Companies were selective in their adoption of CSR practices, and of CSR reporting,
based on company size and revenue, public visibility and their perceived external
stakeholders. This raises an important issue for the sector overall and for junior
resources companies in particular. Just as a “one size fits all” (Idemudia, 2011, p. 3)
template approach to CSR practices fails to address the unique economic, geopolitical,
social and cultural conditions of host communities (García‐Rodríguez et al., 2013; Idemudia, 2011), junior companies perceive prescriptive CSR codes of conduct and
reporting frameworks as inappropriate to their specific needs. Instead, these companies
opted for an informal, opportunistic approach to CSR practice and programs, that was
highly localised and community-focused. Significantly, junior companies also rejected
existing CSR reporting frameworks and, in doing so inadvertently reinforce their
collective reputation for irresponsible behaviour (Dougherty, 2011; Luning, 2012) and
lack of accountability.
Institutional theory provides a useful lens through which to consider the selective
adoption of both CSR practices and reporting. The extent to which organisations are
compelled to adopt similar behaviour as their peers depends on external pressures such
as regulation and the level of scrutiny into their activities (DiMaggio and Powell, 1983;
Campbell, 2007). Compliance with both Australian and host country CSR legislative
requirements was taken as given by mining company employees. However, companies
were also subject to scrutiny by a range of other stakeholders including investors,
media, sharemarket analysts, NGOs and financiers. Larger companies are more subject
to scrutiny from powerful external stakeholders, and are thus more motivated to use
CSR to demonstrate legitimacy (Crane et al, 2008b; Othman and Ameer, 2009).
The three largest companies in the study took a broad, holistic view of CSR that
encompassed all aspects of the company’s operations, and had put in place formal and
structured procedures and processes for CSR that reflected the requirements of industry
codes of conduct and reporting frameworks. Importantly, the mid-tier companies were
large enough to attract attention from a range of stakeholders including potential
investors, sharemarket analysts and media, and were thus under pressure to publicly
demonstrate legitimacy to a broad external audience. Further, this group had progressed
to setting up and operating mines and thus had tangible outcomes on which to report.
CSR reporting frameworks provide a means to demonstrate legitimacy to external
stakeholders through the production of a formal CSR report (Farrell et al., 2012; Hilson,
2012; Livesey & Graham, 2007) and the three mid-tier companies all either reported or
benchmarked against the GRI, on a range of CSR indicators including health and safety,
corporate governance, human rights and environmental performance.
The three junior companies, by contrast, largely equated CSR with localised
consultation and engagement with directly impacted communities and host
governments. The junior companies explored for mineral deposit across a region, rather
than operated established mines, which meant they were reliant on cash reserves, and
not operating revenue, to fund their operations. Their limited budget, considerable
uncertainty about their long term presence in the region and often nomadic operations,
necessitated an opportunistic and informal approach to CSR, rather than a planned long-
term community development approach. These companies recognised the many social,
economic and environmental issues faced by disadvantaged host communities but
focused on one or two of the most pressing problems that it was within their limited
resources and budget to address. CSR initiatives were often directly related to their
operations, or able to be leveraged off their existing operations and logistics to deliver
tangible, practical and immediate benefits to host communities.
This narrow scope of CSR practice reflected both a lack of formal training in CSR and
their rejection of formal codes and frameworks, which set far broader parameters for
CSR. The junior companies were not signatories to a formal reporting framework and
did not report on CSR. These companies, the largest of which was one sixth the size of
the smallest mid-tier company, had a small, tightly-held shareholder base and attracted
very little attention from external stakeholders, other than Australian and host country
regulatory authorities. This group had little incentive to demonstrate legitimacy to a
broad audience, preferring to focus their CSR efforts on directly impacted stakeholders,
principally host country governments and communities. This is consistent with previous
studies that show small and medium sized companies in general have low CSR
reporting rates (Crane et al., 2008) and tend to focus CSR on their immediately
impacted stakeholders (Nielsen & Thomsen, 2009).
Reporting against the 50-plus sub-categories of social, economic and environment
indicators set out in the GRI is time-consuming and expensive. The pre-eminent
reporting framework offers a choice of reporting options purportedly suitable for an
organisation of any size, type, location or sector in its latest incarnation, the GRI 4
Reporting Principles and Standard Disclosures (GRI, 2014). Despite a growing
understanding that CSR practice must be considered in the light of contextual factors
such as operating environment (Blowfield & Frynas, 2005; Dahlsrud, 2008; Factor et
al., 2013) and company size (Apospori et al, 2012; Crane et al., 2008b; Del Baldo,
2012; Kechiche & Soparnot, 2012), the junior companies in this study dismissed the
current crop of reporting framework, as unwieldly and inherently unsuited to their style
of operations. This is significant because these companies appeared to have no alternate
way to track not just their CSR inputs but, more importantly, the outcomes. This
allowed companies, however well meaning in their intentions, to be deliberately
ambiguous about CSR, a point which is explored in detail in section 5.3.
The junior companies’ rejection of formal reporting CSR reporting frameworks,
coupled with their generally low public profile and a lack of research into this group of
companies, has important implications for both the industry and host communities in
developing nations. Because they do not report on CSR, companies are able to
selectively adopt CSR terminology and practices which give the appearance of
legitimacy without any requirement of proof. Of course, the same criticism can be
levelled at voluntary and self-selective reporting frameworks (Bouten et al., 2011;
Brown et al., 2009; Crawford & Williams, 2011) that allow companies to report
selectively to the point of hypocrisy (Lim & Tsutsui, 2012; Sorensen, 2012). However,
in the absence of any form of appropriate and widely adopted CSR reporting
framework, the impact on vulnerable host communities in developing nations of this
large group of very low profile companies will continue to be unknown at best, and
potentially very damaging,