From community’s perspective, mining companies need to provide a mechanism of compensation for the social and environment costs associated with mining. The costs are associated with environmental impact of the industry, higher food and housing costs, and social impacts from the increase number of workers living in the area.
There are some benefits of doing CSR programs for the mining companies. First, to build better relations between local communities and them. With good relations, economic risks (for example: project delays) can be avoided. According to the World Bank, the mining industry has become a very technologically complex sector which employs considerably fewer people than in the past and, therefore, needs to provide other benefits to local communities “in order to obtain a ‘social license’ to operate.*
Second, CSR programs provide a way of responding to increasing consumer concern about how the products they buy are produced, combined with the fact that the internet allows consumers to scrutinize mining companies’ operations.*
Last, companies may be more likely to be asked to do business with governments that are accountable to their citizens. The recruitment processes also can be more efficient because access to the brightest and best in the labor market will depend upon the reputational status of the industry and the companies within it.*
*Humphreys, D., A business perspective on community relations in mining. Resources Policy, 2000. 26(2000): p. 127-131.
