February 11, 2015, by ICCSR

After the Gold Rush: Exploring the impacts of gold mining on poverty-alleviation in Tanzania

Dr. Judy Muthuri and I have just returned from a research trip to Tanzania. As part of the European Commission’s GLOBAL VALUE project, we and our partners from Saarland University (Germany), Central European University (Hungary) and Sokoine University of Agriculture (Tanzania) spent two weeks exploring the gold mining sector in Tanzania.

We are interested in how ‘systems of governance’ influence poverty alleviation, especially when gold mining is involved. What this means in practice is that we interviewed individuals from the government, international NGOs, local NGOs and gold mining companies to ask their views on the drivers for responsible business practices in gold mining. How do external trends (e.g. the Extractive Industries Transparency Initiative) and internal trends (e.g. new laws on mining tax) change the way gold companies do business in Tanzania? How do different institutions work together? Or are there some tensions impossible to overcome?

Whilst the analysis is only just underway, here we share some initial impressions. Gold mining is a highly impactful industry. The physical action of mining has knock-on effects for the community and their environment. Responsible business practices aim to mine in a way that doesn’t destroy alternative livelihoods such as farming, or the future of the local area once the mine is closed. Mining offers employment, improves local infrastructure, and develops services and small businesses in the surrounding area, but with this sudden growth comes attendant problems in illegal and often dangerous small-scale mining, the erosion of cultural values, and a rise in the demand for essential, but under-funded, services such as healthcare.

As ever, more reliable methods of assessing the impact of CSR practices are needed. Schools may be built, but how many of the most vulnerable community members can send their children? Healthcare may be improved, but are water sources being kept clear of polluting chemicals? Then there are the questions surrounding responsibility. In a context where there are gaps in service provision, to what extent should a company step in? How can the government be supported to promote further development?

Balancing the needs of business, community, environment and national growth is a controversial and difficult endeavour. The ‘systems of governance’ we are mapping demonstrate the inter-reliance of different actors and institutions. We were struck how the gold company’s CSR activities are often limited by local and national governance problems. Even more fundamental is the changing of institutions in Tanzania from an ujamaa (socialism) orientation to capitalism, and its impact on systems of governance in gold mining. For example, the growing role of a vocal civil society in Tanzania, especially as more people come online and use social media to publicise government and corporate misdemeanours. Watch this space for more insights!

By Lauren McCarthy, Research Associate, ICCSR.

Image by Lauren McCarthy, 2015 – ‘FP7 GLOBAL VALUE researchers visit a gold mine’

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