Although the mining industry has significantly contributed to the national economy, it has also been named the “evil sector” because of its repeated impact to the social, economic, cultural and environmental changes (Bhatasara 2013). By its very nature, the mining industry, just like the oil and gas industries, leaves behind a “footprint” an environmental, social and economic impact (World Bank
1 Development Agreements signed by the government at the time of privatization gave away generous tax concessions. They not only cover the taxation issues but also cover management of the environment and social service, and the responsibility of the companies to employees, communities and the local economy.
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and International Finance Corporation 2002). Bebbington and Bury (2009), observed that in the least developed economies, the growth of mining offers the potential to generate new resources for development, but also creates challenges to sustainability in the towns where mining is conducted.
When the mine ownership was under the state, ZCCM provided almost everything that held society together in the mine townships: jobs, hospitals, schools, housing and a wide range of social services including managing the environment, routine analysis of water, maintaining roads and collecting refuse and HIV/AIDS and malaria programmes. Such that within other communities, malaria and diarrhoeal diseases were the primary cause of mortality, but in the mining townships, more deaths were from mine accidents than preventable diseases. However, after privatization, the new mine owners refused to take up this responsibility. They were more interested in the core business of mining copper and maximizing their ROI. As a result, noticeable changes began to show such as heaps of refuse and residents started to dig pits to throw the rubbish within the housing areas, bringing about an increase in flies and diarrhoeal diseases. There was also mismanagement of the environment and compromise to the health of local people as a result of sulphur dioxide emissions from smelters, heavy-metal effluents being released into drinking water and silting of local rivers (Fraser and Lungu 2007).
Other reasons for the increase in environmental degradation was that in negotiating their DAs, the new mine owners refused to take on the ZCCM liabilities, thereby, avoiding responsibilities for cleaning up pollution problems resulting from the facilities that they own but which were created by ZCCM operations. Besides the environmental and social responsibilities, ZCCM conducted business with local suppliers. When the mines were under the state ownership, there were about 400 suppliers most of which had a long-term collaborative relationship. After privatisation, the DA signed between the state and the new mine owners allowed importation of equipment and supplies. In addition, the new mine owners brought their home suppliers’ base to Zambia (Hampwaye et al. 2014). As such, each mining company ended having its own supplier database of thousands of suppliers. Furthermore, the awarding of a
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tender to supply is based on price, but can also be based on lead time, quality and brand. However, the final decision as to which SME should be awarded the tender rested with the individual mine management. Therefore, in order to increase their chances of winning the tender, SME suppliers have multiple lines of interest (Kasanga 2012). For instance; the mines categorize items/area of supply such as mechanical, electrical, stationery, hardware, construction, labour hire to name a few. The SME suppliers are then required to indicate their area of specialization and interest. However, SME suppliers frequently register for more than one area of interest, in order to try their luck in the bidding process. In addition, privatisation led to the retrenchment of many workers. The retrenched workers formed own businesses often referred to as “brief-case” businesses, which they registered with mining companies as suppliers. These small-scale businesses (informal enterprises) born out of necessity added to the existing number of SME suppliers and are likely to exhibit different orientations to essential social and environmental functions (de Kok et al. 2013; Demuijnck and Ngnodjom 2013).
However, with regards to the sustainability agenda, the main focus has always been, and is still on, large firms and multinational corporations. Small-scale firms plays a major, if not the most important role in economic development, but yet they have been side-lined in the environmental debates, fall below or are outside the compliance requirements of environmental legislation, their environmental behaviour governed by regulation not an environmental ethos (Spence 1999; Hillary 2000). The regulators only exert pressure on the large firms which have the resources and affect a large number of the population (González‐Benito and González‐Benito 2006), because they are perceived that, if they were to adopt sustainably practices, the results would be immediate and significant.
Nonetheless, their capacity to carry out environmental monitoring and enforcement is weak (International Council on Mining and Metals 2014). Bhatasara (2013) also noted that in developing countries the evidence of positive effects in terms of sustainability is weak. The mining-sustainability nexus is characterized by conflicts regarding livelihoods, the environment, culture and social relations. According to Moyeen and Courvisanos (2012), SMEs operate
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“on the ground” and have closer links to the local communities and as such are better positioned and equipped to design appropriate sustainability strategies to address the needs of the local communities and the environment. SMEs are also considered more capable than their large counterparts to respond to social and community needs due to their flexible organization and simple structure (Sweeney 2007).