|Controlling the damage to gold mining’s gritty image|
by Lisa Wright, The Star
May 21st, 2011
Two words instantly come to mind in cynical business circles when a tragedy occurs under a big company’s watch: damage control.
Barrick Gold Corp. landed in a firestorm of controversy last week when seven villagers were gunned down and a dozen more were injured in a brutal clash at its troubled North Mara mine in Tanzania, run by its African Barrick Gold division.
Though Barrick spun off its higher-cost African assets last year to the newly-created London-based firm, the Toronto bullion behemoth remains the majority owner.
And since Barrick’s name is literally on it, the Toronto headquarters is forced to wear -- and ultimately repair -- the hit to its global brand, and it won’t be easy, say industry watchers and public relations experts.
“The paradox is that the mining industry has come a long way in improving itself in terms of trying to mitigate their environmental impacts and to improve their social impact, yet there is the perception that they still aren’t doing the right thing,” says Paul Klein, founder of Toronto firm Impakt which specializes in the field of corporate social responsibility, or CSR.
Experts agree that on the communications side, the company did the right thing by promptly releasing a statement about the “security incident” in which 800 villagers reportedly stormed the site with machetes, hammers and rocks to steal gold ore from a crusher.
“You have to show you get it. The longer you take the more likely it is that you’re not going to pass the ‘empathy test’,” says Joe Chidley, senior vice-president of Veritas Communications, which specializes in crisis management.
Next, if there’s any wrongdoing or culpability on the part of the company, you have to admit it, he advises.
In this case, both the company and the Tanzanian police have launched two separate investigations into the violent confrontation to address security concerns at the site, where Barrick has been in an ongoing battle with locals who scavenge for gold-laced rocks on the lucrative property.
“You also have to establish yourself as a credible source of information about the incident because there are so many voices out there that you are not able to control,” adds Chidley.
Even Jamie Kneen, spokesman for known industry critic Mining Watch Canada, acknowledges that Barrick has clearly learned that lesson already when they’ve been forced into crisis management mode.
“They’ve been doing that fairly consistently. They put out their version of things before it’s too late.
“But the bottom line is people are dead and I think every time this happens it adds to the negative perception of Canadian companies internationally,” says Kneen.
“This story will not go away,” warns Steven Theobald, a communications specialist at Idea Workshop in Toronto.
“Barrick is a global leader in the movement for mining companies to be more socially responsible, so it is vital that it handles this situation properly,” he says.
“Barrick needs to explain what went wrong and how it will work with the communities to prevent further tragedies,” he advises, noting the crisis provides “an opportunity to prove that the company does indeed treat the communities as partners and stakeholders.”
Stan Sudol, a communications consultant and mining industry blogger, recommends that the Canadian government establish a fact-finding mission, headed by a respected, retired, non-partisan individual, to go to Tanzania “to shed light on this incident. It’s the only way to get credibility back to the Canadian mining sector.
“No one is going to believe any report coming from Barrick or the Tanzanian government” on this incident, he notes.
No matter how the company spins it, the optics are pretty bad when seven people lose their lives on your property, says Theobald.
“You cannot justify killing people because they are stealing, so Barrick better not even try,” he says.
“They have to be transparent about it and take action quickly,” offers Klein.
“All kinds of difficult things happen in this industry. The reality is that this is an area (geographically) where there is a lot of risk, and I’m skeptical that they will ever fully mitigate the risk,” he says.
The best they can do at this point is to acknowledge the tragedy of it and work locally to help the community, says Klein.
He recommends even going “above and beyond” what’s legally required of them by providing compensation to the victims’ families.