Newmont Mining Corp. and a Mercury Spill in Peru (B)
(4 pages of text)
This B case is a supplement to Newmont Mining Corp. and a Mercury Spill in Peru (A) 9B13M002
. Since the spill, Newmont spent more than US$100 million on compensation and improvements to the mine to reduce its environmental impact and prevent further spills.
An internal audit concluded environmental standards at the mine were seriously lacking. In-house counsel warned other executives about the possibility of criminal liability.
Despite improvements at the mine, a large local protest prevented Newmont from expanding its operations in the area. Lack of trust by the locals contributed to the protest. The new CEO is trying to decide what else Newmont is morally required to implement before continuing to operate Yanacocha, and Newmont’s other mines, successfully.
The A and B cases can be used in business ethics courses at all levels from undergraduate to executive education. In a typical 75-minute class, we recommend focusing on the A case and moral principles that guide business decision making. With a longer class period, particularly with MBA and EMBA students, the B case can be handed out in class to extend the discussion to the role of business in society. The cases raise the following issues:
- Moral responsibility of companies to those affected by operations — workers, surface rights owners in the surrounding communities and other residents.
- Moral legitimacy of mining and the “social license to operate.”
- Role of companies versus the state, in poor areas in developing economies.
Mining, Quarrying, and Oil and Gas Extraction
Peru, Large, 2005
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