"Is CSR truly positively impacting our communities

today or is it just another way to increase profit

margins and sales?"

The assertion required us to come up with a definition of what CSR means so that we can
evaluate a companys impact on the stakeholders. Knowing that we have different views, we had
to call on various scholars definitions for us to reach a consensus on what CSR means. When
defining corporate social responsibility, Daft (2010, p. 138) defines corporate social
responsibility as, the obligation of organization management to make decisions and take actions
that will enhance the welfare and interests of society as well as the organization.' On the other
hand, the European Union made a press release in October 2011 (European Commission [EC]
2011), which states that CSR is the responsibility of every enterprise for its impacts on the
environment and society. With an increased globalization world, Africa has embraced the CSR
practice in some cases voluntarily others compulsory as a way to bring new value to the society.
This is especially as regards to natural resources.

In most businesses, practicing CSR involves contributing some of their profits to charity and
running initiatives that add value to the community. Vale Mines is a coal mining company
located in Mozambique. In 2006, they discovered coal deposits in Moatize, but they faced a
challenge of having to deal with the inhabitants of the area. On top of carrying its burden of
employment creation, Vale Mines decided to resettle 1,365 households to a newly-constructed
village in Cateme an urban neighborhood in 25 de Setembro in 2009. Also, they also provided
electricity which many did not have before being relocated. As if that was not enough, Vale
Mines financed food to the people who were relocated. Having said this, one can argue to say
that they practiced CSR and it had a positive impact on the stakeholders who in this case are the
people who were compensated for their relocation.
While it might be observed that Vale set an example of best CSR practices, the negative impact
their establishment had in Tete province were far greater. This new investment lifted coal
production from about 600,000 tonnes to 11 million tonnes a year which was to their benefit.
They overlooked the fact that this stunt was worsening the environment. Some of the visible
negative impacts this project had on the environment included air pollution, loss of biodiversity,
damage to crops, noise pollution, and deforestation. In addition to that, Vales investment
destabilized the socio-economic situation through displacing homes and loss of livelihood among
other things (Boaventura Monjane 2014). Although Vale financed provision of food for
displaced families, it was short-term (Human Rights Watch [HRW] 2013). They did not take into
consideration the need for society to have food security.

This case showed us that building new houses wasnt enough to compensate the living style of
the population had before the resettlement. The population depended on agriculture and cattle as
the primary source of income. Vale representatives had in mind that the land in the resettlement
sites is arid and cannot sustain any agricultural activity. It required constant artificial irrigation to
improve its fertility yet the natives relied on rainfall. Rio Tintos communication to Human
Rights made a promise of providing irrigation schemes. However, there were no widely available
irrigation projects/schemes in place as of 2013 (HRW 2013). More so, the company didnt
consider about providing alternatives ways to help these families to come up with new activities
that would create income for themselves.

In conclusion, it is no doubt to consider the fact that CSR has become a very controversial term
which is difficult to achieve while running a business. This can be evidenced by the case of Vale
Mines who increased their production immensely but at the expense of the inhabitants of
Moatize. Little did they know that their plan had worsened the situation for those people as they
ended up without land to do their farming, they financed food on a short term, land pollution
only to mention but just a few. Milton Friedmans shareholder theory defends such practices as
in Vales case since it considers maximizing profit as the only goal for any business. Although
this approach seems correct, it has been proven that corporate social responsibility boosts
corporate financial performance, Orlitzky et al. (2003). This leaves us with a question of whether
or not it is possible to run a business and practice CSR to its actual definition which brings
positives only to the stakeholders.

Reference list

Boaventura Monjane, 2014, Vale mines displace farmers, Mozambique, Environmental Justice
Atlas, viewed 13 February 2017,
https://ejatlas.org/conflict/vale-mines-displace-farmers-mozambique

Daft, R 2010, Management, 9th Edition, Macmillan Publishing Solutions, Mason, OH.

European Commission 2011, Corporate Social Responsibility: a new definition, a new agenda
for action, viewed 13 February 2017,
http://europa.eu/rapid/press-release_MEMO-11-730_en.htm

Human Rights Watch 2013, Mozambique: Mining Resettlements Disrupt Food, Water -
Government and Mining Companies Should Remedy Problems, Add Protections, viewed 13
February 2017,
https://www.hrw.org/news/2013/05/23/mozambique-mining-resettlements-disrupt-food-water