The Case of Newmont Mining in Peru Essay Example

For multinational companies to do business in a developing country they should obtain the social license which will protect the community, the employees working for the companies and the environment where the companies are operating. The social science will help to keep the standards of the employees and environmentally safe, and thus the community will benefit from the operation as well as their environment well maintained. Therefore, I strongly agree with multinational companies to obtain the license first before they start operation to make them operate successfully.

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Social license is a substantial agreement between the company or industry wanting to start the operation and what the employees and the community accept as the standard business practices. A social license will ensure that the company take care of its employees and maintain the state of the environment (Gunningham, 2004).

For the social license to be approved to operate it should be accepted by all the community stakeholders with the concept of community societal concern and social acceptance by all stakeholders. Social license is built and created through the companies' actions of responsiveness towards maintaining the community moral code such as not violating the labor rights and keeping the state of environmental sustainability (Prno, 2012). The social license will get a compromise by the community if the companies in agreement with community start doing in contrary with the deal and if they did not solve the issues, they would lose the social license.

If I were to advise Newmont, I would recommend them to put down all the rules and requirements they need from those companies who want to do mining in the areas. These rules should contain what the companies should go towards maintaining the environment from any damage, how to take care of laborers and employees working for them and what should the community benefit from the operation. The critical positive impact from the initiative is that it will improve the standards of the community and make sure that the affairs and environmental affairs are well preserved. Though the action may have some disadvantages as not most of the companies will be reluctant to operate under those restrictions as most of them will be working for self-interest.

Conclusion

In conclusion, any operation taking place in a specific community should ensure that the community standards maintained and the community should benefit from the process directly.

References

Gunningham, N., Kagan, R. A., & Thornton, D. (2004). Social license and environmental protection: why businesses go beyond compliance. Law & Social Inquiry, 29(2), 307-341.

Prno, J., & Slocombe, D. S. (2012). Exploring the origins of 'social license to operate 'in the mining sector: Perspectives from governance and sustainability theories. Resources policy, 37(3), 346-357.