- Original Article
- Open Access
A research-informed model for corporate social responsibility: towards accountability to impacted stakeholders
© The Author(s) 2017
- Received: 1 February 2017
- Accepted: 2 August 2017
- Published: 22 August 2017
An Australian case study is presented of an ongoing conflict between Alcoa World Alumina, a multi-national mining company and the impacted stakeholders of Yarloop, a small rural community in Western Australia. The conflict has been subject to research by the author since the early 2000s and is the impetus for developing a model for corporate social responsibility (CSR). The model emphasises engaging impacted stakeholders in dialogue with powerful stakeholders to achieve social justice. This involves a three way set of relationships with key people in leadership positions from the relevant government departments, the corporation’s management group and the impacted stakeholders.
The model is premised on an ethic of love approach which utilises the ideas of social justice, social sustainability, and the social pre-cautionary principle. An outline is presented of these ideas as well as a set of inter-linked strategies which are responsive to power inequalities in conflict situations. The ideas and strategies can guide efforts to address the social costs incurred by the impacted community stakeholders. This will involve a discerning commitment to work towards accountable government, sustainable business practices and social justice for impacted stakeholders. The approach requires a cultural shift in the business sector, and wider society, to equally value people, place and profit.
- Social work
- Corporate social responsibility
- Impacted stakeholders
- Social justice
- Social precautionary principle
- Social sustainability
- Ethic of love
The article explains how the social justice imperatives of social work led the author to respond to an invitation by Alcoa World Alumina, Australia (Alcoa) to assist them with issues they were having with Yarloop, their neighbouring community. This entrée point into the conflict between Alcoa and Yarloop has led to an ongoing interest in issues of failure of corporate social responsibility (CSR). In the Australian context, large scale extractive mining is a significant driver of its ‘two speed economy’ (Brueckner et al., 2013). One speed relates to the economy which functions on high levels of company profits and individual wealth in the mining industry. The second speed economy relates to the other end of the spectrum where almost one third of the population are living below the poverty line on government benefits (ACOSS 2014). This broader context of inequality sets the scene for a complex intersection between social irresponsibility by mining companies and the pre-existing patterns of disadvantage in Australian society (Habibis & Walter 2015).
The question at the centre of CSR literature is - what responsibility does the mining sector have to its employees and local communities, and perhaps the broader society? Some examples noted in this introduction suggest that a number of multi-national mining companies do not consider their responsibility extends very far at all. The link between business claims of CSR in contexts of adverse impacts on, or conflicts with, community stakeholders appear to show an over-valuing of business profits at the expense of people and place (Brueckner & Author 2010). The article brings a focus to the social costs and inequalities in the mining sector which can be understood as examples of corporate social irresponsibility. The purpose in doing this is to establish an argument for the need to find effective ways to respond to these issues without further disadvantaging the less powerful, adversely impacted stakeholders.
Where a social positive value is not experienced by some social groups or communities, the pressing task is how to engage the involved stakeholders to work towards a fairer outcome. An illustrative case study is presented which developed from some initial research into the conflict between Alcoa and the town of Yarloop.
First, due to exhibited fairness, socially responsive activities appears to be a means to reduce employee turnover. Second, by meeting justice needs of customers, CSR is likely to increase customer satisfaction. Lastly, CSR activities provide visible signals from which stakeholders infer various positive characteristics of firms, thus creating an avenue to increase overall firm reputation. (Galbreath 2010: p411)
A practice model is outlined for responding to failures of CSR which features an ethic of love premised on: social justice; social sustainability, and; the social pre-cautionary principle. A key component of the model is the inclusion of warrants which hold the powerful stakeholders accountable for their contributions toward addressing the issues they have created. These ideas and other features of the model will be explained using details from the Yarloop-Alcoa case study.
The irreconcilable conflict at the centre of the case study rests on perceived pollution threats from Alcoa’s mining operations and the impacts of their increasingly intrusive public relations campaigns on local people and towns. This was occurring in tandem with the intricately influential role of the State Government which continues to have a pro-development agenda. This pro-development agenda privileges businesses such as Alcoa (Brueckner et al. 2013: p113) without sufficient regard to the socio-environmental impacts and costs (Sharp 2004; Brueckner & Author 2010: p61).
During 2002 and 2003, the author was engaged by Alcoa to advise them on how to quieten the community outrage against them which was reported in national media releases (Mayman 2002: p19). At the time, deep concerns were placed on the public record relating to air, land and noise pollution from Alcoa’s alumina refinery at Wagerup. For example, some Alcoa employees were claiming unfair consideration for work related health impacts (McDermott 2005; Flint 2006a: p50). The extent of health and social impacts became exposed as more people in the community spoke out after a build-up of frustration and fear due to both the Government and Alcoa being slow to listen and take people’s concerns seriously (Hahn 2002). Alcoa’s own medical expert, Mark Cullen, deepened the controversy by declaring there was a link between health concerns and the refinery and he called on the local management of Alcoa to fix the problem (Miraudo 2002). Alcoa perversely continued to deny harm while it nevertheless commenced major technical improvements at the refinery. Meanwhile in this volatile context in early 2002, Alcoa undertook what became a very undermining and divisive buy up of private properties to secure what local people called a ‘buffer’ (Brueckner & Author 2010: p83). Alcoa has since purchased more than half of the town and many of the surrounding farms.
After an initial reconnaissance of various key stakeholders’ views, the author and a small group of research colleagues from Edith Cowan University, sought entrée to the community and established regular meetings with community leaders and Alcoa managers. The evident power differences and competing interests between the community and the company alerted the researchers of the need to avoid complicity with Alcoa. A critical, participatory action research strategy (Stringer 2013) was undertaken as this allowed an emergent approach with action and reflection cycles based on an ongoing awareness of the power dynamics in the conflict. The article refers to information on the public domain and does not discuss material held in confidence by any of the stakeholders.
From Alcoa’s perspective the project was about solving the problem of a community blaming them for issues Alcoa did not accept they were causing. While initially sceptical, the community gradually co-operated with the research team. The project used a community development style of engagement (Ife & Tesoriero 2006) which enabled people to be heard and to jointly seek solutions to the shared issues (Author 2002, 2003). To ensure transparency and accountability to both Alcoa and community members, the researchers provided all research materials such as meetings notes and discussion papers to the public as well as to Alcoa.
All sides to the conflict were separately engaged with and listened to and then a series of facilitated public meetings were conducted with the stakeholders in various combinations over an 18 month period. These meetings constituted the dialogue table where efforts to resolve the issues were centred. The challenge was to find a beginning point where all parties would be willing to come to the table. While health and safety were the main concerns of many residents, the focus for the facilitated public meetings was on the perceived unfairness of Alcoa’s policy for buying local properties. Alcoa offered a bonus on top of market value for properties adjacent to its refinery but only market value for properties in the older part of Yarloop. This in itself created disharmony and confusion in the town. The buy up of properties by Alcoa was very contentious and was in ‘take-off’ mode as the research began.
During the life of the research and under increasing pressure from a number of concerned residents groups and medical experts, the State Government instigated a Parliamentary Inquiry which found that Alcoa was acting outside town planning requirements in creating the buffer (Sharp 2004: p267). An expert independent planner called the buffer ‘a zone of commercial interest’ (Author 2003). That is, Alcoa continued to act in its own commercial interest as all indicators showed the town’s viability and growth had stalled and even reversed. There were no new residential developments in Yarloop once Alcoa became the main buyer of property in the context of health and property value concerns. The research in 2002 and 2003 also helped build the pressure on the Government to act and information submitted to the Parliamentary Inquiry from the research assisted in addressing Alcoa’s unfair property formula.
The Inquiry recommended that Alcoa purchase any properties where owners were concerned for their health which was the first time a link was made and seen as fact that Alcoa was responsible for local peoples’ health impacts and fears. Again perversely, Alcoa continued to deny it was buying properties because it had caused health issues. It was also probably perturbed by the unexpected number of property owners outside the township of Yarloop who wanted to sell up. The property purchase program required by the Government collapsed under this pressure within a short period (Brueckner & Author 2010: p56). The dialogue created by the research obtained a local commitment from Alcoa to not pursue further expansion of its Wagerup refinery while Yarloop and other local towns were feeling adversely impacted. It was not too long though before Alcoa announced its intention to expand and despite very strident community submissions against the expansion, it gained approval from the State Government. This was regarded by some residents as the ultimate act of social irresponsibility by Alcoa and while the expansion has not yet occurred due to unfavourable market conditions, the harm to company/community relations was done.
The research team’s decision to withdraw from the project was triggered by Alcoa not allowing to release a key report of the research. Just prior to this action, Alcoa had refused to provide remaining residents in Yarloop with a life of the refinery guarantee on the value of their properties. This guarantee was central to the negotiations at the dialogue table over the 2 year period of the research. Since 2004 several members of the research team have continued to lend their support to the town of Yarloop. This ongoing relationship has afforded a deep understanding of the largely hidden costs of living too close to a major industrial complex in a state which has a vested interest in keeping Alcoa operating, if necessary at the cost of its people and local environment. The book – Under corporate skies (Brueckner & Author 2010) – provides a detailed account of this original research and some subsequent research about a community’s struggle for social justice which continues to this day. The book and more recent publications by the authors can be considered the product of the research and a testimony to the challenges of trying to achieve CSR from the impacted stakeholders’ perspective.
What the model needs to do
The case study shows how a practice model needs to address the dominance of the business sector’s self-interested commercial activities. In particular, the model needs to ensure the interests of non-dominant impacted stakeholders are upheld. In the event of conflict or serious harm to the environment, animals or people, where corporate irresponsibility is occurring, it is manifestly illogical to leave to the corporation the task of self-regulating. For example, in a context of concerns for the air quality at Alcoa’s Wagerup refinery, it was Alcoa, not the State Government or an independent body, who gathered, tested and reported on air samples.
Matters of environmental and social justice are the business of all tiers of civil society. Evidence shows that at times of major social and political upheaval, for example, there is a phenomenon of private businesses benefiting from the suffering and chaos of the society (Palazzo 2007: p55). The case study suggests that government regulatory mechanisms, to the extent they exist, can be inadequate for some types of socio-environmental issues where scientific evidence is inconclusive but public outrage persists. There has been a hidden burden on the Yarloop community to research and prepare a large number of submissions over the last 15 years against Alcoa’s expansion and aspects of its licence. This effectively has done the Government’s work for it and yet has not resulted in a curbing of Alcoa’s incremental increases in production levels (Community Alliance for Positive Solutions CAPS 2017).
A power sensitive model of negotiations through dialogue is proposed premised on anti-oppressive ethics and principles (Clifford & Burke 2009) that can guide key stakeholders in their response to issues of CSR. The model is not on its own sufficient to address complex issues of harm, loss and unrestrained commercial interests but is an essential set of capacities and processes for ensuring efforts towards CSR achieve some traction. The model derives from the research experience and subsequent involvement with the Yarloop community and is designed on the author’s understanding of what worked and what failed.
Main concepts explained
The proposed model involves the concepts of: anti-oppressive theory; social justice; dialogue; social sustainability; the social precautionary principle, and; an ethic of love. The concepts will be explained in this section and then the model will be presented. Anti-oppressive theories refer to ideas that seek to explain and respond to issues of discrimination and disadvantage where there tends to be a pattern of loss and harm for de-valued social groups such as women, people with disabilities and people who live on low incomes (Thompson 2011). These ideas bring a critique to privileged social groups who gain at the expense of non-dominant groups (Pease 2010). In the context of issues with CSR, adversely impacted stakeholders are the non-dominant group which often have members who belong to other disadvantaged social categories. For example, in the mining sector in Australia one such category is disadvantage that relates to locality. Rural and remote locations, where most of the large scale mining occurs, can exacerbate access to employment and services (Smith 2004). In the case study, Yarloop is in a rural area where there is limited employment and one of the impacts of Alcoa’s operations has been a reduction in services to the community. Only a small number of Yarloop residents work at the Wagerup refinery.
Social justice involves efforts to address discrimination and disadvantage and usually refers to the re-distribution of societal resources (Rawls 1973). It can also refer to the inclusion of people in discussions and decisions which affect them (Young 1990). Social justice in Yarloop would have a number of dimensions and for many this required gaining compensation for harm done by Alcoa. Dialogue is a set of strategies for enabling this form of social justice where power differences between stakeholders are mediated to enable democratic, non-exploitative and power equalising processes (Author 2013b).
Social sustainability was defined earlier in the article and for current purposes refers to a genuine valuing of relationships across power differences where justice is sought without further disadvantaging the most vulnerable stakeholders. The social precautionary principle is an adaptation of the more familiar idea of the precautionary principle which is ‘based on values related to “forecaring for life” and the natural world’ (Myers 2002: p210; Myers 2004). According to Weier & Loke (2007:pi) ‘the most widely adopted versions, based on the United Nation’s ‘Rio definition’, seek to ensure that uncertainty about potentially serious hazards does not justify ignoring them’. In this article the term highlights the need to consider the social consequences of decisions as well as the environmental consequences.
An ethic of love refers to actions that seek to employ social justice, social sustainability and social precautionary principles to address issues of corporate irresponsibility. An emphasis on ethics brings attention to the way the issues are addressed and the love ethic brings attention to fostering a respectful and caring regard for all parties alongside the challenging of power relations that cause harm.
Dimensions of a model for critical social responsibility
This section describes the various aspects of the model that seeks accountability to adversely impacted stakeholders. The notion of critical social responsibility (Critical SR) highlights this goal of the model. It brings an anti-oppressive focus to the resolution of mining conflicts to avoid further disadvantaging less powerful stakeholders. Specifically, Critical SR refers to an ongoing need to check and moderate the effects of actions by powerful stakeholder groups when these actions have adverse impacts (Author 2017).
In relation to matters requiring Critical SR, the three principles to be upheld are: the social pre-cautionary principle (SPP); social sustainability (SS), and; social justice (SJ). These are the components of an ethic of love. This brings attention to the social capacities of: acting to protect vulnerable or adversely impacted group’s interests as a priority (SPP); respect and a sustained commitment in all relationships (including non-human and ecosystems, Plumwood 2000) (SS), and; inclusion and fairness, with accountability by the powerful stakeholders (SJ). The main stakeholders this work needs to include are the senior business managers and government representatives (accountability for SJ), over the life of the issue (SS) where deference is given to the least powerful stakeholders (SPP).
The social capacities are required of all stakeholders. Further, the wisdom of the people (Ife & Tesoriero 2006) based on their lived experience needs to be given equal credence with the scientific and expert knowledge of business and government (SPP, SJ). Responses to issues of CSR need to hold the more powerful stakeholders, the corporation and government, responsible to resolve the issues (SJ), without blaming or ignoring the impacted communities and ecosystems (SS).
Thus, the government, as the corporate regulator, has the onus of responsibility to enact the SPP, for example, when a mining company applies for expansion or increases in their production levels in circumstances of unresolved conflict with impacted communities (Brueckner & Author 2010). The corporation has the onus of responsibility to sustain relationships with all stakeholders, in particular with stakeholders who are claiming adverse social and other impacts (Author 2016, 2017). Finally, the onus of responsibility for impacted stakeholders is to act to ensure their views and interests are heard and to seek to influence due processes of accountability of the government and corporation (SS).
It is for the impacted stakeholder group to declare if the desired outcomes are being achieved (SJ). In this regard it cannot be the prerogative of the powerful stakeholders to decide justice has been bestowed. The privilege and vested interests of powerful parties could mean that the members will continue to act defensively and in their own interests at the cost of non-dominant groups if necessary (anti-SS and anti-SJ). This is the main power dynamic of all global examples of corporate irresponsibility (Zadec 2007).
The dialogue table is not a consultation process initiated by the corporation to gain support for their business plans and it is not a government regulatory process for consulting with the public about the corporation. The dialogue table needs to be a ‘third space’, much as the post-colonial literature suggests (Bhabha 2004). In this third space, the parties attend without duress and in good faith to progress a power-sensitive conversation based on the principles of an ethic of love – the social precautionary principle, social sustainability and social justice.
The sources of power and authority to act, both to cause the issue and to resolve it, have been outlined in Fig. 1 with the idea of ‘onus of responsibility’. Here it suffices to note that each stakeholder group draws upon different types of power where the legal, financial and institutional power of the government and corporation, while differently constituted, locates and legitimises ongoing human and financial resources to these entities. Thus, in the current case study, Alcoa is legally authorised with its own legislation – The Alumina Refinery (Wagerup) Agreement Act, 1961 & 1978 – and by the approval of its licence to operate by the State Government. The type of authority impacted community stakeholders can draw upon tends to rest in ethical and social bases which have been shown to be harder to galvanise and finance to undertake effective activism. There are though innumerable examples globally of the effectiveness of social activism in relation to irresponsible corporate and government activities (Zadek 2007: p160).
Drawing on the work of Fox & Miller (1995), the starting point to dialogue is identifying the warrants that need to be achieved. If these warrants cannot be agreed to, or fall away at key decision-making points between the stakeholders, then dialogue has shifted to domination and control. This will mean a usurping of both democratic processes and an ethic of love (SPP; SS; SJ) has occurred. The discussion at the dialogue table needs to focus on matters of relevance (SJ), especially to the less powerful parties; result in substantial contributions to addressing the issue (SJ), especially by the corporation and government; and be based on sincere relationships over time (SS). Further, the process needs to include stakeholder group based reflections, and if necessary, a challenging strategy, if power dynamics undercut the goodwill of any stakeholder/group in the dialogue process (SS).
In the intensely contested and highly politicised context of the Yarloop-Alcoa conflict (Southwell 2001; Mayman 2002; Flint 2006b, 2008), it was extremely difficult to maintain relationships across all the intersecting power differences. One fragment of the author’s practice is noted here to give an example of how an ethic of love guided actions and decisions. The research team enabled weekly meetings over an 18 month period between Alcoa and the community, and sometimes this included government officials, politicians, lawyers and other experts. The focus was on developing a set of recommendations relating to Alcoa’s policy for property purchases, town amenity improvements and other sustainability measures. The aim was to achieve consensus between local Alcoa managers and community stakeholders of ways forward that could be ratified by senior managers in Alcoa at their Australian head office. A key strategy at the dialogue table was strongly facilitated meetings which very firmly held to meeting etiquette. A love ethic was needed to ensure everyone present felt safe, respected, heard and able to contribute and influence matters of concern to them without anyone dominating or being aggressive. Crucially, the significant power differences needed to be constantly negotiated and acknowledged. Some townspeople were angry and affronted by their perceptions of harm caused by Alcoa. As well, some Alcoa people became angry and affronted that Alcoa was being blamed.
Thus, an aspect of the meeting etiquette and facilitation strategy was the modelling of respectful engagement with a strong challenging of unilateral claims of power and claims of being right or beyond question. The challenging skills (Thompson 2011) needed to be enacted by the facilitator guided by the ethic of love. This was occurring to the extent that, for example, there is a perceived care and fairness in applying the challenging to all parties, including less powerful people. However, this needed to occur with a very explicit awareness of the unequal situation of stakeholders. Specifically, the love ethic stance involved demonstrating a critical awareness of power (Fook 2016) and structural issues (Mullaly 2010) alongside a refusal to allow a reduction of discussions to private troubles (Mills 1959) or non-existent issues. This needed deep regard, care and concern for people (Banks 2012) so that how the meetings were conducted was experienced as respectful and sensitive to power while enabling constructive discussions and decisions (Author 2003).
To enable such complexity in the public meetings, parallel spaces were needed for stakeholder groups to prepare for the meetings and debrief after them. These parallel meetings were crucial for instilling non-violent, respectful and robust critiques of others and for strategising for the next steps. The involvement of the research team in many of these meetings allowed a developed appreciation of the interactional, contextual and sustainability issues. All aspects of these issues involved high levels of emotional intensity, opposing views and evidence and competing agendas which could de-rail the dialogue if not carefully acknowledged or addressed. Matters of substance were achieved in the form of the majority of recommendations co-created at the meetings. One key recommendation – protection of resident’s property values for the life of the refinery – however, was not upheld by senior management at Alcoa headquarters. The hope - more sensed momentarily in the meetings than realised beyond the dialogue table - was that the practising of Critical SR would transfer to enacting an ethic of love by all stakeholders in between the meetings and going forward over time.
This was one and only time Alcoa was willing to engage in a power-equalising dialogue with impacted stakeholders over matters of substance to the Yarloop people. The experience has significantly informed the nature of the proposed model. The research identified a number of characteristics that are anchored in the model: the voluntary participation of stakeholders; an embedded power analysis; the fostering of respectful relationships; the value of independent third party facilitation, and; the transparent public meetings and documents. What was missing at the time that was a major learning from the research is that formally binding warrants need to be established. This needs to occur at the beginning of attempts to hold the government and corporation accountable through a community dialogue process.
As Fig. 5 shows, the model includes a set of four warrants, or agreements, that need to be upheld until the issue, as understood by the impacted stakeholders, is resolved. The research did achieve the warrant of a willingness to focus on several matters of significance to the impacted stakeholders. This was held though, only at the local level between Alcoa managers at the Wagerup refinery and community members. When the set of recommendations generated locally were presented to senior management in Alcoa, the key recommendation of life of the refinery guarantee of property values, was not upheld. This constituted a lack of willingness to focus on the matter of substance to residents who wanted to stay in Yarloop without being financially disadvantaged by Alcoa’s operations.
The ongoing challenge during the meetings was to obtain the warrant related to the substantive and relevant contributions to the issue by Alcoa and the State Government. The example of guarantee of property values sat alongside other interests of the impacted stakeholders which were not able to be placed on the dialogue table at the time due to resistance from Alcoa. The big issues were: Alcoa to take responsibility for a range of health and social impacts and to pay compensation for harm done; medical authorities’ calls for no further expansion of the refinery, and; the need for comprehensive, independent health and air quality studies. After the life of the research, independent studies were undertaken (Telethon Institute for Child Health Research 2008; Department of Environment and Conservation 2008) but there has been no change to the status quo to date.
The other warrants relating to sincere relationships and curtailing of adverse effects of dominant power relations were intertwined with the lack of substantive contribution to the issues. The public meetings were efforts at dialogue where sincere relationships, attention to power dynamics and staying focussed on matters of relevance were achieved during the meetings. Beyond the meeting spaces in the corridors of power and privilege, the dominant stakeholders took little direct responsibility to uphold the integrity of the local relationships and agreements. There was no formal, legally binding agreement to uphold the commitment to act in the interests of the impacted stakeholders and to fix the problems. In unresolved situations, the baseline action needs to be the right of any stakeholder to call for the enacting of the social pre-cautionary principle.
The long running industrial conflict between Yarloop and Alcoa in Western Australia was explored to show a contribution being made by social work. This contribution took the form of industry funded research and subsequent support of the impacted stakeholders. The article presented a model for engaging key stakeholders which can enable redress to social justice issues as part of achieving CSR. The model is the culmination of the author’s involvement in the issue since the early 2000s. It fits into a politico-economic context of pro-development and limited checks and balances for harm done to impacted stakeholders. As such the model is feasible and adaptable to contemporary circumstances where multi-national mining companies are operating in close proximity to pre-existing towns and agricultural businesses.
Crucially though, the warrants which set the parameters of areas of focus and who is responsible need to be secured before efforts at dialogue are attempted. It is extremely difficult to enable dialogue across differences of power where there is a perceived or actual threat to the powerful stakeholders. Alcoa was able to employ a range of tactics to avoid being accountable, including senior management foiling local efforts of its own people at problem-solving. As Freire (1970) notes, the dominant stakeholders won’t want to give up their privileges and advantage and are unlikely to do so without legal pressure. The role of government in bringing this legal pressure to bear becomes a central matter needing further investigation.
The outcome from using the proposed model is not assured for the impacted stakeholders as the Yarloop people have found. In such circumstances, there is perhaps a greater obligation on civil society to regulate for CSR and to direct the areas of social concern and social impact that the businesses need to address as part of their legal licence to operate.
About the author
Dyann Ross lectures in social work at the University of the Sunshine Coast in Queensland. She has been a social worker for many years in the areas of mental health, community and tertiary education, and research in the mining industry. Dyann led a research team in a critical, participatory research project with Alcoa World Alumina of Australia and local impacted communities in the early 2000s. Her interest in this area has continued in the form of follow up research, writing and support of local communities who continue to seek corporate social responsibility of their nearby neighbour.
The author declares that she has no competing interests.
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