Memorandum submitted by the London Mining
Network
The role of London-based and London-financed mining
companies in human rights abuses overseas
The London Mining Network (LMN) is an alliance
of 23 human rights, development and environmental groups
concerned about the impacts of the activities of mining companies
listed on the London Stock Exchange or financed by London-based
institutions. Members include ACTSA (Action for Southern Africa),
CATAPA (Comite Academico Tecnico de Asesoramiento a Problemas
Ambientales), Colombia Solidarity Campaign, The Corner House,
Down to Earth (the ecological campaign for Indonesia), Forest
Peoples Programme, LAMMP (Latin American Mining Monitoring Programme),
Partizans (People Against Rio Tinto and its Subsidiaries), PIPLinks
(Philippine Indigenous Peoples Links), TAPOL (the Indonesia human
rights campaign) and the Society of St Columban. LMN's twelve
observer groups include leading human rights, environmental and
development organisations.
LMN wishes to draw to the attention of the Joint
Committee on Human Rights the persistence and gravity of the allegations
brought against London-connected mining companies in the pursuit
of projects which have a negative impact on human rights. LMN
understands that the Committee will be receiving detailed submissions
about the effects of the activities of Vedanta plc in India, Rio
Tinto in Colombia and Ecuador, Monterrico Metals in Peru, GCM
Resources in Bangladesh and a number of mining companies in the
Philippines. The current submission is intended simply as an overview
which it is hoped may encourage the Committee to take a continuing
interest in the matter.
Most of the world's biggest mining companies,
and many smaller mining companies, are listed on the London Stock
Exchange, and on its Alternative Investment Market (AIM).
The world's most important metals price fixing
mechanism, the London Metal Exchange, and the leading precious
metals trader, the London Bullion Market Association (LBMA), are
based here. Only Toronto rivals London's importance as a centre
of world mining finance.
There is a great deal of information publicly
available on the negative impacts of mining company activities,
including alleged human rights abuses. The leading source of critical
information on the world's mining industry is the Mines and Communities
website, www.minesandcommunities.org.
The more recent London Mining Network website, www.londonminingnetwork.org,
carries a more limited amount of information about companies with
a London connection. These websites link to many other sources
of published information which counter the generally positive
picture which the mining industry paints of itself.
The largest mining company in the world is the
dual-listed Anglo-Australian company BHP Billiton. The company
has, along with its partners Anglo American and Xstrata, both
also listed on the London Stock Exchange, come under fire for
its involvement in the Cerrejon Coal mine in northern Colombia.
The mine has a history of forced relocation of farming communities
with inadequate compensation. It took years of campaigning by
local people, backed by Cerrejon mine workers and supporters in
Britain, Australia, Canada, Switzerland and the United States,
and the lodging of complaints to the Organisation for Economic
Co-operation and Development in Australia and Switzerland, before
the demands of the affected communities began to be taken seriously.
Even now, reports from communities facing relocation suggest that
the mine's community engagement strategy leaves a lot to be desired.
BHP Billiton and Anglo American, together with, at the time, Glencore,
were part of a Joint Venture which owned 50% of the Cerrejon mine
when, in August 2001, the unarmed inhabitants of the small farming
village of Tabaco were evicted by armed force and their houses
demolished to make way for mine expansion. In February 2002, that
Joint Venture took control of the remaining 50% of the mine, thus
inheriting responsibility for the legacy of suffering caused by
the forced evictions.
The Cerrejon Coal Company signed an agreement
with former residents of Tabaco in December 2008, following recommendations
made by an Independent Panel of Inquiry established by the company
to respond to persistent criticisms. The agreement is welcome;
but the gravity of the abuse suffered by the people of Tabaco,
and by other communities before the destruction of that village,
should not have occurred. Having occurred, it should have received
speedier and fuller redress.
One of the problems worthy of the Committee's
consideration is that of the so-called 'corporate veil', whereby
British-based companies can avoid legal responsibility for actions
for which they bear moral responsibility simply by virtue of their
convoluted corporate structure. In the case of the Cerrejon mine,
the operating company, Cerrejon Coal, is owned by companies in
the Caribbean which are wholly owned subsidiaries of the London-listed
multinationals. It is difficult to believe that the three multinational
companies, which between them owned 50% of the Cerrejon mine in
2001, were unaware of the planning of the demolition of Tabaco.
However, legal advice obtained by the villagers' supporters was
that an action in English courts would be unlikely to succeed,
not because the case lacked merit but purely because of the company's
structure. LMN believes that this is an injustice.
BHP Billiton also faces continuing criticism
for its activities in the Philippines, including notable community
opposition at its Hallmark Project in Davao Oriental and accusations
around an initial off-take agreement on the island of Sibuyan.
The dispute in Sibuyan led to the shooting of an unarmed protestor
in October 2007.
BHP Billiton is exploring for nickel in Guatemala
and is believed to hold a number of leases in the Lake Izabal
region, where there has been strong community opposition to any
activities which might pollute the lake, on which over 1000 fisher
people rely for their livelihood. Baroness Miller of Chilthorne
Domer, who visited the area early last year, doubts that the companies
proposing mining and mineral processing in the area will be able
to carry out adequate Environmental Impact Assessments or valid
community consultation. BHP Billiton's subsidiary Mayaníquel
S.A., has already been fined $25,000 for not carrying out
a legally required Environmental Impact Study. As in Colombia
and the Philippines, there is widespread and violent intimidation
of those opposed to mining.
Rio Tinto has a long history of conflict with
communities who believe that they have been ill treated by the
company. Most notably, the company has financed expansion at,
and continues to profit from, the vast and notorious Grasberg
mine in West Papua, which has caused extensive environmental damage,
violated indigenous land and cultural rights and is associated
with atrocities by the Indonesian military. In 2006 the Norwegian
Government's sovereign pension fund disinvested from Freeport
McMoran Copper & Gold, the US company which controls the mine,
and in September 2008 the Norwegian Government also disinvested
from Rio Tinto because of the Grasberg connection.
At its recent Annual General Meeting, Rio Tinto
was strongly criticised for violating Indigenous treaty and religious
rights in the Upper Peninsula of Michigan. The objections of the
Keweenaw Bay Indian Community were carried to the meeting by Lutheran
Pastor Revd Jon Magnuson, representing leaders of100 faith
communities in the area who believe that the company's Eagle Project
would, in addition to being ecologically disastrous, represent
an attack on the right of Indigenous People to exercise their
spiritual traditions at their sacred site. Similar allegations
were made on behalf of Embera Indigenous communities and Afrocolombian
communities in north western Colombia, where the company is involved
in a Joint Venture with US-based La Muriel Mining Corporation.
Here local people also allege militarisation, intimidation and
brutality. In December 2008 Rio Tinto announced new Joint
Ventures with India's National Aluminium Company Ltd (Nalco) which
could see new projects violating the rights of local communities
which have already forcibly rejected new mining or expansion.
Anglo American has attracted criticism for its
above-mentioned involvement in the Cerrejon Coal mine in Colombia
and its exploration activities in the Cordillera region of the
Philippines, where it is alleged that it has manipulated community
consent processes in order to obtain the legally required certificate
of Free Prior Informed Consent. It is in a highly militarised
area, where those who express opposition to mining are subject
to threats and intimidation. The company's Anglo Platinum division
continues to attract heavy criticism from farming communities
in South Africa for its handling of community resettlement and
for polluting water supplies. Anglo Gold Ashanti, which was until
late 2007 41% owned by Anglo American, was accused of profiting
from paramilitary intimidation of mining opponents in Colombia.
De Beers, in which Anglo American retains a 45% holding, has been
criticised for potentially benefiting from forced removal of indigenous
Bushmen from their ancestral territory in Botswana. The lease
in question was sold last year to London-based Gem Diamonds.
Xstrata has been criticised for its activities
in Colombia, as noted above. It has also been criticised for its
role in taking forward the Tampakan copper and gold project in
the Philippines, in a situation of growing human rights abuses
as the project has become the subject of attacks by armed paramilitaries.
In May last year an Argentine Federal Appeals Court upheld criminal
charges against Xstrata General Manager Julian Rooney for contamination
caused by the company's Alumbrera copper and gold mine. Aboriginal
people around McArthur River in Australia have had to watch their
sacred lands violated by expansion of a massive opencast zinc
mine and the diversion of the river. They claim the company does
not listen to them.
London-listed Vedanta is notorious as a model
of poor corporate governance. Anil Agarwal is both its Chairman
and CEO, and with his family owns the majority of the company's
shares. The company has been criticised for its behaviour in Armenia
and Zambia, but it is in India that it has come under heaviest
criticism for the cavalier manner in which it has ignored environmental
legislation. It is currently trying to bulldoze its way into tribal
land in Orissa in the hope of constructing a huge bauxite mine
on land sacred to the Donghria Kondh people in order to feed its
nearby illegally constructed alumina refinery. Under Indian law,
tribal land should not be transferred to a private company. There
has been overwhelming opposition to the mine by communities dependent
on the mountain for their livelihoods, and there are persistent
allegations of intimidation of opponents to the mine. Many of
the Majhir Kondhs and other tribal people from villages around
the refinery have stated that they gave up their farm land after
heavy-handed tactics by the state police, acting on behalf of
Vedanta. They were paid meagre compensation, but much of this
has run out and the promised jobs at the refinery never materialised.
They are now landless and jobless. In November 2007 the Norwegian
Government's sovereign pension fund disinvested from Vedanta when
its Council on Ethics, after nearly two years' research, found
that continuing to invest in the company would present "an
unacceptable risk of contributing to grossly unethical activities".
It is not only these larger companies which
attract criticism, however. Among the smaller companies listed
on the London Stock Exchange, GCM Resources has been widely criticised
for its proposed Phulbari project in Bangladesh. According to
the Bank Information Center in Washington, the project will acquire
almost 6,000 hectares of land and will displace between 50,000 and
220,000 people, destroying a critical agricultural region
and threatening the region's water and food supply. Over 80% of
the land taken for the project will be fertile agricultural land
which will not be fully replaced, leaving farming families with
few options for employment. People in the area have made clear
on numerous occasions that they oppose the project. In August
2006, the Bangladesh Rifles, a paramilitary force, opened fire
on 50,000 local people conducting a peaceful protest around
the Phulbari project area. At least three people were killed,
including a 14-year old boy, and over 100 people were wounded.
Over the succeeding two years of military rule, community leaders,
individuals from non-governmental organisations, human rights
defenders and others were intimidated, threatened, arrested and
tortured.
London-based Monterrico Metals' Rio Blanco project
in Peru is also a cause of concern. A huge majority of local people
rejected the mining project in a 2007 referendum. In November
2005, two protestors against the project were killed during a
demonstration; protesters said at least 28 members from their
communities were kidnapped and brutally beaten; the following
March, Monterrico was accused by a community representative of
orchestrating further violence against opponents of the project.
In January of this year, the Peruvian National Coordinating Committee
for Human Rights released photographs which showed local people
being tortured by police and mine personnel. Journalist Julio
C
sar Vásquez Calle, who says that the photographs
were taken in the mine camp, was himself allegedly tortured. He
claims that, before he was released, company representatives apologised
for his detention. According to Amnesty International he is now
receiving death threats for revealing the abuse. Some of the other
torture survivors are also being threatened should they co-operate
with a Peruvian Government inquiry.
The groups involved in London Mining Network
believe that companies need to be held accountable for the impacts
of their operations around the world. In our experience of working
with numerous mining-affected communities, it is clear that the
current systems of accountability and avenues of redress for injustices
committed, including the OECD complaints procedure, are wholly
inadequate. In response to the Committee's question number 7,
"Does the existing legal, regulatory and voluntary framework
in the UK provide adequate opportunity to seek an appropriate
remedy for individuals who allege that their human rights have
been breached as a result of the activities of UK businesses?"
we would answer with an emphatic "No!"
LMN as a network, however, is not making specific
proposals to the Committee concerning legal or regulatory reform.
Some of the groups involved in LMN are also members of the Corporate
Responsibility Coalition (CORE) which proposes a UK Commission
for Business and Human Rights. Some LMN groups are also involved
with the European Coalition for Corporate Justice, which proposes
enhancing direct liability of parent companies, establishing a
parental company duty of care and establishing mandatory social
and environmental reporting. Another proposal of which LMN is
aware is the abolition of limited liability status for corporations
as a way of encouraging responsible behaviour by company boards,
management and shareholders. Some groups in LMN question the legitimacy
of foreign direct investment and believe that countries' mineral
resources should always be under the exclusive control of the
people who live there. LMN urges the Committee to examine further
evidence of human rights abuses by London-connected mining companies
in formulating its own proposals for reform.
London Mining Network
May 2009
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