Who is Responsible for MNCs Mistakes?

Having grown up the grandchild of a mining engineer, it’s hard to avoid discussing the topic of being in a mine, from the processes to the devastating effects that they have, there always ends up being some debate on how MNCs operate and the responsibilities that they have. Canadian mining MNCs have been particularly offensive in this sense, almost always being associated to some extent with environmental or humanitarian disasters in the host countries that they operate in. Placer Dome, the Canadian mining firm based out of Vancouver that my grandfather worked for, is no exception to such allegations. In 1996, the Marcopper Mine majority-owned by Placer Dome suffered a fracture in one of their drainage tunnels, causing massive environmental damage to the island of Marinduque. Originally, Placer Dome took responsibility and was willing to cooperate for the cleanup from the disaster, but quickly pulled out of the project via divesting from the Marcopper Mining Corporation. In 2001, citing an agreement made with Marcopper, Placer Dome saw their selling of Marcopper as ending their responsibility for the cleanup of the mine tailings.

This change of heart by the company is particularly concerning when examined through the lens of corporate social responsibility. In particular, the fact that a firm would openly consider their responsibility ended the moment they sell their subsidiary in the host country reflects the attitude of many firms at the time. This tact that MNCs during this time took shows how, despite the immense power that they held, there is very little incentive for them to consistently aid in global governance. Nevertheless, these actions by Placer Dome did create positive change in terms of strengthening the Philippine Mining Act to ensure greater protection for the environment and the groups in close proximity to mining operations. Overall, based on examples like this, I find that it is hard not to see MNCs as wanting to be a part of the governance framework only when it is convenient. This notion is especially prevalent with regards to MNCs in extractive industries, as Shell just recently called for the Canadian oil lobby to support the imposition of a carbon tax, yet conveniently did so after divesting from the Alberta tar sands.

One thought on “Who is Responsible for MNCs Mistakes?

  1. Obviously, from my initial point of view, the MNC’s should always be responsible for the negative externalities that arise from their particular involvement or interaction within any given area on the local, regional, national and international scale. However, although I believe this to be true, and that MNC’s should be accountable for these costly issues relating to their operations, the reality is, like seen above, that MNC’s can and will divert from this responsibility. Although I believe the responsibility is largely on the MNC’s, there also needs to be accountability for the host, assuming the risks and rewards were presented to the city or state or country, there needs to be some form of responsibility for allowing and in taking these risky MNC’s into their domestic lands. Therefore, it is important to try and formulate and devise some international regulatory laws that can be upheld throughout any state across the globe. This is critical because as we continue to venture deeper and deeper within this partially MNC driven world and economy, we need to begin to find regulatory actions that will keep these corporations in check on a myriad of issues. Regulatory laws that are typically upheld within the United Nations would be an important place to start and impose some laws that put inherent discipline on all MNCs for their potential negative issues while also providing a lesser amount of discipline for the states to follow. With this being the initial target zone for imposing these laws, the current issue is that the world is functioning within this capitalistic and consumerist society that relies on and elevates MNC’s to be involved and present. These regulatory laws could not only disincentivize the continued growth and success of MNC’s but it would also make it extremely hard for countries (like the United States) to impose international sanctions on MNC’s within other countries. Reason being, the US themselves utilizes these corporations but also because pushing international sanctions will punish the states economically who do try and make MNC’s fully accountable because MNC’s won’t participate in their countries as much. Therefore, making an international law that fellow countries uphold a tough task to actually fulfilling its duty.

Leave a Reply

Your email address will not be published. Required fields are marked *