Corporate Social Responsibility refers to operating a business in a manner that the business is sensitive to the social and environmental impacts created by the business. The EI-CSREPA is an annual award and it will be handed out for the first time in November this year.
The award seeks to promote good practices in the extractive industry by ensuring that communities around the mines benefit socially from the activities of the companies working in their locations.
In his address during the official introduction of the awards, held towards the end of February in Dar es Salaam, President Jakaya Kikwete urged foreign and local companies extracting minerals, natural gas and oil to incorporate local procurement of goods and services into their company policies.
The President urged companies to empower communities surrounding their areas of operations. "If the principles of corporate social responsibility are observed and delivered, companies will enjoy very good relations with the communities around them. If companies pay taxes correctly and on time they will have good relations with the government," the president said and added,
"Likewise, if the government and communities aptly deliver on their part of the responsibilities they will enjoy good relations with companies. In the end everybody benefits and a win-win situation will be realised," Mr Kikwete remarked. The event was attended by various stakeholders in the industry including companies in the extractive industry, civil society organizations and the government.
Without mincing words, the president blasted companies that import goods and services even when the same commodities and service are found locally. "There are lots of goods and services which can be sourced locally, and this is a best way to economically empower locals," he said. Speaking in a rather serious tone, President Kikwete said people need to see tangible development accrued from the extractive industry.
The president narrated an incident where he refused to drink bottled water at a hotel in one of the game parks because the water was imported. "People always ask, what do we get in return? Our gold is taken, the companies have tax holidays and exemptions but they don't even buy our goods or support us economically," he emphasised.
Mr Kikwete cited sugar companies as one group of investors that empower surrounding communities through the sugar cane out growers' schemes. "The operations of sugar companies may not be the same as companies in the extractive industry but the principle of economic empowerment is the same," he said.
He also warned that since extraction of resources depletes resources in the long run, people need to know what the economy of their country benefited, otherwise there would be no harmony with the investors. "For the industry to develop effectively, we need to create a win-win situation between the companies in the sector and the communities surrounding them," he remarked.
Speaking at the occasion, the Minister for Energy and Minerals, Mr William Ngeleja, said the extractive industry, particularly the mining sector, has registered significant growth over the last ten years. A panel of experts will assess corporate social responsibility and empowerment projects select a winner who will be awarded at a gala in November, this year.
According to the Deputy Minister of Energy and Minerals, Mr Adam Malima, the panel will have its members drawn from the academia, civil societies and the media among other stakeholders in the extractive industry. "The companies in the industry as well as officials in the Department of Mining in the Ministry of Energy and Minerals will not be included in the panel," Mr Malima explained.
The Minister noted however that challenges remain on incorporating the success of the sector in other sectors of the economy for the growth to be appreciated by the common people. "The presidential award aims at promoting excellence and will be awarded annually to large, medium and small scale companies in the extractive industry," the minister said.
He was optimistic that the presidential award will promote excellence in extraction of minerals, oil and gas particularly in corporate social responsibility and empowerment of locals. Tanzania has witnesses an increase in the number of the extractive industries projects in exploration and mining of minerals also exploration of natural gas and petroleum under the private owned companies for the last 14 years.
Despite the size of the investments there has been public outcry that the communities found near the projects are not benefiting from the said investments. Key indicators that will be looked at by the panel include the wellbeing of communities, local industry participation training, safety, social amenities like housing and health services and infrastructure development.
Other indicators are the procurement of goods and services within the country. The Presidential award is expected to improve participation of extractive companies in the community wellbeing activities, build trust responsibility and ownership on mineral and energy projects.
The awards will have six categories namely environmental conservation and protection, education contributions and training and health services and community wellbeing sustainability. Others are skills development, transparency and community safety.