Foreign direct investment (FDI) in natural resources is thought to be a primary route to "development" in some of the lower income countries. Mining FDI constitutes nearly 25 percent of the capital investment in Africa, making it a potentially important economic driver. Yet corporate investment in mining has long been a controversial: it has not appeared to improve the lot of the poorest countries and mining corporations have been compellingly criticized for their environmental, social, and community impacts via activist organizations like Project Underground, more established NGOs like Oxfam and Friends of the Earth (FOE), and indigenous peoples' organizations. The recent World Bank-sponsored Extractive Industry Review and the industry-sponsored Mining, Minerals and Sustainable Development project facilitated by the International Institute for Environment and Development are testimony to the self reflection of the industry necessitated by pressures from multiple stakeholders. The general consensus emerging from these initiatives requires mining corporations to be not only environmentally responsible, but to help get today's generation of poor people out of poverty and build strong, sustainable communities. Mining companies, community advocacy groups, and researchers are polarized as to whether this is possible. This research examines the impacts of the now "socially responsible" mining sector in the goldfields of Tanzania, an area of recent (and aggressive) mineral development and large potential (Tanzania became the third largest gold producer in Africa in 2001, behind South Africa and Ghana). The research focuses upon two major aspects of mining FDI impacts: 1) the effects on sustainable livelihoods in the host communities and 2) the revenue distributions flowing from companies to the central government and beyond. Data will be collected through surveys, semi-structured interviews, and archival and secondary sources. Qualitative and quantitative analysis techniques will be used to provide assessments of the impacts and the revenue distributions. The study will make a vital and measured contribution to a significant gap in the evaluation of mining and development: it will afford a rigorously designed analysis of the CSR-induced programs and mining impacts on host communities (including women) and host governments, including the Tanzanian central government which operates under a liberalized mining law recommended by the World Bank. It will determine whether people (and objective verifiable indicators) find their lives better or worse as a result of FDI-based mining operations.
Wealth from non-renewable natural resources like oil and gold can only be produced once - when the resource is developed. If the corporations that reap the benefits of this resource development use revenues to fund development projects for host communities, build infrastructure that will serve communities after the mine is closed, and pay substantial royalties and taxes to national governments, there is potential for sustained regional and national development. The latter depends also upon what the host government does with the revenues from the mines. On the other hand, if mining operations pollute water and air, degrade biodiversity, and pay low wages/royalties, local people and national revenue potentials may be substantially disadvantaged by foreign direct investment in mining. This project will advance knowledge on whether foreign investment in mining under current conditions of corporate social responsibility is a viable route toward sustainable development.
