Local Economic Development?

To what extent are mining companies contributing to local economic development? This question is being fiercely debated around the world. On the one hand, you have the companies, World Bank and investors pointing to how the industry has a mandate to hire locally, builds schools and libraries for indigenous groups, and attempts to generate local employment for affected peoples. On the other hand, you have NGOs arguing that because they are mechanized, mines provide very few employment opportunities; that the schools being built have no schoolteachers and that libraries are well-stocked but are in areas where no one can read; and that the efforts made to generate employment have been sporadic and ineffective overall. I tend not to get caught up in these debates.

But what I am interested in is how a company’s operations are contributing to local economic development. One way of doing that is to make use of local smallholders’ product. In Ghana here, it pains me to drive through rural areas and see tons of produce – mangoes, citrus, bananas, plantain – rotting on the roadside because it did not get to the market on time. I have seen this time and time again in mining communities, which raises the questions: to what extent are companies using local producers? This is something that needs to be investigated.

Someone once told me that in Ghana, one company does catering for all of the mining companies. That is a lot of money and more importantly, a lot of food. ‘It is ridiculous what some of these companies are doing,’ a Guyanese colleague once told me. ‘Here in Guyana, these companies are importing apples, when you have mangoes and papaya here; they are importing canned tuna, when you have the best shrimp and fish right here; and they are importing rice when you have the best rotis produced right here.’ Having eaten at several of the mining companies’ canteens in Ghana, there is certainly evidence of this taking place: the beef, potatoes, apples, pears and juices are surely imported, in true expatriate style. And fair enough, I guess. But there are also local dishes served alongside these luxuries, including fu-fu, banku and red red. These dishes use local ingredients: plantain, maize, yam, cassava. So where is the catering company sourcing its supplies of these goods?

Of course, a mining company cannot make everybody happy. But allowing caterers to go outside of catchment communities to secure food supplies seems senseless. I am by no means advocating that this is taking place in Ghana but communications with colleagues suggest that it is happening elsewhere in the world. Using local producers would certainly make a lot of people happy, and could go a long way toward restoring a company’s relationship with its communities.

After all, is not engaging with local producers a more beneficial CSR initiative than a school with no teacher?