Activist shareholders represent victims of international mining projects

LONDON — Angela Paine has been going to Rio Tinto shareholder meetings for decades. She’s part of a group called Partizans, which since 1978 has brought indigenous people from around the world to the mining giant’s meetings using proxy shares. Paine said company officials did not used to welcome the guests.

“They would just ignore them, they would say you’re not really a shareholder,” she remembered over tea sandwiches served following Rio Tinto’s annual general shareholder meeting last month. “There was one big, black aboriginal man who got up on the stage to have his say. The company heavies came up and lifted him out bodily, by the feet. It was quite spectacular.”

This year, Rio Tinto’s 140th anniversary, the attitude toward international visitors was much different. Rio Tinto chairman Jan Du Plessis effusively thanked an Alaskan Native Yupik elder, a Mongolian woman speaking on behalf of nomadic herders and others for making the trip.

Rio Tinto, like other major mining companies, now goes to great lengths to emphasize its “partnerships” with local communities and specifically indigenous people. Rio Tinto and Anglo American, which had its general shareholder meeting in London on April 19, were founding members of an industry group focused on socially responsible mining.

The members commit to principles including obtaining “free, prior and informed consent” from indigenous people. The video Rio Tinto showed to open its April 18 shareholder meeting stressed its social responsibility, and noted it is the largest private sector employer of aboriginal people in Australia.

“We supply the fundamental building blocks to the developing world,” said Rio Tinto CEO Sam Walsh at the meeting. “We’re creating economic and social benefits for the places where we mine and our host communities.”

But members of the increasingly organized international mining watchdog movement say the companies are ultimately still determined to mine wherever, whenever and however they desire, and in the least costly way.

Hence, they say, all this talk about social responsibility is largely rhetoric or “greenwashing” and that companies would have to do a lot more — including making financial sacrifices — to really change their ways.

Impacting natives, from Mongolia to Arizona

The Oyu Tolgoi mine that Rio Tinto is currently developing in Mongolia’s Gobi Desert will be one of the largest copper and gold mines in the world, and will account for a third of the country’s GDP once fully operational. The company had hoped to begin mining this summer, but construction has been hampered by $2 billion in cost overruns and tussles with the Mongolian government, which owns 34 percent of the project and unsuccessfully sought to acquire a bigger stake.

The mine is on rugged, windswept land used for centuries by nomadic herders who tend camels, sheep and goats. By Rio Tinto’s count, 89 herding families will be displaced by the project. The company has reached compensation agreements with 88 of them, Du Plessis said at the meeting.

Sukhgerel Dugersuren, a good government and human rights campaigner who heads the NGO Oyu Tolgoi Watch, said about 380 families could ultimately see their livelihoods threatened because of the mine. Because the pastures are shared in a delicate traditional system, she said it is impossible for the company to fairly compensate people when the mine eats up the land, vegetation dries out because of the mine’s water consumption or displaced herders encroach on different territory.

Rio Tinto also plans to divert the Undai River, a crucial source of water for livestock especially because it doesn’t freeze until December, as Dugersuren told the Rio Tinto executives.

She said Rio Tinto representatives have held meetings with families in their yurts, and promised one job to each household.

“The jobs will be things like wood chopping, road sweeping, cleaning, watchman,” she said. “The herders here don’t have many skills, if they lose their pastures they’ll be dependent on just those jobs. They present it as something great they’re doing, but if you look at the real impact it has on households, it’s something different.”

And she thinks families agreed to be relocated under subtle coercion: “People from the company going to the herders’ homes can be really intimidating, especially when they show up with someone from the local government.”

Dugersuren complained to the executives that the company has not officially recognized the herders as indigenous, which would mean a higher standard of consultation and consent. “They’ve been here since the 12th century, since the Mongol Empire,” she said. Walsh told Dugersuren that the company uses World Bank standards to decide whether a group is indigenous.

Bobby Andrew had a similar message for Rio Tinto: that the company’s planned Pebble Mine in Bristol Bay, Alaska could destroy traditional ways of life for Alaskan Natives like himself.

“We’ve lived there for thousands of years and you’re celebrating your 140th year in the industry,” said Andrew. “We rely on all of the renewable resources in the region — salmon, freshwater fish, moose, caribou, beavers. All of these require clean water…Our aim is to stop the project and we’re not going to give up. Our numbers are growing in opposition. And I hope you listen, I hope you hear what I have to say and take my advice — divest in the project, [or] it’s going to be very, very costly for your shareholders.”

Walsh thanked Andrews for his “constructive…very articulate” comments and seemed to try to pass the buck to Rio Tinto’s majority partner in that venture, Anglo American, saying that Rio Tinto wants an underground mine which theoretically would cause less pollution than the proposed open pit.

Campaigners from Michigan and Arizona also testified that Rio Tinto’s proposed mines in the Upper Peninsula and near Phoenix would destroy land and water sacred to Ojibwe and Apache tribes, respectively. Mining activist Roger Featherstone noted that leaders of the San Carlos Apache Tribe and the National Congress of American Indians are opposed to the “land swap” bill that Rio Tinto wants Congress to pass so it can gain control of public land near the Apache reservation thought to hold massive copper reserves.

“How do you reconcile your corporate rhetoric about getting local permission first with your actions on the ground in Arizona?” asked Featherstone.

Walsh said Rio Tinto acknowledges the land “was once frequented by Native Americans including Apaches.”

“It still is!” Featherstone interjected. Walsh said the company would like to meet with tribal leaders but they have refused, invoking treaty rights to “government to government consultation” with the US government, whom they want to deny the land exchange.

Meanwhile Benny Wenda, a West Papuan tribal member who gained asylum in England in 2003, didn’t go inside the Rio Tinto meeting but protested outside with a banner calling for a “Free West Papua.” 

Rio Tinto holds a non-managerial 40 percent stake in the massive Grasberg gold and copper mine operated by a subsidiary of New Orleans-based Freeport-McMoRan Copper & Gold. Wenda and other West Papuan separatist advocates say — and a 2005 New York Times expose documented — that mine operators have colluded with and made payments to Indonesian police and military to suppress local dissent, often violently.

A tale of two mining companies

Julio Gomez grew up in La Guajira, a peninsula in northeast Colombia home to largely indigenous people and Afro-Colombians. A number of villages have been demolished because of the massive open pit Cerrejon coal mine, owned by Anglo American, Australian giant BHP Billiton and another London-based company, XStrata. The mine exports almost all its coal to Europe and the US, including to British power plants that have relied primarily on imports since Prime Minister Margaret Thatcher closed most of England’s coal mines in the 1980s.

Both the miners union that represents Cerrejon workers and people in the surrounding communities say they are being treated unfairly. They say that workers and nearby residents are sickened with skin and respiratory ailments “that were never seen before the mine,” as Gomez put it. And they say people displaced by the mine’s expansion have not been fairly compensated. In February and March mineworkers went on strike for 32 days. Among other things workers complain that a majority are hired by temporary subcontractors, earning about 30 percent less than direct hires and denied the ability to unionize.

Gomez thinks local opposition is behind the companies’ decision to suspend a plan to divert a nearby river. At the shareholder meeting he planned to press Anglo American executives on company statements that the river plan was suspended because coal prices are low. He wants them to clarify whether the river will be diverted for a mine expansion if coal prices improve.

“The true reason they suspended it is the resistance of the people, but they don’t want to admit that,” Gomez said.

An Anglo American spokesperson noted that the mine employs 10,000 people and said, “Anglo American adheres to national and international standards with regards to human rights, environmental and social issues at all of its operations.” She added that an independent organization was commissioned to review complaints at Cerrejon, and that a process resulted in which the companies are working with locals to address issues including “sustainable economic development, improving agricultural techniques and efficient use of water.”

More from GlobalPost: Religious groups keep an eye on global mining giants

Peter Bailey is health and safety secretary of the National Union of Mineworkers, a powerful South African union with close ties to the African National Congress. He noted that Anglo American, South Africa’s largest private sector employer, has a relatively good relationship with labor unions in Africa because of the necessity of working with the labor-friendly ANC.

Anglo American and other mining companies have committed to a plan along with the union and the government to improve conditions in South African mines by 2015, including the elimination of male-only hostels, cutting workplace injuries by half and addressing the HIV, tuberculosis and silicosis epidemics that plague migrant mineworkers. But Bailey still thinks mining companies are more interested in appearances than sweeping reforms.

“For them image is everything, they invest millions just on propaganda saying that they are the best,” he said. “In reality that’s not true, when a black mine worker can’t even support his family.”

Glen Mpufane, a former South African mineworker and union organizer, is now director of mining for IndustriALL, the labor federation founded last year through mergers of international energy, mining and manufacturing unions representing 50 million workers. He told GlobalPost that Anglo American does a good job of honoring global agreements it has signed with labor at mines throughout Africa. But IndustriALL wants to pressure Anglo American to live up to the same standards on other continents, including at the Cerrejon mine in Colombia.

Meanwhile the labor organization plans to take on Rio Tinto in an international campaign, including demanding that it sign global agreements similar to those negotiated with Anglo American. Mpufane said union leaders from around the world will meet in South Africa this summer to launch their initiative targeting Rio Tinto. During the shareholder meeting, Mpufane asked about Rio Tinto’s reputation as an “anti-union company” and the protracted lockout of union workers at Rio Tinto’s aluminum smelter in Quebec, which the company has blamed in part for the disastrous 2012 performance of its aluminum assets. Walsh countered that Rio Tinto is not anti-union; Mpufane said afterwards that he didn’t buy it.

“They see us as a nuisance and a hindrance, they’re forgetting that we’re legitimate stakeholders,” he said. “Until there is a peace deal, we will make their lives difficult.”

Progress and priorities

Mine operators have battled with workers and local residents since the dawn of the large-scale mining industry in the mid-1800s; and naturally mining has been a major target of environmentalists since the birth of the environmental movement roughly a century later. In recent years these groups have increasingly worked together in monitoring and fighting mining companies.

The somewhat loose and amorphous yet increasingly organized global mine watchdog movement brings together interest groups who sometimes have conflicting aims – for example mineworkers who want to keep their jobs even as they demand reforms, and environmental and indigenous groups who want to see mines closed altogether.

The movement has become increasingly focused on London, which is headquarters to many of the world’s biggest mining companies along with the financial institutions that provide mines crucial capital and insurance. Toronto’s stock exchange lists more mining companies than London’s, but Canada is home to more “juniors” whereas the big-money operations are concentrated in London.

In June 2012 the International Institute for Environment and Development issued a 10th anniversary report card on the industry’s progress. It noted that “despite good intentions,” “implementation (of improved practices) across the sector has been highly variable.” It noted that competition from emerging economies, climate change and the increasing desire for governments to nationalize their mineral resources will complicate mining companies’ efforts to be more responsible.

Mining companies are also facing financial pressures at the moment, with the cost of energy, raw materials and labor rising in key locations rising. Du Plessis and Walsh described Rio Tinto’s rough year in 2012, including a $14 billion write-down of asset value primarily in the aluminum sector and its troubled Mozambique coal project. Former CEO Tom Albanese resigned because of those developments, and the new leadership has pledged a commitment to efficiency and cost containment. Nonetheless, a Rio Tinto spokesman said the company’s devotion to social responsibility will continue: “sustainable development is not an optional add-on.”

Roger Moody founded the group Minewatch International and wrote a book on political risk insurance in mining — where companies take out policies to cover losses from local and governmental opposition, among other things. He thinks some of the most vocal critics should give companies more credit for the changes they have made — and give themselves credit for driving the changes.

“Originally we didn’t expect this industry to change radically in any way, we didn’t expect the leopard to change its spots one bit,” Moody said. “But now they have changed their due diligence in many ways. It used to be that (the companies thought) ‘We’ll always get government on our side even if the community is against it.’ Now they rate community opposition among the top risk factors.”

Publicizing this risk is a primary reason that critics visit the shareholder meetings.

Though the most prominent investors rarely attend shareholder meetings and the important votes have already been cast ahead of time, people like Paine and peace activist Albert Beale see it as an important way to educate the public. During this year’s meeting, Beale asked why the 2012 annual report did not include the fact that Rio Tinto won the “Greenwash Gold” competition during the 2012 Olympics. Online voters chose Rio Tinto over BP and Dow as the company with the most disingenuous marketing during the Games, for which Rio Tinto provided metal for the medals.

“Most of these are middle-ground, well-meaning people who come up from the country for their day out in London,” said Beale of his fellow shareholders. “If they can be educated by some dissidents making a fuss…”

Du Plessis called first on shareholders who quizzed the board about its investment decisions and executive remuneration protocol. The latter part of the meeting was occupied by the critics. The final word, however, went to a woman who asked why Rio Tinto hadn’t reduced its dividends given its asset write-downs in 2012. Du Plessis seemed amused and relieved.

“I smile because I appreciate the question,” he said. “At the end of the day we should be in business to raise cash to pay our shareholders.”

This reporting was supported by the Fund for Environmental Journalism.