Table of Contents
Critical review of the articles
Critical discussion of the 2018 Rio Tinto sustainable development report
Corporate social responsibility enhances commitment of the companies to manage economic, social and environmental effects on its operations and implement ethical practices to improve sustainability. Six journal articles related to sustainability are reviewed in this study along with a 2018 sustainability report of a large Australian mining organisation, Rio Tinto to identify their sustainable services.
The first article namely “Environmentally Sustainable Mining: The Case Of Tailings Storage facilities” analyses the environmental impact of the mining and the way by which Tailings Storage Facilities (TSF) can be managed. According to Schoenberger (2016), some breaches such as inadequate geographical analysis, ineffective design, issues in dam construction as well as inappropriate regulation and regulatory supervision in the mining cause disasters and increase the pollution. Therefore, this report provides standard mining practices for training management and ensuring safety in the facilities.
Tailings dam requires independent technical views and regular supervision from the experienced engineers. The main reason for geographical TSF failures is water in the wrong place that causes overtopping of the embankment. Henceforth, the engineers require backfilling of the underground mines and disposal in open pit mines needs to be increased. This backfilling and regular independent audits of operations can reduce problems of surface storage.
A qualitative research has been completed in the present paper by reviewing the unpublished and published document regarding engineering in TSFs. As per the findings of this research, underground disposal methods are effective for tailings storage as well as paste or thick discharge is effective for water management. It can further reduce the chemical reaction especially for sulfidic materials that are prone to acid production. Therefore, these methods are effective for creating sustainable and consistent regulatory environments for mining. However, an exact regulatory environment and technology implementation can increase the cost of mining.
The paper named “Using sustainability reporting to assess the environmental footprint of copper Mining” mainly discusses that sustainable reporting on energy consumption, greenhouse gas (GHG) emissions, water intensity and environmental footprints of copper production is necessary for the companies. It must specify the fuel type for vehicles, electrical or heat energy and sources of electricity to identify the GHG emission factors. Sustainable reporting can improve the sustainable performance and life cycle assessment (LCA) can be developed. For this purpose, primary data has been collected in this research from different mining companies and general methodology for LCA is to gather and estimate life cycle inventory data for all stages. LCA consists of every stage of product life cycle such as manufacturing, distribution, usage and disposal.
As per the findings of the report, production statistics like ore mined, mass of ore milled, ore grade and saleable product needs to be reported with exact data. Direct and indirect energy consumption by primary energy sources should also be included in a report based on GRI standards to maintain sustainability (Northey, Haque & Mudd, 2013). GHG emission during production is a result of fossil fuel energy usage. Energy, water, and GHG data presented in the paper reflect the proportion of copper produced that can maintain sustainability of copper ore grades. Henceforth, the companies can improve the reporting standard by specifying energy to maintain long-term corporate loyalty and sustainability.
The article, “Corporate Social Responsibilities: Alternative Perspectives About the Need to Legislate” investigates whether corporate social responsibilities (CSR) and accountabilities should be regulated or needs to be determined by market forces. Australian Government has established “Inquiry into Corporate Responsibility” through “Parliamentary Joint Committee on Corporations and Financial Services” (PJCCFS) based on the “Australian Securities and Investments Commission Act 2001”. This corporation completes inquiries for CSR based on interest of the stakeholders, present legal framework governing directors and sustainable operations based on Corporations Act 2001.
The current report provides understanding of Australian business communities about CSR. Most of the businesses in Australia considers stakeholder interest for decision making. Business corporations, industry codes and accounting bodies consider business cases more than ethical cases, only social and environmental organizations are different (Deegan & Shelly, 2014). The companies are not interested in adopting legislations for CSR. Large companies like GlaxoSmithKline and Shell Australia also consider it. However, it is identified that some business leaders use “enlightened self-interest” to address environmental and social issues alongside profit maximizing activities that improve corporate sustainability.
“Corporate governance and environmental reporting: an Australian study” evaluates the relationship between the attributes of corporate governance and environmental reporting in Australia. The paper has used qualitative analysis and examined 2008 annual reports of 100 Australian firms listed on the “Australian Stock Exchange” (ASX). Environmental reporting includes “Triple Bottom Line” (TBL) information based on financial, social and environmental performances of the company. Corporate governance focuses on stakeholders to widen corporate accountability and responsibility.
As mentioned by Rao et al. (2012), most of the Australian firms provide attributes to environmental reporting with strong corporate governance. The companies with female and independent directors have positive influence on environmental reporting of the organization and stakeholder engagement encourages reducing environmental and social issues. The board of directors have possibilities to implement CSR and commitment to the environment. According to findings there is a relationship between environmental reporting and institutional investors. On the contrary, it has been determined that only four corporate governance variables and disclosure of annual reports have been considered only that have not been effective enough to understand the relationship of environmental reporting and corporate governance.
The article namely “Corporate social responsibility and the parameters of dialogue with vulnerable others”' analyses a case study of BHP Billiton corporate dialogue with vulnerable others. Corporate public communications improves the community engagement as a corporate social responsibility. In accordance with Mayes, Pini & McDonald (2013), a proper stakeholder model increases understanding of corporate dialogue and influences CSR decisions by applying a customer-centric approach. “Vulnerable others” are not answerable to the corporation but managing the relationship with them through a win-win approach can improve social responsibility and build strong communication with the local communities.
It has been noticed in BHP Billiton that without communication and engagement strategies, business costs, disruption and delays are increased. Henceforth, corporate control, conceptualised and pre-closure engagement with the “vulnerable others” is required to enhance profitability and obtain competitive advantage. They contribute to corporate conjunctions and influence CSR that is effective for building company reputation. However, the relationship of corporate engagement with the vulnerable others is power asymmetries and a company cannot bring sustainability only focusing on the vulnerable others.
“Corporate accountability in the Samarco chemical sludge disaster” explores the path of corporate accountability on the basis of Samarco chemical sludge disaster. MNCs follow OECD (Organization for Economic Cooperation and Development) Guidelines for setting international standards in corporate sustainability. The companies need to take legal initiatives to reduce social, economic and environmental issues. The chemical companies required to successfully implement human rights regulations to reduce the impact of chemical disasters and quick rehabilitation of the community. OECD strengthened corporate accountability and created standards against tax evasion and bribery (da Costa, 2017). The guidelines property create CSR models and complaints can be addressed to National Contact Points (NCP) for imposing human rights and reducing possibilities for disasters.
The sustainability report of 2018 clearly suggests that Rio Tinto has made substantial development in maintenance of sustainability in the vicinity of its head offices and areas of operations. It has been found that Rio Tinto has made a contribution in 2018 of $ 3.6 billion in the payment of corporate tax, $ 42.8 billion in the direct economic contribution to the UK economy. Furthermore, it has also laid its emphasis in other countries of operation by paying $ 200 billion for sustainable development in the last five years. Additionally, $ 192 billion has been provided for strengthening the cultural heritage, environmental status and health sector in the countries of operation. Rio Tinto has also laid the foundation of empowering employment opportunities in its country of operation. It has employed 47,500 employees across a span of 35 countries.
In Mongolia alone, Rio Tinto comprises 93% of the stakeholder in provision of employment to the people. It has also employed 10,500 people of which 13.5% comprises the indigenous groups in Pilbara. In 2018, the company has paid $ 4.7 billion in employment and wage costs. However, the company has fallen short of achieving its standardised goals. The commercial success of Rio Tinto in 2018 could have been increased manifolds by manifesting valuable contribution to the ecological balance. It has been found that there have been 2 safety fatalities along with 1 security fatality of its employees. The frequency of injuries has been up to 0.44 scaling which has been up by 5% from its report in 2017 (0.38) (Riotinto.com, 2020).
Rio Tinto produces minerals and metals for developing sustainable cities and developing the technology for enhancing low-carbon futures. It has also partnered with communities, civil society and governments for recognising socio-economic needs of the people in general. The main focus has been to enhance the long term resilience of the people in the associated countries for maintaining a perfect flow of ecological and economic balance. In the past decade, the company has been effective in reducing the Greenhouse Gas emissions by 43% and intensity by 29%. The change in the decrement of Greenhouse Gas from 2017 has been 7.9%. The material production is done by the company for enhancing low-carbon future. The TCFD report of the company has aimed at substantial decarbonisation of its business by the end of 2050.
Rio Tinto has worked along with its stakeholders in the local and global arena in 2018 for refreshing its sustainable strategy and laid the foundation for integrating goals according to the United Nations’ Sustainable Development Goals. It has also laid its strands in maintaining the gender diversity in its offices. There has been an increase of 2% in the senior management positions and also 50% of the intakes of graduates in 2018 have been females. However, it has been found that the company has not been able to accomplish its own targets in all forms as there has been a drop of female employees by 0.3% to 17.7%.inspie of the increment of female employees in senior management positions, only 22.6% of the female employees occupies positions at senior level positions in the company.
The company has also met its overall water management targets for conserving water by several means. The diverted water has been applied in generating hydropower and also in the mining sites where there is water scarcity. About 296 litres of water has been recycled after usage of 796 litres in 2018. Furthermore, 71% of the electricity consumed by Rio Tinto in its operating units and offices has been from renewable sources of energy (Riotinto.com, 2020).
Waste management ability of Rio Tinto has been considerably good since it has helped in minimising the adversity of environmental impact. 353,877 tonnes of non-mineral waste along with 740,249 tonnes of mineral waste has been recycled in 2018. The effective monitoring as well as controlling program has helped in the mitigation of acid and metalliferous drainage (AMD) which is consequently generated by the reaction of 31% of mineral waste with water and air. The Particulate (PM10) emissions have also been decremented by Rio Tinto to 57,000 tonnes in 2018 as compared to 60,000 tonnes in 2017. The company has aimed at setting up international panels for maintenance of biodiversity in its operational areas. The QIT Madagascar materials unit has involved biodiversity as well as natural resource experts for maintenance of environmental norms for reducing pollution according to the International Union for Conservation of Nature (IUCN). The mineral Hazardous and Toxic wastes has been reduced to 31 million tonnes in 2018 as compared to 44 million tonnes in 2017.
In conclusion, stakeholder engagement, sustainable reporting and reduction of pollution improve corporate social responsibilities of Australian companies. The maintenance of sustainability helps Rio Tinto in making sure that the environmental constraints are looked after at an equal pace of industrialisation. It is essential for maintaining the development and progress of an organisation since it lays the foundation for making a change in the economic strata in the global scale.
da Costa, K. (2017). Corporate accountability in the Samarco chemical sludge disaster. Disaster Prevention and Management.Retrieved from:https://doi.org/10.1108/DPM-07-2017-0171
Deegan, C., & Shelly, M. (2014). Corporate social responsibilities: Alternative perspectives about the need to legislate. Journal of Business Ethics, 121(4), 499-526.Retrieved from:https://doi.org/10.1007/s10551-013-1730-2
Mayes, R., Pini, B., & McDonald, P. (2013). Corporate social responsibility and the parameters of dialogue with vulnerable others. Organization, 20(6), 840-859. Retrieved from:https://doi.org/10.1177/1350508412455083
Northey, S., Haque, N., &Mudd, G. (2013). Using sustainability reporting to assess the environmental footprint of copper mining. Journal of Cleaner Production, 40, 118-128.Retrieved from:https://doi.org/10.1016/j.jclepro.2012.09.027
Rao, K. K., Tilt, C. A., & Lester, L. H. (2012). Corporate governance and environmental reporting: an Australian study. Corporate Governance: The international journal of business in society. Retrieved from:https://doi.org/10.1108/14720701211214052
Riotinto.com. (2020). Sustainability Reporting 2018. Retrieved 27 May 2020, from https://www.riotinto.com/en/sustainability/sustainability-reporting
Riotinto.com. (2020). Home. Retrieved 27 May 2020, from https://www.riotinto.com/en/operations/australia
Schoenberger, E. (2016). Environmentally sustainable mining: The case of tailings storage facilities. Resources Policy, 49, 119-128.Retrieved from:https://doi.org/10.1016/j.resourpol.2016.04.009
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