Corporate Social Responsibility Practices in the Extractive Sector in Tanzania: Is It a Transition from a Voluntary to Legislative Approach?

Abstract

In this chapter, we explore the CSR practices in the extractive sector in Tanzania. Through a review of literature, reports, and relevant laws, we show that although companies have until recently followed a voluntary approach in the implementation of CSR activities, the landscape has changed in the mining subsector. The recently introduced law on local content and CSR compels companies to present an annual CSR plan to the government for approval before it can be implemented. While this might represent an attempt to balance the power of actors in the economy to ensure that the benefits of economic activity are shared with local communities, it may also stifle innovation by companies in the area of CSR as companies might find it in their best interest to set lower targets so they can easily avoid punishment by the government in case they fail to achieve them. Other types of incentives could be considered to encourage companies to implement CSR activities including recognizing publicly the companies that spent significant sums to implement CSR. Future research should examine the effect of the new legislation on CSR practices of companies in the subsector to inform further CSR efforts.