Introduction

Placer Dome Inc. (PDI) is the product of a merger between Placer and Dome in 1987, two old companies that had been operating for over fifty years. The analysis of the evolution of Placer Dome’s CSR policies begins at that time. In contrast to Noranda, which by the late 1980s had already developed CSR policies, had managerial practices to implement them, and was working towards publishing its first EHS report in 1990, Placer Dome was at the beginning of the process of developing its CSR policies. Placer Dome can nevertheless be considered an early mover compared to the majority of major mining companies in terms of the development of CSR policies and practices, the adoption of sustainable development as a normative frame for its CSR, and the commencement of stand-alone CSR reporting. As was the case with Noranda, it is argued here that internal leadership is a critical part of the explanation for CSR adoption at Placer Dome. Senior management was responsive to global normative developments, and Placer Dome was one of the first companies to adopt sustainable development as an integrative framework for its CSR.

The need to manage the serious environmental and associated social risks inherent in gold mining provides the setting in which Placer Dome’s policies evolved. The original Placer company had experience in dealing with challenging social issues stemming from its operations in Papua New Guinea (PNG) dating back to the 1920s. As stakeholder theory predicts, over time Placer Dome came to respond to these environmental and social risks as part of a strategic effort to address reputational concerns, and to ensure the company’s long-term viability. In embracing sustainable development, Placer Dome sought to weave its thinking about sustainable development together with the company’s core values. The implication of this effort is that, as much as the framing of CSR in terms of sustainable development was a strategic response to external stakeholder pressures, management sought to align Placer Dome’s core values with sustainable development. The adoption of CSR framed in terms of sustainable development was driven by both interest-based and norms-based considerations.

Placer Dome had a range of environmental challenges to manage associated with the gold-mining process. One of the most difficult problems is what to do with the crushed rock (tailings) left over after the mineral has been extracted from the ore. How tailings are stored is a technical problem whose solution is dependent on geological conditions in the vicinity of the mine. At Placer Dome’s Marcopper mine in the Philippines, tailings were kept in a mined-out pit. On March 24, 1996, the plug to the tailings drainage tunnel gave way, causing chemical-laced tailings to pour into nearby rivers. This event led to Placer Dome becoming the subject of sustained attack from NGOs, and served as an impetus for moving forward with sustainable development.

Tailings disposal was an issue at other PDI mines, such as Porgera and Misima in PNG, where the company had to resort to controversial riverine and submarine tailings disposal methods, respectively. The Porgera mine is located in steep mountainous terrain, where the risk of building tailings dams was judged to be too great, due to difficult geography, earthquake potential, and high rainfall. Tailings were therefore discharged into the Strickland River, after they had been treated to remove cyanide and other contaminants. In the case of the Misima mine on Misima Island, there was very limited land available, so the tailings were piped to a holding tank, where they were mixed with seawater before being deposited into a deep underwater basin in the sea.

Another serious environmental challenge confronting Placer Dome was acid-rock drainage (ARD), which occurs when sulfide rock is exposed to water and air, causing the formation of sulfuric acid. Acidic water moving through waste rock piles, tailings, or old mine workings will dissolve metals contained in the rock. If not contained, contamination of surface and groundwater then occurs, seeping into lakes and rivers, causing harm to animals and humans. Placer Dome had a severe problem with acid-rock drainage at its Equity Silver mine in northern British Columbia, which closed in 1994.

As a gold-mining company, Placer Dome had to contend with the management and use of cyanide, which is used to extract gold. After the ore has been crushed and ground, the cyanide dissolves the gold into a solution, which is further processed to recover gold. After processing, the cyanide appears either in tailings ponds or on heap leach pads, posing a threat to local waterways and groundwater if spills occur before the cyanide has decomposed or been treated. Cyanide handling is a serious safety issue for mine workers.

Institutional setting: external pressures (global and domestic)

Placer Dome’s external environment, operating at the local, provincial, national, regional, and global levels, exerted a range of pressures to which senior management had to respond. At the global level, sustainable development became, in the 1990s, the key normative framework for pushing ahead both globally and nationally with environmental protection. At the same time, governments in countries such as Canada and Australia, where Placer Dome had major investments, had adopted sustainable development as an overarching normative frame for their environmental policy initiatives. As outlined in Chapter 3, these countries, along with the other major industrialized countries, began to tighten existing legislation in the 1990s, and introduce new regulations respecting the environment. The changes to taxation and foreign ownership regimes in developing countries opened up new opportunities for Placer Dome to expand its global operations.

In the province of British Columbia (BC), where PDI was headquartered, a very strong and politicized environmental movement, coupled with the left-leaning New Democratic Party (NDP) government, resulted in significant uncertainty over access to land and with respect to the permitting process. British Columbia was a hotbed of the environmental movement, and the home of Greenpeace. Much earlier than other provinces, a culture of respect for the environment grew in BC, a reflection of its rich native culture, rich salmon resources, and love of the outdoors. The legacy of the many large, open-pit mines built in the 1960s in northern BC was brought to the public’s attention by activists years later. The provincial government was under political pressure to respond to growing public demands for greater environmental protection. Placer Dome was undeniably influenced by this setting (Executive 3, January 26, 2006).

In 1993, the provincial government denied the Windy Craggy proposal to build a large copper and gold mine in the province’s northwestern corner. Instead, the government created a vast provincial park in the area of the proposed mine, the Tatshenshini-Alsek Provincial Park, and declared the area a World Heritage site. The move permanently barred development of one of the province’s richest mineral reserves.¹ Opportunities for developing new mining projects were effectively closed off to mining companies in British Columbia and North America as a whole (as Noranda’s New World mine experience demonstrated). In BC, the government approvals process became very lengthy, and targets set by the provincial government were deemed by Placer Dome to be unrealistic (Executive 2, January 25, 2006). As CEO John Willson put it in a 1997 address to the Canadian Club:

The province was effectively closed off to new mining investment by the early 1990s.

The provincial context influenced the shift in thinking within Placer Dome on the importance of sustainable development for the mining industry. In 1991, the provincial government set up the BC Round Table on the Environment and Economy, with the mandate to develop a sustainable development strategy for the province (Hansen Reference Hansen1991). Placer Dome represented the mining-industry perspective on developing sectorial strategies, and three-day meetings took place on a quarterly basis. The Placer Dome executive who participated in the process found it to be a hugely important education, which helped crystallize his understanding on the implications of sustainable development (Executive 2, December 6, 2011). This executive pushed for the establishment of guidelines for the mining industry in BC, but encountered resistance to this idea from mining companies at that time (Executive 2, January 25, 2006). When the provincial government disbanded the Round Table in 1995, the executive applied his thinking on sustainable development to Placer Dome.

Developments at the national level which influenced thinking within Placer Dome include the Whitehorse Mining Initiative (WMI) (see Chapter 3). The impetus behind the WMI was the rising tide of stakeholder pressures, and Placer Dome was at the meeting in 1992 in Whitehorse that endorsed the launch of the WMI. The common view in the industry at the time was that mining faced a communications challenge, but the WMI demonstrated that mining companies had to better understand the different perspectives of stakeholders, including indigenous communities (Executive 2, December 6, 2011). The WMI was a path-finding initiative in which Placer Dome was very active, and it further reinforced corporate learning about the importance of coming to terms with sustainable development.

The evolving global context, in turn, influenced thinking within Placer Dome and the BC mining industry as a whole. In 1998, the environmental Mining Council of BC, created by the mining industry in that province to address environmental challenges, released a code of environmental conduct for mining operators (Environmental Mining Council of BC 1998). The code of conduct drew upon extensive work on principles and codes of conduct for mining operations carried out by a variety of Australian NGOs in 1997. The Environmental Mining Council of BC also drew on discussions with the Washington, DC-based Mineral Policy Center, the Western Mining Activist Network and with BC-based environmental mining experts. The code called for much greater transparency and accountability than was generally the practice amongst major mining companies operating in BC at the time.

Developments in Australia were significant to Placer Dome, because of its extensive operations in the Pacific region. As in Canada, pressure was growing on the mining industry in Australia. In the mid-1990s, the Australian Labor government contemplated the application of extra-territorial legislation for its mining companies operating abroad. To forestall government action, in 1995 the Minerals Council of Australia (MCA) was established, which worked to develop a code of conduct for the mining industry (MCA 1996). In 1996, the MCA developed a Code for Environmental Management, which committed signatories to continual improvement and public reporting of code implementation and environmental performance. Placer Pacific was a signatory to the Code, which was revised in 2000, following a review and consultation with the Australian government and NGOs. Placer Pacific’s early engagement with the Australian mining industry’s attempt to promote environmental excellence and to be more open and accountable to the community was to influence PDI’s subsequent progress on sustainable development.

The tailings failure at Marcopper brought home forcefully to Placer Dome the role of global communications, and in particular, the internet, in disseminating information about the company. CEO John Willson expressed unease about the deluge of news about Marcopper, and the ease with which what he considered misinformation about Placer Dome and mining in general could be spread (Willson Reference Willson1997: 7). Placer Dome sought in 1997 to counteract that by setting up a company web page to disseminate information about the company. Clearly, however, senior management recognized that a public relations exercise would not suffice to remedy the reputational issues facing Placer Dome and the mining industry generally.

Even before the disastrous tailings accident at its Marcopper mine in the Phillipines, Placer Dome was sensitive to the impact of environmental accidents involving other mining companies on its own operations. The 1995 Omai tailings dam failure in Guyana, for example, was seen to have a potential impact on Placer Dome’s Las Cristinas project under development at the time in Venezuela. On August 20, approximately 3.5 million cubic metres of tailing water was released into the Omai River, and from there, on into the Essequibo River. The concentration of cyanide in the tailings was enough to kill fish in a section of the Omai River, but concentrations further downstream were determined to be insignificant.

The manner in which this accident was reported points to the difficulty of ascertaining the veracity of claims made by different stakeholders. The environmental community, for example, termed the event an “environmental catastrophe.” Engineering, consulting, and mining communities termed the event an “environmental incident,” as it was determined that there were short-term and limited environmental impacts (Executive 6 (Placer Dome) 1995: 1). Whatever the facts, the legitimacy enjoyed by environmental NGOs lent greater weight to their claims in the public eye. It is also the case that the response to an incident may be more dramatic than the incident itself. Placer Dome anticipated that the Las Cristinas project would come under greater scrutiny as a result of the accident. Indeed, Venezuelan officials had expressed concerns about the parallels between the Omai and Las Cristinas projects, especially around the type of tailings dam proposed (ibid.: 7).² The lesson here was that an approach consistent with sustainable development might give Placer Dome an edge in obtaining permits for its projects.

Placer Dome had received its share of negative publicity around the operations of its mines. Prominent examples include the Porgera and Misima gold mines in Papua New Guinea. Local communities raised concerns about possible poisoning from water contaminated by arsenic, mercury, and other pollutants. A number of NGOs drew international attention to these concerns, including allegations that the environmental standards set by the PNG government (which has a 25 per cent stake in Porgera) were more lenient than Australian standards on such matters as heavy metals concentrations (Kennedy Reference Kennedy1996: 1). Many of these NGOs were based in Australia, where they trained their eyes not just on mining in Australia, but in the Pacific region, including PNG. Both Las Cristinas and Porgera demonstrated the negative spill-over effects of mining in the information age.

A combination of external developments shaped the operational challenges and institutional environment to which senior management felt compelled to respond. These external developments included the tightening and expansion of regulations in Canada, Australia, and the US, the hostile environment to new mining projects in BC by the early 1990s, the emergence of concerns about the impact of mining on indigenous peoples in Canada and other countries (addressed at the WMI), and the public relations disaster arising from the Marcopper tailings failure. The negative publicity about the mining industry generally, and the central role played by NGOs in disseminating negative information about mining, led to the targeting of individual mines for exposure of damaging environmental practices. In 1999, a new NGO was established in Canada, Mining Watch Canada, which, as the name implies, had as its mandate to scrutinize the activities of Canadian mining companies at home and abroad. Placer Dome was a prime target of Mining Watch Canada, because of Marcopper and its operations in PNG.

Organizational and managerial response

The institutional context outlined above helps to explain why Placer Dome came to adopt CSR policies. In order to understand how the firm responded to external pressures, organizational and managerial factors need to be brought into the analysis. By the early 1990s, the evidence suggests that Placer Dome was seeking to bring the organization into alignment with shifting societal expectations. While all mining companies were attempting to do so by the early 2000s because of external pressures, the external environment alone cannot explain how senior management chose to approach the challenges it faced, or why the company sought to play a leadership role in moving towards sustainable development. This section begins with a brief look at the arrangements in place at Placer Dome before the changes to policy and procedures took place, to serve as a baseline for comparison to subsequent measures implemented in support of CSR.

By the late 1980s, there is some evidence to suggest that Placer Dome had begun to give serious attention to its social and environmental responsibilities. Subsequent to the merger of Dome mining with Placer in 1987, two key people were transplanted from Dome to the headquarters of Placer Dome. These people took up key positions: Placer Dome’s first Senior Vice-President, Environment position in 1991, and Director, International and Public Affairs, for Placer Dome. After the appointment in 1992 of John Willson as CEO, there were a number of key people in senior management who were well-placed to serve as policy entrepreneurs for CSR and later, sustainable development.

Willson’s leadership was crucial in moving Placer Dome forward on CSR, and in shaping its approach to sustainable development. Willson, whose father was a mining engineer, is a self-described “mining brat” (Executive 1, July 31, 2002). Exposed to dirty coal mining from an early age, Willson developed a consciousness of environmental and safety issues, and his early experiences imprinted how mining should not be done. As Willson moved up in the industry, as CEO of Western Canadian Steel (a subsidiary of Cominco, now Teck Cominco) in the 1980s, and then CEO of Pegasus Gold in the US in the late 1980s to early 1990s, he acquired extensive experience on environmental issues.

Willson’s concern for mining’s reputation is revealed in his response to the situation at the Summitville mine, Colorado, owned until 1992 by Galactic Resources Ltd. In 1992, the American EPA took over supervision of the site, after Galactic Resources declared bankruptcy and walked away from the threat of a massive spill of cyanide-laden water. Willson convened a meeting in Denver to deal with the problem. He proposed that a number of mining companies get together and take over the mess, and help fund the clean-up, which was estimated to cost over US$100 million. Willson’s proposal did not get a good reception from other mining CEOs, and he was told that he was acting like a “boyscout” (Executive 1, July 31, 2002). Willson can be considered to have been ahead of his time, and brought his experiences and approach to the environment with him to Placer Dome.

Prior to Willson’s appointment, Placer Dome had taken a number of steps to strengthen its environmental policies. In this regard, leadership was provided with a view to avoid liability through environmental failure (Executive 2, December 6, 2011). In 1990, the company released a broadly worded policy statement on the environment, which simply stated broad principles to which Placer Dome would adhere (Placer Dome 1990a). The 1990 Environmental Policy Statement identified ten steps the company would take to meet its stated commitment to the “integration of good stewardship in the protection of the natural environment with efficient management in the extraction of mineral resources” (Placer Dome 1990a). The policy statement also referred to the establishment of environmental-monitoring programs and audits, and to the introduction of reporting to its Board of Directors on these programs on a quarterly basis. These policies, together with a commitment to engage in research on environmental technologies, suggest that at the hortatory level, at least, Placer Dome was displaying commitment to CSR as it relates to the environment. Together with the environmental policy statement, Placer Dome released an Environmental Managementdocument, which was intended to raise awareness among employees about the company’s environmental policy and management goals (Placer Dome 1990b).

In addition to the annual review, in 1990 a Corporate Environmental Group was established, which reported to the Board on a quarterly basis on any non-compliant events, progress on issues of special concern, audit results, and emerging issues. The Corporate Environmental Group was headed by the Senior VP, Environment, and was responsible for ensuring that auditing and monitoring activities were carried out, and for reporting to the Board and CEO. The Group also provided support to the project development and operating groups, including the mine managers, in the form of expertise and assistance in dealing with individual issues. A further step, taken in 1990, was the establishment of an environmental Management Review Committee, comprised of all Senior Operating Officers, as well as the officers responsible for Project Developments, Exploration, Legal, and the Corporate Environmental Group. Those at the COO level were accorded special responsibility for ensuring that performance standards were achieved and all major issues were identified.

In 1989, Placer Dome arranged for its environmental management systems to be examined by an outside consultant. Ernst and Young was contracted to review its systems, in order to transform Placer Dome’s environmental policy and concerns into a comprehensive program. Using the Campbell Mine in northern Ontario as the guinea pig, the review led to roles being more clearly defined, and provided a clearer idea of what steps had to be taken next. One such step was the development of Environmental Operating Plans, a process which was completed in 1993. All of these initiatives point to early efforts to improve Placer Dome’s environmental performance.

Management attitudes in the late 1980s to early 1990s point to the recognition of the need to take environmental issues seriously, largely for strategic reasons. A presentation given in 1991 by Henry Brehaut on improving environmental performance reveals that key considerations driving Placer Dome’s policies at this early stage were risk prevention and minimizing environmental liability (Brehaut Reference Brehaut1991). Brehaut declared that while having an environmental policy is a good start, what matters is how a company interprets and communicates its environmental obligations. This includes having employees who can establish specific operating procedures, ensuring that employees are sufficiently trained in their duties, and working towards establishing a proactive environmental culture throughout the company. In effect, he was saying that simply having an environmental policy provides little guidance for action.

Brehaut’s presentation provides an interesting glimpse into the state of thinking about the environment at the time, from the perspective of a mining executive. He demonstrates that companies go through different stages in their degree of environmental awareness, as revealed in Table 5.1.

Table 5.1 Corporate attitudes towards the environment

Source: Brehaut, Reference Brehaut1991.

The “redneck” phase is self-evident, and in the early 1990s there remained a significant number of mining companies that were at this stage. The “lip service” stage refers to companies that have endorsed the Mining Associations of Canada’s (MAC) Environmental Policy Statement, but which do not have internal environmental policies of their own in place (MAC 1989).³ Endorsement of such policies would have little impact, as they offered no guidance as to how companies should improve their environmental performance. At the “concerned” stage, the consciousness level of senior executives on environmental issues is raised, and the company produces an environmental policy. At this stage, the policy is understood at the corporate office level, but is likely to end up as “another framed policy on the wall at the mine site” (Brehaut Reference Brehaut1991).

At the time Brehaut presented his paper, he felt that Placer Dome was approaching the “proactive” stage. At this stage, the company has developed codes of conduct, standard designs and procedures, and is trying to get ahead of the environmental agenda. At this point, employees become involved in the design and implementation of individual programs. In the “clean and green” stage, the environment moves from being a technical issue, to a management issue as well. As Brehaut put it, “by management I mean more than systems to ensure individual issues are assessed, responsibilities assigned and performance monitored . . . it also means that a corporate culture has been established whereby consistent actions and responses are the primary keys to success.” Important to fostering a corporate culture of commitment to CSR was the introduction of annual President’s Awards (made of gold and silver) for the PDI operation with the best safety and environmental record (Executive 1, July 3, 2002).

In 1994, Placer Dome released a revised environmental policy statement (Placer Dome 1994). The updated policy reflected the company’s intention to broaden the involvement of employees and stakeholders in environmental issues. In the same year, an Environmental and Safety Committee of the Board was established, with members selected from the Placer Dome Board. As of 1994, Placer Dome had forty-eight people working in environmental control across the company. Table 5.2 provides a timeline of the major organizational and policy changes instituted by Placer Dome in the early years.

Table 5.2 Timeline of organizational and policy changes: Placer Dome, 1989–94

These developments in the areas of policy, management, and organizational change reflected a deepening commitment to the environment on the part of Placer Dome. At this early stage, environmental issues were still perceived as costs to be avoided, although reputational concerns were becoming salient. Environmental policies were conceived as a strategic response to risk prevention, and minimizing environmental liability.

Shift in thinking

By the mid-1990s, there was evidence that internal company thinking had begun to evolve towards a more comprehensive view of its environmental responsibilities. A paper presented in 1994 by officials in the Environmental Group in Caracas attested to the need to consider environmental impacts through the entire life cycle of the mine, from claims staking to exploration, to mine operation and post-closure (Billette and Robertson Reference Billette and Robertson1994). In 1995, PDI released an Environmental Management Framework for implementation. The company had also begun to participate in research on such difficult environmental issues as acid drainage prevention and control, in the form of on-site, in-house research, joint research with universities involving graduate students, and in joint industry/government task forces on environmental issues. As of 1998, for example, Placer Dome had invested US$325,000 at the University of Saskatchewan in research funding for cover-design technologies to control acid-rock drainage (Executive 6 (Placer Dome) 1999: 33).

Placer Dome’s expansion into developing countries was a further impetus behind a more comprehensive approach to environmental issues. Indeed, by 1994, internal documents reveal the recognition that not just environmental, but also social issues, needed to be better handled. Although Placer Dome had experience working with local populations in its North American and Asia Pacific operations, the complexity of working in foreign locales was acknowledged. Managers were becoming attuned to the growing attention of the international media and human and environmental rights groups, and the impact of their activities on the ability of a project to move forward: “Our performance in all aspects of exploration and development in any country is quickly communicated to other countries targeted for exploration and possibly used in decisions regarding a general willingness to have [Placer Dome] investment” (Executive 6 (Placer Dome) 1994: 1).

The need for people with specialized skills to respond to the greater complexity of communicating with stakeholders in foreign countries was recognized. As one valuable member of the Corporate Environmental Group noted, historically, geologists had been assigned all tasks associated with environmental and social communications on a new project. Increased demands on geologists in these areas had diluted their ability to focus on exploration tasks for new projects, and required them to manage difficult issues without the necessary skills or resources (Executive 6 (Placer Dome) 1994: 1). A multi-skilled team was proposed for new exploration projects, which would bring together exploration staff, corporate and regional environmental staff, and corporate and regional “political/socio-economic” staff (ibid.: 2). Placer Dome was an early mover in recognizing the limitations of having people trained in geology and engineering responsible for handling delicate community-relations issues.

Together with the need for people with specialized skills beyond geology and mining engineering, came the recognition that potential environmental and social issues had to be recognized and adequately addressed at the preliminary exploration stage, so as to avoid projects being excessively delayed or derailed at the mine development stage. A proposal was made that certain generic issue areas be identified, with team leaders responsible for each area. Four areas needing coverage were identified, including: 1. government relations/environmental; 2. environmental technical programs; 3. technical transfer to developing countries; and 4. government relations/social (Executive 6 (Placer Dome) 1994: 2). Government relations/environmental refers to the need for persons with “human” interaction skills to initiate dialogue with government agencies involved with exploration permits, and in later phases, additional permits and environmental impact statement documents. Government relations/social refers to the need for people capable of communicating with environmental or social activist groups and local communities, with a view to early detection of problem areas, and to establishing long-term relationships (Executive 6 (Placer Dome) 1994: 4–5).

Concurrent with this evolution in thinking on environmental issues, a major, company-wide discussion was initiated under the leadership of CEO Willson. The purpose of this discussion was to encourage employees to ponder how they perceived Placer Dome, and what core values they felt should inform the company’s activities. This process of corporate “navel gazing” (as it was referred to by one person involved with the process), influenced the evolving approach to environmental/social issues. Through the identification of underlying ethical norms guiding individual behavior, Willson sought to inculcate a collective corporate identity, where the company would see itself as a community, or in the words of one executive, a “collective moral agent” (Executive 2, January 25, 2006). The intent was partly strategic, in that Willson hoped to develop stronger corporate cohesion, but also values-based, in that he wanted Placer Dome’s stated values to resonate with those of employees.

In the company’s mission statement, released in 1995, the first core value listed was ethics, defined as “governing our actions with integrity, honesty, fairness and respect” (Placer Dome 1995: 4). The focus of the document was on the quality of interactions amongst employees within the entire corporation, and with core values including trust, teamwork, recognition, and continuous improvement through ongoing learning. The final core value was to be stewards of the environment, understood as “living the ethic of environmental responsibility in our business practices” (Placer Dome 1995: 5). The push to define the company’s CSR was thus both interest and norms-based.

Willson came to believe that sustainable development should be embedded in the corporate culture, as an expression of the company’s value system. The extended process of identifying the company’s core values fed into evolving thinking on sustainable development. By aligning the values of the company with the personal values of employees, the foundation was laid for people to commit to sustainable development (Executive 4, July 31, 2002). In some respects, sustainable development was a way of framing some aspects of CSR which the company had already been doing in places such as PNG. It was also a conceptual structure for encouraging integrative thinking about what the company was doing, and what still needed to be done (Executive 2, July 30, 2002). To embed sustainable development in the corporate culture, the position of Vice-President, Sustainable Development was created in 1997 (replacing the VP, Environment position). The executive appointed to this position spent eight years as mine manager at Porgera. He brought his knowledge of sustainability initiatives on the operational side at Placer Pacific, and took on the responsibility of coordinating the formulation of policy, providing leadership for implementation, and developing an understanding of emerging issues.

As the company moved forward on sustainable development, Willson sought to integrate CSR into the company’s strategic business plan. In 1998, sustainability was designated an element of the 1998 Corporate Strategic Plan by the Executive Council, consisting of the CEO, CFO, the Executive VPs for Strategic Development, Exploration, and for the three geographic regions (at the time North America, Latin America, and Asia Pacific). As such, Willson recognized the need to emphasize the business case for sustainable development, while also seeking to align the norm with the company’s core values.

Lessons from the experience of mining

As noted earlier, global, national, and provincial developments had an impact on thinking in Placer Dome, and learning was taking place on sustainable development norms. The available documentation and interview material make it clear that the experience of operating mines in Canada and the Asia Pacific region is central in explaining Placer Dome’s approach to sustainable development. In the 1960s and 1970s, mine managers cut their teeth in remote communities in Canada. These people grew up there, and developed awareness of living in these small communities. Mine managers moved up in the company as it expanded throughout the globe. This progression influenced the culture of Placer Dome, and set the foundation for the adoption of sustainable development policies (Executive 3, January 26, 2006). The role of leadership can also be seen as the projection of learnings from operational challenges which management faced at specific mine sites to the development of corporate-wide policy and practices.

Lessons learned from the operation of the Campbell (Ontario) and Equity (BC) mines in Canada, and the Porgera and Misima mines in PNG fed into the evolving thinking on CSR policies and practices. Placer Dome had managed social as well as environmental issues at these mines, which were to inform subsequent approaches to CSR. Existing practices at socially challenging sites such as Porgera were later formalized in policies on sustainable development.

One key lesson that emerged out of Equity and Porgera was the value of having community-oversight committees (Executive 2, December 6, 2011). These committees were initially set up at Equity and Porgera to address extreme circumstances, but later evolved into being best practices at many of Placer’s socially challenging operations.

In 1980, Placer opened the Equity Silver mine in northern BC. Shortly after, in 1981, acid-rock drainage was found originating from the mined waste rock, and from 1982, the mine became a severe producer of ARD. The situation posed a technical challenge for Placer in managing the environmental problem, as well as a social challenge in dealing with the concerns of the downstream communities (Aziz et al. Reference Aziz, Ferguson and Ferris1998). Downstream communities impressed upon Placer Dome the need for structures to promote accountability on the part of the mining company, and to provide accurate information to the public. At Equity, this need led to the establishment of the Equity Mine Technical Monitoring Committee, which meets regularly. An annual report for the Equity site is distributed, and monthly effluent discharge records are available for review upon request (ibid.: 8).

At Porgera, a stakeholder-monitoring committee was established in 1996 to monitor Placer’s management of environmental issues around riverine tailings disposal (Togolo Reference Togolo1999: 8). Established in 1996, the Porgera Environmental Advisory Komiti (Peak) was the first of its kind in PNG. In addition to government representatives from the PNG Office of Environment and Conservation and the PNG Department of Mineral Resources, the “Komiti” consisted of NGOs representing indigenous peoples (Conservation Melanesia), the churches (Melanesian Institute), the PNG Institute of Medical Research, and the World Wide Fund for Nature (Australia). Independent experts were also made available to NGOs, to assist in their understanding of the technical issues surrounding environmental management at Porgera.

Placer Dome eventually established permanent community-liaison committees at the Campbell, Equity, Musselwhite, and Porcupine mines in Canada, the Golden Sunlight mine in the US, the Misima and Porgera mines in PNG, and at Zaldivar in Chile. Where permanent committees were not in place, ongoing stakeholder engagement was maintained through site-specific reports, newsletters, regional reports, and informal engagement.

The experience of operating mines also taught valuable lessons about how being responsive to community concerns translates into success at the permitting, building, and operational stages of a mine’s life. In 1997, Doug Fraser (newly appointed VP, Sustainability) met with a group of shareholders in Toronto, to explain Placer Dome’s emerging sustainability policy. In describing his years from 1987 to 1990 as site manager on the Porgera project in PNG, Fraser described the huge learning process he and those working with him underwent in dealing with social issues. In working on final feasibility for the mine, it was necessary to prepare a social/economic impact study and an environmentalist from Australia was hired to do the work. Very candidly, Fraser noted that the environmentalist “wore an earring,” and was not the sort of person he would naturally gravitate to, given his engineering training, which at the time, “held little regard for non-tech issues” (Fraser Reference Fraser1997).

The project required that over 230 families be relocated, and once project approval was obtained, the company attempted to move forward with relocating the families. As Fraser noted, “after several months of frustration, we realized we had to change our approach” (Fraser Reference Fraser1997). The relocation effort was continually being stopped by irate landowners who had unsettled issues to discuss. Nothing moved until the issues were resolved, leading to the realization that the company would have to work together with the affected families and land staff in order to address the social issues satisfactorily. As Fraser put it, “the lesson we learned here is that to be successful in permitting, building and operating mines today, we needed to get beyond our personal biases and judgments about people, and get creative about dealing with the issues” (Reference Fraser1997). In other words, it was necessary to listen to the local community, learn about the issues affecting them, and find creative solutions to solving them.

The Musselwhite mine in northern Ontario, which opened in 1997, is an example of how engaging with the local community helped facilitate and speed up the permitting process. Specific issues affecting local First Nations (indigenous) communities were identified before the mine was developed. An agreement was signed with First Nation representatives and two levels of government, detailing how the local community would benefit from the mine (the Musselwhite Agreement). The agreement included provisions for employment, training, and scholarship opportunities and social, cultural, and community support, recognized the traditional activities of indigenous communities, and created a planning board to review issues on an ongoing basis. Fraser claimed that by dealing with stakeholders up-front, a strong relationship was fostered, which sped up the environmental approval process for the mine, thereby avoiding costly delays (Fraser Reference Fraser1997).

Early lessons about the challenges of operating in developing countries influenced the development of Placer Dome’s CSR policies. In a developing-country context, where the reach of government into remote communities is tenuous at best, Placer Dome found it beneficial and appropriate to step in to deliver social services. In 1992, Placer Pacific introduced a tax credit scheme that was inspired by the concern that the tax benefits of resource development were not returning to the local communities affected by the mines in PNG. Under Placer’s initiative, government approval was obtained to allow mining and petroleum companies in PNG to spend up to 2 per cent of their taxable income on approved infrastructure and social projects in their immediate impact areas (Togolo Reference Togolo1999: 7). Considered to be very successful, the scheme allowed private corporations to support education and health facilities, physical infrastructure, water supplies, community development projects, and sporting facilities (ibid.). This same thinking was later echoed in PDI’s approach to dealing with the HIV/AIDS problem at its South Deep mine in South Africa.

In seeking to apply best practices to its operations around the world, Placer Dome learned that applying the same standards was not the answer, as circumstances in individual communities were not identical, so that different strategies and tactics had to be devised (Executive 3, January 26, 2006). Specific policies needed to be applied on a site-specific basis, tailored to meet the specific conditions in mine sites. For example, in PNG, closure guidelines emphasize the social aspects, as there is little in the way of basic social services. In North America, closure guidelines emphasize mostly environmental aspects.

As had been the case at Porgera, Placer Dome conducted a social impact assessment (SIA), in addition to the EIA, at its new mine developments. The conduct of an SIA in South Africa before opening its South Deep mine enabled Placer Dome to anticipate serious social problems surrounding the mine development and operation (Placer Dome owned 50 per cent of South Deep and formed the Placer Dome Western Areas Joint Venture (PDWAJV)). Placer Dome introduced an innovative and highly regarded program to address the high incidence of HIV/AIDS amongst its workers. In partnership with organized labor, the provincial government, local NGOs, and two other mining companies, the Tshwaragano Project sought to assist those in surrounding communities suffering from HIV/AIDS, as well as raise awareness about prevention. The program included the provision of home-based care and support to medically incapacitated workers and their families, as well as income support. The home-based care program won a Development Innovation Award and a People’s Choice Award at the World Bank’s 2002 Development Marketplace competition. The South Deep mine introduced wide-ranging prevention and treatment programs at the mine site, in the surrounding communities, and in the mineworkers’ home communities (including migrant workers from Lesotho, Mozambique, Botswana, and Swaziland).

The path to sustainable development

The lessons learned and various activities around Placer Dome’s operational challenges would eventually be integrated and formalized as part of the company’s sustainable development approach to CSR. The experiences of mining were understood to be part of the company’s political risk-management strategy, in keeping with the risk mitigation culture of mining companies. To make sustainable development relevant to the corporation, it was necessary to link the elements of sustainable development with political risk management (Executive 2, July 30, 2002). This fact highlights the importance of relating change to existing cultural frames.

It took considerably more effort to move the company to a point where sustainable development would serve as a conceptual glue for integrating all the initiatives on the environmental and social side. Sustainable development played a very important role in integrating and broadening thinking within the company, not just at the HQ level, but at the mine level as well (Executive 4, July 31, 2002). Existing corporate practice ultimately integrated into conceptions of sustainable development, included risk management, reputational concerns (the business case), and the core values of the company.

Three important factors combined to propel Placer Dome towards integrated thinking around sustainable development. First, leadership from senior management was critical in allowing the initiative to move forward. Leadership was also provided by those who had worked with Placer Pacific, and who had hands-on experience. Second, the historic practice and experience of operating mines in remote communities in Canada and abroad was key in shaping the implementation of Placer Dome’s sustainable development policies. Third, the leadership became persuaded of the business case for sustainable development. The Marcopper tailings spill in 1996 forcefully drove home some important lessons that people in the field, as well as at HQ, could relate to (Executive 4, July 31, 2002).

In the mid-1990s, senior management began to pull together the various strands of these different influences in the form of an explicit policy formulation on sustainable development. Key individuals played the role of policy entrepreneurs in moving the idea of sustainable development forward. In a speech delivered in 1995 to the Northwest Mining Association (US), Jim Cooney spelled out the direction he felt mining companies should take in order to confront the political challenges of operating in the developing world. The speech proved to be a reliable indicator of the strategic vision Cooney and others were pushing for within Placer Dome.

Given the fact Cooney’s professional background was in philosophy, not in engineering, he was quick to understand the significance of sustainable development for the company. His position gave him a strong mandate to engage in the international public policy arena, participating in frequent dialogue with NGOs and international governmental organizations. Leadership in this sense was his role in transmitting perspectives on sustainable development to Placer Dome, and using that experience to promote change from within.

In his 1995 speech, Cooney spelled out three priorities for mining companies seeking to expand their operations in the developing world: 1. gain access to the world’s mineralized jurisdictions; 2. establish security and predictability in the governmental treatment of mining; and 3. sustain the welcome of mining companies in developing countries over the long term (Cooney Reference Cooney1995: 11). Put another way, the third priority addressed the need to reduce and contain the long-term political risk exposure of mining companies in developing countries. To address these political risk and reputational issues, Cooney pointed to the need for an evolution in the thinking and practices of mining companies. To accomplish these goals, he called for mining companies to define their activities in the framework of sustainable development (ibid: 12).

Cooney’s views were echoed by the Senior VP, Environment. In a revised speech originally given in March 1996, Brehaut noted that mining companies are now expected to justify their activities, not just on economic grounds, but on social and environmental grounds as well (Reference Brehaut1996: 6). In a similar vein to Cooney, he observed that most governments had adopted sustainable development as a key part of their national agenda, and that the mining industry “must talk the language of the audiences it must convince” (Brehaut Reference Brehaut1996: 6). Brehaut called for a comprehensive framework focused on sustainable development, which would provide the basis for individual project decisions in the “real world” (as opposed to the world of academic debates on the meaning of sustainable development) (ibid.: 7). He recognized that a key component of this was the need to consult with “civil society,” that building a good relationship with governments was not enough (ibid.: 10).

The speeches by Cooney and Brehaut reveal that internal thinking about sustainable development preceded the Marcopper disaster. In essence, Cooney and Brehaut were selling sustainable development to their own company, as much as to the industry as a whole. Their speeches demonstrate the view that the mining industry had to engage in some “unlearning,” in order to broaden understanding about mining’s role and responsibilities in the economy and society. In the mid-1990s, much of the mining industry remained uncomfortable with the terminology of sustainable development (Executive 2, July 30, 2002). Sustainable development was seen to veer away from a market-oriented understanding of the operating environment. It would take time to recognize that it was not enough to think that the provision of jobs in local communities would foster lasting socio-economic development.

In 1996, the decision was made to develop a formal sustainable development policy. In that same year, on March 24, the disastrous tailings spill happened at the Marcopper mine in the Philippines, in which PDI had a 39 per cent interest. The fall-out from this accident was huge, and it brought PDI under critical scrutiny from NGOs and even prompted an investigation by the United Nations (UN 1996). As one executive noted, before Marcopper, few in the company knew what “NGO” stood for, but after Marcopper, everyone understood what the term referred to (Executive 2, January 25, 2006). Although Marcopper did not cause PDI to adopt a sustainable development strategy, the incident helped to catalyze the change in thinking within the company. Marcopper clearly provided added impetus and urgency to the decision to move forward with a sustainable development strategy.

Marcopper proved to be very costly to the company in both tangible and intangible ways. PDI was a minority shareholder in Marcopper, a publicly listed company in the Philippines, with the Philippine government having the majority stake. Although Placer Dome was not responsible for the management of the company, two PDI employees had been seconded as Chair of the Board and as Mine Manager. To save money in a context of low commodity prices, Marcopper tended to use local engineers and construction personnel for the building of the tailings tunnel (Executive 2, January 25, 2006). PDI assumed responsibility for the environmental clean-up, and by 1998, close to US$100 million had been expended on repair work, clean-up, divestiture, and compensation costs (Sloan Reference Sloan1999: Part 1). Less tangible costs were those to PDI’s reputation. The company learned at its Las Cristinas mine in Venezuela, for example, that critics and competitors would invoke Marcopper to oppose PDI’s involvement in new mine projects (ibid.: Part 1).

Willson’s earlier reaction to the Summitville disaster informed his response to Marcopper, in that walking away was not an option. Placer Dome actually had a lot of difficulty getting permits to do the clean-up, and Willson had to appeal to then President Ramos to help get permits issued. Extraordinarily, Ramos later asked Willson why he was spending so much to clean up Marcopper, as the majority owner was not prepared to spend money (Executive 1, July 31, 2002). In addition to feeling it was the right thing to do, Willson saw it as pragmatic, as the company was looking for permits elsewhere.

The experience of Marcopper provided momentum behind the decision to move forward with sustainable development but the impetus did not merely come from the corporate office. Placer Pacific, in part because of its experience with social and environmental issues in Australia and PNG, played a leading role, as it was ahead of the game on many issues. In fact, the first sustainable development report actually came out of PPI for the 1997 reporting year (Placer Pacific 1998). It reflected the decision that Placer Dome should not only revise its policies, but should also report on its performance in the environmental and social domains (as well as the economic one).

In moving forward on sustainable development, extensive internal consultations took place, as a means for building consensus. Consensus building was not merely a top-down process, although Willson set the tone in terms of corporate culture, and provided leadership (Executive 2, January 25, 2006). Placer Dome was not a strongly hierarchical organization, so there were two parallel processes taking place, one through Placer’s regional operations in the Pacific and the other through corporate headquarters in Vancouver. In both instances, in addition to the company-wide consultations, external stakeholders were invited in to provide feedback. That feedback was then considered by company officials, with a view to determining what could be incorporated into the company’s sustainable development policy and first report.

Sustainable development appeared on the agenda of the company’s “Public Affairs Round-Up” meetings, an annual gathering of company officials from all of the regional operations. At the April 1997 Public Affairs Round-Up held in Vancouver, issues surrounding sustainable development were given a prominent place on the agenda. Thirty-five key individuals from PDI’s worldwide operations were brought together, along with ten outside academics and mining consultants. At the workshop held on sustainable development, discussion was organized around three key questions: 1. What are the key aspects of sustainable development?; 2. What internal obstacles limit Placer Dome’s capacity to support sustainable development?; and 3. What actions can Placer Dome take over the next ten years to implement sustainable development? (Resource Futures International 1997: 1; also cited in Sloan Reference Sloan1999: Part II).

Documentation on the Round-Up reveals that questions were raised about how to define sustainable development, how to operationalize the concept within the context of mining, and how to contend with organizational and financial constraints within Placer Dome. On financial constraints, concern was raised about how to reconcile the interests of shareholders, who are driven primarily by short-term returns, and the fairly significant expenditures needed to promote a sustainable development agenda (Placer Dome, Manager 3, 1997: 2). The need to secure shareholder support was identified as a key imperative. In a related vein, it was noted that most people within Placer Dome, whether financial or engineering based, are used to the concept of trying to maximize near-term performance, and that Placer Dome at the time lacked a framework for incorporating the longer-term “softer elements” into the equation (Placer Dome, Manager 4, 1997: 4).

On the organizational side, the following point was made:

The significance of this point was that the challenge of getting middle management to understand and implement corporate sustainable development initiatives was acknowledged. It was recognized that senior management would need to communicate with the operators who make the daily decisions.

There was some internal push-back from within Placer Dome to sustainable development. The company’s senior lawyers, for example, were concerned about risk exposure, and the sort of commitments the company might make. Still, they saw the idea of sustainable development as a business necessity. Concerns were also expressed that Placer Dome would become a lightning rod for environmental activists and that a policy would be used as a platform for spreading misinformation about the company. Doubts were expressed about the utility of the concept itself, as had been the case at Noranda (Executive 2, July 30, 2002). Some within Placer Dome saw sustainable development as a Trojan horse, allowing the arguments of those critical of mining to be implanted within the company.

Compelling business reasons were essential in persuading the company’s mine managers, who did not want to hear about more expenditures and time-consuming procedures (Executive 4, July 31, 2002). Industry needed to participate in decision-making about global public policy affecting mining, or risk regulation that was unreasonable from an industry perspective (Executive 2, July 30, 2002). Furthermore, national governments, the EU, and the World Bank were all placing their policy initiatives in the context of sustainable development. Sustainable development, it was argued, would address deficiencies in developing countries where regulations were weak or non-existent. Change agents within Placer Dome thus argued that the only practical approach was to place Placer Dome’s strategy within the context of sustainable development. The Board of Directors proved to be very supportive of a sustainable development policy, which was helpful. The appointment in 1997 of the position of VP, Sustainable Development, was seen as a key means to contend with push-back from within the company.

Notwithstanding the rather significant challenges that were identified on a variety of fronts, a consensus was reached that Placer Dome should go ahead with sustainable development, and a strategy was worked out to plan the way forward. External consultants recommended that Placer Dome consider engaging in annual sustainable development reporting and auditing of performance. Three stages of action to implement sustainable development were identified. The first stage was the creation of a realistic sustainable development policy framework, involving the development of a company sustainable development policy, the education of shareholders, and the cultivation of relationships with external stakeholders, in order to integrate external perspectives into the development of policy. The second stage was the evaluation of Placer Dome’s position against the sustainable development policy, involving gap analyses of its current practices, the development of an audit mechanism of existing operations, to compile an inventory of where the company now is on sustainable development, and to establish a plan of action for implementing the sustainable development policy. The third stage involved the systematic integration of sustainable development into company practices, through a comprehensive training program, the hiring of personnel trained in sustainable development, and the development of internal performance standards related to sustainable development (Resource Futures International 1997: 7–9).

In 1997, Placer Dome proceeded to develop a draft discussion paper on sustainable development. That same year, the Sustainable Development Group was formed, to assist in the dissemination of a sustainability policy at all business units within the company. Placer Dome followed through on the decision to consult external stakeholders, and a number of NGOs were sent drafts of the policy. A great deal of effort was devoted at this formative stage to securing input from leading-edge thinkers. At the same time as this was occurring at the corporate office, a similar process of policy development and consultation took place out of the Placer Pacific regional office in Sydney. In September 1997, Placer Pacific held a workshop with NGOs in Sydney, which included participants from NGOs, academia, and Placer Pacific employees. The purpose of this workshop was to discuss sustainable development in general, and to review Placer Dome’s initial discussion paper on sustainable development.

In February 1998, a second workshop was held in Sydney involving external stakeholders, with a view to discussing Placer Pacific’s draft 1997 Sustainable Development Progress Report, and the difficult task of developing sustainable development performance indicators. Placer Dome acknowledged the need for a cultural change, moving away from “Decide–Announce–Defend,” to “Listen–Learn–Engage” (an explicit intent to learn from others), on operational matters requiring consultation with external stakeholders, including local communities (Placer Pacific 1998a: 3). From external participants, comments ranged from: “Placer’s ability to handle the process to date is impressive – progress is being achieved,” to “Sustainability is about people’s lives and mining is social engineering that causes genocide” (ibid.: 6–7).

The corporate office also consulted with various external stakeholders, including NGOs, academic experts, and consultants. Among the NGOs consulted were the World Resources Institute (WRI), the Taskforce on the Churches and Corporate Responsibility (TCCR), and the North–South Institute. The TCCR had been formed to address the issue of corporate responsibility in apartheid-era South Africa, and developed important benchmarks for measuring CSR performance (Kairos 2002). In March 1998, James Cooney met with members of the TCCR involved with mining to discuss at length Placer Dome’s draft Sustainability Policy (TCCR 1998). In 1998, the North–South Institute released its Annual Development Report, which focused on Canadian corporate responsibility (North–South Institute 1998). These NGOs were responsive to Placer Dome’s request for feedback. Not surprisingly, a common theme in all of their responses was the need to move beyond policy towards implementation, calling for verifiable performance indicators.

The extraordinary nature of Placer Dome’s consultations with external stakeholders cannot be over-emphasized. To consult with external groups, who are often hostile to the company, represents a loss of control over the agenda that few companies are prepared to entertain. Even ten years after Placer Dome began this process, very few companies in the extractive sector are prepared to engage in the way Placer Dome did. As CEO Willson and Cooney explained:

NGOs willing to participate in the process were also taking risks, and were concerned they not be seen to be endorsing Placer Dome’s policies or reports.

As Cooney and others had recommended, Placer Dome began to build strategic relationships with internationally based NGOs, including the World Resources Institute (WRI), the Worldwide Fund for Nature (WWF), Conservation International (CI), the International Union for Conservation of Nature (IUCN), the International Institute for Sustainable Development (IISD), the Task Force on the Churches and Corporate Responsibility (TCCR), and the Mineral Policy Center (MPC). Links were established, and information sought from, international organizations, such as the World Bank and the United Nations and its various agencies (WHO, UNCTAD, UNDP, UNEP, UNCHR).

In February 1998, the Placer Dome Board approved a “sustainability” policy. Critical to this “buy-in” from the Board was the need to inform and generate support from shareholders. Part of management’s strategy to accomplish this was to appeal to the values the company wished to adhere to. Management also stressed the strategic importance of sustainable development, by presenting it as a core business issue directly related to the company’s future ability to access new resources and grow (Sloan Reference Sloan1999: Part II). Embracing sustainable development was portrayed as a strategic calculation to enable the company to gain access to new gold reserves, by, for example, obtaining support from local inhabitants, thereby ensuring its long-term survival. The policy was also justified on the grounds that it would reduce the social, economic, and environmental risks of mining development. As CEO Willson put it: “It is difficult when others, your shareholders for example, are more concerned about risks than the future rewards . . . but going global requires long-term vision” (Willson Reference Willson1997: 10).

Table 5.3 provides a timeline of the major organizational and sustainable development policy initiatives from 1995 to 1998.

Table 5.3 Timeline of major organizational and policy initiatives: Placer Dome, 1995–8

Sustainable development policy

In the course of developing its new policy, Placer Dome adopted the term “sustainability” to define its CSR initiatives. In Placer Pacific’s 1997 Progress Report, the company’s understanding of the difference between sustainability and sustainable development was described:

The corporate Sustainability Policy defined Placer Dome’s approach to sustainability as follows:

The evolved thinking on the company’s place and role in the larger project of sustainable development is reflected in the vision Placer Dome ultimately adopted. A distinction was made between corporate citizenship, CSR, and sustainability (Executive 2, July 30, 2002). Corporate citizenship was understood as a set of minimalist obligations a company has towards its stakeholders, reflecting a compliance-based approach, as set out by regulations. CSR is understood as a set of obligations that corporations should recognize, not just by virtue of what is fundamentally required, but by a desire to go beyond that. As determined by management, the corporation moves beyond the idea of doing no harm, to doing “good.” With sustainability, the corporation sees itself as one actor in a complex scheme of many actors with which it must interact and work. As reflected in the company’s extensive consultations with external stakeholders, sustainability entails moving towards collective action for a common goal (Executive 2, July 30, 2002). As will be seen in the next chapter, Placer Dome and Barrick differ quite significantly in their understanding of CSR and sustainable development/sustainability.

Two policy developments reflected PDI’s efforts to realize its commitment to sustainability; the first was the 1998 release of the Sustainability Policy (Placer Dome 1998a), and the second was the release in 1999 of the first Sustainability Report (for the year 1998 – Placer Dome 1999). The main elements of the Sustainability Policy were as follows:

To align the new policy with its management and accountability systems, all aspects of sustainability, economic, social, and environmental, were integrated into the company’s general management systems. This action was a significant break from the past, when economic and financial aspects of performance were handled through the general management systems, and a separate system was used for safety and environmental management (Sloan Reference Sloan1999: Part III). Placer Dome also took steps to improve competencies, through employee training, and the acquisition of new skills through the hiring of new people.

Mine General Managers were delegated responsibility for achieving sustainability objectives at the mines and exploration sites, with support and guidance from the Executive VPs of the North America, Latin America, and Asia Pacific regions. The mine managers were expected to translate corporate sustainability policies, and apply them to the local circumstances in their specific operations. By the early 2000s, many mines were releasing their own sustainability reports, in addition to the corporate sustainability report.

Senior executives recognized that merely publishing a list of sustainability policies would not suffice to cement Placer Dome’s credibility and commitment to sustainable development. The company therefore decided to report annually on its economic, social, and environmental activities. As already noted, the first annual report, Towards Sustainability, came from Placer Pacific, covering the period October 1996 to September 1997 (Placer Pacific 1998b). It provided economic, social, and environmental details on Placer Pacific’s operations, covering Marcopper in the Philippines, Porgera and Misima in PNG, and Kidston, Osborne, and Granny Smith in Australia. It reflected a first attempt to incorporate sustainability performance indicators, a challenging task, as endeavors such as building trust are not easily measured. Importantly, the report included targets for improved performance in a range of areas, from improving environmental management systems to frequency of community consultations, to rectification of identifiable health and safety risks.

In preparation for the publication of PDI’s first annual sustainability report, head office grappled, together with Placer Pacific, to develop sustainable development indicators for the company-wide report. A consulting firm was contracted to present the various options for sustainable development reporting, based on work in this area available at that time. The consultants’ report hints at the possibility of learning from Noranda, which was developing sustainable development indicators around the same time (Ecos Corporation 1998: 4). The main challenge identified for mining companies developing sustainable development indicators was to translate the concept of sustainability into business language and processes (i.e. as measurable outcomes) (ibid.: 4). Placer Dome also had to consider that its performance would be judged against any indicators or targets it set for itself, potentially exposing itself to further attack.

In 1999, Placer Dome released its first company-wide sustainability report, covering the year 1998 (Placer Dome 1999). As was the case with the Placer Pacific report, it reported on a range of economic, social, and environmental indicators, now on a company-wide basis. Data on such aspects as contribution to the local economy, water consumption, safety, and cyanide use was provided for each mine site. Five “sustainability priorities” were identified, including surface and groundwater quality, acid-rock drainage and metal leaching, tailings management, cyanide management, and closure (ibid.: 29). Environmental incidents, including cases of non-compliance due to ground or surface water contamination or an uncontrolled release onto land outside the operational mining lease were reported for each mine.

Documentation on the sheer magnitude of preparing the first report is testament to the steep learning curve the company was undergoing. The company was experiencing transformative change, for not only did it institute a new policy that in itself represented a substantial shift in thinking, it also commenced annual reporting on its performance, which required a major mobilization of personnel across the entire company. In a summary prepared by a member of the Sustainability Group on the development of the 1998 report, a number of challenges encountered by the sustainable development team were identified.

One major problem arose out of trying to meet the expectations of NGOs that had been consulted on the report, while at the same time ensuring adequate consultation with company personnel. The VP, Sustainable Development conducted tours of the mines, to help communicate the project to site personnel and to get their input. This was important, as having senior personnel visit the mines demonstrated the seriousness with which head office viewed the project. Yet, it was determined that more time was needed to get buy-in from the bottom up, in order to get consensus around commitments to be made. It was deemed especially critical to get this right before attempting to incorporate the expectations of external stakeholders, in order to prevent hostility from Placer Dome employees over being committed to someone else’s agenda with inadequate consultation (Executive 6, Placer Dome, 1998: 4).

The process of collecting environmental indicators revealed significant lacunae in Placer Dome’s environmental systems. The report noted that the company had overstated its environmental systems, and a major lesson was that it did not have its act together on major environmental questions. Areas identified for improvement included consistency of closure plans and programs, consistency of tailing management systems, and EMS completeness at sites and at head offices (Executive 6, Placer Dome, 1998: 3). It was observed that Placer Dome was “nowhere near ready for external reviews in some areas.”

As early as 1995, PDI had recognized that its existing environmental management systems needed improvement. After a review of international environmental management standards, Placer Dome decided to develop a customized approach, which led to the adoption in 1997 of the Environmental Management Framework. In assessing environmental risks, PDI sought to move away from the tendency to equate priorities with those issues requiring immediate attention, to identifying potential risks and taking steps to eliminate or mitigate them. Such an approach requires enhanced monitoring and verification programs, to allow early detection and mitigation activities, as well as the implementation of contingency and emergency preparedness programs. By December 2005, Placer Dome’s sustainability leadership team had well-established accountability through the line structure, as depicted in Figure 5.1 below.

Figure 5.1 Sustainability leadership structure: Placer Dome (as of December 2005).

Circling this line management configuration was the Board’s Safety and Sustainability Committee (to which the Executive Leadership Team reported), Government Relations, and the Projects, Communications, Finance, Legal, and Systems departments. In 2002, a Corporate Safety Group separate from the Sustainability Group was established, reporting to the Executive Leadership Team, and the Safety and Sustainability Committee of the Board. Operational management at the mining sites had ultimate responsibility for sustainable development implementation.

PDI sought to apply the example of initiatives in the Asia Pacific region to its company-wide operations. In Australia, the Australian Minerals Council (AMC) developed a Code for Environmental Management (1996), which Placer Pacific adopted. Placer Pacific led the way in adopting, in 1997, the International Safety/Environmental Rating System (ISRS/IERS) developed by Det Norske Veritas (DNV), a European auditing firm. In 2002, PDI began to use DNV’s system in order to commence environmental and safety audits at all its sites, with a plan to commence environmental audits at ten sites between 2002 and 2004 (Placer Dome 2004a). The results of these audits revealed that, although Placer Dome attained high scores for emergency preparedness and regulations, permits, and operations control, it received low scores for environmental aspects and impacts (Placer Dome 2004a: 10). These score results revealed that PDI was still grappling with weaknesses in its environmental performance, as had been acknowledged at the start of the reporting process in 1999.

Placer Dome’s first company-wide sustainability report attracted much attention, including from the NGO community. The Mineral Policy Center, for example, published a “report card” on Placer Dome’s 1998 report. Assigning a grade of “incomplete,” it noted that inadequate performance targets made it difficult to judge what Placer Dome would consider to be “success” in terms of specific objectives or benchmarks (Mineral Policy Center Reference Mineral1999: 8). In its subsequent sustainability reports, Placer Dome responded to these and other comments provided by external stakeholders. Goals and targets were more clearly articulated, and the company worked towards continual improvement in its environmental management systems. Supplemental to the company-wide reports, some of the individual mines began to provide their own sustainability reports, including Misima (PNG) and Zaldivar (Chile).

Willson retired in 1999, and Jay Taylor became the new CEO. Taylor continued to push sustainable development forward, and established the goal that Placer Dome take on a leadership role in implementing sustainability policies. In 1999, a Sustainability Committee of the Board was established. In 2001, Taylor announced a three-point strategic plan for the company (Placer Dome 2002: 11). The third goal was to invest significantly in research and technology, with a view to reducing costs, PDI’s “footprint” on the land, and to improving the company’s social acceptance.

Taylor’s vision regarding technological innovation reflected the importance he attached to research and development to attain sustainability, by employing technological breakthroughs to minimize harmful environmental impacts (Placer Dome 2002: 4). In 1999, PDI committed US$24 million over two years to conduct research into five key priority areas: alternatives to cyanide and recovery methods, prevention of ARD, improved effluent treatment and discharge systems, and best practices approach to integrating community development and mining (Placer Dome 2000: 8). In 2001, PDI increased its research and development budget to US$29 million (Placer Dome 2002: 11). In addition to reducing the amount of land disturbed, Taylor hoped that technological innovation would reduce costs, by, for example, developing machinery that could target the vein deposits more efficiently, reducing the tonnage of rock needing to be processed. In this respect, Placer Dome attempted to develop the “win–win” strategy which had been central to Noranda’s approach to CSR.

Under Taylor’s leadership, Placer Dome also sought to improve its health and safety management systems, and from the late 1990s, serious efforts were made to improve PDI’s safety record, and promote a culture of commitment to safety. As part of its effort to promote safety as a corporate value, Placer Dome added in 2000 “safety” to the title of the position, VP, Sustainability, to become VP, Safety and Sustainability. In effect, “safety” was separated from “sustainability,” with a view to making safety Placer Dome’s highest and core value (Placer Dome 2005c). When PDI acquired the South Deep mine in South Africa in 1999, the issue of safety became even more pressing, with ten fatalities recorded in 2001 and 2002 (out of a total of thirteen for the company’s entire operations) (Placer Dome 2003: 2). From 1996 to 2000, Placer Dome operations recorded 1,648 critical incidents, of which twenty-seven were fatal, a rate deemed unacceptable by Placer Dome (Placer Dome 2001: 8). In response to this bad record, and in light of evolving legislation involving workplace accidents, in 2001, PDI launched the Critical Incident Initiative, which identified a number of issues that were to inform the company’s evolving policy on safety. In 2002, PDI appointed three Corporate Safety Directors, creating the Corporate Safety Group, to facilitate safety systems deployment through the DNV system.

PDI also launched in 2001 the PlacerSMART process, in order to promote engineering safety and behavioral safety. The PlacerSMART program emphasized training of supervisors and employees, workshops, and training for contractors not in the direct employ of Placer Dome (Placer Dome 2005c: 5). In the same year, a Health and Safety Charter was released, to promote uniformity and standardization at all mine sites. The “triple zero” safety goal was established; zero medical injuries, zero lost-time injuries, and zero fatalities. Unfortunately, PDI continued to experience fatalities at its South Africa mine, with three fatalities in 2003 and two fatalities in 2004 (Placer Dome 2004a, 2005b). In 2003, a Safety, Sustainability, and Environment Committee of the Board was established, to provide oversight in the development of a comprehensive strategic approach to safety (Placer Dome 2005b).

Efforts to continually improve Placer Dome’s performance are evident in its policy initiatives and management practices. In 2003, for the first time, Placer Dome began to report against the 2002 GRI Sustainability Reporting Framework, a clear effort to identify indicators against which PDI’s performance could be gauged. Starting in 2004, Placer Dome began incorporating indicators from the GRI’s Mining and Metals supplement, with a commitment to report against all of these indicators for the 2006 Sustainability Report (which was never released) (Placer Dome 2005b: 3). In October 2005, Placer Dome signed onto the International Cyanide Management Code (ICMC). The ICMC was an industry initiative to promote the safe transport, handling, use, and containment of cyanide in the gold-mining process, and to work towards reducing the amount used.

Placer Dome sought to incorporate indicators that would be relevant to the local communities, in addition to site indicators, and indicators relevant to the country or region as a whole. Overall, senior management felt that the longest list of indicators should apply to the local level, with a smaller list of standards from the national level, and the smallest list of standards from the global level. The view was that global prescriptions for behavior were generally unhelpful, because of the need for site-specific indicators in the face of considerable variation in social situations and geological conditions from one site to the next (Executive 3, January 26, 2006).

By the time the last sustainability report was released for the year 2004, considerable progress had been made in developing and reporting on sustainable development indicators. Beginning in 2003, it included a supplement to its sustainability reports, consisting of additional detailed sustainability information and technical data. In this regard, Placer Dome sought to align itself with evolving global standards relevant to mining, a process in which it played a leading role.

From “sustainable development” to “sustainability”

In the early 2000s, there was still some internal resistance to the drive to promote sustainable development. One problem was that by 2001, sustainable development had ceased to be as useful a means of differentiating Placer Dome from other mining companies, as more major mining companies came to adopt the norm. This made it harder to sell Placer Dome as a leader in this area, and to win out over competitors for permits in countries where sustainable development was a priority. Head office costs grew substantially, and when Peter Tomsett became CEO in 2004, he took steps to reduce them. Noteworthy among these was the disbandment of PDI’s research and development unit. Cutbacks at head office did not affect the implementation of sustainability policies, however, as these were integrated throughout the operation, and absorbed as part of operational costs (Executive 3, January 26, 2006). Closure costs were running at around US$20 million per year in the mid-2000s, as reported to the Canadian Securities and Exchange Commission (SEC) (Placer Dome 2005a).

Overall, Placer Dome remained committed to sustainable development, both as an intrinsic value, and as part of its risk-management strategy. In addition to immediate concerns about cost, however, was a philosophical questioning of what the extent of Placer Dome’s role should be, especially in the developing country context where the need was so great. One dimension of the problem is that local communities develop a relationship of dependency on the mine, which creates problems (in the absence of effective government) when the time comes to close the mine. CEO Willson called for a “new model” for structuring the responsibilities of mines, governments, and local communities to achieve long-term social and economic development, in the form of a multi-institutional approach (Willson Reference Willson1997: 3–5). This led Willson to declare that:

Our experience in PNG, Venezuela and elsewhere is convincing us that market forces alone are unlikely to make mining succeed as a contributor to development . . . [rather] . . . sustainable development directs the mining company, the host government, aid agencies and non-governmental organizations to work collaboratively to plan for integrated economic, social and environmental progress. (1997: 8–9)

The need to constantly evaluate and re-evaluate PDI’s proper role in developing societies was reflected in its evolving understanding on CSR. Initially framing its policies in terms of sustainable development, the company moved to the concept of sustainability (as reflected in its reporting), to capture the idea that it was but one player in a larger, complex process. The drift towards increasing social intervention in communities, such as in South Africa, led to escalating costs and concerns about how far the company should properly go in stepping in where governments were not necessarily able or willing. These concerns led to the introduction in the mid-2000s of CSR into Placer Dome’s understanding of its sustainability policies, to reinforce the reality that the company could only be one of many actors seeking to assist in the larger goal of sustainable development.

Ongoing initiatives reveal that overall, PDI’s commitment to sustainable development was becoming institutionalized through specific practices consistent with the norm, but its thinking on sustainable development continued to evolve. In 2004, under Tomsett’s leadership, a Sustainability Charter was released, reiterating PDI’s core values and beliefs, and commitment to sustainability (Placer Dome 2004b). The Sustainability Charter reflected Placer Dome’s evolving view that sustainability is a dynamic process involving ongoing learning. The Charter also incorporated the concept of CSR, to better reflect the understanding that the corporation is only one of many partners involved in the ultimate goal of sustainable development. Placer Dome’s CSR policies were understood to be an integrated framework through which goals in the areas of the environment, society, the economy, and governance could be realized (Executive 2, January 25, 2006).

A stated goal of the Charter was to enhance buy-in throughout the organization, especially from senior management and the Board (Placer Dome 2004b: 20). This suggests that concerns lingered about just how much Placer Dome could do on its own, or should be doing on its own. One executive saw sustainability as a means for the company to change its orientation in terms of how to make decisions to meet its interests (Executive 2, January 25, 2006). In order to counter the results-oriented “mining mindset,” a system was needed that would emphasize process rather than outcomes or results. From the company’s perspective, sustainability would not be an end result, but an ongoing process. To make sustainable development attractive to the corporate mindset, it was proposed that there could be trade-offs between the economic, social, and environmental dimensions of “sustainability” (Executive 2, December 6, 2011). By the mid-2000s, there was no more internal pushback to sustainable development/sustainability policies (Executive 2, January 25, 2006).

The evolution of thinking on sustainable development within Placer Dome over the course of a decade shows that there was not a simple linear progression towards acceptance of the norm, and adoption of practices consistent with it. Thinking about the nature of Placer Dome’s obligation to society continued to evolve, although lingering internal pushback and concerns about costs suggest a degree of backtracking. However, the company continued to undertake organizational changes and introduce new practices consistent with sustainable development, pointing to the need to look at organizational attributes in determining the extent of commitment to the norm. Table 5.4 outlines the major organizational and policy changes undertaken up to the time of Placer Dome’s acquisition by Barrick Gold.

Table 5.4 Timeline of major organizational and policy initiatives: Placer Dome, 1999–2005

Conclusion

The case study of Placer Dome confirms the importance of external institutional context, and internal managerial leadership in explaining CSR adoption. The global momentum behind sustainable development informed the evolution of Placer Dome’s CSR policies and practices. Senior management was heavily engaged with global NGOs and international governmental organizations, to make sure the company’s perspective was represented in global decision-making bodies. Through the course of dialogue with these actors, senior management was in turn influenced by their perspectives on sustainable development. Management also learned from engagement in national and provincial processes, including the BC Round Table on the Environment and the Whitehorse Mining Initiative. Placer Dome’s openness to learning from external actors such as NGOs in the process of developing its sustainability policies taught the value of learning how to learn (deutero learning) from external actors.

The support of senior management from the CEO on down was essential to bringing about transformative change. This case study shows that leadership took on different forms, and combined to produce a very effective group for bringing about change. Leadership from the top is always essential, and when CEO Willson joined Placer Dome in 1992, he brought with him a lifetime of experience and a strong understanding of how mining should be done in a manner consistent with respect for the environment.

Strategic motivations were paramount, but Willson also sought to instill a values-based approach to its new policies. This he did by engaging in a corporate-wide discussion on what the company’s core values should be, and then working to integrate those core values into Placer Dome’s sustainable development strategy. While the need to establish the business case for sustainable development was ever present, Willson used the norm to promote integrated thinking about the company’s economic, social, and environmental responsibilities, as well as to foster cohesion amongst employees around common, values-based goals. His successors sought to inculcate a culture of commitment to sustainability and later, safety, by institutionalizing practices consistent with the norm. In short, management was driven both by norms and interest-based considerations.

Another form of leadership was provided by policy entrepreneurs, who moved thinking forward on sustainable development. One senior manager’s specific mandate was to engage with public institutions at the global, national, and provincial levels, and his background in philosophy facilitated his ability to comprehend the relevance and applicability of sustainable development to mining. At the senior management level, others, including those with engineering backgrounds, quickly grasped the significance for mining of the emerging norm of sustainable development. Professional background was a factor, but not decisive in explaining sustainable development adoption (Executive 2, December 6, 2011). It was anticipated that resistance to sustainable development would be especially acute at the level of the mine site, as mine managers were responsible for implementing corporate policies. Positive steps were taken to counteract resistance and encourage buy-in, including extensive consultations throughout the organization.

As senior officials attested, the experience of operating mines in remote parts of Canada and the Asia Pacific provided vital lessons that were incorporated into the development of Placer Dome’s CSR policies. Crucial leadership was provided in the form of projecting learnings from operational challenges in specific locales into specific policies and practices. The VP, Sustainable Development, who had prior extensive experience as a mine manager at Porgera, was tasked with the job of selling sustainable development to the mine managers. At the same time, management recognized that practices appropriate in one developing country location might not be completely transferable to other locations due to variation in local community dynamics. It was the responsibility of mine managers to institute specific practices relevant to their operational challenges. Placer Dome worked proactively to counteract the problem of sub-cultures at specific mine sites undermining corporate CSR initiatives.

In making the case for sustainable development, Placer Dome was driven in the development of its policies by instrumental considerations, including reputational concerns, the need to manage social and environmental risks, and the need to maintain a social license to operate. Leadership also took the form of spelling out the need to avoid liability through environmental failure, and demonstrating the direct correlation between avoiding costly delays and/or disruptions to its operations, and the profitability and long-term viability of the firm. By selling sustainable development as a risk avoidance/mitigation strategy, norms entrepreneurs were able to relate the concept to the dominant cultural frame within the company.

The combination of internal leadership, receptiveness to global normative developments and learning from experiences in specific institutional settings explains why Placer Dome was an early mover in CSR adoption framed around the norm of sustainable development.