Discussion and conclusion

These case studies suggest that uptake of corporate social responsibility depends on responsive individuals in the company, especially senior management, being receptive to the pressures for responsiveness; namely those that appeal to commercial interest. Once a company has accorded a community group or organisation ‘stakeholder’ status, the degree to which their demands are acknowledged and addressed is a function of how managers perceive stakeholder power (to impact on the firm), the legitimacy (of the group or its claim) and urgency with which the demands are pressed (Agle, Mitchell and Sonnenfeld 1999; Mitchell, Agle and Wood 1997). While urgency seems difficult to delineate from power (beyond how acutely demands for response impact on shareholder value), responses seen in the case studies suggests that power is the most relevant element in this equation. It was those communities able to affect the company’s capacity to operate which were accorded most corporate attention. The immediate response to the sit-in at Century mine, after little response from the company to written attempts at communicating aspirations, starkly demonstrates this, as do the various elements of the anti-Jabiluka campaign.

Moreover, comparison of North and Rio Tinto’s handling of the anti-Jabiluka campaign, and in particular reaction to traditional owner opposition, illustrates divergent criteria for stakeholder legitimacy: North adopted Western-centric ‘majoritarian’ notions of who speaks for land (Trebeck 2005), while Rio Tinto accorded value to authority based on traditional ownership according to Indigenous political systems and sought to respond to the concerns of these community groups in particular.

The case studies also demonstrated how interpretation of community demands for corporate social responsibility is often shaped by the values held by a corporate executive, or their experience of a crisis where the company’s social licence to operate was jeopardised (Agle, Mitchell and Sonnenfeld 1999; Parker 2002; Webley 2001). Orlitzky and Swanson (2002) model this as how ‘attuned’ executives are to the demands of relevant stakeholders. For example, when a crisis (such as delay of Marandoo or closure of Bougainville mine) demonstrates capacity of certain stakeholders to impede company operation, individuals within the company who are pre-disposed to corporate social responsibility, even for ‘moral’ reasons, gain leverage for their views, while recalcitrants might come to appreciate the business case for it. Personal commitment to corporate social responsibility for moral reasons thus co-exists alongside the business case that drives prudent support for corporate social responsibility.

While a moral motivation might be sufficient in some cases and for some individuals, because the raison d’être of companies is profit and commercial continuity there is a need to understand and communicate the business case for corporate social responsibility internally to achieve change in corporate responsiveness to community demands. Only when the strength of a business case is evident will resources be dedicated to implementing corporate social responsibility (McLaren 2002; Parker 2002). Thus, if an individual or group is completely ineffectual in relation to a company, then there is unlikely to be a persuasive business case for the company to respond to the interests of these entities, save for a sense of moral duty held by some individuals within a firm.

The examples of Century, Hamersley Iron, Rio Tinto and the anti-Jabiluka campaign support the contention that key individuals within organisations, notwithstanding any personal moral motivations, ultimately rely on business case arguments to gain internal traction for change and operational support for corporate social responsibility initiatives. In turn, however, the effectiveness of otherwise austere structures and policies comes from individuals. These individuals may be driven by either an appreciation of the business case, company policies, promotion and pay incentives, or moral commitment to improved Indigenous relations (Trebeck 2005).

That civil regulation often hinges on key individuals can, potentially, constitute risk. When such (arguably ‘enlightened’) individuals leave or when incidents that initially highlighted the need for corporate social responsibility recede in relative prominence in management attention then the drive and vigour of implementation is likely to abate. For example, for a time corporate social responsibility was ostensibly deemed relatively less important than the eventual catastrophic financial situation of Century’s parent company. Developing structures to internalise corporate social responsibility might reduce the burden of advocacy away from a few individuals. Equally, however, structures themselves are insufficient: frameworks and programs to deliver corporate social responsibility are of little use if those charged with implementation do not do so with enthusiasm, understanding and appreciation of the necessity of their task. This was evident in the way some committees created to implement the GCA at Century were mismanaged, becoming counter-productive and a cause of community discontent that eventually impelled, in part, the 2002 sit-in (Trebeck 2005).

Civil regulation then is successful when community actions (or deliberate inactions) recognise that the most effective way in which to shape company behaviour is via financial gain or loss, thereby creating a business case for desired corporate change. It is individuals in the company who must recognise this business case, as occurred when management attention to the need for sound community relations became focused by incidents such as Bougainville’s forced closure, the Marandoo dispute, the advent of native title, Century’s sit-in and the anti-Jabiluka campaign. Here, a shift in the balance of external influences brings Indigenous demands to the fore by—directly or indirectly—threatening financial performance. When such civil regulation consequently gains corporate response there has invariably been a convergence of personal commitment and commercial imperative.

Given that companies are neither uncomplicated nor internally homogeneous, community pressures for corporate social responsibility will affect respective elements of a company differently. Adding to this complexity, both the organisation itself and individuals within it, function within a diverse social system (Keskinen, Aaltonen and Mitleton-Kelly 2003). Companies are porous entities, with individual employees having their own external networks that inform their actions and motivations. Once the objectives of individuals within companies are accumulated, and external stakeholders accounted for, companies can be seen as assemblies of relationships with respective audiences, requiring specific corporate responses and actions. This was evident, for example, in the divergent expectations of corporate behaviour held by the financial sector, compared with those of local communities, seen during Pasminco’s financial difficulties.

There are frequently structural causes of such divergence. Employees at mine sites—where much corporate social responsibility is made manifest—often have strict job requirements that encompass output quotas, directing their priorities towards immediate production targets. Business units are faced with contradictory signals from headquarters, with consequent dilemmas regarding priorities: they must deliver production targets, reduction of costs and manage industrial relations, while also being expected to implement more intangible, costly community relations initiatives with their inherently longer-term outcomes. Time and production constraints in pursuit of profit often override other pressures. If corporate social responsibility initiatives are deemed expensive relative to other objectives, they are unlikely to be entered into, unless mandated by headquarters. Those at headquarters are charged with navigating the company’s external environment for the longevity of shareholder value, whereas managers at mine sites appreciate less the geographical cross-subsidisation of reputational capital.

In addition, an essential element in the notion of civil regulation is the section of civil society doing the ‘regulating’. Findings from the case studies suggest that there are several characteristics of civil society that might undermine the capacity of civil regulation to deliver beyond isolated instances. The representativeness of civil society—how those organisations demanding change from companies reflect the actual needs and demands of those in whose interests they purport to act—is vital. The greater the deficit in organisations’ representativeness, the greater the likelihood that results of civil regulation will be skewed away from the interests of those affected. Such distortion, where outcomes do not reflect the actual wishes and expectations of communities, undermines any advancement of citizen sovereignty over companies.

The nature of the ‘civil regulators’ is an area for further research. It is worth suggesting, however, that it is in the company’s interest to understand how any organisation actually relates to and represents its constituents—relationships will ultimately be undermined if citizens feel they are disenfranchised by engagement taking place between companies and certain elements of civil society. The structure of Century’s GCA reflects dilemmas associated with civil society organisations. Part of the discontent that led to the 2002 sit-in at Century Mine was a feeling amongst some local Indigenous community members that they had not been sufficiently accounted for in the GCA, referring to themselves as ‘the forgotten Waanyi’ and eventually seeking alternative means (the sit-in) by which to achieve their demands.

Given these (and other) caveats, civil regulation and increased community participation in corporate decision-making is insufficient to attain the stated aims of particular communities (Bendell 2000a; Trebeck 2005; see also Maddox 1991). This limits the scope for social sustainability potentially realised through corporate social responsibility. Moreover, necessity of the business case highlights a role for civil society in maintaining vigilance and sustaining the context that prompts companies to consider communities. Inevitably the capacity of civil society to sustain this vigilance will be shaped by factors underpinning a community’s sustainability, while corporate social responsibility itself can increase the sustainability of a community (see Trebeck 2007b). Emerging from this complex multi-directional relationship is evidence that the success of civil regulation to deliver community wishes in some contexts, as illustrated above, does illustrate that social sustainability can be advanced by utilising various levers to alter corporate operating frameworks.