The resource extraction industry poses a set of unique challenges unlike other industries. The nature of the business is highly complex and risky. It involves tremendous initial capital investment. It requires management teams to be able to manage diverse and vulnerable populations. And it involves setting up operations in geopolitical “hot spots” rich in raw materials. So even for the best intentioned company, the promise of running a responsible corporate enterprise in this industry is a daunting task.
The Canadian mining company Barrick Gold is one company caught between trying to “do the right thing” and actually managing to pull it off.
Over the years, the company has faced a number of allegations concerning human, labor and environmental violations. These risks are indeed so paramount to the company’s brand that a major institutional investor in Europe – the Norwegian government’s pension fund – has recently decided to divest from Barrick Gold stating that it “finds reason to believe that the company’s unacceptable practices will continue in the future.”
To its credit, the company has very comprehensive labor and environmental policies. But the problem for management at the moment is that despite its stated commitment to a CSR agenda, the list of human rights and environmental allegations keeps growing. In light of this, there seems to be a sharp disconnect between what Barrick Gold professes to be doing to shareholders with its actual record on the ground where it operates.
JMR Portfolio Intelligence (GIW’s parent company) has recently issued a “non-compliant” investment rating for Barrick Gold. Read the report.
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Uncle B 02.18.09 at 7:42 am
Every companies first responsibility is to the shareholders, and any idiot dumb enough to get in the way of that corporate fact deserves what he gets. Labor, neighbors, towns, counties, provinces, countries, are all exploitable entities and by corporate law of this country, in the victim category. The shareholder comes first, foremost, and out front, by the very wording of incorporation. Barrick has done nothing to break the first law, the law of incorporation. Bleeding hearts who don’t understand this must take note, and read up on the basics of incorporation, and stop whining.