Anglo American: death and diversions

Anglo American logoReport on the Anglo American AGM, Thursday 23 April 2015

by Richard Solly, Co-ordinator, London Mining Network

  • Company pressed on climate issues but puts its faith in technological fixes rather than pulling out of coal
  • South African mine workers’ union NUM calls for more action to aid former miners dying of silicosis – company wants a pan-industry solution and drags its feet over compensation
  • Pressed by mine workers from Colombia, company refuses to rule out diversion of water courses round Cerrejon coal mine
  • Company CEO Mark Cutifani commits to investigating allegations of harassment of health and safety officers in Australia

I am fully in favour of politeness. I think it is undervalued in some quarters. Why be nasty when you could be nice? Everyone feels better for a bit of courtesy.

But when courtesy is used as a cover for action – or inaction – that is causing immense suffering and destruction, it ceases to be acceptable. What is required is repentance – that change of heart that includes, of necessity, a change in activity.

Anglo American is a past master of politeness – though BHP Billiton and Rio Tinto are fast catching up with it – but carries on doing all the things that we castigate it for.

So, it offers fine words about climate change but continues to mine colossal quantities of coal, putting its trust in technological fixes that are sure to fail and continuing its membership of industrial associations that lobby against effective action. It says it is deeply concerned about the plight of former gold miners in South Africa dying of silicosis, but is fighting them in court to prevent having to pay the level of compensation they are demanding. It says it is concerned about communities’ views in Colombia, but presses forward with plans for diversion of water courses in the arid and drought-scarred region round the Cerrejon coal mine despite massive opposition from Indigenous people, local farmers and its own mine workers.

I’ll give it this: over the past year, it has taken a step forward in helping broker a possible industry initiative to assist former gold mine workers suffering from silicosis in South Africa – but progress is outrageously slow, as mine workers continue to suffer and to die while the industry prevaricates. And company CEO Mark Cutifani says he will look into allegations of bullying of health and safety representatives in Queensland and into the proportion of subcontracted workers used in the company’s operations. But will anything come of that? Perhaps we’ll know at next year’s AGM. And how many more workers’ lives will have been blighted by then?

Preliminary propaganda

The AGM began with the usual nauseating propaganda video and the speeches by the Chairman and CEO.

Chairman Sir John Parker’s speech is available at http://www.angloamerican.com/media/press-releases/2015/23-04-2015a and I will not reproduce it here. The one statement that caught my attention for its outstanding insensitivity was that ‘economic conditions in India have improved since the Modi election’. Modi’s government is busy dismantling environmental safeguards and protection for adivasi rights. It is vilifying and harassing its critics. And it is linked with violent organisations who have a track record of attacks on religious minorities. There is nothing whatever to celebrate about the Modi government. Sir John Parker’s offhand remark was as repugnant as lauding Mussolini for getting the trains running on time.

Chief Executive Officer Mark Cutifani’s remarks can be found at http://www.angloamerican.com/media/press-releases/2015/24-04-2015.

A change in the climate

Almost all the questions raised were from critics of the company’s record.

A representative of the Central Finance Board of Methodist Church congratulated Anglo American for taking a leading role in controlling carbon emissions and seeing the importance of climate change. She said that the company had had an ‘A’ rating on the Carbon Disclosure Project (CDP) until last year when it slipped to a ‘B’ rating. How did the board intend to address this reduction in CDP rating?

Sir John Parker replied that in 2014 the company was ranked as ‘B’ because of its purchase of an additional 40% of De Beers, which contributed extra carbon emissions. He said that the rest of the group improved by 0.4 million tonnes and that it was a shame that this was not taken into account when evaluating the rating. He said that the company is making an effort to report and reduce its emissions. It reports scope 3 emissions (carbon emissions over which it has influence but not control, such as emissions in its supply chain and the burning of the coal it produces) and actively seeks to reduce these through efficiency and better transportation. It recognises the science of climate change and the challenges it poses for industry, and as a major energy user and producer of coal Anglo American is committed to responding pro-actively and reducing its emissions.

He said that the road to reduction includes more efficient coal combustion through the use of technologies such as supercritical boilers and better flue gas clean-up systems, and the company sees Carbon Capture and Storage (CCS) technologies emerging. He pointed to the launch by Sask Power of the first commercial scale CCS project in Canada last year. CCS is no longer just a theoretical possibility, he said. (For articles explaining why CCS is a dangerous waste of time and money, see http://www.minesandcommunities.org/article.php?a=12787.

The Methodist Church representative asked what the company was doing to promote public policies which would encourage better efficiency. Could Sir John confirm that the company was NOT part of any initiatives working against a strict policy on climate change?

Sir John Parker replied that in Australia the company is involved in capturing carbon to use to grow algae which can be converted into food and fertiliser. In South Africa, Anglo American is a founding member of the Centre for Carbon Capture and Storage.

Perhaps because this response avoided answering the question, Mark Cutifani added that the company is involved in the World Coal Association in engaging with governments and NGOs in looking for solutions through efficiency and reducing consumption, for instance in South Africa with power generator Eskom to make coal burning more efficient. The World Coal Association is trying to persuade the US to come back into work on CCS, and as a company Anglo American has been very clear about designing a carbon neutral mine by 2030. The company does not have a pathway but is looking for it, he said. (Looking for it in CCS technology will be as helpful as trying to find your way around London with a town plan of Paris.)

A representative from ShareAction said that it was good to read in Anglo American’s climate change strategy that the company supports the government’s plan to move to a low carbon economy, and that it is looking at an efficient and equitable climate change policy. But, she said, the company continues in membership of industry association Eurometaux, which has adopted positions which are misaligned with the progressive statements the company has made, as a recent report by the Policy Studies Institute at the University of Westminster makes clear. Does Anglo American support Eurometaux’s position on climate change? If not, will the company make a statement against it or withdraw?

Sir John Parker said that the company had made its position very clear on climate change and on the practical steps it is taking. Anglo American is not an active members of Eurometaux so he did not want to get involved in a debate with them.

The ShareAction representative pointed out that European trade associations get credibility from companies like Anglo American, so if the company does not agree with them it should make a public statement or withdraw.

Dying for work

Peter Bailey from the South African National Union of Mineworkers (NUM) was the next questioner to be called. Sir John Parker said it was good to see him. Peter replied that it was not good to see Sir John. Peter said that, while acknowledging the interventions made by CEO Mark Cutifani regarding the South African gold mining industry’s responsibility to former mine workers, he had hoped that last year would have been the last year he had to come to the company’s AGM. He said he was tired of seeing the board. Nonetheless, it looked as though he would have to come back again next year. The initiatives taken by Mark Cutifani had not brought anything tangible. The fact that we continue to see black miners with silicosis dying and there is still an argument about why we should or should not compensate them is a major concern to the NUM. Peter said that what made him believe he would have to come back next year is that the company had not made any mention of the issue of former mine workers dying of silicosis in this year’s AGM. This led Peter to question the mandate that Mark Cutifani has in the process he has embarked on with the union. He asked how much longer discussions would have to continue while miners continue to suffer, live in abject poverty, die, and be stripped of the human dignity of being able to provide for their families. He asked, “Are we getting closer to a resolution? If so, why has this not been mentioned in this AGM to prepare shareholders for tightening their belts a bit to put this issue to bed?”

Sir John Parker replied, “Thank you for the gracious way in which you have raised the point. You know better than most that the issue of silicosis is difficult and emotive and at times our perspectives differ with different stakeholders. Anglo American cannot be expected to take responsibility for the whole of the mining industry, given that some thirty mining companies were named in some of the legal actions.” He assured Peter that the board was very concerned for those miners who have contracted silicosis and want miners and ex-miners who have silicosis to have compensation which is “fair and sustainable for the industry”. He said that the company had introduced health support for miners in remote areas of the country and took care of several of the cases that NUM had brought to it, and did so on a voluntary basis. He said that the joint objective is to find a solution for all miners and ex-miners. It cannot be quick given the number of miners, mining companies and law firms. Mark Cutifani had embarked on this exercise with the backing of the board. He mentioned that Peter’s efforts would surely guarantee him a place in heaven.

Mark Cutifani acknowledged Peter’s and NUM’s work in representing their members. He said that Anglo American had convened a meeting of the Chamber of Mines in South Africa and Peter had made a very strong case. As a result the company had established a working group with AngloGold Ashanti, Harmony, Goldfields and other gold mining companies. They had reported back to others in the Chamber. They had also been establishing clinics, seeking out and finding former employees who may have been affected. He said he was hesitant to speak too much about the progress of the process towards compensation but said that none of them could see anything which might stop this being resolved. He said he hoped that by next AGM they would have have made significant progress. He did not want to give Peter a date and then disappoint him. He hoped they could make some tangible progress before the next AGM but was cautious in saying so definitely. Everyone can sympathise with people suffering, he said. He thanked Peter for his efforts and said he was conscious that the company was frustrating and disappointing him.

Peter said that if Sir John started singing his praises it meant that he must be doing something terribly wrong. He assured Sir John that when he did get to the pearly gates, Sir John would not pass without getting permission from him. He said that NUM representatives usually come to the company’s AGMs in the hope of tarnishing its image. Because of the progress made, this year the NUM had decided not to tarnish it. But there needs to be more definite progress, and it must be at the cost of the company and its shareholders, not at the cost of miners. Anglo American is not solely responsible, but the NUM wants Anglo American to do the right thing simply because it is the right thing to do. The company needs to put its money where its mouth is. He said he hoped that the hiccups in the process would be resolved as a matter of urgency. The work the company is doing had not gone unnoticed, but the issue is not the state compensation process. It is about Anglo American and other gold mining companies taking responsibility because silicosis is an illness that comes from the apartheid era and the democratic government could not be held responsible for what the companies had done.

Tony Dykes, of Action for Southern Africa (ACTSA) said that he could not believe that any of the board would think that any mine worker who had contracted silicosis would not deserve the best possible health care. He commended Mark Cutifani for the work he had done on the issue since the last AGM. He said he hoped that all the board would support Mark Cutifani in giving the matter more urgency. Sir John had said that it is a complex and demanding matter. But if you have got silicosis it makes you more likely to contract TB and AIDS. People want to live the rest of their lives with dignity. The slide presentation at the beginning of the AGM had said that Anglo American is first for corporate social responsibility, but the company should redouble its efforts because people with silicosis are dying. The legal action begun in 2005 had been settled out of court in late 2013. There were 23 plaintiffs in that case and eight had died before the action was settled. It is good that Anglo American is committed to pass the benefit on to families in these cases, but in new cases the company is not committing to that. It is a simple but serious request that the CEO redouble his efforts and that a progress report be given on outcomes at next year’s AGM.

Sir John Parker said that the board did not even have to encourage Mark Cutifani to find solutions to this ‘complex issue’. Many stakeholders were involved in this and it is not easy for this man, despite his will and energy, to bring all the parties together to reach a common agreement. Mark Cutifani has the board’s backing – they are anxious that there be a just settlement. He said he hoped they would have achieved something by the next AGM.

Water in the desert

Jairo Quiroz of Colombian coal mine workers’ union Sintracarbon offered a fraternal greeting to the board and shareholders. He said that he was President of the union from the Cerrejon coal mine in La Guajira in the north of Colombia, where Anglo American is joint owner with BHPBilliton and Glencore.

After 32 years of mining, he said, many workers are suffering health effects, with respiratory problems such as silicosis, pneumoconiosis, musculosketal and psychosocial problems. The Cerrejon Coal Company violates the right of its workers in relation to health and medical attention. The latest violation has to do with the new health contract, which has worsened medical attention, violating workers’ fundamental right to health.

With respect to subcontracted workers, Jairo said that there had been violations of the right to unionisation and collective bargaining rights.

Jairo explained that La Guajira is 80% semi-desert and the biggest population – 60% of the people – is the Wayuu people, the most numerous Indigenous People in Colombia.  The last UNICEF report on the area said that in the last six years 5,000 children, most of them Wayuu, have died of hunger and thirst. The investigative journalist Gustavo Guyen had found that it is probably closer to 14,000 children who have died from hunger and thirst in La Guajira in recent years, mostly Wayuu children. Despite this, Cerrejon had sought in the recent past to divert 26 kilometres of the River Rancheria, the only major river in the area, and now wants to divert 3.6 kilometres of the Arroyo Bruno (the river’s main tributary).  He said that the union could not permit Cerrejon to affect water sources. That is why the union had decided to defend the water sources to defend right to life of the Wayuu and other people in the region. Jairo said he had heard Sir John say that the money of Anglo American was the money of its shareholders. But profit should not come at the expense of failing to respect the rights of workers to health, the rights of subcontracted workers, and threatening the life of future generations in La Guajira.

Sir John Parker asked Jairo to come to his final point as, he said, he was taking a lot of time.
Jairo thanked him for giving him the opportunity to speak about the problems experienced by workers and people in La Guajira.

Sir John Parker thanked Jairo for coming such a long distance. He said he had heard something about the investigative journalist mentioned, and that what he had written was a misrepresentation of what was happening on the ground. He said that Cerrejon Coal is jointly owned with BHPBilliton and Glencore and day to day management is in the hands of Cerrejon Coal. Anglo American works to observe the highest standards in its fully owned operations and in joint ventures like Cerrejon. This includes the principles in the UN Global Contract, the Voluntary Principles on Security and Human Rights, International Finance Corporation (IFC) standards and the UN Guiding Principles on Business and Human Rights. Anglo American appreciates Cerrejon’s attempts to keep international standards and insists that it keep Colombian law.

Sir John said that Cerrejon Coal is a critical part of the economy in La Guajira. It contributes 55% of the area’s GDP. It fosters economic growth through a whole series of social programmes. Cerrejon has a dedicated foundation specifically focused on improving water quality and supply. This programme has benefited 18,000 people in 126 communities with clean water. Anglo American recognises that it has a responsibility to work with all these communities.

On the Arroy Bruno diversion, Sir John said that the company respects communities’ right to water and knows that with appropriate planning it is possible to mine and to respect this right. Water is scarce in La Guajira because of a serious and lengthy drought. Diversion of the Arroyo Bruno will not affect water quantity or quality and will feed water back into its existing course after being moved 700 metres north. It is on Cerrejon Coal’s land and communities are situated upstream of the diversion. Downstream, the Ministry of the Interior determined that only one Wayuu community needed to be consulted, and this was done in an open way in 2014, and NGOs were involved in the process, as well as the authorities.

Mark Cutifani added that the company had deferred diversion of the River Rancheria because the market in thermal coal is tough. It remains in the company’s plans but has been delayed. Anglo American will maintain an open dialogue to ensure that the concerns expressed are conveyed to the Cerrejon team. In the process of drawing water from local water sources, Cerrejon Coal has reduced its offtake by 80% to help manage the drought. Its contribution has been significant.

Regarding the rights of workers, Sir John said that Anglo American was always sensitive to human rights and would make sure that the issues Jairo had raised would be conveyed to Cerrejon management and make sure that any issues which had not been dealt with in a constructive way would be dealt with better.

Jairo said that the standards which Sir John had mentioned are minimum standards which need to be kept. It does not guarantee that Cerrejon will uphold standards just because its multinational owners have signed up to them. He said that the only community in La Guajira which has water 24 hours a day is the settlement where the mining executives live. The capital of La Guajira, Riohacha, only has water twice a week for a period of one hour.

Sir John Parker said that Cerrejon uses 20% of the water that it is permitted by the government to draw. It had managed through efficiency and recycling to reduce use, recycling 70% of the water that is used in the mine. He said that Jairo should speak to Jon Samuel about the detail.

Behaving like bullies

Glen Mpufane, of global mining union IndustriALL, said that IndustriALL supports Jairo and Peter. Glen said that there were also concerns about fatal accidents in Australia. IndustriALL’s CFMEU affiliate had asked him to raise the matter of the seemingly upward trend in such accidents in that part of the company’s operations. According to the CFMEU, Anglo American has the worst record in the Queensland mining district, and to add salt to the wound, Anglo American in that part of the world is threatening health and safety representatives in the work place and targeting safety representatives for harassment and bullying. CFMEU has requested a meeting with the CEO to deal with this as a matter of urgency. Precarious employment through subcontracting is also a concern, as raised by Sintracarbon. There is a connection between health and safety and subcontracting. What is Anglo American’s view on this? IndustriALL would like to see a lower ratio of subcontracting.

Sir John Parker said that the company’s booklet on Effective Partnerships gives lots of Key Performance Indicators on health and safety.

Mark Cutifani said that incident frequency rates had been improving significantly. Tragically, the company had lost three colleagues in little over 12 months. This was a tragedy. Extensive investigations had been conducted into all three incidents and presentations had been made to the board and committees. There had been problems with the keeping of agreed procedures, but the company took full accountability for that performance and had been discussing how company leadership can do a better job. Regarding possible harassment, Mark Cutifani would personally take up the concern Glen had raised with Seamus French, CEO of the company’s coal operations, who would involve himself personally in the follow up. Mark would report back through Seamus in the next three months if that was acceptable to Glen. On Cerrejon subcontracting, he would also follow up with Seamus through the tripartite ownership team on questions about subcontractors and demand that Cerrejon respect local rules and the rights of every worker.

The price is wrong

There was a question about iron ore, the company’s Minas Rio mine in Brazil, its profits, and how its share prices compare unfavourably with Rio Tinto and BHPBilliton. Sir John Parker said that Minas Rio had been a huge drag on profits and on the share price.

Dr Luk, a frequent contributor at mining company AGMs, said that the buck stopped with the Chairman. In the past five years the share price had gone as high as £33 and now is about £10. Had Mick Davies (former CEO of Xstrata) or Ivan Glasenberg (CEO of Glencore) talked to the board about a takeover? Had the board talked to China about joint ventures?

Sir John Parker said that company representatives had met with Ivan Glasenberg for dinner as they wanted to remain friends but that he could not possibly comment on any linkage with any of those companies. He said he needed to leave it at that, as any further comments would be price sensitive.

And when all’s said and done, that’s what really matters to these corporations, isn’t it? Their price. Save us from those who know the price of everything and the value of nothing!

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