Description
Impact: Transnational Corporations (TNCs) are considered to be one of the most important actors in the global economy and now occupy a position that is more influential than ever before. In their pursuit to make profits, most TNCs have ended up expanding their business to developing countries. Developing countries have increasingly ended up providing a “haven” for TNCs, with incentives such as reduced regulation of corporate activity, lower tax rates and reduced restrictions on labor and environmental protection in exchange for access to foreign direct investment (FDI).
There are over 65,000 TNCs operating in developing countries, accounting for approximately two-thirds of international trade. It is argued that TNCs, through FDI, are able to open up entrepreneurial opportunities, provide cleaner technology and better management practices as well as create employment opportunities. It is therefore contended by some developmental international organizations that TNCs are better suited to foster sustainable development in resource-rich but poverty-stricken developing countries.
Mining is the world’s fifth largest industry and by its nature one of the most environmentally destructive activities. In Zambia, mining is the largest sector of the economy accounting for close to 80% of the country’s export earnings. The efficacy of the mining industry in contributing to economic growth and sustainable development forms part of the debate about the role of business in development. It is therefore important to understand the corporate approaches employed by various mining TNCs in fostering sustainable development.
