Compulsory community social responsibility

We are a large mining company with operations worldwide, including Tanzania and we are required to invest in local infrastructure as part of our community social responsibility (CSR). However, we are frustrated with the additional costs and resources required to invest in infrastructure. Why does Tanzania make CSR mandatory? Other countries do not have similar requirements. What is the rationale behind compulsory CSR and how can we avoid this? Kindly guide us.
PS, Dar es Salaam

It is true that in many countries, CSR is a voluntary undertaking. In Tanzania, however, investment in the communities impacted by the mining activities is critical to the mining operations. In 2017, the Government through the Written Laws (Miscellaneous Amendments), 2017 (Act No. 7 of  2017), among others, amended the Mining Act, [Cap. 123 R.E. 2019] (the Mining Act) by introducing a requirement that mineral rights holders must prepare and submit CSR plans on the basis of guidelines prepared by the local government authorities. Section 105 of the Mining Act requires every mineral right holder to prepare a credible annual CSR plan jointly agreed by the relevant local government authority or local government authorities in consultation with the Minister responsible for local government authorities and the Minister responsible for finance. The CSR plan must take into account environmental, social, economic and cultural activities based on priorities of the host community as identified by the local government authority. After preparing the corporate social responsibility plan, the company will submit it to the respective local government authority for consideration and approval. Further, guidance on CSR is provided in the Mining (Corporate Social Responsibility) Regulations, 2023 (G.N. No. 409 of 2023) including the procedures for approval of CSR plans, dispute settlement mechanisms and offences.

As clearly seen from the law, an obligation is placed on the company to prepare and implement the community development programmes under the supervision and guidance of the Government and its agencies. In that case, the Government may identify areas of priorities for CSR which in your case is local infrastructure. Unfortunately, there is no other way to avoid this obligation other than exploring ways to balance CSR responsibilities and the company’s economic interest by engaging the local government in the planning process.

The rationale behind mandatory CSR is that mining companies are extracting resources in the midst of communities. It is of critical importance that the company secures a social licence from the communities in whose environment mining operations are carried out. This follows the fact that without securing the social licence, mining becomes an impossible venture because some of the local communities around the area where mining is done have lost their farming land because of the mine. One of the most important ways to secure the social license is to invest in the communities impacted by the mining operation. The investment in the communities can take the form of investments in education, health, water and sanitation, road construction, etc. These investments secure the support and cooperation to enable the company carry on its mining operations without interference or agitations from the community. Your lawyer can guide you further.