Company Towns and Corporate Social Responsibility: How much is enough?

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Company Towns

Throughout history towns have been established to support industries and rapid demand for workers and the provision of services. Australia is no stranger to this phenomena seeing over 20 ‘company towns’ (Littlewood, 2014) established during a time of exponential growth in Australia’s mineral sector during the 1960’s (Chesire et.al, 2011). While these towns are becoming increasingly sparse (the last resource dependant town being established in Australia in the 1980’s (Chesire et.al, 2011)) we have instead begun to see a shift towards a highly mobile workforce in the form of Fly-In-Fly-Out (FIFO) or Drive-In-Drive-Out (DIDO) arrangements, whereby workers are flown or driven out of town at the end of their rosters in order to minimise pressure on surrounding towns and services. The movement towards this structure, while creating a new realm of societal issues, has highlighted the remaining legacy towns from the unprecedented industry growth nearly half a century ago and their high dependence on mining companies at the very foundation of their community structure.

The ‘Fly-Over Effect’

The shift towards a workforce that is mobile has also given rise to disgruntled communities being subjected to the ‘fly-over effect’ of the economic benefits of mining and employee spending bypassing the communities located in close proximity to an operating mine (Lawrie et.al, 2011). In an attempt by mining corporations to greatly reduce the pressures placed on host rural communities many are now opting to completely bypass the closely located towns through the provision of camps and facilities that service their workforce, employing only those people located in a major town as serviced by it’s charter flights.

The Balancing Act…

It’s a losing battle where a middle ground for communities, towns and companies has yet to be established. Legacy towns have been left to cling on to the last remnants of a declining industry with wavering support from both company and state and their continued viability thrown into question. The implementation of DIDO and FIFO working arrangements to curb the societal and community impacts of a mining company on surrounding rural towns that legacy towns are experiencing seems to cause upheaval and unrest in communities also (Lawrie, et.al, 2011).

FIFO
Local communities against 100% FIFO operations (Hair, 2015)

While many of the mining companies are under no obligation to invest or create infrastructure for the towns that are bypassed through a mobile workforce, many residents believe these mining companies have a duty to provide and improve their towns through some sizeable investment of funds. But when does this support end? Shifting away from the past dependence and into a no net loss stance towards communities is a balancing act that companies seem to struggle with. This movement away from a company rural governance structure where a mixed economy was evident towards a traditional state governed town is also challenging the preconceived expectations of the responsibilities of a mining company.

 

It was not uncommon for mining companies to provide infrastructure, health services, community facilities and sponsorship within small rural communities but has now become expected (Littlewood, 2011) and is fostering the development of unsustainable towns. This balancing act mentioned before is clear in the below example:

A mining operation based in Northern Queensland offers a ‘buy local’ program that uses local businesses to support it’s services and operations. However by using locally sourced goods and services from surrounding towns, mining companies unintentionally promote inefficient businesses that can potentially not be able to compete in an open market after a mine closes (Littlewood, 2011). Conversely by not supporting local businesses the company risks compromising their social license to operate (SLO); a crucial element in the continuation of a mine in gaining community and local support. It’s a balancing act for mining corporations in order to properly manage not only the expectations of communities and the public but also to ensure the least amount of disruption to existing townships.

The Northern Queensland Experience

Screen Shot 2016-05-01 at 1.50.41 PM
Dysart Main Street (Fotheringham, 2015)

Research within the Bowen Basin on the
societal effects of a declining industry is sparse beyond 2012; from my recent 3-month placement within a ‘company town’ it was evident that the community reliance on the mining company was not dissimilar to the dependence you would find between city and state. New gymnasium, fitness and recreational center, pool and even vocational training including the employment of staff within the local high school were all still being provided for and maintained by the mining company. Although with the decline in the mining industry future investment into the community was forecasted to decrease, this meant the cut of funding of the vocational training centre within the high-school, the decrease of apprentices taken on by the company and the position of the teacher employed to run these programs no longer being funded and therefore the collapse of the program. This legacy mining town is clearly struggling with future prospects not optimistic seeing one of the two mines serviced by the town already closing in late 2011 and a gradual shift towards a FIFO arrangement.

 

Time for the state to step in or a clear cut case of corporate responsibility?

The future ahead for the remaining legacy towns that are dotted throughout Queensland, Western Australia and Northern Territory remains uncertain. A unified approach to ensuring long-term sustainability and viability is not an easy task, nor is it one that can be undertaken without mutual support and responsibility from community, state and company actors. Defining future expectations of mining companies in terms of the provision of community support and services will help to finely tune the balancing act of corporate sustainability and town un-sustainability.

 

References 

Chesire, L. Everingham, J and Pattenden, C. 2011, ‘Examining Corporate-sector Involvement in the Governance of Selected Mining-Intensive Regions in Australia’, Australian Geographer, Vol. 42, Issue. 2, pp. 123-138. Accessed 1 April 2015. Available from: http://www.tandfonline.com/doi/abs/10.1080/00049182.2011.569986?journalCode=cage20

 

Hair, J. 2015, ‘FIFO Report: Panel warns against approving new 100pc fly-in, fly-out mines in Queensland’, ABC NEWS, 2nd October. Accessed 24 April 2015. Available from: http://www.abc.net.au/news/2015-10-02/report-warns-against-new-100pc-fly-in-fly-out-mines-in-qld/6822514

Lawrie, M. Plummer, P and Tonts, M. 2011, ‘Boomtowns, Resource Dependence and Socio Economic Well-being’, Australian Geographer, Vol. 42, No. 2, pp. 139-164.Accessed 1 April 2015. Available from: http://www.tandfonline.com/doi/abs/10.1080/00049182.2011.569985

Littlewood, D. 2014, ‘’Cursed’ Communities? Corporate Social Responsibility (CSR), Company Towns and the Mining Industry in Namibia’, Journal of Business Ethics, Issue 120, pp. 39-63. Accessed 28 March 2015. Available from: http://link.springer.com/article/10.1007%2Fs10551-013-1649-7 

 

 

 

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