‘Unwritten Rules’ in Social Partnerships: Defining Corporate Social Responsibility (CSR) Through Institutional Theory in the Peruvian Mining Industry

Abstract

Since 1990s, the mining sector has been one of the most important industries that contribute to the economic development of Peru. However, it has also led to the environmental disruption and social conflict. This situation has forced the companies to reconsider the development of social partnerships between businesses and the civil society in order to tackle social issues including social justice and the environmental protection. Consequently, the object of the study involves mining companies, peasant communities, government and non-profit organisations and seeks to answer: How institutional forces contribute to the development of Corporate Social Responsibilities (CSR) initiatives through social partnerships in the Peruvian mining industry? Social partnerships require companies to understand not only the market but also the distinctive socio-economic, legal and cultural forces that represent social norms known as institutions. The theoretical framework of this study is based on the new institutional theory that establishes three pillars of institutional order; cognitive, normative and regulative. This framework represents a holistic approach that provides new lenses to understand CSR in a developing country. This exploratory qualitative research consists of 53 interviews and a focus group during a communal assembly. In addition, indigenous methodology has been implemented in order to unleash the unheard voices from peasant communities based on observation and witnessing of verbal traditions. The fieldwork was carried out in August 2016 and from June to September 2017 in the regions of Lima and Ancash in Peru. The secondary research is based on the study of 25 sustainability reports and the analysis of three partnership agreements between peasant communities and mining companies. Some early findings have revealed that no compliance with communities has led to distrust towards mining companies, government and NGOs; and protests have been used by peasant communities as a legitimate instrument in order to manage an unbalance power.