LMN submission to UK Parliament's Joint Committee on Human Rights

The UK Parliament’s Joint Committee on Human Rights (JCHR) called in March for evidence to be presented to an inquiry into business and human rights. The JCHR’s call for evidence is posted below London Mining Network’s submission.

1 May 2009

Submission to the Joint Committee on Human Rights inquiry into business and human rights

The role of London-based and London-financed mining companies in human rights abuses overseas

The London Mining Network (LMN) is an alliance of 23 human rights, development and environmental groups concerned about the impacts of the activities of mining companies listed on the London Stock Exchange or financed by London-based institutions. Members include ACTSA (Action for Southern Africa), CATAPA (Comite Academico Tecnico de Asesoramiento a Problemas Ambientales), Colombia Solidarity Campaign, The Corner House, Down to Earth (the ecological campaign for Indonesia), Forest Peoples Programme, LAMMP (Latin American Mining Monitoring Programme), Partizans (People Against Rio Tinto and its Subsidiaries), PIPLinks (Philippine Indigenous Peoples Links), TAPOL (the Indonesia human rights campaign) and the Society of St Columban. LMN’s twelve observer groups include leading human rights, environmental and development organisations.

LMN wishes to draw to the attention of the Joint Committee on Human Rights the persistence and gravity of the allegations brought against London-connected mining companies in the pursuit of projects which have a negative impact on human rights. LMN understands that the Committee will be receiving detailed submissions about the effects of the activities of Vedanta plc in India, Rio Tinto in Colombia and Ecuador, Monterrico Metals in Peru, GCM Resources in Bangladesh and a number of mining companies in the Philippines. The current submission is intended simply as an overview which it is hoped may encourage the Committee to take a continuing interest in the matter.

Most of the world’s biggest mining companies, and many smaller mining companies, are listed on the London Stock Exchange, and on its Alternative Investment Market (AIM). The world’s most important metals price fixing mechanism, the London Metal Exchange, and the leading precious metals trader, the London Bullion Market Association (LBMA), are based here. Only Toronto rivals London’s importance as a centre of world mining finance.

There is a great deal of information publicly available on the negative impacts of mining company activities, including alleged human rights abuses. The leading source of critical information on the world’s mining industry is the Mines and Communities website, www.minesandcommunities.org. The more recent London Mining Network website, www.londonminingnetwork.org, carries a more limited amount of information about companies with a London connection. These websites link to many other sources of published information which counter the generally positive picture which the mining industry paints of itself.

The largest mining company in the world is the dual-listed Anglo-Australian company BHP Billiton. The company has, along with its partners Anglo American and Xstrata, both also listed on the London Stock Exchange, come under fire for its involvement in the Cerrejon Coal mine in northern Colombia. The mine has a history of forced relocation of farming communities with inadequate compensation. It took years of campaigning by local people, backed by Cerrejon mine workers and supporters in Britain, Australia, Canada, Switzerland and the United States, and the lodging of complaints to the Organisation for Economic Co-operation and Development in Australia and Switzerland, before the demands of the affected communities began to be taken seriously. Even now, reports from communities facing relocation suggest that the mine’s community engagement strategy leaves a lot to be desired. BHP Billiton and Anglo American, together with, at the time, Glencore, were part of a Joint Venture which owned 50% of the Cerrejon mine when, in August 2001, the unarmed inhabitants of the small farming village of Tabaco were evicted by armed force and their houses demolished to make way for mine expansion. In February 2002, that Joint Venture took control of the remaining 50% of the mine, thus inheriting responsibility for the legacy of suffering caused by the forced evictions.

The Cerrejon Coal Company signed an agreement with former residents of Tabaco in December 2008, following recommendations made by an Independent Panel of Inquiry established by the company to respond to persistent criticisms. The agreement is welcome; but the gravity of the abuse suffered by the people of Tabaco, and by other communities before the destruction of that village, should not have occurred. Having occurred, it should have received speedier and fuller redress.

One of the problems worthy of the Committee’s consideration is that of the so-called ‘corporate veil’, whereby British-based companies can avoid legal responsibility for actions for which they bear moral responsibility simply by virtue of their convoluted corporate structure. In the case of the Cerrejon mine, the operating company, Cerrejon Coal, is owned by companies in the Caribbean which are wholly owned subsidiaries of the London-listed multinationals. It is difficult to believe that the three multinational companies, which between them owned 50% of the Cerrejon mine in 2001, were unaware of the planning of the demolition of Tabaco. However, legal advice obtained by the villagers’ supporters was that an action in English courts would be unlikely to succeed, not because the case lacked merit but purely because of the company’s structure. LMN believes that this is an injustice.

BHP Billiton also faces continuing criticism for its activities in the Philippines, including notable community opposition at its Hallmark Project in Davao Oriental and accusations around an initial off-take agreement on the island of Sibuyan. The dispute in Sibuyan led to the shooting of an unarmed protestor in October 2007.

BHP Billiton is exploring for nickel in Guatemala and is believed to hold a number of leases in the Lake Izabal region, where there has been strong community opposition to any activities which might pollute the lake, on which over 1000 fisher people rely for their livelihood. Baroness Miller of Chilthorne Domer, who visited the area early last year, doubts that the companies proposing mining and mineral processing in the area will be able to carry out adequate Environmental Impact Assessments or valid community consultation. BHP Billiton’s subsidiary Mayaníquel S.A., has already been fined $25,000 for not carrying out a legally required Environmental Impact Study. As in Colombia and the Philippines, there is widespread and violent intimidation of those opposed to mining.

Rio Tinto has a long history of conflict with communities who believe that they have been ill treated by the company. Most notably, the company has financed expansion at, and continues to profit from, the vast and notorious Grasberg mine in West Papua, which has caused extensive environmental damage, violated indigenous land and cultural rights and is associated with atrocities by the Indonesian military. In 2006 the Norwegian Government’s sovereign pension fund disinvested from Freeport McMoran Copper & Gold, the US company which controls the mine, and in September 2008 the Norwegian Government also disinvested from Rio Tinto because of the Grasberg connection.

At its recent Annual General Meeting, Rio Tinto was strongly criticised for violating Indigenous treaty and religious rights in the Upper Peninsula of Michigan. The objections of the Keweenaw Bay Indian Community were carried to the meeting by Lutheran Pastor Revd Jon Magnuson, representing leaders of100 faith communities in the area who believe that the company’s Eagle Project would, in addition to being ecologically disastrous, represent an attack on the right of Indigenous People to exercise their spiritual traditions at their sacred site. Similar allegations were made on behalf of Embera Indigenous communities and Afrocolombian communities in north western Colombia, where the company is involved in a Joint Venture with US-based La Muriel Mining Corporation. Here local people also allege militarisation, intimidation and brutality. In December 2008 Rio Tinto announced new Joint Ventures with India’s National Aluminium Company Ltd (Nalco) which could see new projects violating the rights of local communities which have already forcibly rejected new mining or expansion.

Anglo American has attracted criticism for its above-mentioned involvement in the Cerrejon Coal mine in Colombia and its exploration activities in the Cordillera region of the Philippines, where it is alleged that it has manipulated community consent processes in order to obtain the legally required certificate of Free Prior Informed Consent. It is in a highly militarised area, where those who express opposition to mining are subject to threats and intimidation. The company’s Anglo Platinum division continues to attract heavy criticism from farming communities in South Africa for its handling of community resettlement and for polluting water supplies. Anglo Gold Ashanti, which was until late 2007 41% owned by Anglo American, was accused of profiting from paramilitary intimidation of mining opponents in Colombia. De Beers, in which Anglo American retains a 45% holding, has been criticised for potentially benefiting from forced removal of indigenous Bushmen from their ancestral territory in Botswana. The lease in question was sold last year to London-based Gem Diamonds.

Xstrata has been criticised for its activities in Colombia, as noted above. It has also been criticised for its role in taking forward the Tampakan copper and gold project in the Philippines, in a situation of growing human rights abuses as the project has become the subject of attacks by armed paramilitaries. In May last year an Argentine Federal Appeals Court upheld criminal charges against Xstrata General Manager Julian Rooney for contamination caused by the company’s Alumbrera copper and gold mine. Aboriginal people around McArthur River in Australia have had to watch their sacred lands violated by expansion of a massive opencast zinc mine and the diversion of the river. They claim the company does not listen to them.

London-listed Vedanta is notorious as a model of poor corporate governance. Anil Agarwal is both its Chairman and CEO, and with his family owns the majority of the company’s shares. The company has been criticised for its behaviour in Armenia and Zambia, but it is in India that it has come under heaviest criticism for the cavalier manner in which it has ignored environmental legislation. It is currently trying to bulldoze its way into tribal land in Orissa in the hope of constructing a huge bauxite mine on land sacred to the Donghria Kondh people in order to feed its nearby illegally constructed alumina refinery. Under Indian law, tribal land should not be transferred to a private company. There has been overwhelming opposition to the mine by communities dependent on the mountain for their livelihoods, and there are persistent allegations of intimidation of opponents to the mine. Many of the Majhir Kondhs and other tribal people from villages around the refinery have stated that they gave up their farm land after heavy-handed tactics by the state police, acting on behalf of Vedanta. They were paid meagre compensation, but much of this has run out and the promised jobs at the refinery never materialised. They are now landless and jobless. In November 2007 the Norwegian Government’s sovereign pension fund disinvested from Vedanta when its Council on Ethics, after nearly two years’ research, found that continuing to invest in the company would present “an unacceptable risk of contributing to grossly unethical activities”.

It is not only these larger companies which attract criticism, however. Among the smaller companies listed on the London Stock Exchange, GCM Resources has been widely criticised for its proposed Phulbari project in Bangladesh. According to the Bank Information Center in Washington, the project will acquire almost 6,000 hectares of land and will displace between 50,000 and 220,000 people, destroying a critical agricultural region and threatening the region’s water and food supply. Over 80% of the land taken for the project will be fertile agricultural land which will not be fully replaced, leaving farming families with few options for employment. People in the area have made clear on numerous occasions that they oppose the project. In August 2006, the Bangladesh Rifles, a paramilitary force, opened fire on 50,000 local people conducting a peaceful protest around the Phulbari project area. At least three people were killed, including a 14-year old boy, and over 100 people were wounded. Over the succeeding two years of military rule, community leaders, individuals from non-governmental organisations, human rights defenders and others were intimidated, threatened, arrested and tortured.

London-based Monterrico Metals’ Rio Blanco project in Peru is also a cause of concern. A huge majority of local people rejected the mining project in a 2007 referendum. In November 2005, two protestors against the project were killed during a demonstration; protesters said at least 28 members from their communities were kidnapped and brutally beaten; the following March, Monterrico was accused by a community representative of orchestrating further violence against opponents of the project. In January of this year, the Peruvian National Coordinating Committee for Human Rights released photographs which showed local people being tortured by police and mine personnel. Journalist Julio César Vásquez Calle, who says that the photographs were taken in the mine camp, was himself allegedly tortured. He claims that, before he was released, company representatives apologised for his detention. According to Amnesty International he is now receiving death threats for revealing the abuse. Some of the other torture survivors are also being threatened should they co-operate with a Peruvian Government inquiry.

The groups involved in London Mining Network believe that companies need to be held accountable for the impacts of their operations around the world. In our experience of working with numerous mining-affected communities, it is clear that the current systems of accountability and avenues of redress for injustices committed, including the OECD complaints procedure, are wholly inadequate. In response to the Committee’s question number 7, “Does the existing legal, regulatory and voluntary framework in the UK provide adequate opportunity to seek an appropriate remedy for individuals who allege that their human rights have been breached as a result of the activities of UK businesses?” we would answer with an emphatic “No!”

LMN as a network, however, is not making specific proposals to the Committee concerning legal or regulatory reform. Some of the groups involved in LMN are also members of the Corporate Responsibility Coalition (CORE) which proposes a UK Commission for Business and Human Rights. Some LMN groups are also involved with the European Coalition for Corporate Justice, which proposes enhancing direct liability of parent companies, establishing a parental company duty of care and establishing mandatory social and environmental reporting. Another proposal of which LMN is aware is the abolition of limited liability status for corporations as a way of encouraging responsible behaviour by company boards, management and shareholders. Some groups in LMN question the legitimacy of foreign direct investment and believe that countries’ mineral resources should always be under the exclusive control of the people who live there. LMN urges the Committee to examine further evidence of human rights abuses by London-connected mining companies in formulating its own proposals for reform.

JOINT COMMITTEE ON HUMAN RIGHTS
COMMITTEE OFFICE, HOUSE OF COMMONS
7 MILLBANK, LONDON SW1P 3JA

House of Lords House of Commons
6 March 2009 Session 2008–09 No. 21

CALL FOR EVIDENCE

Business and Human Rights

The Joint Committee on Human Rights has decided to inquire into business and human rights; the way in which businesses can affect human rights both positively and negatively; how business activities engage the relative responsibilities of the UK Government and individual businesses; and whether the existing UK regulatory, legal and voluntary framework provides adequate guidance and clarity to business as well as adequate protection to individual rights.

Professor John Ruggie, the UN Special Representative on Human Rights and transnational corporations and other business enterprises, has said that “there are few, if any, internationally recognized rights business cannot impact – or be perceived to impact – in some manner”. He also recognised that Governments do not help businesses if they fail to provide adequate guidance on the human rights impacts of their business activities.1

The UN Special Representative has recently proposed a new policy framework for the business and human rights debate. This framework is based on three core principles:
• the State duty to protect against human rights abuses by third parties, including businesses;
• a corporate responsibility to respect human rights; and
• the need for individuals to have effective access to remedies for breaches of their human rights.

In June 2008, the UN Human Rights Council endorsed this framework and asked the Special Representative to provide more practical recommendations for the operation of the framework before 2011.

The Committee has reported on a number of occasions on the scope of the Human Rights Act 1998 and the circumstances in which private sector entities, performing a public function, will be subject to the duty to act in a Convention compatible way.2 The Committee has called for clarity in the application of the Human Rights Act 1998 to publicly funded care homes; providers of social housing and private bodies performing functions involving the treatment of children. A number of services which might previously be provided by a public body are provided in the UK by private providers, subject to regulation, for example the provision of utilities or public transport.

It is now widely accepted, including by many businesses, that business can affect the human rights of individuals not only when performing public functions, but in their everyday activities. For example, a recent topical issue which the Committee has considered is the right to adequate procedural protection for those facing repossession of their homes.

Interested persons and bodies are invited to submit written evidence for consideration by the Committee by 1 May 2009.

This call for evidence identifies the questions in relation to which the Committee would particularly welcome evidence. The Committee would also welcome views on other matters relevant to business and human rights. The Committee intends to hold oral evidence sessions in the early summer.

The Committee has adopted the framework of the UN Special Representative for the purposes of formulating the questions on which it would particularly welcome evidence. It would also welcome submissions on the effectiveness and viability of this framework; and next steps for the UK.

The duty of the State to protect human rights
1. How do the activities of UK businesses affect human rights both positively and negatively?
2. How do these activities engage the human rights obligations of the UK?
3. Are there any gaps in the current legal and regulatory framework for UK business which need to be addressed, and if so, how?
4. Does the UK Government give adequate guidance to UK businesses to allow them to understand and support the human rights obligations of the UK? If not, who should provide this guidance?
5. What role, if any, should be played by individual Government departments or the National Human Rights Institutions of the UK?

The responsibility of businesses to respect human rights
6. How should UK businesses take into account the human rights impact of their activities (and are there any examples of good or bad practice which the Committee should consider)? How can a culture of respect for human rights in business be encouraged?
• Should UK businesses’ responsibility to respect human rights vary according to:
o Whether or not they are performing public functions or providing services which have been contracted out by public authorities; Is it clear when the Human Rights Act 1998 does and does not apply directly to businesses?
o Whether they are operating inside or outside the UK;
o the size, type or nature of their business?
• How, if at all, should the current economic climate affect the relationship between business and human rights?

Effective access to remedies
7. Does the existing legal, regulatory and voluntary framework in the UK provide adequate opportunity to seek an appropriate remedy for individuals who allege that their human rights have been breached as a result of the activities of UK businesses?
8. If changes are necessary, should these include:
• Judicial remedies (If so, are legislative changes necessary to create a cause of action, or to clarify that a cause of action exists; or to enable claims to proceed efficiently and in a manner that is fair to both claimants and respondents);
• Non-judicial remedies (for example, through the operation of ombudsmen, complaints mechanisms, mediation or other non-judicial means). If non-judicial remedies are appropriate, are there any examples of good or bad practice which the Committee should consider?
• Government initiatives, whether by legislation, statutory or other guidance or changes in policy;
• Initiatives by business or other non-Government actors.

Notes:

1 A/HRC/8/5 7 April 2008, paragraph 22
2 See for example, Ninth Report of 2006-07, The Meaning of Public Authority under the Human Rights Act, HL 77/ HC 410

Submissions should be no longer than 2,500 words and should be addressed to Dr Mark Egan, Commons Clerk of the Joint Committee on Human Rights, Committee Office, House of Commons, 7 Millbank, London SW1P 3JA. Electronic submission is acceptable, but a signed hard copy should also be sent. In any event, witnesses are asked wherever possible to accompany hard copy by an electronic version, preferably in Word format, and emailed to jchr@parliament.uk.

Evidence becomes the property of the Committee, and may be printed, placed on the Internet or circulated by the Committee at any stage. You may publicise or publish your evidence yourself, but in doing so you must indicate that it was prepared for the Committee. Evidence published other than under the authority of the Committee does not attract parliamentary privilege.

THE MEMBERS OF THE COMMITTEE ARE:
Mr Andrew Dismore MP (Labour, Hendon) (Chairman) Lord Bowness (Conservative)
John Austin MP (Labour, Erith & Thamesmead) Lord Dubs (Labour)
Dr Evan Harris MP (Liberal Democrat, Oxford West & Abingdon) Lord Lester of Herne Hill (Liberal Democrat)
Mr Virendra Sharma MP (Labour, Ealing, Southall) Lord Morris of Handsworth (Labour)
Mr Richard Shepherd MP (Conservative, Aldridge-Brownhills) The Earl of Onslow (Conservative)
Mr Edward Timpson MP (Conservative, Crewe and Nantwich) Baroness Prashar (Cross-Bencher)
Clerks of the Committee: Dr Mark Egan (House of Commons) 020 7219 2797 and Rebecca Neal (House of Lords) 020 7219 6772
ENQUIRIES: 020 7219 2797/2467 FAX: 020 7219 8393 E-MAIL: jchr@parliament.uk
HOMEPAGE: http://www.parliament.uk/jchr
MEDIA INQUIRIES: Ms Jessica Bridges-Palmer: 020 7219 0724
ENDS/

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