Memorandum submitted by CAFOD and the
Peru Support Group
INTRODUCTION
1. CAFOD, the development agency of the
Catholic Church in England and Wales, supports and works with
partner organisations in over 45 developing countries. The
Peru Support Group (PSG) is a UK-based membership organisation
of people concerned about the implications for human rights and
human well-being of economic and social changes in Peru. The two
organisations have been working together to support the rights
and interests of the people of Peru, in particular the poorest,
since 1989. We welcome the opportunity to respond to the call
for evidence by the Joint Committee on Human Rights. Drawing on
our areas of expertise, this memorandum concentrates on the impact
of businesses on human rights in the developing world, with an
illustrative case study of a British junior mining company in
Peru.
2. Today many companies operate in an increasingly
global context where business transactions and supplier relationships
cross national boundaries and legal jurisdictions. While the focus
of this enquiry is on the human rights impacts of UK business,
it is important to recognise that many companies based or listed
in the UK are operating internationally. The UK remains a global
business centre. London is an important hub for extractive industries
with many UK and foreign companies listed on the LSE Main Market
or the Alternative Investment Market (AIM).
3. CAFOD and the Peru Support Group believe
that the enquiry is timely as there are clear actions that the
British Government can take now in relation to businesses based
in the UK. In addition, it will also be necessary for the UK Government
to be proactive at European and international level in order to
set high standards for corporate practice globally.
4. The crucial measure required is to ensure
that those affected by corporate abuses have access to justice.
This should be complemented by preventive actions to reduce the
risk of the activities of UK companies having a negative impact
on human rights. Our recommendations draw on a specific experience
in Peru and research in other countries where CAFOD partners are
looking at the impact of the private sector.
THE DUTY
OF THE
STATE TO
PROTECT HUMAN
RIGHTS: IMPLICATIONS
FOR THE
HUMAN RIGHTS
OBLIGATIONS OF
THE UK
5. States have the primary responsibility
to promote human rights recognised in international law and ensure
they are respected.
6. It is clear that relying solely on host
governments to uphold this duty is not sufficient to ensure that
rights are promoted and respected. Thousands of UK businesses
operate in or have business partners in territories identified
by the UK government as 'major countries of concern in relation
to human rights', for example China, Colombia and the Democratic
Republic of Congo.[178] In
many instances national or local governments are unwilling or
unable to protect the human rights of their citizens.
7. Large-scale projects in the oil, gas
and mining sectors are often particularly contentious and high-risk
in this respect. In Honduras, the administration identified a
lack of technical expertise within government departments to monitor
the social and environmental impacts of gold-mining operations
effectively.[179] In
the Philippines many potential mine sites lie within ancestral
lands of indigenous peoples whose rights are recognised in ILO
Convention 169. The UN Special Rapporteur on Indigenous Rights
found that national legislation, which on paper gives significant
legal protection for indigenous communities' rights, is contradicted
by other laws and not always enforced effectively.[180] CAFOD
partner organisations in Latin America report an increasing tendency
on the part of the state to treat legitimate protest by civil
society as crime.[181]
8. The UK Government has put the private
sector at the heart of its strategy for economic growth in the
developing world.[182] While
sustainable development requires a vibrant private sector creating
jobs, tax revenues and investment, in some cases, profitable business
models can have detrimental effects on economic, human and environmental
rights. Any drive to maximise the positive contribution of UK
businesses to development, thus needs to be underpinned by appropriate
action to reduce the risk of negative impacts.
9. Measures are needed to build capacity
within developing countries to monitor business activities and
ensure that human rights are protected. The UK Government should
also introduce mechanisms to ensure that British-based companies
operate responsibly abroad.
IN DEPTH CASE STUDY: MONTERRICO METALS, PERU
10. Monterrico Metals was a UK company incorporated
in 2001[183] and
listed on AIM in June 2002. It operated wholly inside Peru. Monterrico
Metals was 100% owner of Peruvian subsidiary Minera Majaz, which
has operated the Majaz copper mining exploration project (also
known as the Río Blanco project) in Piura, northern Peru,
since 2002. This project aroused the opposition of local communities
for operating on their land without proper consent and for its
potential to damage the environment. This opposition led to protests,
which climaxed in 2004 and 2005.
11. In 2005, at a mine site owned by Monterrico
Metals, 29 people were allegedly detained by the police after
a protest march, held inside the mining camp for three days and
were allegedly subject to various forms of physical and psychological
torture.[184] In
October 2007, the North American institution Physicians for Human
Rights examined eight of the alleged victims of torture. Their
final report corroborated the accusations of abuse suffered during
their illegal detention (see Appendix 1).[185]
12. In July 2008, Peru's National Coordinator
for Human Rights (CNDDHH) and local human rights organisation
the Ecumenical Foundation for Development and Peace (Fedepaz)
lodged a formal complaint about the allegations of torture before
the Public Prosecutor's Office in Piura.[186] The
complaint included charges of illegal detention, torture and sexual
crimes.[187]
13. On 6 January 2009, the CNDDHH made
public a set of photographs, anonymously delivered to them, which
seemingly corroborate the allegations of torture. The photographs
appear to document the claims of abuse that occurred at the Majaz
mining camp.[188] Images
of the alleged incidents appear to establish the actions of police
and/or mine security guards.[189]
14. The photographs show the injuries sustained
by Melanio García, the campesino protestor who died in
August 2005, allegedly after being illegally detained by company
security guards and/or police as punishment for taking part in
a protest march (Appendix 2). Peruvian human rights groups believe
that the circumstances of this death must be seriously investigated
as, according to the post mortem examinations, Melanio García
died on 2 August 2005 of a haemorrhage caused by the
gun shot wound (Appendix 3). On 2 August Melanio García
had been in police custody.[190]
15. On 18 March 2009, local and international
press reported that "Peruvian prosecutors have accused police
of torturing protesters at a mining camp in 2005 but cleared
a British-Chinese metals company and its security firm of wrongdoing…"[191]
16. Lawyers for Fedepaz, the rights group
that filed the complaint along with the National Coordinator for
Human Rights, denounced the findings as incomplete. They also
criticised the failure to prosecute those who directed the police
operation.[192] According
to the CNDDHH, the trial of eight officers, those identified as
direct authors in the incident, is underway.
17. Notwithstanding the decision of the
Public Prosecutor of Piura not to initiate proceedings against
private security firm Forza, Monterrico Metals or its Peruvian
subsidiary, Peruvian human rights groups (CNDDHH and Fedepaz)
believe it is imperative that the conduct of these companies in
relation to the incident should be properly and fully investigated.
In particular, investigations should focus on the following: Monterrico's
knowledge, at the time, of the human rights violations; possible
involvement of mine employees and mine security contractor, Forza,
in the violations; assistance given to the perpetrators eg in
the form of food, money, transport and information; and communications
that occurred between the company, Forza and the police.
MULTINATIONAL ACCOUNTABILITY
18. When the torture allegedly took place
Minera Majaz S.A. (now known as Río Blanco Copper S.A.),
was a wholly-owned subsidiary of British junior mining company
Monterrico Metals. But by the time the incident was being officially
investigated, the parent company Monterrico Metals had been acquired
by a Chinese consortium led by Zijin.
19. This case is relevant to the JCHR's
call for evidence for various reasons: accusations of torture
took place whilst the parent company Monterrico Metals was still
a 100% British company, operating in a particularly difficult
and conflictive context and was therefore of interest to British
citizens and government concerned about the behaviour of UK firms
overseas. In August 2006, the former British Ambassador to Peru
(2003-2006) was appointed Executive Chairman of Monterrico. According
to a company press release, he "…became acquainted with
and visited the Rio Blanco project, amongst other mines in Peru,
during his term as Ambassador".[193] The
case is also emblematic of broader issues in the relationships
between mining, society and development—issues that are
also relevant to the operations of other British mining companies
in Peru (Britain is a significant source of investment in the
Peruvian mining sector and a number of important and junior UK
companies have offices in Peru).[194] The
long time that has elapsed in trying to bring a legal case against
those responsible and the difficulty created by new ownership
is also a feature typical of this kind of case.
THE RESPONSIBILITY
OF BUSINESSES
TO RESPECT
HUMAN RIGHTS
20. As UN Special Representative on Business
and Human Rights John Ruggie has stated, "there are few if
any internationally recognised rights business cannot impact -
or be perceived to impact—in some manner."[195] Much
of the evidence regarding both positive and negative impacts of
business is based on case-study examples. While these can be very
useful, there is a lack of more quantitative data on the human
rights impacts of UK businesses abroad. More systematic reporting
requirements would help to capture these impacts.
21. In addition to the case of the Río
Blanco mining project in Peru, instances of violence and even
killings are also all too common elsewhere. In October 2007, environmental
activist and municipal councillor Armin Marin was shot during
a protest against mining on Sibuyan Island in the Philippines
following a confrontation with the head of security for Sibuyan
Nickel Properties. At the time British-Australian company BHP
Billiton had an agreement to purchase 500,000 tonnes of nickel
from the company in exchange for a loan of US$250,000 for
exploration activities. CAFOD research noted that BHP Billiton
withheld funds under this ore-supply agreement as a result of
the incident. The Sibuyan killing and the concerns which CAFOD
has documented about the community consent process around the
Hallmark project demonstrate that it is important to apply social,
environmental and human rights standards to joint venture partners,
suppliers and contractors.[196]
22. Labour rights violations remain a feature
of global supply chains and a concern for many UK consumers. Research
has identified that purchasing practices and decisions about contracts
and orders within a business can have direct implications for
workers' rights.[197] In
the first quarter of 2009 China was the UK's third greatest
source of imports.[198] UK
companies are aware that Chinese factories have a poor record
on health and safety; because of the political context, workers
are not able to organise in independent trade unions; and instances
of child labour are rising. Nevertheless many companies are still
sourcing from such high risk suppliers.
23. In our view, the response by government
to the issue of business impacts on human rights has been insufficient
and piecemeal. The UK government and the European Union have too
often framed this issue in terms of Corporate Social Responsibility
(CSR) instead of as a human rights issue created by core business
practices. Too much weight has been placed on voluntary initiatives.
24. Experience of multi-stakeholder and
industry initiatives to date have shown the limitations of relying
on a purely 'good-practice' approach. For instance, CAFOD is one
of the NGO members of the tripartite Ethical Trading Initiative
working to improve labour rights in global supply chains. ETI
has generated valuable learning but clearly has limited reach:
after ten years, only 56 companies are members.
25. Human rights obligations are not an
optional extra. Multi-stakeholder initiatives need to be underpinned
by comprehensive measures to ensure that all UK companies respect
human rights in their core business activities.
EFFECTIVE ACCESS
TO REMEDIES
26. In our view the existing legal, regulatory
and voluntary framework in the UK does not provide individuals
who allege that their human rights have been breached as a result
of the activities of UK businesses with an adequate opportunity
to seek an appropriate remedy. We agree with the Special Representative's
analysis that globalisation has caused "governance gaps".
Companies can use investment treaties, national and international
laws to protect their interests but it is much harder for communities
suffering from corporate abuses to pursue legal redress.[199]
27. Complex transnational corporate structures
mean that it is often very difficult for someone who has suffered
human rights abuses as a result of business activity to bring
a successful case. In the case of the Río Blanco mining
project, for example, it is necessary to establish parent company
liability. This has not been straightforward. The fact that, while
ownership has changed, the issues for the community remain the
same highlight the international dimension, particularly in mining.
28. To address the "governance gaps"
highlighted above, a range of actions are urgently needed.
RECOMMENDATIONS FOR
UK GOVERNMENT ACTION
AT UK LEVEL:
ADDRESS GAPS
IN EXISTING
ACCOUNTABILITY MECHANISMS
— Consider judicial measures to make
it easier for foreign victims of UK corporate abuse to access
English courts. For example, admissibility of class actions/multi-party
cases.
— Improve accountability and recourse
mechanisms by establishing a robust, independent UK Commission
on Business, Human Rights & the Environment along the lines
of the Corporate Responsibility (CORE) Coalition proposal.[200]
PREVENTIVE MEASURES
TO REDUCE
THE RISK
OF HUMAN
RIGHTS ABUSES
— Require companies listed or headquartered
in the UK to undertake and publicly disclose social, environmental
and human rights impact assessments for significant overseas projects.
— Strengthen individual responsibility
of company directors to minimise, manage and mitigate the companies'
human rights and environmental impacts.
— Build human rights measures into
the criteria for selecting companies for DFID Public-Private Partnerships,
Export Credit Guarantees and Overseas Insurance.
AT INTERNATIONAL
LEVEL:
— Support legislation at EU level which
would enhance direct liability of parent companies, establish
a parental company duty of care and introduce mandatory environmental
and social reporting.[201]
— Support the development of the UN
Special Representative's framework to include home country legislation
requiring companies to respect internationally agreed human rights
standards in relation to their overseas operations.
Documents relevant to the in-depth case study:
— Appendix 1—Report
by Physicians for Human Rights (PHR).
— Appendix 2—Photographs
of Melanio García.
— Appendix 3—CNDDHH
letter in English sent to international NGOs summarising the Río
Blanco case and the allegations of torture.
CAFOD
May 2009
Peru Support Group
May 2009
178 Foreign and Commonwealth Office (2009) Annual Report
on Human Rights 2008. Back
179
CAFOD (2006) Unearth Justice: counting the cost of gold. Back
180
CAFOD (2008) Kept in the dark: why it's time for BHP Billiton
to let communities in the Philippines have their say. Back
181
CIDSE (2009) Impacts of Extractive Industries in Latin America. Back
182
DFID (2009) Private Sector Development Strategy. Prosperity for
all: making markets work. Back
183
http://wck2.companieshouse.gov.uk/2db504c87e65c709fb00be5b74982a1b/compdetails.
Company No. 04236974. Back
184
http://blog.dhperu.org/?p=1873.
This is the official blog of Peru's National Human Rights Coordinator
(CNDHH). Established in 1985, the CNDDHH is a group of non governmental
organisations involved in the defence and promotion of, and education
in, human rights in Peru. The CNDDHH publishes an annual report
on the state of human rights in the country, reports regularly
to the Inter-American Commission on Human Rights (IACHR) and takes
part in the National Council on Human Rights and the National
Council for International Humanitarian Rights. It has special
consultative status within the UN's Economic and Social Council
(ECOSOC). Back
185
Ibid. Back
186
Ibid. Back
187
Ibid. Back
188
Ibid. Back
189
http://www.flickr.com/photos/34173573@N08/sets/72157612249566195/detail/ Back
190
http://blog.dhperu.org/?p=1873 Back
191
http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSN1835190220090319 Back
192
Ibid. Back
193
http://www.monterrico.co.uk/s/PressReleases.asp?ReportID=147212&_Type=Press-Releases&_Title=Former-British-Ambassador-to-Peru-Appointed-as-Executive-Chairman Back
194
Mining and Development in Peru, Peru Support Group, March 2007,
p 1. Back
195
Report of the Special Representative of the Secretary-General
(SRSG) on the issue of human rights and transnational corporations
and other business enterprises, "Business and Human Rights:
Mapping International Standards of Responsibility and Accountability
for Corporate Acts", UN Doc. A/HRC/4/035. 9 February
2007, p.15. Back
196
CAFOD (2008) Kept in the dark: why it's time for BHP Billiton
to let communities in the Philippines have their say. Back
197
See for example ETI (2005) Bridging the gap between commercial
and ethical trade agendas. Back
198
HM Revenue and Customs, Overseas Trade Statistics. Back
199
The case of Konkola Copper Mines (KCM) in Zambia provides an example
of this power imbalance. See for example CIDSE (2008) Recommendations
to reduce the risk of human rights violations and improve access
to justice. Submission to the UN Special Representative on Business
and Human Rights. Back
200
The Corporate Responsibility (CORE) Coalition was set up in 2001 and
represents over 130 charities and campaigning organisations.
www.corporate-responsibility.org Back
201
http://www.corporatejustice.org/IMG/pdf/ECCJ_FairLaw.pdf Back
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