instability was a political conflict between the ruling ZANU-PF of President Robert Mugabe and a rising challenge from the Movement for Democratic Change, formed in 1999 and led by Morgan Tsvangirai (Saunders, 2009). The ruling party, ZANU-PF embarked on the restructuring of Zimbabwean politics and business that was increasingly driven by the demands of political survival , at the expense of sustainable economic development.

In 2010 the Ministry of Mines accepted expressions of interest from companies willing to enter into joint ventures agreements to mine in Marange under the auspices of the Zimbabwe Mining Development Corporation (ZMDC) . Diamond mining firms were formed as joint ventures between the state-owned ZMDC and Marange Resources with Chinese firms. The Chinese owned stakes in mining companies which were exempt from the indigenisation policy . It was noted that China and Zimbabwe have a relationship whereby Beijing supplies weapons and Chinese firms were allowed to mine diamonds (Kubatana.net, 2011). In 2012: former finance minister Tendai Biti confirmed that he had trouble with some government officials who were helping the Chinese to siphon money out of the country . Biti said Chinese diamond firm, Anjin , failed to remit revenue from its operations in Zimbabwe’s Marange fields in the first quarter of 2012 amid fears that the money was used clandestinely. “During that time, we did not receive a single cent from Anjin , yet Anjin is seven times bigger than some of the other [diamond ] businesses,” (Zim: Chinese mining firm not paying, 2012). Biti said during his tenure there were suspicions that the funds were funnelled elsewhere, outside the government central coffers. “Clearly, there might be a parallel government somewhere in respect of where these revenues are going, and are not coming to us,” (Zim: Chinese mining firm not paying, 2012).

The ruling party utilized the Marange diamonds to maintain the loyalty of the army , the security sector and its key supporters (Towriss, 2013). Zanu (PF) politicians , in a bid to strengthen their political position, have continued to the present day to ensure that a significant percentage of the revenue has benefited not the government ‘s depleted coffers but a number of currently serving and retired members of the national security agencies. Mugabe turned to the Marange diamond fields for political survival . Whilst negotiations for power-sharing were taking place in 2008, Mugabe was securing control of the Marange diamond fields (Maguwu, 2013).

  1. (c)

    Social

CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (Dahlsrud, 2008). As noted, there are significant differences between developed and developing countries in their conceptualization and implementation of CSR . The need of CSR is more pronounced in developing countries because there are gaps in social provision and governance (Dobers & Halme, 2009). Institutions providing social goods are in general less prevalent and weaker in developing countries than in their wealthier counterparts (cf. Baughn et al., 2007). Therefore; in the developing countries companies tend to come under heightened requirements and expectations to fill those gaps (cf. Baughn et al., 2007).

Mining-induced displacement of rural communities is a negative externality of development (Madebwe, Madebwe, & Mavusa, 2011). The Marange community was displaced and the community continues to bear the burden of the cost of displacement . The mining company promised to build a clinic, schools and to sink more boreholes (Madebwe et al., 2011). The displaced families have great difficulty accessing basic services and amenities and the community is fractured as social capital is dispersed. Initial displacement was of families immediately within the focal points of the mining concession. Consequently resettled families are not clustered in the same way as at origin causing social dissonance. For this particular group of displaced families seeking recourse to their grievances is particularly difficult as government owns a 50% stake in the mining company which displaced them (Madebwe et al., 2011). Rural communities continue to bear a disproportionate burden of the cost of development projects. Development induced displacement destabilizes affected communities and exposes them to impoverishment risks (Madebwe et al., 2011).

The businesses operating in the diamond mining fields did not honour their obligations to the Marange -Zimunya Community Share Ownership Trust. The management of natural resources in Chiadzwa has been affected by too many interest groups whose activities did not take into account environmental considerations. The traditional leadership in Chiadzwa feels that it has been marginalised in the decision-making related to the diamond mining. Since this is a natural resource found within their jurisdiction, they felt the state usurped their authority when it came to the allocation of mining rights. In an interview with an elder in the chief’s lineage, it was pointed out that the land had been spoiled and there was therefore need to cleanse it (Chimonyo et al., 2013). The social and cultural timbre of the Chiadzwa community has been negatively altered through economic deprivation, ecological deficits and geographic displacement (Chimonyo et al., 2013).

  1. (d)

    Environmental

In 2014 1000 cattle died and it was discovered that the river was being contaminated by substances discharged by mines operated by Anjin Investments and Marange Resources . In 2015 Marange villagers accused the government ’s Environmental Management Agency (EMA) of folding its hands whilst diamond mining businesses were destroying the environment. The villagers further accused the state watchdog of making profits from pollution fines paid by the businesses. At the initial stages of formal mining companies ferried the diamond ore to Odzi River for washing the ore and removal of dust. This raised the turbidity of the soil and it became unsuitable for most downstream uses. It is obvious that the change in the aquatic environment had effects on aquatic flora and fauna. Whilst the alluvial diamond mining loosens the soil the heavy vehicles and machinery have the effect of hardening the soil. The loose sediment is easily carried away by the increased runoff because of the hard surfaces increasing sediment input into the Save, Odzi and Singwizi Rivers and the small dams in the area. The pollution of the Odzi River for example was more pronounced when Canadile used to do its sorting of ore in the Odzi River . It is reported that polluted water along the Save and Odzi rivers led to skin rash and livestock losses (Chimonyo et al., 2013).

4 Conclusion

This book outlines a single case study in the extractive sector focusing on the challenges and opportunities for CSR . The mining sector and the diamonds represents a strategic resource for Zimbabwe a developing country. Until 2017, Zimbabwe had one leader, Robert Mugabe, since independence from British rule in 1980.  During his reign foreign owned companies were supposed to cede 51% of their ownership to locals and retain 49% through a law known as indigenization. In November 2017 Mugabe’s rule came to an end and the government under the new president Emmerson Mnangagwa scrapped the indigenization laws. The laws were maintained, however, in the diamond and platinum sectors. The communities usually do not benefit much from the resources mined in their areas. This volume will focus on what mining corporations should do in the communities where they operate and their role to all stakeholders. The important lessons learnt through the Marange Diamonds case will help academics and practitioners on ways to improve and ensure that the same pitfalls are avoided.