Any of our business? Human Rights and the UK private sector - Human Rights Joint Committee Contents

Memorandum submitted by CAFOD and the Peru Support Group


  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.


  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.


  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.


  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.


  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.


  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.




    —  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]


    —  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.


    —  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.


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 Company No. 04236974. Back

184 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 Back

190 Back

191 Back

192   Ibid. Back

193 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. Back

201 Back

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