Barrick Gold Corporation-Tanzania

Barrick Gold Corporation-Tanzania

Summary

Barrick Gold Corporation is one of the transnational mining corporations that expanded its mining activities to Tanzania, an East African country. Barrick was a Canadian mining corporation operating in many countries across the world, meaning that it had vast experience in mining activities. Barrick used advanced technologies in its mining activities because it was one of the most respected mining corporations in the world (Kahindi & Beamish, 2010). It owned one of the largest gold mineral reserves and large land for mining activities on five continents. Its shares were traded in Toronto, New York, London, Switzerland, and Euronext Paris stock exchange markets.

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Barrick Mining Corporation launched mining activities in Tanzania in 1999 after four years of exploration. Its initial activities were limited to the Bulyanhulu area in Kahama District until 2004, when the company expanded its operations in other surrounding areas within the Lake Victoria region (Kahindi & Beamish, 2010). The company claimed it followed all the recommended United Nations corporate social responsibility standards and adhered to international laws in establishing its operations in Tanzania. The company claims to promote long-term benefits to the communities in which it operates and collaborate with the governments, local government, stakeholders, and employees (Kahindi & Beamish, 2010). Barrick strived to earn community and employee trust to ensure long-term and uninterrupted operations.

Barrick established several community projects as its corporate social responsibility, including health centers, schools, training centers, and environmental conservation measures. However, a decade later, the company found itself amid community demonstrations, rejection, resentment, and confusion (Joanne, Lawrence, Paul, 2012). The company had not successfully earned the local community’s trust since community members did not see tangible benefits of the company operating in their area apart from the pain it was causing.

Critical aspects

Some of the critical aspects in this case study are, first, the issue of poverty and overpopulation in the Lake Victoria zone. Unfortunately, the gold field reserves were located in an overpopulated region, and this population was poor. Therefore, Barrick and the government had to deal with the issue of compensation for the community members who relocated from their homes (Kahindi & Beamish, 2010). The communities were poor because they lacked basic social amenities such as health centers, clean water, and schools. The pain of the communities increased when the members were not compensated well for giving up their ancestral lands.

The second issue in the case study is weak government systems. Tanzania is a developing nation, meaning that its government systems, such as the judiciary, regulatory authorities, and human rights groups, are not well developed (Kahindi & Beamish, 2010). Thus, Barrick took advantage of the weak government systems to make its way since reports showed that the company initiated several community projects in its initial years of operation, but in later years, it relaxed because there were no regulatory authorities to make a follow-up on how the company is operating.

The third critical issue that manifests in this case study is high levels of corruption among government officials. The issue of compensation was messed up because of corruption between government officials, local authority leaders, and the company management (Meir Et al., 2014). The company management corrupted government officials to have their way at the expense of the local community members.

The fourth critical issue is environmental pollution; Barrick’s operations led to many kinds of environmental pollution, including noise from the mining sites, soil erosion, water pollution, and more (Kahindi & Beamish, 2010). Another critical issue is the lack of government commitment to ensuring that the communities are safe and benefiting from foreign investors such as Barrick Corporation. The government of Tanzania did not make Anaya follow-up to ensure that the investors were implementing what was agreed upon.

Assessing critical aspects

I was able to make the assessments of the critical issues because I read through the case study from the first to the last page. Going through the case study gave me a complete picture of the whole situation, and I was able to see what happened and where the problems arose (Wall & Pelon, 2011). Reading through the case study made me want to know why Barrick Mining Corporation faced rejection and resentment from the local communities despite spending huge resources on community projects.

Secondly, I was able to assess the critical aspects of this case study by evaluating the concerns raised in the case study. The first concern is why the communities should reject a company that is trying to help them develop. Another problem is trying to establish why a foreign corporation such as Barrick has managed to carry out its activities for so long without being monitored by the government authorities (Joanne, Lawrence, Paul, 2012). Analyzing these concerns, I identified underlying critical issues that could be the reason for what was happening.

I managed to assess the critical aspects by finding the international standards foreign companies must adhere to while trying to establish an investment in a foreign country. From the case study, it is clear that Barrick observed all the global trade standards while establishing mining operations in Tanzania (Wall & Pelon, 2011). I confirmed that Barrick did exceptionally well in keeping the laws, but when it realized that Tanzania did not have strong systems to check and monitor its activities, it started neglecting the local communities.

I tried to find out why the company started by engaging the communities and implementing community projects, and later, these activities were less and why there was community resentment. I realized government neglect of the local community concerns made Barrick Corporation less committed to the concerns (Joanne, Lawrence, Paul, 2012). Thus, I realized that the laxity and negligence of the Tanzanian government was a big issue.

Solutions

Several solutions could help in solving the issues in the case study. First, the government of Tanzania should rise to the occasion and come out to defend the communities and give them their rights. If a foreign company comes and gives ancestral land to the local communities, the community members should be compensated handsomely to help them resettle somewhere else without neglect (Wall & Pelon, 2011). Therefore, the government should spearhead the displaced communities’ resettlement and ensure they are comfortable in the new locations.

The second solution is to strengthen the tactics of fighting corruption among government officials. The sufferings that the local communities are enduring are attributed to top corrupt deals by government officials who are corrupted by the company management to sign important agreements at the expense of the local communities (Joanne, Lawrence, Paul, 2012). Curbing corruption in government institutions requires enacting strict laws and defining heavy punishment of individuals found engaging in corrupt deals.

The third solution is for the government to put in place a strong environmental watchdog authority that monitors corporations’ effects on the environment. The authority should limit emissions and force corporations to dispose of their wastes responsibly (Joanne, Lawrence, Paul, 2012). The environmental authority should punish those corporations that violate the regulations. Corporations should be put to task to operate sustainably.

Another solution to the issues in the case study is community engagement by both the company and the government. The local communities are against the company because they believe that they are not benefiting from the operations of the company, yet it is using the community resources. The local community members need to be dedicated to the importance of such corporations to the community and see why they should embrace such development (Wall & Pelon, 2011). To succeed in this initiative, the company and the government should ensure that the communities get tangible benefits. Bringing together the concerned parties would help to raise their concerns and find ways of sorting the theme (Meir Et al., 2014). The local communities are against the company because the government has neglected them, and the company is not benefiting them fully as expected.

Reflection

The case study about Barrick Gold corporation operations in Tanzania comes out well to showcase the challenges of global leadership. Barrick Corporation, like many other international corporations, faced challenges common to investors who invest in developing countries. The case clearly shows the struggles multinational corporations encounter when exploring new markets. The first important lesson I have learned is that any international corporation that is venturing into a new market should adhere to international business laws so that it may not be haunted later. Barrick, as an experienced mining company, followed the global trade laws to the letter when launching its operations in Tanzania. However, it was unfortunate that Tanzania was a developing nation, meaning it did not have all the systems in place. This gave the company an advantage in maximizing its revenues at the expense of the local communities.

I have learned that developing countries should strive to put in place some systems that would help to create a fairground whenever international investors come to invest or operate in the country. Tanzania’s government did not have strong systems to ensure that multinational corporations such as Barrick used fairly and sustainably. Having strong systems helps protect citizens and the environment.

In this case study, I have also learned that international corporations seeking to operate in foreign countries should always be ready and willing to engage the local communities. Corporations should strive to educate the local communities about the benefits of their being there and how the community members would benefit. The companies should fully address the concerns of the local communities to avoid future confrontations. Another important aspect I have learned is that international corporations’ management should not fall into the trap and be persuaded by government officials to start engaging in corrupt deals to evade the laws. The management should strive to remain truthful and act within the rules for the corporation’s sustainability in the area. Corruption deals could work for just some time, but things may turn in the future and cause much loss to the company.

References

Caravanos J, Et al., (2013). Rapid assessment of environmental health risks posed by mining operations in low- and middle-income countries: selected case studies. Environ Sci Pollut Res. 2013;20: 7711–7718.

Joanne T. Lawrence, Paul W. (2012). Beamish. Globally Responsible Leadership: Managing According to the UN Global Compact. Sage publishers.

Kahindi, K & Beamish, P. (2010). Barrick Gold Corporation-Tanzania. Environment

Meir, R Et al., (2014). Socially Responsible Mining: the Relationship between Mining and Poverty, Human Health and the Environment. Rev Environ Health. 2014; 29(0): 83–89.doi: 10.1515/reveal-2014-0022

Wall, Elizabeth; Pelon, Remi. 2011. Sharing Mining Benefits in Developing Countries. Extractive industries and development series;n o. 21. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/18290 License: CC BY 3.0 IGO.

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1. Write a brief Overview/Summary of the case in your own words describing the nature and background information on the case. (Minimum 1/2 -1 page)

Barrick Gold Corporation-Tanzania

2. In your opinion, what were some Critical Aspects of the case that were identified? What were some Critical Aspects that you perceived to be very vital? (Minimum 1 page)

3. How were you able to make those Assessments of selecting the critical aspects or components for the case author/writer and yourself? (Minimum 1 page)

4. Identify and list some of the Outcomes, Solutions, and Resolutions you extrapolated from the case. (Minimum 1 page)

5. Write a reflection on what you learned about global leadership from the case. (Minimum 1 page)