Companies exploring for resources in many poor countries around the world can engage in corporate social responsibility that assist them in their activities whereas at the same time benefit the locals.
According to the Co-Director, Oxford Institute for Global Economic Development Sir Paul Collier companies should engage in CSR such in the infrastructure side as building or roads as well as setting up of utilities as they benefit the company as well as open new opportunities for locals to engage in.
Collier cautions that the biggest disconnect between companies and locals is that the communities surrounding the companies believe that they can participate in provision of services to the companies whereas in some instances such communities do not have the capacity to do that.
He thus says that infrastructural projects that open up opportunities in the community can reduce this over reliance on direct services from the mining companies as compared to traditional CSR activities such as building of schools, sponsoring of community activities among others.
For the companies Collier says this would enable them access and deliver raw materials and extracted goods more quickly making such infrastructure works beneficial to them especially in poor countries.
Speaking during the key speech address at the national resource charter conference held last month the professor of economics also called for more regulation and a better tax regime as seen in the banking sector as exploration companies are custodians of other people’s assets similar to financial insitutions.
Other speaking points were as to whether poor countries in the extractive sector needed to set up sovereign wealth funds similar to nations such as Norway as well as investing in the future by exploration companies through plough back of profits.
Watch the whole speech here.