Half-truths and evasions

Report of the BHP Billiton plc AGM, Thursday 23 October, London

Summary

At its AGM (annual shareholders’ meeting) in London on 23 October, BHP Billiton was attacked over its record in the Philippines, Indonesia, Guatemala and Colombia, its failure to endorse the UN Declaration on the Rights of Indigenous Peoples and its role in worsening climate change and producing a radioactive legacy for future generations.

The company’s responses were characterised by
• failure to listen to complaints
• failure to answer many detailed questions with anything more than vague generalities
• failure to admit that consultation processes in many countries are affected by corruption and intimidation
• and blank denial, without evidence, of informed and well-documented criticism.

Company Chair Don Argus repeatedly told critics to read the company’s ‘Sustainability Report’ without dealing adequately with examples showing that the company is not living up to it.

Argus and company CEO Marius Kloppers both asserted that ‘We won’t mine in World Heritage Sites’ – but would not commit to ditching prospective mining projects in UNESCO’s proposed World Heritage Site at Gag Island in Papua. So what’s going on behind the scenes? Lobbying to ensure that Gag Island is excluded from UNESCO’s proposed site?

Full report

We’re loaded

The sparsely attended AGM began, as always, with lengthy speeches by the Chair and the Chief Executive singing the company’s praises and defending its record on climate change and its involvement in uranium mining. Chair Don Argus assured shareholders that the company remained in a strong position despite the current financial turmoil because of its ‘uniquely diversified portfolio of high quality, low cost assets’ and its strong balance sheet, which enables it to invest throughout the economic cycle. Chinese growth, the motor of the minerals industry, is ‘softening’ but still strong, and industrialisation and urbanisation will mean continued strong demand for the company’s products.

Zero Harm

Chief Executive Marius Kloppers echoed the Chair’s enthusiasm but tempered it with deep regret at continued work-related deaths and injuries in the company’s operations, which he said were unacceptable. The company continues to aim for ‘zero harm’ among its workforce.

Vote first, ask questions afterwards

Argus then announced that the business of the meeting would be taken before general questions on the Annual Report and Accounts – so shareholders could re-elect directors without any examination of their collective conduct.

Thirty-four agenda items later, he called for questions on the annual report. The majority of the questions concerned human rights and environmental issues.

Macambol, Philippines: community division, dubious associates and potential environmental damage

Sonya Maldar of CAFOD (Catholic Agency for Overseas Development) managed to read a brief statement from communities in Macambol on the island of Mindanao in the Philippines concerning the community divisions which have been caused by mining in the area by BHP Billiton’s joint venture partner AMCOR – despite being interrupted by Don Argus and told that she should ask a question, not make a statement. Sonya said that CAFOD’s report on the Hallmark project had revealed bribery by AMCOR, flaws in the process of obtaining community consent and serious environmental problems.

Don Argus said that the company was in the early stages of studying the feasibility of mining nickel in the area. The company follows the guidelines set by the Philippine Government and the Free Prior Informed Consent process. The company has listened to CAFOD’s criticisms and undertaken its own private study. It rejects any allegations of impropriety.

Marius Kloppers added that no work was being done by BHP Billiton on the Hallmark project because of a legal dispute with AMCOR. He said it was in the company’s interests to ensure that all parties are content, because the company will be co-operating with them for decades to come. Projects go through pre-feasibility and feasibility stages before being approved, and before the stoppage this project was at the earliest stage. The company needs to ensure ‘maximum harmony’ before proceeding.

Sonya Maldar repeated that CAFOD’s studies show that there are major problems with the project. Don Argus repeated that the company’s study contradicts CAFOD’s findings. He did not offer to publish the results of the investigation that he claimed the company had done, and after the meeting company representatives refused to make the results of their study available. It is therefore impossible to judge the worth of the company’s study against the published, well-documented report by a widely respected Church development agency, and if the company is going to claim that CAFOD’s report is inaccurate, it should provide evidence. Nor did Argus or Kloppers mention the intimidation and violence to which opponents of mining in the Philippines are often subjected by its supporters in order to manufacture ‘consent’.

Protected areas in Indonesia – to mine or not to mine?

Andrew Hickman of Down to Earth (the campaign for ecological justice in Indonesia) raised the issue of mining in protected areas in Indonesia. He said he was representing JATAM (the mining advocacy network in Indonesia) and WALHI (Friends of the Earth Indonesia). They are concerned about Gag Island, which UNESCO is proposing as a World Heritage Site. Gag Island is in West Papua, which itself raises human rights concerns (because of the Indonesian response to Papuan demands for independence) as at the Freeport-Rio Tinto mine at Grasberg. JATAM and WALHI are demanding that BHP Billiton stop its projects in Gag Island and in protected areas of Kalimantan (Indonesian Borneo). They are demanding that shareholders stop profiting from destruction and bad governance. How will BHP Billiton dispose of tailings at Gag Island and how will it avoid human rights abuses associated with its operations?

It was difficult for Andrew to make his points because of repeated interruptions by Don Argus, who attempted to prevent him from conveying the very brief JATAM/WALHI statement of opposition, telling him that the AGM was ‘not a political meeting’ and that he should hurry up and ask his question. Don Argus then said that he had answered the question on six previous occasions and that the answer on this occasion was the same: the company will not use marine tailings disposal and will not mine in World Heritage Sites.

Marius Kloppers added that if Gag Island is designated a World Heritage Site by UNESCO, BHP Billiton will not mine there. (The ‘if’, of course, is important. UNESCO has already told the Indonesian Government that Gag Island is at the top of its list of proposed sites, so the company’s failure to abandon its plans begs the question of whether it is lobbying UNESCO or the Indonesian Government to ensure that the areas it wants to mine are excluded from the proposed World Heritage Site. It has already successfully lobbied the Indonesian Government to alter legislation on mining in protected areas.)

Don Argus said nothing about the widespread violation of human rights in West Papua. All he said was that BHP Billiton is not involved at Grasberg. He did not mention that Rio Tinto, which the company wants to buy, is heavily involved at Grasberg, a mine with an appalling record of Indigenous rights and human rights violations and of environmental destruction.

Andrew handed over the full statement from JATAM and WALHI to BHP Billiton’s Vice President for Sustainable Development and Community relations, Ian Wood.

Exploration in Guatemala: threat to ecosystems, livelihoods

Baroness Miller of Chilthorne Domer, a Liberal Democrat spokesperson in the House of Lords (the second chamber of the British Parliament) and member of the All Party Parliamentary Groups on Central America and Latin America, stated that she had made two visits to Guatemala, one as part of a parliamentary delegation and the other privately. She was particularly concerned about the Lake Izabal region. There are plans for increased mining activity in the area and a nickel smelting plant is proposed. The area is a protected area. The lake is the largest in Guatemala and is particularly rich in biodiversity. Many people make their living from it. BHP Billiton has been exploring for nickel in the area. Baroness Miller asked whether the company would accept that it should not mine any nickel it found because of the threat to biodiversity and livelihoods.

It was interesting to note that Don Argus did not interrupt Baroness Miller while she made the series of statements leading up to her question.

Don Argus said that ‘the company has a process which it goes through’ and has a good record on the environment. It only owns 2.5% of the project at Lake Izabal. (He did not mention that, although it owns only 2.5% of the project being developed by HudBay Inc, it has also itself been exploring for nickel to the north and west of the lake in recent years, and has failed to answer specific questions as to whether it is still exploring there.)

Baroness Miller pointed out that the Guatemalan Government has fined BHP Billiton’s subsidiary Maya Niquel $25,000 for not carrying out a legally required Environmental Impact Study. She said that communities have made a number of representations about mining projects but that in Guatemala when people do this they get shot dead or are otherwise intimidated. What might apply to community consultation in Australia does not apply in Guatemala. And if even the Guatemalan Government believes that BHP Billiton has not completed a proper Environmental Impact Study, it reflects badly on the company. The company’s concern for the safety of its workers should extend to the people in the communities which its operations affect.

Don Argus said that he totally agreed with the Baroness. He advised her to read the company’s Sustainability Report. She replied that she had done so already.

Cerrejon, Colombia: community removals and worker health

Richard Solly, of Colombia Solidarity Campaign, spoke about the Cerrejon mine in Colombia. He noted that since the Independent Panel of Investigation into the mine’s impacts published its report early this year there had been progress towards a settlement with the people of Tabaco and negotiations had begun with other communities facing relocation. He said there is concern about how people in those communities will make a living during the couple of years before they are able to move, given the impact of mine expansion on their farming activities. He asked what Cerrejon Coal is doing to ensure that livelihoods will not suffer during the transition period. He also said that the mine workers’ union, SINTRACARBON, is concerned at the lack of progress on concerns raised at last year’s BHP Billiton plc AGM, particularly on recognition of work-related illnesses and injuries and social security payments. The union says that the higher rate contributions required by law for workers exposed to carcinogenic crystalline silica are not being paid and that this prevents workers from limiting their exposure through earlier retirement. When will Cerrejon Coal accept the union’s demands on these issues?

Marius Kloppers said that the company would scrupulously follow the World Bank guidelines on removals, including on managing transition. BHP Billiton is aware that union is trying to get work at the mine declared hazardous but Cerrejon Coal disagrees with it, and BHP Billiton supports the view of the management that the work is not hazardous.

Philippines: deaths and even dodgier associates

Andy Whitmore, of PIPLInks (Philippine Indigenous People’s Links), said that he had warned the company about the Hallmark project and that if they had listened to him they would not now be having problems with AMCOR. As for the Sibuyan project, the community had sent a statement calling for the cancellation of the contract (not simply its suspension) with its Philippine associate Sibuyan Nickel Properties Development Corporation Ltd (SNPDC) because of the killing of Councillor Marin at a peaceful anti-mining protest in October 2007 by an SNPDC security guard.

Marius Kloppers said that BHP Billiton has a supply agreement with SNPDC but is not taking any ore from them at present and has to await the outcome of the legal dispute in court. He would not comment further.

Andy Whitmore handed a copy of the Sibuyan community statement to BHP Billiton’s Vice President for Sustainable Development and Community relations, Ian Wood.

Indigenous rights to Free Prior Informed Consent

Geoff Nettleton, of PIPLinks, pointed out that there is a major problem of ‘social licence to operate’ in Indigenous territories. Since the last AGM, the United Nations General Assembly has passed the Declaration on the Rights of Indigenous Peoples, making Free Prior Informed Consent a minimum standard for operations on Indigenous lands. Neither BHP Billiton nor the International Council on Mining and Metals, of which the company is the biggest member, has endorsed the declaration. If BHP Billiton takes over Rio Tinto, this will represent a step back in terms of recognition of Indigenous rights. The company should endorse the Declaration.

Don Argus said that not all governments have accepted the Declaration and it is governments that determine the company’s procedures. He said that the company’s behaviour is first class, that it is just as aware of Indigenous issues as Geoff is, that it spent $141 million on community projects over the past year, and that it has no lack of commitment to Indigenous Peoples.

Geoff said that it was an issue of rights, not money. He pointed out that only four governments voted against the Declaration, and one of those – Australia – has now announced that it will accept it. The UK has accepted it and so have most of the countries where BHP Billiton operates. It is up to the company to take responsibility to go beyond government requirements when these are inadequate, as the company says it does and which it has in fact done in some cases. It needs an independent element in its monitoring processes so that it is not being evaluated only by itself.

Don Argus repeated that the company had a good record and does not lack commitment. He said that in the Philippines they work according to Government guidelines. Geoff suggested that the Philippine Government had a very poor record of respecting people’s rights. Don Argus said that was just Geoff’s opinion and he disagreed with it. Geoff countered that his own opinion was shared by many, including the UN Special Rapporteur on Extrajudicial Killings, so it was fairly solidly grounded.

Climate change

Fr Frank Nally, of the Society of St Columban (Columban Fathers) pointed out that the company’s increasing production of oil and coal is contributing to climate change and that the total carbon dioxide emissions caused by its operations and the use of its products worldwide approach the carbon emissions level of the whole of the UK. Production of uranium at Olympic Dam in South Australia already accounts for 10% of South Australia’s total power consumption and this would worsen with mine expansion – and then there is the legacy of radioactive waste. He asked what alternatives the company is investigating.

Don Argus told Fr Frank to look at the Sustainability Report. The company has an emissions reduction scheme in place. It works with Governments throughout the world. Governments have to make choices about the mix of energy their populations need. Emissions trading is being proposed for Australia. There is not a universal view at present. The company has invested $300 million in research into technology such as carbon capture and storage. It will be technology that changes people’s behaviour.

Marius Kloppers said that although energy was used in the production of uranium, over the whole life cycle uranium use compares favourably on carbon emissions with other energy sources. Each nuclear power station takes carbon emissions equivalent to those of a city of a million people out of the air. (He did not mention that a serious nuclear accident could take a city of a million people out of existence; or that the radioactive wastes left by mining, processing and use of uranium will remain deadly for many times longer than the entire course of recorded human history.)

Fr Frank appealed for the company’s Zero Harm policy towards its workers to be extended not only to communities, as Baroness Miller had rightly advocated, but towards the planet itself.

Report written by Richard Solly, Co-ordinator, London Mining Network. Opinions expressed or implied in this report do not necessarily reflect those of all member groups of London Mining Network.

Appendix

Press Release by JATAM (Indonesian Mining Advocacy Network) and WALHI (FoE Indonesia), 23 October 2008

Stop destroying our protected forests and small islands

On 23rd October 2008, BHP Billiton will hold its shareholder meeting in England. In Indonesia, the company is turning a protected forest in Central Kalimantan into a coal mine. It is also going to devastate Gag Island, Papua, by mining nickel and dumping tailings in the sea – a sea which contains the richest biodiversity in the world. This is bound to make BHP Billiton shareholders feel ashamed.

Gag Island, in Papua, covers an area of just 9,200 hectares, lying in the Raja Ampat Island cluster, which is known to host the highest level of marine biodiversity in the world. Four hundred and fifty types of coral, 950 types of reef fish and more than 600 species of molluscs of various size can be found here. Two years ago the area was proposed as a World Heritage Site.

Gag Island also contains one of the world’s biggest laterite nickel deposits. In 1998 BHP Billiton signed a contract of work with the repressive Suharto regime to acquire the nickel deposit in a joint venture with PT Antam Indonesia. The companies established PT Gag Nikel, with a concession covering the whole island and the surrounding waters. The company will develop an open-pit mine, excavating 660,000 tonnes of ore per day and dumping 627,000 tonnes of tailings into the sea. Gag Island could well disappear.

Despite its status as a protected forest, with soil extremely prone to erosion, PT Gag Nikel is pressing ahead with a mine. The island’s topography is also susceptible to landslides, because 27% of the land consists of steep slopes and rainfall is quite high. It is certain that the corals and other marine biodiversity will end up being destroyed by sedimentation.

PT Gag Nikel’s contract was signed without any agreement whatsoever from local people. From 1999 to 2004 BHP Billiton along with other multinational mining companies, put pressure on the Indonesian government to change Forestry Law No 41, 1999, which prohibits open-pit mining in protected forests. The companies’ move led to public protests across the country. At the time, the company even threatened to take the Indonesian government to international arbitration if it prevented open-pit mining from going ahead on Gag. In the end, the pressure worked and in 2004, a new law was issued which permitted PT Gag, among others, to go ahead with open-pit mining.

Tension in the area has increased since PT Gag Nikel appeared. On April 24th this year, for example, local people blockaded the door of the company’s office in Sorong. Given that West Papua is a region of conflict and military brutality, people fear that PT Nikel will worsen human rights conditions there.

In another part of Indonesia, in Central Kalimantan, BHP Billiton’s coal mine is changing the nature of 65,858 hectares of protected forest, which cover the upper reaches of the area’s main rivers. The coal is being sent to generate electricity, creating greenhouse gas emissions and contributing to global warming.

At the upcoming shareholders meeting, this morning at 10.30am local time in the Queen Elizabeth II Conference Centre, Westminster, England, JATAM and WALHI are demanding that BHP Billiton stop these mining projects. Stop destroying protected forests and small Islands in Indonesia, both in Central Kalimantan and West Papua, and in other parts of the world.  Also, we ask shareholders to stop profiting from this destruction and bad governance.

Sibuyan community statement

No to BHP Billiton!

Early October, the Taclobo (San Fernando, Sibuyan Island, Romblon) village chief received notices of small-scale mining applications (July 9, 2008) of two previous holders of small-scale mining permits (SSMP) which expired in May 2008.

All Acacia Resources Inc. (AARI) is applying for another 20 hectares for utilisation of nickel ores and SunPacific Resources Philippines Inc. (SRPI) for another 15.58 hectares. They seek for another two-year permit from the Provincial Mining Regulatory Board (PMRB) of the province of Romblon.

We strongly oppose the application for small-scale mining permit of SunPacific Resources Philippines Inc. (SRPI) and All-Acacia Resources Inc., (AARI) stockholders of mining conglomerate Sibuyan Nickel Properties Development Corp. (SNPDC), venture partner of Pelican Resources Ltd (ASX-PEL) of Australia. SNPDC has a Memorandum of Agreement with QNI Philippines (QNPH), as agent for Queensland Nickel Pty. Ltd. (QNPL) acting for and on behalf of the joint venture participants of QNPL Resources Pty. Ltd. and QNPL Metals Pty. Ltd., which are subsidiaries of the global mining giant BHP Billiton. SNPDC further has a Memorandum of Understanding (MOU) with Altai Philippines Mining Corp (APMC), which is connected to Altai Resources Inc (TSX-ATI) of Canada.

The agreement grants BHP Billiton or its related entity the exclusive rights to purchase laterite nickel ore mined by SNPDC. BHP Billiton in return shall finance the exploration and drilling evaluation upon the issuance of Mineral Productions Sharing Agreement (MPSA) permit by the Philippine Government. The total cost of financing is $250,000.

Both AARI and SRPI (with Mabuhay Gold Project in Mindanao) are partners of Pelican Resources Ltd.

“Because MPSA and Exploration Permit cannot be issued quickly, SNPDC tries to use SSMP to access the areas as they did before. These small-scale mining applications show the aggressive push for the financed further exploration and drilling of BHP Billiton” opines Rodne Galicha, Executive Director of Sibuyan Island Sentinels League for Environment Inc. (Sibuyan ISLE).

“BHP Billiton through its subsidiaries and partners can be described as an island-swallowing Godzilla”, says Taclobo village resident Lando Tan, a former Kabang Kalikasan ng Pilipinas-World Wildlife Fund (KKP-WWF) staff.

Late last year, the chief security officer of SNPDC shot to death a newly-elected councillor, Hon. Armin Rios-Marin, during a picket against mining.

The ice-age Sibuyan Island, dubbed as Galapagos of Asia, is where the world’s densest forest flourishes, the Philippines’ cleanest inland body of water flows, and the majestic Mt. Guiting-guiting dwells.

Rodne R. Galicha
Sibuyan Island Sentinels League for Environment, Inc. (Sibuyan ISLE)
Website: www.sibuyan.com

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