Deriving social benefits from mining through regulation: Lessons learned in South Africa

Abstract

Shortly after the transition to the post-apartheid state, South Africa began a process of requiring mining companies to invest in community and workforce development in areas surrounding operations. This development shifted the concept of corporate social responsibility from mainly a discretionary activity to an issue of regulatory compliance. Drawing on field-based interviews and regulatory and company documents, this article analyzes the process of compliance with South Africa’s mining regulation and the stakeholders formally involved or marginalized in this process. Findings demonstrate the challenges that remain in ensuring that regulation leads to mining company activities that actually yield effective and impactful local social benefits. While regulation has increased entry points for government involvement and has increased corporate social spending, it has undermined the idea of corporate citizenship by focusing on mandatory compliance, while failing to put in place effective process transparency and monitoring mechanisms that would allow for local government and community participation and sanctioning. The lessons learned in the case of South Africa have implications as more African countries attempt to regulate the promotion of social benefits derived from mining.