Issues between Company and Community: Towards Terms of Reference for CSR-Conflict Management Systems

Austin Onuoha
Africa Centre for Corporate Responsibility (ACCR)

Maurits Barendrecht
Tilburg Law School; HiiL Innovating Justice

December 8, 2012


Business operations may have an adverse impact on the environment and on the livelihoods of the surrounding communities. For these relationships, often stretching over several generations, a governance structure and conflict resolution mechanisms are needed. Very general terms of reference for these can be found in the so-called Ruggie-Principles and in similar instruments. Many companies and states are now reviewing their conflict resolution mechanisms in the light of these standards for Corporate Social Responsibility (CSR). New mechanisms for dealing with grievances, dialogue and mediation are being set up. Increasingly, courts deal with such conflicts as well, which creates a demand for design of appropriate litigation procedures and case management. In this paper, we facilitate these processes by developing more concrete terms of reference for CSR conflict mechanisms (judicial or non-judicial).

First, we list 20 types of issues that frequently cause conflicts and the characteristic interests of business and community members in these disputes. Then we analyze what is generally needed to solve these types of conflicts effectively, focusing on tasks, capabilities, timing and costs. We find that CSR creates many different conflict management needs, requiring a range of different capabilities. Most capabilities have to be available locally, but most of them have also to be linked to specialist services through internet or by bringing in expertise. Building conflict management capabilities thus requires substantial investments for companies, preferably at an early stage of setting up the operations. Once conflicts emerge, it is much more difficult (but not impossible) to bring in the credible and neutral third parties that are essential for conflict management. One reason for this is the ethical dilemma of funding of neutral interventions by the company once the situation has deteriorated.

Issues between Company and Community- Towards Terms of Reference for CSR-Conflict Management Systems

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