3.1.1 Defining Conflicts of Interest in Mining

According to Gingras and Gosselin, the term “conflict of interest” evolved from describing simultaneous competing events to clashes between groups with opposing interests, and finally to cases where an individual, group, or institution is accused of illegitimate influence. According to Boatright's key definition that is often referred to in business ethics, a conflict of interest occurs when “a personal interest interferes with a person’s ability to promote the interests of another when the person has an obligation to act in that other person’s interest” (2017, p. 95). While many relationships can involve competing interests, the key element of a conflict of interest is the obligation present on one side. For example, consider a government contractor who is responsible for conducting environmental impact assessments while also owning shares in the company being evaluated. In their capacity as a government contractor, they are required to deliver an impartial and unbiased assessment, but they also have a direct financial stake in the company's success. The foundations of such conflicts of interest are best examined through principal-agent theory, which was developed by Jensen and Meckling (1976). In this theory, a principal hires an agent to perform a certain task. Because both act in their own self-interest, and due to asymmetrical information (where agents typically have better knowledge than principals), a problem of moral hazard can arise. In this scenario, the government serves as the principal, engaging the contractor as the agent to perform tasks like the environmental impact assessment.

This perspective highlights the objective factors that pose a risk of undue influence, rather than centering on an individual's mindset or decision-making process. In our mining example, conflicting interests represent an objective reality, regardless of whether the government contractor engages in any inappropriate actions. By shifting the spotlight from an individual’s mental state to analyzing objective circumstances, it becomes easier to pinpoint potential conflicts of interest proactively, before any misconduct occurs. This proactive approach enables the implementation of preventive measures, such as allowing the government contractor to recuse from the case when a possible conflict of interest arises. It is crucial to distinguish between potential and actual conflicts of interest, since determining the existence of an actual conflict often relies on subjective factors, including the agent’s level of integrity.

Organizations as Principals and Agents

However, some situations are more complex and nuanced than the earlier example. Imagine a scenario in which a mining company provides funding to a research institution to investigate the ecological effects of mining activities. Conflicts of interest can arise not only among individuals but also between organizations on both sides, principal and agent. In this case, while the research institution gains from the financial backing, their responsibilities are not as clear as in the previous example, since their foremost duty is to uphold scientific independence and integrity. Even though the mining corporation may appear to be the principal, they should not assume that the research institution will prioritize the corporation's interests. In situations like this, which often arise when research and academia intersect, particularly in the mining industry (e.g. Marlatt, 2021), identifying solutions can be more challenging. The organization could develop a strategy that avoids conflicts of interest – for example, through setting up a general research fund to which companies contribute without directly funding individual research projects. This approach would help maintain scientific autonomy while still enabling industry backing for research.

Dynamics of Power

If there is clear evidence indicating a conflict of interest, analyzing the dynamics of power can be beneficial. Studies on power (Nye, 2005) differentiate between three types of power. Hard power entails one party coercing another, whereas soft power influences preferences through attraction and persuasion. In our earlier situation, the company may exert influence over research in multiple ways, ranging from controlling the study design through financial pressure (hard power) to fostering relationships and shaping a sense of common purpose (soft power). The third type, smart power, refers to a strategic blend of both soft and hard power. One method to identify subtle power dynamics is to examine the communication between two entities. For instance, a study revealed that Coca-Cola employed soft power to influence research they financed related to childhood obesity – the researchers “consistently sought to ensure the funders were satisfied and sought their guidance on choices of study design, framing and public presentation of study findings.” (Stucker et al., 2017, p. 55)