Corporate social responsibility and multinational enterprise identity: insights from a mining company's attempt to localise in Ghana

ABSTRACT

This paper investigates how a US gold mining multinational enterprise (MNE) – one of the world's largest – operates its subsidiaries in various parts of the world by creating a unique ‘glocal identity’. The US parent company has experienced several significant challenges across its network of subsidiaries. These challenges were mostly linked to the enforcement of the MNE's identity and culture in its host environment. We contribute by describing, in detail, the attempts made by this company to localise its corporate social responsibility practices in Ghana as it sought to gain legitimacy and create an identity that would overcome the issues relating to the liability of foreignness. Our data come from a combination of sources, including questionnaires and detailed semi-structured interviews conducted with the key management employees of the mining company, members and opinion leaders of the company's host communities, and secondary sources. Our main finding is that the construction of a ‘host-friendly’ identity was centred around the mining company's involvement with the Newmont Ahafo Development Foundation.

KEYWORDS:

• CSR
• Ghana
• mining
• identity
• communities
• MNE

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 On 3 May 2017, the Supreme Court of Peru ruled in favour of local potato farmers who were protesting against Newmont's use of their land. The company's plans to expand its presence in Peru by building the Conga mine have been put on hold following protests from local community.

2 Under the investment agreement, the Newmont Corp. would pay corporate income tax not to exceed 32.5% and fixed gross royalties of 3.0% on gold production (3.6% for any production from forest reserve areas). The Government of Ghana was also entitled to receive 10% of the project's net cash flow, after Newmont had recouped its investment, and 20% of the production. The investment agreement also contained commitments with respect to job training for local Ghanaians, community development, the purchase of local goods and services, and environmental protection (source: www.sec.gov/archives; accessed on 25 December 2016).

3 Ghana became a centre for mining with the arrival of the Portuguese and Arab traders. Between 1957, when Ghana attained independence from the United Kingdom and 1972, when the sector was nationalised and taken over by the State, foreign MNEs dominated the landscape of Ghana's mining sector. In mid-1980s, major State-owned mining companies were privatised against the backdrop of the IMF structural adjustment programme.

4 Before commencement of operation in Ahafo, some civil society groups had campaigned against Newmont's entry into the Ghanaian market because of their previous record of environmental pollution in other developing countries.

5 Professor Gyimah-Boadi, the then Vice Chancellor of the University of Mining and Technology, Tarkwa, although not a member of a local community, was made the co-moderator of the ASRF, which was made up by the representatives of the 10 communities, the government, and eminent members of the civil society. He and his colleagues were instrumental in drafting the formal agreement between NGGL and the ASRF. In an interview, he stated that, ‘the agreement is the most comprehensive document ever to be enjoyed by a mining community in the country, if not in the world’ (speaking to SKY FM, 11 May 2007; reported in www.Ghanaweb.com).

6 The company initially denied the charges that it had wilfully caused the cyanide spill, but the Government of Ghana upheld the accusation in 2010. (http://www.minesandcommunities.org/article.php?a=9597; accessed on 22 May 2017).