Safeguarding the positive impacts of multinational corporations (MNCs) have in developing countries, for instance, in what concerns paying taxes and job creation, there is a need to better understand their contribution for rural space transformation in those operating countries.
In the case of the extractive, agricultural and forestry industry, which operate at rural communities, the transformations occurring in this rural space are notorious. On the one hand, the dismantling of local habits and customs due to resettlements that removes the population from their place to settle the company’s operations; on the other, the imperativeness of the resettled communities that lose their land, of having to develop new economic and social activities, since in many cases the new areas of residence do not offer the same conditions of previous lands, e.g., fertile lands for agriculture and cattle breeding. In these circumstances, changes in habits occur, e.g., leading to the need for small business ventures and the search for formal employment in the new housing areas.
Corporate Social Responsibility (CSR) programs have been spread across subsidiaries of/and MNCs. Moreover, the CSR disclosure throughout company’s sustainability reporting contributes to the established idea that transparency contributes for good governance, impacts reduction and is basis for sustainability reforms and enhanced local development wherever companies operate. However, local evidences in many countries show CSR is not being enough to minimize rural transformations and associated problems.
Findings indicate subsidiaries’ CSR activities are implemented at the local level within the framework of global international guidelines and themes; and even proactive CSR strategies among autonomous subsidiaries appear to be in harmony with home-country and international policies and not tailored to the host-country context. One knows however that MNCs and their subsidiaries operate within high diversity external environments and CSR standards might not be adequately applied universally, reducing its potential to solve issued problems.
In Mozambique, mining and quarrying has been one of the driving forces behind development and job creation (in 2011, the industry would contribute 5% to GDP). Since the 2000s, with the discovery of huge gas and coal deposits, the focus has been on this sector as a motor of development. However, the effective contribution of this industry to local development, as well as to the preservation of the environment, generates controversies within the academic and political sphere.
Hence questions such as: How is the CSR focus done by MNC’s subsidiaries within developing countries? Which are the mechanisms and effects of firms’ CSR to deal with local rural transformations? Namely, how are companies dealing with community life quality improving within new redeveloped areas? In addition, what mechanisms do use (or not) that contribute to the preservation of the values and cultural traditions of the affected communities? need to be answered.
In this article we will try to answer to some of these questions focusing on the Mozambican case. First, we will analyse the scientific literature on CSR in developing countries. Specifically, how MNC’s subsidiaries implement CSR practices in developing countries namely the ones related with community support. Second, following an exploratory approach we analyse the sustainability reports of extractive companies operating in Mozambique and articles from Mozambican public newspapers to map MNC’s practices and evolution in Mozambique. The focus will be on mechanisms being used by companies, communities and governments to deal with rural changes.
The paper will present the current debate and trends on CSR practices and CSR policy in contributing to rural transformations associated to communities, where firms in Mozambique, especially extractive, are located.
We hope to contribute to the scientific debate on how MNC’s subsidiaries deal with CSR contextualization. We also expect to contribute to knowledge of what is happening in Mozambique, considering the need to preserve the local socio-cultural structure and to support the sustainable economic development of local communities.
Key-words: MNC’s subsidiaries; communities; impacts; sustainability reporting; CSR policies.