FACULDADE DE LETRAS E CIÊNCIAS SOCIAIS (FLCS)

SOCIOLOGY DEPARTMENT
MASTER’S DEGREE IN SOCIOLOGY OF DEVELOPMENT

RESEARCH PROJECT

Sustainable Development and Extractive Industry in Mozambique: a case study on the social
sustainability of mining company Siyrah Resourses de Balama, Cabo Delgado, Mozambique

Studant:

Ruby Muinde

Advisor:
Claúdio Mungói, PhD

Maputo, UEM
2020
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 FACULDADE DE LETRAS E CIÊNCIAS SOCIAIS (FLCS)
SOCIOLOGY DEPARTMENT
MASTER’S DEGREE IN SOCIOLOGY OF DEVELOPMENT

RESEARCH PROJECT

Sustainable Development and Extractive Industry in Mozambique: a case study on the social
sustainability of mining company Siyrah Resourses de Balama, Cabo Delgado, Mozambique

Research project presented to FLCS,

Department of Sociology, for evaluation purposes
in the Sociological Research Practices module
and the realization of the dissertation

Maputo, UEM
2020

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Indice

1. Introduction ………………………………………………………………………………..….. 4

2. State of the Art …………………………………………………………………………….. 5

2.1. Sustainable Development (SD), Social Sustainability (SS) and Social Sustainability
Indicators (ISS) ……………………………………………………………………………….. 5

2.2. The interface between Sustainability and Mining ……………………………………… 6

2.3. Social Sustainability Indicators (ISS) ………………………………………………………. 7

2.4. Research problem ………………………………………………………………………….. 9

2.5. Objectives ……………………………………………………………………………….. 11

2.5.1. General …………………………………………………………………………………. 11

2.5.2. Specifics ………………………………………………………………………………… 11

2.6. Hypothesis ……………………………………………………………………………… 11

3. Theoretical and conceptual framework of the study ………………………………………… 11

i) Dutch disea ………………………………………………………………………………….. 12

ii) Resource Curse ………………………………………………………………………….. 12

iii) Rent (rent search) ………………………………………………………………………… 12

3.1. Key concepts …………………………………………………………………………….. 13

4. Methodological options …………………………………………………………………… 14

4.1. Field and research subjects ……………………………………………………………… 15

5. Work Plan and Work Schedule ……………………………………………………………. 15

6. Bibliographical references …………………………………………………………………... 16

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1. Introduction

Contemporary society is at a time when discussions about sustainable development (SD) are in
vogue, which has been challenging the most diverse sectors, economic, environmental, social,
political, etc. Meanwhile, the search by the DS calls into question sectors such as the mineral
extractive industry that use mineral resources considered as non-renewable resources, that is to
say, the finding that natural resources would not be permanently available has increasingly
prompted measures to prolong the use of these resources in a balanced way.

This concern has even attracted the attention of the mineral extractive industry sector, which,
although it still remains focused on achieving economic growth, is already obliged to practice a
change of behavior and pressed by the legal requirement of a triple license: mining title,
environmental license and social license. (Fernandes et al., 2007).

In this context, our research theme is translated into the analysis of the social sustainability of the
mining company Ryrah Resourses de Balama taking into account the social sustainability
indicators. This choice of subject is due to the fact that the little existing national literature tries
to analyze this phenomenon from an economic and/or environmental point of view. So it is our
intention to fill this theoretical gap.

In terms of methodology, the approach will be configured as a qualitative, exploratory research,

and in relation to technical procedures, it is characterized as a case study and bibliographic

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2. State of the Art

2.1. Sustainable Development (SD), Social Sustainability (SS) and Social Sustainability
Indicators (ISS)

Sustainability, as a concept, comes from a long historical process of strengthening human

consciousness in the face of the rapid development of societies (technological development in
particular) in contrast to the recurrent environmental disasters.

As fundamental historical milestones for the dissemination of this new concept and its correlates,
as well as the fostering of dialogue and discussion on the subject, whose importance and
influence on the present world is continually increasing, can be cited: the United Nations
Conference on Man and the Environment held in Stockholm (1972), marked by the publication
of the Meadows Report; the emergence of the ecodevelopment theme in 1973, followed by the
Cocoyoc Declaration (1974); the Brundtland Commission (1987) and the Brundtland Report; the
Montreal Protocol (1989); the United Nations Conferences on Man and the Environment (Eco92
or Rio/92, Rio+5 and Rio+10) held in 1992, 1997 and 2002; the Kyoto Protocol in 1997; and the
Ecosystem Assessment in 2005. (CAMPOS et all, 2013, p. 915)

These events, although held at different times, demonstrate the importance, the scope and the
growing maturing of world awareness on the subject of sustainability. Another concept that
stands out in this context is the term sustainable development (DS), coined by the Prime Minister
of Norway, Gro Harlem Brundtland, who explains it with the phrase [...] is the development that
seeks to meet the needs of the current generation, without compromising the ability of future
generations to meet their own needs (WORLD, 1987, p. 12).

The great merit of this report seems to be the effort to make the concept of DS operative,
synthetically translated into the so-called alternative strategies. Therefore, the goal of
sustainability requires that all countries rethink their policies and actions in relation to their
impact on global ecology and socio-economic development.

For Bond and Morrison-Saunders (2009) apud Campos et all (op.cit.), DS is the one that allows
to grow, develop an activity, a region based on economic, social and environmental dimensions,
mainly, worrying to maintain a balance in this trio. The same authors consider that there are three

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objectives enshrined in the definitions of Sds, which are: economic growth, the protection of the
environment and the enhancement and well-being of the human being.

According to Sachs (2001), the desirable type of development proposes a conciliation, at the
same time sensitive to the social dimension, environmentally prudent and economically viable.
Thus, this conciliation becomes preponderant in order to achieve the desired development.
According to the author, sustainability is based on five main dimensions, namely social,
economic, environmental, political and cultural sustainability. The SS is linked to a better
income distribution with reduction of social differences.

Dyllick and Hockerts (2002) point out that, at the level of corporations, the SS assumes that
organizations add value to their communities, from the development of human capital of
individuals and the social capital of communities. For other projects, the SS refers to the bonds
of trust, social cohesion, participation and sharing of projects that are built on the relationship
that is established between the mining enterprise and society as a whole, including with the
public power.

Therefore, the connection of this relationship is seen by many thinkers as of fundamental

importance for the establishment of constructive strategies for social sustainability in mining
territories. In addition, the SH requires guarantees of advancement in health, education, public
safety and other fundamental social rights. (DYLLICK and HOCKERTS, 2002)

2.2. The interface between sustainability and mining

The relationship between sustainability and mining has raised numerous debates. For many, this
concept is inapplicable to the extractive industry, since mineral resource has two important and
specific characteristics: its rigidity Location, mineral extraction can only be developed at the site
of its mineral occurrence, and its finite, non-renewable nature, meaning that it will inevitably be
closed and abandoned. So, how to give guarantees to future generations, when the resources used
to promote development are finite? Enríquez and Drummon (s/d)

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Mikesell (1994) warns that, in order to be more than a slogan, the DS proposal must contain
strict definitions, quantifiable objectives and indicators of progress or backward progress towards
those objectives.

However, although we note this apparent conflicting relationship between the DS and mineral
activity, since mineral goods, by definition, are non-renewable resources, there are those who
believe in the connection between both. For example, Enríquez and Drummon (s/d) state that,
from the point of view of the current generation, mining can promote sustainable development if
it increases the level of socio-economic well-being and minimises environmental damage and,
from the point of view of future generations, if it can provide alternative wealth that compensates
for the depletible resources.

Parallel to the above idea, Gibson and Auty apud Kumah (2006) believe that it is possible to
think about a relationship between sustainability and mining. These, for example, speak of the
need to allocate a portion of mineral income to the creation of sustainable productive alternatives
when mining runs out.

2.3. Social Sustainability Indicators (ISS)

Indicators are important management tools as they can provide an alarm for a situation or
condition that would not be immediately detectable from initial information (HAMMOND et al.,
1995)At the same time, they enable the comparison and follow-up of the observed processes
(BARCELLOS, 2002). In addition, indicators can express in a summary, simplified and
quantitative or qualitative way a complex scenario, which, when recorded over time, can reveal
trends and indicate forecasts, as well as, affirm Bakkes et al. (1994), define actions for the
specific processes of which they are part. Its use should be considered as a dynamic of
transforming complex processes into one-dimensional variables.

The idea of developing indicators to assess sustainability emerged at the World Conference on
the Environment - Rio 92, as recorded in chapter 40 of Agenda 21:

Indicators commonly used, such as Gross National Product (GNP) or

measurements of individual streams of contamination or resources, do not give
precise indications of sustainability. Methods for assessing the interaction
between various sectoral parameters of the environment and development are
imperfect or poorly applied. Sustainable development indicators need to be
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 developed that serve as a solid basis for decisions at all levels and contribute to
the self-regulatory sustainability of integrated environmental systems and
development" (UNITED NATIONS, 1992).

The proposal was to define sustainable development patterns that take into account
environmental, economic, social, ethical and cultural aspects. In order to achieve this objective, it
was necessary to develop indicators to measure and evaluate the system under study, considering
all these aspects.

Thus, although many social sustainability models have been proposed or developed and a single
model cannot capture the various shades, definitions and elements of social sustainability, the
model proposed by Labuschagne, Brent, Erck (2004) and Labuschagne and Brent (2005) in a
study to assess the sustainability of operations in the manufacturing sector, it integrates the many
dimensions identified by other literatures. It is an innovative model, considering both
stakeholders (including internal employees, external stakeholders and other populations) and
measures of business success and social performance. (Lourenço and Carvalho, 2013, p. 16)

Table 1 - Social sustainability indicators

Job stability Job opportunities, job compensation

Employment practices Security and disciplinary practices Employment
1. Internal Human contract Equity Sources of labor Diversity
Resources Discrimination Work flexibility
Health and safety Health and safety incidents Safety and health practices
Capacity building Research and development
Career development
Human capital Health
Education
Housing Service infrastructure Service mobility; Public
and regulatory services Support to educational
Productive capital
institutions
2. External population
Community capital Sensory stimulus, Security,
Cultural properties, Economic growth and prosperity,
Community capital Social cohesion Social pathologies, Grants and
donations, Sponsorship (support, support) for
community projects.
3.Stakeholder Collective hearings, Selective hearings, commitment to
participation stakeholders, Possibility to influence decisions,
(involvement) Stakeholder empowerment.
4. Macro-social issues Economic prosperity Business opportunities
Monitoring (follow-up) Legislation Law enforcement
Fonte: Labuschagne, Brent e Erck (2004) e Labuschagne e Brent (2005) apud Lourenço e Carvalho (2013), adapted (2020)

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The table above presents the main indicators of the social dimension of sustainability related to
internal human resources, the external population, stakeholder participation (involvement) and
macro-social issues.

2.4. Research problem

Extractive industries in Africa have played a vital role in countries' economic development.
However, excluding Botswana, there is consensus among researchers, and academia in general,
that the extractive industry has not provided the much-desired economic development. Some of
these countries have been experiencing growth rates of between 7% and 14% but this increase in
gross domestic product (GDP) does not translate into social benefits for communities, much less
proportionate a transformation of the productive structures of these economies through upstream
and downstream links. Chivangue (2014)

Em Moçambique, o sector da indústria extractiva, incluindo o gás e o petróleo, tem crescido

desde 2004, impulsionado pelo investimento directo estrangeiro. A exploração dos recursos
minerais e energéticos, além da contribuição na economia nacional, tem colaborado para a
geração de empregos e renda para os trabalhadores nas regiões onde se localizam os
empreendimentos mineiros.

De acordo com o Instituto Nacional de Estatística - INE (2012), o sector dos recursos minerais e
energias tem registado avanços assinaláveis, principalmente em relação a sua contribuição no
Produto Interno Bruto (PIB), em que, em 2006, este sector foi responsável por 1,6%, em 2008,
por 3% e em 2011 por 5% do valor total do PIB.

However, besides the benefits, the exploitation of these resources produces several negative
impacts on the physical environment and introduces a series of socio-spatial and environmental
transformations at the local level and in the areas adjacent to the mining enterprises, as pointed
out by Macmachon and Remy (2001) for Latin America Canada and Spain affirm that mining
involves the degradation of the environment and cultural heritage, and creates changes in the
social and economic structure of the communities receiving these activities. (BATA, 2014)

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Flag et al (2005) in Mozambique, the main environmental effects of the exploitation of mineral
resources are: water pollution, soil infertility, forest depredation, air pollution in areas of higher
population concentration and changes in the balance of some ecosystems resulting from the
emission of gases such as sulphur dioxide, nitrogen oxides and carbon monoxide.

Indeed, the major concerns arein the absence of Community consultations for the granting of the
exploration activity in these locations where the undertakings carry out their activities and the
quantities of land granted to undertakings or natural persons for the purpose of prospectingsome
concerns about the magnitude of the extension attributed to petitioners. (CPOS1, 2017)

The CPOS, in 2016, in a study entitled Corporate Social Responsibility (CSR) of the company as
an ethical requirement, found that, in Cabo Delgado, the company Montepuez Ruby Manning, in
general, does not carry out RSC actions, but specific actions that do not have the community as a
reference, but concern to sell the image of the company through small gestures of delivery of
non-durable goods and materials in a unilateral way, without any mutual agreement based on
consultations for the collection of the real needs of the affected communities.

Syrah Resources is an Australian mining company that has been operating, since 2018, in the
district of Balama, south of the province of Cabo Delgado, and has provided benefits to both the
local population and the country’s economy, but also triggers a series of negative impacts on the
environment, (re) configuring new spatialities and new social dynamics.

Thus, aware that the transformations inherent in the exploitation of graphite in Balama are
extremely important to understand the relationships, the plots, the impacts, in the framework of
social sustainability, we have the following questions:

1. Is Syrah Resourses a socially sustainable company for host communities?

2. What is the company’s role in relation to local communities?
3. What added value does Syrah Resourses add to local communities?

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Center for Research and Social Observatory
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2.5. Objectives

This analysis will be guided by the following objectives:

2.5.1. General

Understanding the social sustainability of Extractive Industry in Mozambique

2.5.2. Specific

i) To seek different perceptions of the external population and stakeholders about the mining
company Syrah Resourses de Balama;

ii) To analyze the effectiveness of corporate social responsibility programs carried out by Syrah
Resourses de Balama;

iii) Verify interactions between local communities, government and Syrah Resourses; and

iv) Identify the sustainability reporting model adopted by Syrah Resourses

1.6. Hypothesis

Based on the analysis of the bibliography and the exploratory research of the land in Balama, we
produced the following starting hypothesis:

The social sustainability of the extractive industry in Mozambique can only be guaranteed
through direct investment in social projects by the company itself, after due consultation of the
host population.

3. Theoretical and conceptual framework of the study

The literature that seeks to analyze the dynamics of the extractive industry in the world will seek
its theoretical foundations in approaches such as:

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1. Dutch diseas

The Dutch disease is an old problem, essential for understanding development and
underdevelopment, but it was only identified in the 1960s, in the Netherlands, where the
discovery and export of natural gas appreciated the exchange rate and threatened to destroy the
entire manufacturing industry of the country.

The Dutch disease is a market failure that generates negative externalities in the other marketable
goods and services sectors of the economy by preventing these sectors from developing despite
the use of best technology and administrative practice. (Bresser-Pereira, Marconi e Oreiro, s/d)

2. Resource Curse
The curse of natural resources, also known as the paradox of abundance, refers to the paradox in
which countries and regions, with an abundance of natural resources, specifically non-renewable
resources such as mineral and fuel, tend to have less economic growth and worse development
outcomes compared to countries with fewer natural resources.

3. Rent Séeking

- The term rent Seeking is used to describe when a private agent seeks to secure his or her
economic interests by manipulating the environment for his or her benefit. This manipulation
occurs, most of the time, through the influence on public decisions, through lobbying and
corruption.

- Its logic is linked to the granting of private privileges to an undertaking or group to the
detriment of public interests

- As, possible consequences, from a theoretical point of view, the moral hazard of rent-Seeking
can be considerable. If "buying" a favorable regulatory environment is cheaper than building
more efficient production, a firm can choose the first option, reaping a revenue entirely unrelated
to any contribution to wealth or social well-being.

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Money is spent on lobbyists and counter-lobbyists rather than on research and development, best
business practices, training employees or additional capital goods, which slows down socio-
economic growth

Therefore, the analysis of the social sustainability of the mining company Syrah Resourses will
be made in the light of the Rent Seeking theory, as it is more appropriate to capture the object of
study that we have proposed to understand.

3.1. Main key concepts

The concepts that will not allow an in-depth reading of the object of study are:

1. Social Sustainability

Dyllick and Hockerts (2002) point out that, at the corporate level, social Sustainability
presupposes that Organizations add value to their Communities, from the Development of
Human capital of individuals and the social capital of Communities.

2. Capital (Human, productive and community), according (Lourenco & Carvalho, 2013, p.
16)

- Human capital - refers to the Ability of Labour to provide individuals with a Gain that can
cover aspects such as health, Psychological well-being, training and Development.

- productive capital - this topic may include housing, service and infrastructure mobility, and
public and regulatory safety. Productive capital involves resources and the infrastructure an
individual needs to maintain a productive life.

- Community capital - this criterion considers the effect of the organization’s initiatives on
supporting social projects and relationships with other institutions, establishing networks of trust,
reciprocity and support, taking into account the cultural characteristics of the community in
which the organization operates.

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4. Methodological options

In terms of methodology, the approach will be configured as a qualitative, exploratory research,

and in relation to technical procedures, it is characterized as a case study and bibliographic.

We will opt for the methodology of qualitative nature, because we understand that the researcher
seeks to understand a social process of the problematic social sustainability of an enterprise.
According to Creswell (2010), in qualitative research, the strategies chosen have an enormous
influence on the procedures. The researcher can study the individual(s), explore processes,
activities and events or learn about the culture behavior of individuals or groups. For Demo
(1995, p. 32), qualitative research aims at "[...] aspects of reality that cannot be quantified,
focusing on the understanding and explanation of the dynamics of social relations", because it
emphasizes the interpretation of the object, taking into account the researched context.

The study will be exploratory because a gap has been identified in theoretical and empirical
studies in the national and international literature of research that address the theme of
sustainability in the extractive industry in its social dimension. According to Mattar (2008), this
exploratory approach is valid to increase the researcher’s knowledge on the topic addressed, and
can help define priorities and generate subsidies on the practical possibilities of forwarding the
research.

Through bibliographic research, several materials will be analyzed, such as articles, websites,
scientific journals and books, which deal with indicator systems that aim to measure
sustainability, especially in the social dimension.

The instruments used in the research will be: observation and interview. We believe that they
allowed us to investigate with the scientific rigor that is expected of a research, but with a
sensitive and detailed look at the very field of action. Observation is one of the most widely used
techniques for obtaining information for research. With this instrument one can observe the facts
and correlations that exist. The observation, according to Marconi and Lakatos (2003), is
important, because it can prove a theory, a discourse in practice. The researcher needs to be
attentive to the situations around him, seeking to understand the objective and subjective
conditions5 that make up the field of study.

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The interview provides situations of contact with the interviewee, even if it is necessary to create
an informal environment to perform it. This is a rigorous technique that requires prior
preparation and roadmaps that determine the path to achieve the objectives of the research.

Therefore, since the research will be qualitative, we will seek in the instruments to capture not
only what is put, but the interdict in the discourse, between the lines of each answer, enabling a
range of information essential for critical reflection.

4.1. Field and research subjects

The field of study will be in the district of Balama, in the province of Cabo Delgado, where the
mining company Syrah Resourses is located. According to the 2017 Census, the district has 180
957 inhabitants in an area of 5619 km².

The subjects of the survey will be the population of the villages of Ntete, Mwalia, Pirira and
Nkwidi, workers of the Syrah Resourses and government of the district of Balama. The sample
will be simple random, as all individuals have the same chance as part of the survey, and we will
interview 10 people from each of the above mentioned villages, 6 (six) workers of Ryrah
Resourses, 3 (three) officials of the Balama district administration.

5. Work Plan and Work Schedule

Set, Out, Nov Fev Mar Apr, Mai, Jun Jul, Ago, Set
Activities
2020/21 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4
Who Obs.
Pract. Soc. Research Ruby FLSC

Exploratory research Ruby Balama

Bibliographic survey
(problematization and
Ruby Maputo
theoretical model and
concepts)

Project delivery and Ruby e for referring

advisor interaction Supervis

Field research Ruby Balama

Ruby e
Analysis and compilation
Supervis Pemba
of data

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Elaboration of the Ruby e
Supervis Pemba
dissertation

Language review Consult Maputo

FLSC
Submission of the
Ruby
dissertation
Defense of the FLSC
Ruby
dissertation

6. Bibliographical references

Bata, E. J. (2014). A vulnerabilidade socioambiental nas áreas de exploração das pedras

preciosas e semipreciosas nas aldeias de Nanhupo e Nséue, em Namanhumbir, distrito de
Montepuez (Moçambique), no período de 2004 – 2011. (dissertação de mestrado)

Bresser-Pereira, L. C.; Marconi, N.; e Oreiro, J. L. Doença holandesa (capítulo 5 de Structuralist

Development Macroeconomics, Londres: Routledge) a ser publicado

Campos et all (2013). Relatório de sustentabilidade: perfil das organizações brasileiras e

estrangeiras segundo o padrão da Global Reporting Initiative. Gestão & Produção

Creswell, J. (2010). Projeto de pesquisa: métodos qualitativo, quantitativo e misto. 3 ed. Porto
Alegre: Artmed.

Demo, P. (1995). Metodologia científica: em ciências sociais. 3. ed. São Paulo: Atlas, 1995.

Dyllick, T.; Hockerts, K. (2002). Beyond the business case for corporate sustainability. Business
Strategy and the Environment, n. 11, p. 130-141.

Centro de Pesquisa e Observatório Rural. (2017). Humanizando a actividade de exploração

mineira. ECD

Gil, A. C. (1999). Métodos e técnicas de pesquisa social. 5. ed. São Paulo: Atlas

______. (2002). Como Elaborar Projetos de Pesquisa. 4. ed. São Paulo: Atlas, 2002

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Labuschagne, C.; Brent, A. C.; Claasen, S. J. (2005). Environmental and social impact
considerations for sustainable project life cycle management in the process industry. Corporate
Social Responsibility and Environmental Management, n. 12, p. 38-54,

Labuschagne, C.; Brent, A. C.; Erck, R.P.G. (2004). van Assessing the sustainability
performances of industries. Journal of Cleaner Production, p. 1-13, 2004. Disponível em: .
Acesso em : 13 Julho 2020.

Labuschagne, C.; Brent, A. C (2005).. Sustainable project life cycle management: the need to
integrate life cycles in the manufacturing sector. International Journal of Project Management, v.
23, n. 2, p. 159-168.

Lourenço, M.L. & Carvalho, D. (2013). Sustentabilidade social e desenvolvimento sustentável.

RACE, Unoesc, v. 12, n. 1, p. 9-38, jan./jun.

Marconi, M. A.; LAKATOS. E. M. (2003). Fundamentos de metodologia científica. 5. ed. São

Paulo : Atlas

Silva, M. A. R. da, & Drummond, J. A. (2005). Certificações socioambientais: desenvolvimento

sustentável e competitividade da indústria mineira na Amazônia. Cadernos EBAPE.BR.

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