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By Root 2117 0

some of the above-mentioned agreements in the year 2000, they were afraid that the U.S. presidential election would be won by the pro-environment candidate Al Gore, that the Montana gubernatorial election would be won by an anti-business candidate, and that good-neighbor agreements offered Stillwater its best chance to buy itself a stable future. In other words, Stillwater’s executives pursued their own perception of their company’s best interests by negotiating good-neighbor agreements, whereas most other large American mining companies have pursued their own differing vision of their company’s interests by denying responsibility, hiring lobbyists to oppose governmental regulation, and in the last resort filing bankruptcy.

In 1998 top executives of some of the world’s largest international mining companies nevertheless became concerned that their industry around the world was “losing its social license to operate,” as the expression goes. They formed an initiative termed the Mining Minerals and Sustainable Development (MMSD) project, launched a series of studies on sustainable mining, enlisted a well-known environmentalist (the president of the National Wildlife Federation) as director of the initiative, and attempted without success to involve the broader environmental community, which refused because of its historical disgust with mining companies. In the year 2002 the study arrived at a series of recommendations, but then most of the mining companies involved unfortunately declined to implement the recommendations.

The exception is the British mining giant Rio Tinto, which decided to move ahead on some of the recommendations on its own, under pressure from its strongly supportive CEO and from British stockholders, and burned by the memory of having owned Bougainville’s Panguna Copper Mine, whose environmental messes had proved so disastrously expensive to the company. Just as Chevron Oil Company found in negotiating with the Norwegian government, Rio Tinto foresaw business advantages to being seen as an industry leader in social responsibility. Its borax mine in California’s Death Valley is now perhaps the most cleanly operated mine in the U.S. One payoff that Rio Tinto has already reaped is that when Tiffany & Co., eager to fend off the risk of environmental protestors marching in front of its jewelry stores with posters about the cyanide releases and dead fish caused by gold mining, decided to stress environmental considerations in selecting a mining company to which to award a contract as gold supplier, Tiffany chose Rio Tinto because of the latter’s increasingly clean reputation. Tiffany’s further motives included some of the exact same considerations that I already mentioned as having motivated ChevronTexaco: establishing a good reputation for their brand name, maintaining a motivated and high-caliber workforce, and the philosophy of company executives.

The remaining instructive example involves U.S.-based DuPont Company, the world’s leading buyer of titanium metal and titanium compounds used in paints, jet engines, high-speed planes and space vehicles, and for other purposes. Much titanium is extracted from Australian beach sands rich in rutile, a mineral that consists of almost pure titanium dioxide. DuPont is a manufacturing company, not a mining company, and so it buys the rutile from Australian mining companies. However, DuPont puts its name on all its products, including its titanium-based house paints, and it does not want all its products to get a bad reputation just because its titanium suppliers arouse consumer wrath through dirty practices. Hence DuPont, in collaboration with public interest groups, has worked out buyers’ agreements and suppliers’ codes of responsibility that it enforces on all of its Australian titanium suppliers.

These two examples involving Tiffany and DuPont illustrate an important point. Individual consumers collectively hold some clout over oil companies and (to a lesser extent) coal mining companies, because the public buys fuel directly from the oil companies and buys electricity