Copper Valley Mine Dilemma, Case Study Example

The community residents have a bad experience in the past when a mining company made a similar promise but left without fulfilling its obligations. On top of that, the community had to incur the clean-up and restoration costs. Thus, the community residents are concerned Mineral Development Corporation (MDC) may do the same if business declines and this time the cost to the community may be much higher due to the scale of MDC’s operations. Commodities market is highly unpredictable and there is no guarantee that MDC will succeed and the price of MDC’s failure will exceed the benefits of MDC’s success. The damage to the ecology and existing industries will not only be quite high but also difficult if not impossible to reverse. The residents are also concerned the negative impact MDC’s operations may have on the ecology, quality of water, and existing businesses (agriculture, tourism). The residents note that unemployment is not a concern for them so the prospects of new jobs don’t hold much attraction. The pollution will also grow in the area which may give birth to new health problems. The water supply may increase but the overall quality of water will be lower. In addition, the cost of living including housing rents may also increase due to competition from MDC’s employees.

MDC argues that it will create jobs and also the supply of water will increase in the area which is a positive thing, given the scarcity of water in the desert southwest. MDC may also argue that it will improve the infrastructure and will provide a more stable source of income unlike tourism and agriculture that fluctuate throughout the year. MDC may also argue that agriculture profession has weak future due to globalization because developing countries have low labor costs. MDC will also be helping towards securing the future of young individuals in the community by teaching them new skills should tourism and agriculture decline. MDC may also argue that it will provide high-paying jobs which should increase living standards in the community and it uses the latest technology which should ease residents’ concerns regarding environment.

The company may also argue that the profits will also increase community’s financial position due to tax receipts which the community could spend on social programs such as education, health, and further improving its tourism sector. MDC may also claim to help improve the real estate values in the community. Rise is real estate values will be a significant impact since Arizona is one of the states that were hit the hardest by the housing market crash (Hight, 2009). MDC will also point out that residents should not be concerned about the quality of water from Central Arizona Project (CAP) because CAP provides water from Colorado River and is the largest single source of renewable water supplies in the state of Arizona (Central Arizona Project). Due to the size of CAP’s operations, one could safely assume that they take measures to ensure a high quality otherwise the negative consequences would be quite significant. Last but not least, MDC will argue that it is its constitutional right to pursue economic activities as long as the company acts in accordance with all applicable laws. Preventing it from doing so will also cost many employees their jobs who may be moving in from outside the area.

The other stakeholders that are not mentioned in the case include the community council, state of Arizona, U.S. Government, and EPA. The community council’s revenues may increase significantly due to MDC’s venture which the council could invest in improving the community’s programs and projects. The U.S. Government may benefit from higher tax revenues as well as lower dependence on foreign energy sources which also negatively impacts its political leverage (The Lithuania Tribune, 2012). The state of Arizona will also benefit from tax receipts and in addition, will also increase its appeal as an investment destination. The project may also help the state improve its employment rate. EPA is a stakeholder because there will be environmental pollution and EPA will be interested in knowing what measures the company will take to minimize the impact of its operations on the environment and how it will ensure compliance with all applicable laws related to the environment.

First of all, MDC could take steps to independently verify the quality of the water that will be supplied by CAP and compare it with local reserves. A positive outcome of independent verification may not only satisfy the community residents but could even increase the appeal of the project to them due to greater supply of water. MDC could also give a written guarantee that in case it has to halt its operations unexpectedly, not only will it incur the cleanup costs but will also provide at least a minimum level of extra compensation to the community. This will increase the community residents’ confidence that they will not have the same bitter experience twice. The company should also outline specifically how it will minimize the impact to the environment and ecology and agree to an independent monitoring whose costs it will be willing to bear. MDC should also provide past records of its operations that verify its claims of safe and environmentally-friendly operations. The company may also provide conservative estimates of income that will flow to the community or could guarantee a minimum amount in order to win the residents’ confidence. The company could also provide specific examples of community development programs that may result from MDC’s presence such as improved road infrastructure, more schools, and funding to local non-profit organizations.

MDC should have led with a participative leadership style (Cherry), inviting the community residents to suggest improvements or solutions as to how MDC’s operations would maximize the benefits to the community. MDC suggested potential benefits to the community residents but didn’t attempt to find out as to what was important to the community residents and what in residents’ opinion could make the project more attractive. When people feel that their ideas have been listened to and their input has played a role in the final solutions, their opposition decreases and they are more likely to cooperate. MDC and the community residents could also have engaged in team-building sessions such as brainstorming which would also increase cooperation from each side to the final solutions. Brainstorming sessions may not only result in innovative solutions but also help each side better understand each other.

First of all, I would suggest that MDC provide more specific examples of its past operations and where possible, seek independent verification for its estimations and claims. This will give more credibility to MDC’s claims in the eyes of the community residents. MDC may also give contractual guarantees that it would be responsible for cleanup should it leave and provide compensation for any other potential costs to the community. MDC should also provide some specifics as to how it will manage its operations to ensure minimum cost to the environment and the community’s ecology. The company could also agree to regular assessments and check-ups in order to ensure compliance with the agreement it entered into with the community. This will also demonstrate MDC’s commitment and attract cooperation from the community residents. The company may also setup a communication system to ensure open and continuous communication between the management and the community residents. Open communication also increases cooperation (Cohen, Wildschut, & Insko, 2010).

References

Central Arizona Project. (n.d.). Welcome. Retrieved April 25, 2012, from http://www.cap-az.com/

Cherry, K. (n.d.). Leadership Theories – 8 Major Leadership Theories. Retrieved April 25, 2012, from http://psychology.about.com/od/leadership/p/leadtheories.htm

Cohen, T. R., Wildschut, T., & Insko, C. A. (2010, January). How communication increases interpersonal cooperation in mixed-motive situations. Journal of Experimental Social Psychology, pp. 39-50.

Hight, J. (2009, June 9). States differ significantly in how hard they are hit by recession: A letter from Arizona. Retrieved April 25, 2012, from http://www.examiner.com/article/states-differ-significantly-how-hard-they-are-hit-by-recession-a-letter-from-arizona

The Lithuania Tribune. (2012, February 17). Poland’s energy sector and Russia’s position: Part 1. Retrieved April 25, 2012, from http://www.lithuaniatribune.com/2012/02/17/polands-energy-sector-and-russias-position-part-1