Community risk management by mining MNEs: managing local communities in Armenian mining

Using data collected during extensive fieldwork and interviews with local communities, non-governmental organisations and mining multinational enterprises (MNE) managers, we explore how MNEs practice community risk management within the Armenian mining industry. We start by conceptualising local communities as communities of place (CofP), which are directly impacted by mining activities but have few resources available to them, and communities of interest (CofI), which are outsiders with an interest in mining projects and with the resources to create uncertainty about a given project. We argue that community risk can be seen as a precursor to financial, political and cultural risks described in the MNE risk management literature, and that both types of community can expose the mining MNE to risks, either individually or in unison. Our empirical findings also show that mining MNEs focus on mitigating community risks in the initial phases of their project but later, when the impact on the community is perceived to be highest, use fewer resources. Our interpretation is that the objective of the risk management practice is to reduce community risk by committing resources to CofP for as long as there is a possibility that they will form lasting partnerships with CofI, which has the potential to pose a greater threat.