Managing conflicts of interest in mining

Conflicts of interest can significantly affect not only principals and agents but also broader stakeholders, making it essential to manage them effectively. Wayne Norman and Chris MacDonald distinguish between micro-, mid-, and macro-level conflicts of interest and thereby provide a framework for organizing strategies to address such situations. On the microlevel that targets the individual, measures are often limited to “exhortations for conflicted professionals to resist temptation”. Ideally, professionals proactively avoid conflicts of interest, maintain objectivity when they arise, fully disclose relevant information, and adhere to established policies. At the mid-level, attention turns to the organization itself, with the goal of fostering an environment that enables individuals to behave in an ethical way. This involves implementing appropriate policies, encouraging the inclusion of independent third parties, and considering structural aspects such as compartmentalization – having one division dedicated to employee safety and another focused on cost reduction can mitigate the likelihood of conflicting interests, for example. The macro-level examines conflicts of interest in business within the broader context of social, legal, and political frameworks. Emphasizing the role of trust in institutions and organizations, one might argue that, following numerous violations, a professional code should be overseen not by the profession itself but by the state.

Example

Case Study: Small-Scale Gold Mining in Ghana

This case study references the work of Crawford and Botchwey, who aimed to explore how a large number of Chinese migrant miners engaged in small-scale gold mining in Ghana, even though this industry is legally reserved for Ghanaian nationals. The research is based on fieldwork conducted in Ghana and includes interviews with government representatives, local miners, and Chinese immigrants. Beginning in 2008, Chinese migrant miners started operating without legal authorization, bringing in new machinery and methods, such as river mining techniques, which greatly enhanced efficiency and increased gold output. Over time, some Ghanaians started to partner with the migrant miners, and eventually, Ghanaians independently adopted the new mining methods. The study by Crawford and Botchwey emphasizes that the state's inability to enforce regulations was not merely a matter of negligence, but rather that migrant miners were actively protected by influential individuals, including government officials, politicians, and chiefs, often in return for private payments. Although the rise in small-scale gold mining could be viewed as a beneficial result, as many stakeholders profited from it, the mining activities caused substantial environmental harm to both land and water as a result of inadequate regulations. Additionally, the illegal status of these operations led to a considerable decrease in tax revenue.