Leiden Law Blog

Green vs. Greenland: The GMEL case

Posted on by Karan Kaushik and Melisa Korkmaz in Public Law
Green vs. Greenland: The GMEL case

Although the nuclear energy sector is rife with controversy regarding the economic viability and environmental issues surrounding the source, it continues to be considered a significantly clean and efficient alternative to fossil fuels. This is best exemplified through Greenland’s repeal of the ban on the extraction of radioactive materials by former PM Aleqa Hammond in 2014, which aimed to profit from sales of the nation’s rich uranium deposits on the global market. This was a crucial factor that enabled organizations like Australian mining firm GMEL to commence operations in the country. However, it raises questions among local and international stakeholders and observers regarding GMEL’s social responsibility. 

The stakeholders in question include the national government, GMEL shareholders, other global energy players and suppliers and distributors on one side of the debate and opposition parties, environmental NGOs, activists, environmentally conscious citizens and directly affected communities on the other. Stakeholder power, however, is rarely distributed evenly and is a function of the material and non-material resources that can be mobilized by any party. GMEL’s business activities in Greenland especially affect the local community in Narsaq. The community’s interest is at stake with regard to the uranium mining in its village because the mine poses serious risks for its inhabitants and the environment. The community worries about pollution that will take place because of the mining and believes its traditional ways of life will be challenged.

Corporate social responsibility entails companies assuming social responsibility that may be over and above that imposed on them by legal standards. Doing so can direct internal policy choices in line with standards that a company imposes on itself, making its impact on stakeholders immune to legal fluctuations. This allows the balance of unevenly distributed stakeholder power and demonstrates integrity on the part of the organisation. In GMEL’s case this requires the company to listen acknowledge the needs of the local community in order to work towards mutual benefit by promoting sustainable regional development. It would also amount to the adoption of standards such as the CERES principles, ISO 14000 and the UN Global Compact Agenda 21, which ensure that it accounts for environmental and social impact of its projects, even when the repeal of the ban does not compel this.

In addition, to act in a socially responsible manner, GMEL could actively pursue green management policies, enabling it to become an ecologically sustainable organization. Leading scholars believe that by moving toward ecological sustainability, corporations will gain a competitive advantage by promoting technological innovation. Most environmentally proactive corporations are technological leaders, as they identify new methods for counteracting pollution and increasing efficiency. Through innovation, they can win new customers and prepare to enter new markets, as changing regulations encourage the adoption of innovative business practices.

Developing skills in strategic planning through green management also confers competitive advantage, allowing managers to ‘think green’ and integrate sustainability into existing business practices, effectively harnessing ecological ideas in the production process. This will not only benefit the environment, but also advance GMEL’s position in the market as a socially responsible enterprise. It is also a profit-increasing strategy, allowing the identification of new trends, markets and products that account for social and environmental externalities.

There are multiple avenues that GMEL could choose to take when determining policies in Greenland with respect to the benefit of the environment and of society. The key issues it must consider are the reduction of adverse impact on all stakeholders, not only those directly affected by its corporate policies, and the adoption of CSR principles which are consistent and determined by informed self-governance.

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