UK Companies in Conflict

Presentation for Compass Conference25 June 2011

 By Andy Whitmore, London Mining Network

(http://www.londonminingnetwork.org)

London Mining Network

• The London Mining Network (LMN) is an alliance of 25 human rights, development and environmental groups

• LMN pledges to expose the role of companies listed on the London Stock Exchange, London-based funders and the British Government in the promotion of unacceptable mining practices

• LMN does this by publishing reports, participating as “dissident” shareholders in company meetings, holding educational events and, where appropriate, addressing decision makers such as investment institutions, politicians and other NGOs  

Why London?

• Most of the world’s biggest mining companies, and many smaller mining companies, are listed on the London Stock Exchange (LSE) or on its Alternative Investment Market, (AIM). 4 of the world’s top 5 mining companies were listed on the London Stock Exchange (the exception being Vale)

• London is the world’s biggest centre for investment in the minerals industry

• The mining industry’s key lobbying organisation, the International Council on Mining and Metals (ICMM) is based in London, as is the London Metal exchange, and the leading precious metals trader, the London Bullion Market Association

Why Mining?• Leaving environmental issues aside, LMN's main concern is

on the disproportionately negative impact on land-based communities, especially Indigenous Peoples

• Mining is frequently associated with forced evictions, militarisation, conflict and human rights abuses

• Prof. John Ruggie noted that “the extractive sector – oil, gas, and mining – utterly dominates this sample of reported abuses, with two-thirds of the total” received by him

• It is estimated that 60% of the world remaining mineral resources are located in Indigenous Peoples Territories

Wide spread of cases

• Myth that problems are only associated with 'junior' companies, or other countries (e.g. China – case of Monterrico metals in Peru)

• However, despite large CSR programmes, the big companies (Rio Tinto, BHP Billiton and Anglo American all have case studies we could have used

• The historically classic example of rights conflict & natural resources is around Rio Tinto (CRA) & Bougainville

• There are a number of companies recently listed, or about to be listed, on the stock exchange with potential problems e.g. Glencore, Vallar, London Mining plc

African Barrick Gold

• Barrick Gold Corp of Canada “spun off” the company’s four main Tanzanian mining operations on the LSE in March 2010

• History of low level conflict with displaced land-owners & artisanal gold miners

• Bloomberg journalist, Cam Simpson, reported in December 2010 that: “At least 7 people have been killed in clashes with security forces at the mine in the past two years”

• ABG mostly denied this (but did acknowledge some deaths in its pre-listing prospectus)

African Barrick Gold

• On 16 May 2011, 5 men were shot dead by security forces at North Mara, while at least a dozen were injured, when around 800 persons entered the mine site in search of gold ore

• ABG called the incident “deeply concerning”, but as before has never admitted responsibility. Local leaders say ABG employs police officers to provide mine security, and allege that African Barrick is benefiting from their actions

• ABG is a signatory to the “Voluntary Principles on Security and Human Rights”, yet has sought to down-play fatal incidents, and the role of the mine in them. It has failed to join calls for an independent enquiry

Gasaya Matiku, the uncle of 19-year-old Chacha Ngoka Chacha, with a photo of

his nephew, who was killed at

African Barrick's mine on 16 May

2011

The police refused to allow

relatives to hold a memorial

Source: Jocelyn Edwards, Toronto Star

Vedanta

• Vedanta Resources registered on the London Stock Exchange in 2003. It is the world’s 17th largest publicly-listed mining company

• It is essentially a vehicle for Anil Agarwal, Vedanta’s founder, majority share owner and Executive Chairman (and his family)

• In a number of scandals around the company the most well known is a fight over their attempts to mine the Niyamgiri hills, which have brought them into conflict with the Dongria Kondh people living there

Vedanta

• In a 2009 complaint before the OECD complaints mechanism, the UK National Contact Point ruled that Vedanta “did not respect the rights of the Dongria Kondh”; did not “consider the impact of the construction of the mine on the [tribe's] rights”; and that it “failed to put in place an adequate and timely consultation mechanism”.

• In 2007 the Norway’s Council on Ethics concluded that: “[C]ontinuing to invest in the … company would present an unacceptable risk of contributing to grossly unethical activities.”

• The mining project was cancelled by India’s Ministry of Environment and Forests in mid-2010, with the international campaign but accusations of violations continue

Red Mud Pond at Lanjigarh, 23 May 2011Source: Amnesty International

What is to be done...?

There is:-• the need for greater transparency of business operations

• better accountability of businesses for their impacts

• improved access to justice for victims of harmful corporate conduct

Vehicles for this could include:-• An effective replacement to the FSA (expel companies from LSE)

• Legislation following Dodd-Frank (Sec 1502) or C-300, or RMI

• A UK Commission for Business, Human Rights & the Environment

• Improved company law (& reporting under company law)

Statement of John Rumbiak, ELSHAM

To put an end to these dynamics of destruction and violence, the international community - particularly international investors - must, first and foremost, recognize indigenous communities' basic rights to chart their own development paths, to manage their own resources, to pursue their traditional livelihoods and cultures, and to say NO to multinational operations on their lands. The failure to respect communities' basic right to "just say no" exists at the heart of the nexus of human rights violations, environmental degradation and conflict.