Corporate Social Responsibility in the Arctic: Successes and Controversies


Corporate social responsibility is about businesses responding to what society expects from them. People generally believe that companies working, specifically, in the Arctic region and benefiting significantly from it should meet certain responsibilities. These include caring for not just their employees but also the wider community, including indigenous peoples, and protecting the environment from potential harm caused by their activities. To legitimise their actions in this sensitive area and keep both the local populations and the authorities happy, companies try to align their efforts with what people want.

The Case of Tukhard

Nornickel’s mines and plants make Norilsk a monogorod,or a one-industry town, as the city’s survival depends entirely on this single corporation. This creates a close, almost symbiotic relationship between the city residents and the company. The people of Norilsk rely on Nornickel for jobs and income, while Nornickel needs the local workforce to keep operating. Given Norilsk’s isolated location as a closed city in the Russian Arctic, far from other major centres, the concept of corporate social responsibility is very evident here. More than just an employer, Nornickel takes on some government-like roles to support the community that exists because of and for the company.

According to the tenets of corporate social responsibility, Nornickel has decided to prove itself as a “good citizen” by developing a new settlement in Taymyr. The “old” village of Tukhard, another small monogorod, was originally built to house workers from Norilskgazprom, a Nornickel subsidiary. The name “Tukhard” itself, in the language of the indigenous Nenets people, literally translates to “place where fire is extracted”, referring to the natural gas deposits near the village. Under Soviet rule, Tukhard had shops, a policlinic and a summer port for fishing boats. But since the USSR collapsed, the village became just a shadow of its former self.

Photo: Tukhard village

Furthermore, recently, a new law placed Tukhard inside a “health protection zone” around the dangerous gas processing plants. This prohibits permanent settlement due to safety concerns. So, the indigenous Nenets who have been living in Tukhard in recent decades will soon be forced to abandon it.

So, on its own initiative, Nornickel started to develop a project to establish a new, modern Tukhard settlement in a safer location. Interestingly, the company justified this action by citing the United Nations rules regarding respect for the rights of indigenous populations. Investigations and studies are now underway using typical social research methods such as individual interviews and community meetings with villagers. The aim is to build a settlement suitable for the Nenets-reindeer-herding way of life.

Rather than the federal government, Nornickel itself – a private corporation – decided to find a solution to an extremely specific and delicate problem, managing to obtain concessions for the indigenous people and promising further compensation to their families. At its own expense, the company will build an entirely new village from scratch, incorporating input from residents to comply with their wishes.

Consultations on architectural and infrastructure choices are nearly complete, and the final project plan will be presented to the population soon. The new Tukhard is expected to be ready by 2026.

LKAB and New Kiruna

Another massive project involves Sweden moving an entire town three kilometers from its current location. Kiruna, a town of about 20,000 people, sits near the world’s largest iron ore mine. The mine’s huge excavations are causing ground shifts that threaten to swallow up the town. So, they decided to relocate the whole city – buildings and all inhabitants – to a safer area. The state-owned company Luossavaara-Kiirunavaara Aktiebolag (LKAB) is in charge of this project.

While Tukhard’s relocation might be seen as a positive example (though, given enough time, we’ll have to see how it turns out), Kiruna’s case is more “neutral”. Let’s break it down: We’ve talked about corporate social responsibility. LKAB, as a company, naturally seeks profit. It does care about the welfare of the population, but not just out of goodwill. As a state-owned company, it’s expected to benefit the population regardless of profit motives.

Photo: Kiruna town

This move, even though it’s meant to help the town, is causing major disruption for the Sami community that has always lived in Kiruna and gave the town its name. The Sami’s traditional reindeer herding lifestyle had already been pushed aside by the mining industry and other man-made changes since the early 1900s. Now, the indigenous population will be forced to leave their land again. It’s being done in the name of survival and civil protection, but also for economic progress, as new deposits of valuable rare earth minerals have been found in the Kiruna area.

The Willow Oil Project, the Environment and Indigenous Rights

To round out our discussion, let’s finally look at a downside: the Willow Project, an immense oil field planned for development in Alaska’s far north. This project has a controversial history. Initially approved by the Trump administration in 2020, it was then blocked the following year by a federal judge. The judge’s concern was that ConocoPhillips, the giant US oil company behind the project, hadn’t adequately considered its potential environmental impacts.

However, despite this earlier setback and amid controversy, President Biden recently gave the project the go-ahead. When operational, the Willow Project is set to become the largest oil field in the entire United States. It’s expected to have a staggering output capacity of nearly 200,000 barrels of oil per day, highlighting both its economic significance and the scale of its potential environmental impact.

The approval of the Willow Project has sparked widespread outrage both in the US and internationally. Despite the Biden administration’s environmental promises, this project seems to contradict those commitments. While we won’t discuss the numbers, it’s worth noting that over its 30-year lifespan, the Willow Project is expected to produce more emissions than all federally approved renewable projects would cut, effectively negating US clean energy efforts.

Now, let’s consider this from a corporate social responsibility perspective. Once again, we’re seeing a major project being built on land inhabited by Arctic indigenous peoples – in this case, Iñupiaq caribou herders. The environmental impact is expected to be brutal: air, water and land pollution, accelerated permafrost thawing and increased coastal erosion. These changes will likely lead to malnutrition in caribou and fish die-offs due to toxic waters, directly threatening the livelihoods of local communities.

Indigenous representatives claim that ConocoPhillips has conducted little to no research into how their extractive work would affect the environment and, maybe most importantly, the local population. This apparent lack of concern for environmental and social impacts stands in stark contrast to the principles of corporate social responsibility. The federal government’s full backing of this project raises serious questions about how top-level decision-makers are balancing economic gains against environmental protection.

Tommaso Bontempi