Photo by Peter Marshall
Report of the AGM of GCM Resources plc, Friday 18 December 2015, by Sam Brown, shareholder’s proxy representative
Few people bothered to come to the 2015 AGM of GCM Resources plc, which is still technically an AIM-listed mining company but lacks investor confidence and cash. Executive Chairman Michael Tang began the meeting dealing directly with what the six or so shareholders present were wondering, given the Bangladeshi government’s outright rejection of GCM’s plans for an open-pit coal mine in Phulbari: “I know some shareholders would like the company to seek redress [ie. compensation] from the government of Bangladesh. This remains an option [but] I will not give up on this project.”
The Phulbari mine is described on page 6 of GCM’s 2015 annual report as its “prinicipal activity”. Condemned in 2012 by seven UN Special Rapporteurs as “threatening fundamental rights”, an Expert Committee commissioned by the government of Bangladesh found that it would displace 220,000 people. The UN Rapporteurs said in a joint press release: “The Phulbari coal mine may entice developers. But for many Bangladeshis the wholesale environmental degradation of the Phulbari region will exacerbate food insecurity, poverty and vulnerability to climate events for generations to come.”
Following massive resistance from locals at risk of being displaced, GCM’s share price has dropped from 250p on 7 January 2011 to 6p today, its lowest ever. The Annual report lists GCM’s 2015 financial resources as £169,000 in cash, down on £1,332,000 the previous year. Recent years have always seen over a dozen shareholders attend; this year there were only six or so. Apologies were received from non-executive directors Guy Elliott and Dato’ Md Wira Dani Bin Abdul Daim: they were ‘unable to come’, Executive Chairman Michael Tang explained.
An early question was from Zahanara Rahman: “The State Minister for Power, Energy and Mineral Resources, Nasrul Hamid, stated on 23 August 2015 that the government is not interested in open-pit extraction of coal from the deposits in the northern region of Bangladesh, saying: ‘We have decided not to extract coal now … We must consider high density of population and the agro-based economy of the mining area.’
“Why do you still say you can go ahead?”
Tang replied, “I’m not familiar with the report. We remain hopeful and optimistic”. Zahanara Rahman interrupted to ask, “are you saying you’re not aware of it?”, but Tang’s answer was simply to repeat that he was optimistic.
I asked what their response was to the UK Government’s statement of “regret” that GCM had not published an updated human rights impact assessment. It said in September: “The UK NCP regrets that work to update the company’s plans is not yet advanced to a point where an updated ESIA [Environmental and Social Impact Assessment] and a n HRIA [Human Rights Impact Assessment] can be completed and published. The context of operations remains, however, one in which development of the project is suspended and uncertain.”
I mentioned that ahead of the UN climate summit in Paris, UK Energy Secretary Amber Rudd proposed on 18 November to phase out “polluting, carbon-intensive” coal-fired power stations in the UK by 2025. I said that carbon emissions from coal are causing climate change and sea level rise which threatens to leave 17% of Bangladesh flooded by 2050, according to the country’s leading climate scientist Atiq Rahman, displacing 18 million people.
Tang responded by listing at least half a dozen countries that still plan to build coal-fired power stations, and and how many they intend to build. I asked if he felt responsible for the people who will be displaced due to ‘business as usual’ carbon emissions, or the people displaced directly by the mine. No, he doesn’t feel responsible, because it is the government of Bangladesh that has decided to use coal.
Chief Operating Officer Gary Lye responded that “The OECD’s statement of regret was regretful. We are not publishing an updated Human Rights Impact Assessment at the moment. Behind the scenes we are looking at it. We are engaged with consultants. We’ve put a hold on that at the moment until we can see that the process [of approval for the mine] is moving.”
I asked whether he felt responsible for the displacement of 220,000 people from their homes and livelihoods. Lye responded: “In Bangladesh resettlement of people is actually a normal process. We’ve got the resettlement plan that’s been reviewed by the Asian Development Bank.
“International companies carry with them standards. Without such standards in place, projects don’t get financed.”
I also mentioned that local opposition made the project undeliverable. As the NGO International Accountability Project reported, in 2006 paramilitary troops opened fire on some 70,000 people marching in Phulbari against the mine, killing three people and wounding as many as 200. Outraged citizens enforced a four-day strike, closing shops, offices, educational institutions, and roadways in the Dinajpur district. AEC/GCM was forced to suspend its operations after demonstrators torched the company’s project information office and its personnel fled the country under police escort. In 2013 protests forced Lye to cancel a PR trip to the region to distribute blankets after police urged him it would be unsafe for him to enter. Again, last year it was reported that Lye, his wife and a dozen employees were forced to leave Phulbari for Dinajpur town under police escort after news of his visit to the area prompted a blockade of the Dinajpur-Dhaka highway and damage to the company office and vehicles.
Lye responded that locals do in fact want the mine: “Our litmus test for support is to consult with the local MP. We have 70 people across the area reporting to us.”
The prospects of the project going ahead were questioned. Tang assured shareholders that GCM has a valid contract with the government: “The question as to whether this contract exists has never been mentioned to us by any member of government. We have had meetings with the highest level of government. We do have a contract in place. What we are seeking is approval.” Last year shareholders had focused on Lye and Tang’s claims to be in contact with the ‘highest level of government’, Prime Minister Sheikh Hasina, and it transpired then that GCM had not met with her personally.
Shareholder Brian Mooney, who used to work for the company, said: “I’ve been coming to these AGMs for over a decade. I have heard you and your predecessors express confidence in the future. That is the mantra we have come to expect. It would appear to most observers that [Prime Minister of Bangladesh, Sheikh] Hasina is a major roadblock and until she is gone your confidence is misplaced.
Tang replied: “With the World Bank, we’ve been in dialogue with senior officials.”
Mooney followed up: “Do you accept that Hasina is a major roadblock?”
Tang responded: “In a sense a roadblock, in that we have yet to receive approval.”
Non-Executive Director Raof Daud added, “I am the ‘new boy in town’, but I don’t think the company’s ducking these issues. They’re real issues.”
We also relived last year’s stock lines from Tang and Lye.
Tang smirked when asking two shareholders who were dissatisfied with his answers why they bought their shares. “If you do not believe in the company, why not sell your shares? You could elevate yourself from the responsibility of coming the AGM every year.”
Lye again spent five or ten minutes arguing with Zahanara Rahman about who could speak for the people of Bangladesh, given that her information about Bangladesh’s energy minister’s rejection of the project had come from newspaper reports, rather than from people on the ground. Rahman responded that she grew up in Bangladesh, goes back many times every year, and talks regularly with people in Phulbari, who tell her clearly that they do not want an open-pit mine.
After the business concluded, Rahman and I spoke with Gary Lye. He denied repeatedly having been forced to leave the area under police escort following local outrage at his presence. He said that during his visit, he had met with groups of around ten people and later with a larger group. He said their concerns had been similar to the points I had raised: resettlement, compensation and jobs.
On whether he felt responsible for the displacement of 220,000 people, he said that people are ‘desperate’ to leave the area. He said resettlement plans have been published on the Asian Development Bank website and claimed there would be one job provided for every family displaced, but repeatedly refused to answer what these jobs would be, how long they would last and where the people would go. On whether the resettlement had been costed, he said it had, but was unable to give a figure.
He said he had seen resettlement for mines ‘done badly’ with bulldozers, whereas his company was signed up to the Equator Principles, and committed to putting the land back to it’s pre-mine state after completion. Rahman pointed out that as a small company, GCM can disappear when the money starts to run out, whereas the government might be more interested in a larger company that they can ‘grab by the tie’ and hold to promises of compensation. Lye said: “Do you see many large companies lining up?”
On whether he felt responsible for people displaced by sea level rise due to climate change, Lye said that “the planet is in a state a thaw; it is only a question of the speed of thaw.” Rahman made the point that she cannot simply go to a region and move all the people there elsewhere, and that Lye cannot either. We shook hands, and Lye wished us a ‘Merry Christmas’.
Photos of the demonstration outside the AGM are at http://www.demotix.com/news/9326344/london-protest-against-phulbari-bangladesh-opencast-coal-mine#media-9325837.