E Nvironmental Self - Reporting in the M Ining Industry

Self-regulation by firms and industries in relation to the environmental impact they cause is by no means a substitute for more traditional regulation of environmental externalities. However, in some instances self-regulatory efforts are undertaken not just to present a responsible image to the world, but involve instead very specific actions that may serve to reduce externalities for a specific industry. An example of such an effort, which goes beyond the normally observed claims about sustainability, is the increasing numbers of mining firms that generate and issue environmental reports. While there is as yet no proof that reporting has a direct effect on environmental performance this paper shows that within a single industry there are wide variations in reporting practices and apparent sincerity involved in the process. Introduction The business of finding, extracting and processing mineral resources is widely regarded as one of the most environmentally and socially disruptive activities undertaken by industry. For some, the activities of the mining industry are coupled with images that include exploitation of the weak, whether they are workers, aboriginal people, local villagers or developing nations. Mining, along with other extractive industries, is also widely perceived to be depleting a strictly limited stock of resources. These factors contribute to a view held by many that mining is a thoroughly unsustainable industry. The overall dim view of the industry has been compounded by specific events surrounding certain controversial companies and sites. A highly visible category being those instances where tailings have been released as a result of poor engineering, deliberate disregard for appropriate levels of safety, or for reasons of economic expediency in malleable regulatory frameworks. An outcome of this is that the industry and its individual members have increasingly been forced to justify their existence and document their performance in order to gain access to resources of all kinds, whether they be exploration leases, financial support, risk insurance, or human resources. Many of the environmental and social concerns have demonstrably translated into “License to Operate” and “Access to Resources” issues. Some mining firms acknowledge this; Western Mining Corporation (WMC) of Australia put it as follows: ‘As a resources company, WMC requires "access to land" and a continuous "licence to operate" to grow shareholder value. In order to achieve this objective, we need to acknowledge changing societal values and expectations.’ (WMC, 2001). As a result, the mining industry and individual mining groups spend considerable resources, time and effort in presenting their views, emphasizing among other things the real benefits mining has brought to many previously poor regions. The mining industry is under increasing pressure in its traditional home regions where ore body depletion and restrictions on land access for exploration are increasingly constraining operations. One solution is for members of the industry to promote a less negative image in these traditional home regions and this is where environmental reporting plays an important role. Although reporting may lessen some of the constraints on mining, depletion and other restrictions have long led mining groups to invest outside their home regions, in countries where environmental concerns receive less attention. In these regions environmental reporting plays a lesser role, thus adding to the attraction of investing there. For operations in these “overseas” regions reporting on environmental performance is less likely to make a significant difference to how “welcome” a mining operation is. However, once a mining group begins reporting in one part of the world it becomes very difficult to avoid reporting for all operations, regardless of location. 1 In this paper we use the term ‘mining groups’ to denote any mining firm with more than one operating site.