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The study assessed the effect of corporate social responsibility on community development with a special attention to Anglogold Ashanti‟s operations in Obuasi and its environs. The study was a descriptive case study using both quantitative and qualitative approach. A sample of 288 was selected through a multi–stage sampling design. Data were collected using questionnaire and interview guides. Data was analyzed using SPSS version 20. Results from the study showed that the company carried out its corporate social responsibility to the Obuasi community and its environs. The major CSR activities mostly practiced by AGA includes provision of malaria control programmes (M = 4.88; SD = 0.535), provision of employment (M = 4.52; SD = 0.962), embarking on environmental issues (M = 4.02; SD = 0.991), and good drinking water to the community (M= 4.00; SD = 0.857). Again, the study showed that the state of community development in the communities were good/satisfactory (87%). The results of multivariate regression analysis showed that corporate social responsibilities has an influence on community development
(adjusted R square = .464). The major challenges the company face in implementing CSR include financial constraints, interference from political and opinion leaders leading to abandonment of completed projects, and lack of support or commitment from community members. This therefore calls for the company to engage the communities, especially key stakeholders to identify and prioritize the needs of the community through public forums, allocation of budget for community development. In addition, lobbying for funds from government and nongovernmental agencies is to be employed, and that will ultimately improve CSR
1.1 Background to the Study
Community development involves the coming together of a group of people in a community planning and acting together to bring about the satisfaction of their needs with a view to bringing about desirable change in the lives of the people through their cooperative efforts and by actively taking part in measures designed to improve their conditions of living (Adedokun, 2008). Community development process provides the opportunity of involving and motivating people of the community to define, identify, analyze and solve problems that they feel are important. Community Development therefore involves strengthening the capacity of individuals within the community to accomplish the community‟s set goals.
During the first development decades of the 1950s and 1960s, community development was actively promoted throughout the developing world as part of the state building process and as a means of raising standards of living by governments and by the United Nations through its affiliated institutions as part of independence and decolonization movements in Africa (Briggs and Mueller 1997). Community Development programmes received substantial support from governments and donor agencies. Therefore, many governments promoted development projects that aimed at environmental security, social renewal, and income generation (Cohen, 1996). The goals of these projects were to address the poverty, hunger, disease, and apathy that were endemic among the rural and urban poor (Bonye et al 2013).
In the context of a Ghanaian community development is usually described in terms of the well-being of the individual and the community or opportunities for improving livelihoods. This is usually carried out by both the state and non-state actors such as parastatals, NGOs, multinationals etc. which includes AngloGold Ashanti. The development agenda of the state are carried out through the decentralization system of governance where most of the developments initiatives have to emanate from the grassroots whiles those from the non-state actors are carried through their corporate social responsibility.
There is a general belief in Ghana that poverty and lack of sustainable development in the mining communities have been caused by the behaviour and operations of the mining companies. Mining activities have had dire consequences on the environment and society and have impacted negatively on the social and economic character of mining communities (Boocock, 2002). Mining companies have also been accused of shirking their obligations to the communities in which they operate, thereby increasing the level of local poverty and vulnerability and struggle to access basic social services like health, water and education.
However, all organizations including mining companies have a corporate identity, which defines all the activities of the organization in public relation administration. It is however worth noting that many firms are conscious of the need to voluntarily integrate both social and environmental upliftment in their business philosophy and operations (Otubanjo, 2013). Whereas some companies have found a need that the environment in which they operate should be provided for because they have a direct impact on the attainment of the corporate goals, objectives and mission statement, others do not. These companies usually responds to the societal needs of the people by providing them with good drinking water, electricity, clinics, roads, places of convenience, national institutions and others. They provide employment in various forms to citizens in the surrounding communities which in the long run bring development in the community. It is therefore eminent to conduct a study on the effect of corporate social responsibility on community development with a special attention to AngloGold Ashanti‟s operations in Obuasi and its environs.
1.2 Problem Statement
In Ghana, large-scale multiple-national companies spearhead Corporate Social Responsibility (CSR) activities. Large-scale manufacturing, telecommunication and mining companies such as AngloGold, Goldfields, Valco, and MTN have been instrumental in the social development of the country. The notion of corporate social responsibility is one of ethical and moral issues surrounding corporate decision making and behaviour, thus if a company should undertake certain activities or refrain from doing so because they are beneficial or harmful to society is a central question. The Ghana Chamber of Mines (GCM), an association of all corporate miners in Ghana, contends that the social investments its members make in the mining communities are their contribution towards improving the well-being of the people and facilitating community development.
However, mining has had significant impacts on the environment, especially on biodiversity, air and water quality, pollution levels as well as land degradation and health (Boocock, 2002). To make matters worse, some mining companies have even been granted mining leases to mine in forest reserves in Ghana. Regardless of the location, large areas of land and vegetation are cleared to make room for surface mining activities. The negative impacts of mining are compounded by the fact that the mining industry has been a major perpetuator of the continuing marginalization of indigenous communities, as this activity has alienated them from their land and livelihood resources (Aubynn, 1997).
There is no doubt that it is the local people who bear the brunt of all the environmental degradation that accompanies mining operations. Serious criticisms have been directed at foreign players who have been known to exploit legal loopholes and abuse both human rights as well as the environment. For example, the current mining law does not allow farmers enough say in authorizing their lands for mining activity, making it difficult to crack down on the rampant exploitation of the environment by mining industries. Whiles the contributions of mining activities to economic development is well acknowledged, others contend that the gains from the mining sector to the economy is achieved at significant environmental, health and social cost to the communities in which they operate in and the country as a whole. These assertions are made nationwide. However, this current study tries to examine the impact of corporate social responsibilities of AngloGold Ashanti Obuasi Mine on community development in Obuasi Municipality. Conclusions drawn from this are expected to provide more evidence on AngloGold Ashanti‟s corporate social responsibilities on the Obuasi community.
1.3 Objective of the Study
The objective of the study has been divided into two: the general objective and the specific objectives.
1.3.1 General Objective
The primary objective of the study is to determine the effect of AngloGold Ashanti‟s corporate social responsibility on the Obuasi community.
1.3.2 Specific Objectives
In order to achieve this aim, the study addresses the following specific objectives which includes;
1. To assess the corporate social responsibilities of AngloGold Ashanti (AGA) Obuasi Mine to the community.
2. To determine the state of community development in Obuasi and its environs.
3. To assess the impact of corporate social responsibilities on community development in Obuasi and its environs.
4. To identify the challenges of AngloGold Ashanti in practicing its corporate social responsibility.
1.4 Research Questions
Based on these issues this study, which seeks to provide response to the primary question of what is the effect of corporate social responsibility on community development. This will be answered through the following sub-questions.
1. What is the corporate social responsibilities of AngloGold Ashanti (AGA)
Obuasi Mine to the community?
2. What is the state of community development in Obuasi and its environs?
3. What is the impact of corporate social responsibilities to the development of communities in Obuasi and its environs?
4. What are the challenges of AngloGold Ashanti in practicing its corporate social responsibilities to the community?
1.5 Significance of the Study
Social issues deserve moral consideration of their own and should lead managers to consider the social impacts of corporate activities in decision-making. Many companies voluntarily integrate social and environmental concerns in their operations and interaction with stakeholders, but is this always the case for all other corporate bodies. It goes without saying therefore that corporate social responsibility is an issue that has to be faced by every organization especially in the mining sector where their day-to-day activities can be detrimental to the communities in which they operate. Hence, the need for this study to highlights the many opportunities, benefits and challenges of corporate social responsibility being provided by these organizations and for that matter, AngloGold Ashanti, Obuasi mine.
Although various researchers have studied various aspects of community development, there has not been much attempt to study the effect of corporate social responsibility of a mining company on community development in Ghana. Finally, this study will augment the very little literature by providing more evidence on the effect of corporate social responsibility on community development, which will help in appropriate decision making by investors, Ghana Chamber of Mines (GCM) and other stakeholders, who need the information for their respective purposes.
1.6 Limitations of the Study
This study aimed at finding the effect of corporate social responsibility of AngloGold Ashanti, Obuasi on community development of Obuasi Township and the surrounding communities, hence the need to find a suitable data collection method to fulfil the objective of the study. It was impossible to have collected and analysed data from all the communities within the catchment area of AngloGold
Ashanti‟s surface mining operations which extended to Kubi, near Dunkwa in the
Central Region of Ghana. In addition, secondary data from AngloGold Ashanti‟s Community Development Department, under Sustainable Division of the company will be used to support the analysis.
1.7 Scope of the study
The study is focused on AngloGold Ashanti, a global gold mining and exploration company with a diverse portfolio of mining operations and projects on four continents, with more than 96% of the company‟s revenue derived from the sale of gold produced at its operations located around the world. AngloGold Ashanti Ghana operates the Obuasi Gold mine, which is an open-pit and underground gold mine, situated near Obuasi, in Adansi North District in the Ashanti Region of Ghana. The study will also focus on the corporate social responsibilities activities of AGA, state of community development, impact of corporate social responsibilities to the development of communities in Obuasi and its environs, as well as the challenges of AGA in practicing its corporate social responsibilities to the community.
1.8 Brief Methodology
The research design adopted for this study was descriptive case study design using both quantitative and qualitative method. It was found appropriate to use this method because it enabled the researcher to explore the situation on the ground of corporate social responsibility and community development. A multi-stage sampling procedure was employed to select participants for the study. Opinions of households and managers at AGA on the subject matter were sort using both open-ended and closeended questionnaire and interview guides respectively based on the research questions formulated to guide the study. The objectives of the study was analysed with frequencies, percentages, crosstabs, means, standard deviations, and other relevant statistical tools. Relationship between variables and assumed cause-effect relationships was tested using appropriate statistical tools in Statistical Package for
Social Sciences (SPSS) version 20.
1.9 Organisation of the Study
This study is organized into five chapters. Chapter One forms the introduction, which focuses mainly on the background, the problem statement, objectives of the study, the research questions, significance of the study, the scope of the study and brief methodology. Review of the theoretical and empirical literature pertinent to the concern of the thesis will be presented in Chapter Two. Chapter Three provides the analytical tools study and data collection used to accomplish the objectives. The result of the study are presented and discussed in Chapter Four. Finally, summary of the major findings, conclusions, implications and recommendations will be presented in Chapter Five.
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