My colleague from LMN, Richard Harkinson, and I joined friends from Move Your Money at the AGM of international bank HSBC on Friday 22 April. I was surprised and, frankly, amused at the extremely strong language which some independent shareholders used to describe the bank’s board and senior management. You can listen to the company’s AGM webcast yourself and have a laugh. We’ve never used those particular epithets in any mining company AGMs.
I spoke about the bank’s support for coal mining in Colombia and the dire impacts that this has.
“Given HSBC’s recent funding for Anglo American, BHP Billiton and Glencore, is the Board aware of the history of human rights abuse and forced resettlement of farming communities around the Cerrejon Coal mine in Colombia, owned by the three companies?
“Their involvement began in 2000, shortly before the brutal eviction of the small farming community of Tabaco. After many years of local, national and international pressure, Cerrejon Coal has put some effort into improving its community relations, but on 24 February this year there was another brutal eviction of a farming family on behalf of the company by the notorious Colombian riot police squadron, ESMAD. Over a dozen people were injured, including a young man with learning difficulties and a pregnant woman who suffered a miscarriage as a result. The Colombian Attorney General’s Office has been asked to investigate.
“At the same time, the province of La Guajira, where the mine is situated, is undergoing a severe drought, and several thousand indigenous Wayuu children have died as a result. In the face of this drought, as part of its mine expansion plan, Cerrejon Coal is preparing to divert the Arroyo Bruno, the main tributary of the area’s only major river, the Rancheria. This diversion is opposed almost universally by local communities and by the coal mining union Sintracarbon.
“Meanwhile, in Cesar, Colombia, controversial coal company Drummond face allegations of complicity in grave human rights abuses including the murder of 3100 people and the displacement of 55000 farmers from their own land. 95% of Drummond’s assets are situated there, so any financing from HSBC necessarily supports Drummond’s Colombian operations. And yet HSBC have provided them with 230 million dollars since 2010 alone, despite at least one other large bank declining to participate on the grounds of due diligence, citing these human rights abuses.
“The Cerrejón Coal companies should support calls for an independent investigation of the eviction on 24 February and the company’s general relations with local communities, and to abandon plans to divert the Arroyo Bruno, whilst Drummond should seek to remediate the damage caused to communities by their grave misconduct, and to compensate them fairly. This is the only path to justice for communities scarred by coal mining in Colombia. Can you assure me that HSBC will suspend all financial support for both the owners of Cerrejón Coal and Drummond, until they prove themselves willing to remedy their respective abuses in the way described?”
Chairman Douglas Flint replied that the company does do due diligence and would respond to any credible evidence it received. He said “we can and do drop customers for human rights abuses.” I undertook to send him information about Drummond and Cerrejon Coal in Colombia.
Richard Harkinson pointed out that HSBC is making the loan book to finance a copper project in the South Gobi Desert in Mongolia. He said that the project is operated by Rio Tinto and its Canadian subsidiary Turquoise Hill. No Environmental and Social Impact Assessment (ESIA) has been published. There may be a feasibility study but this is not available either. The plan is to mine copper and export it to China, into a depressed spot market. Would HSBC add its voice to the demand of the affected nomadic herders for an effective ESIA? Coal power is involved in power generation for the mine, even though wind power would be twice as cheap. Richard explained that we had asked to meet with HSBC’s sustainable development department about this but that they had declined. Could we meet with them?
Company Chairman Douglas Flint replied that HSBC had signed up to the Equator Principles. He could not talk about the specific concerns that Richard had raised but would arrange a meeting. Richard should write to him directly.
Later, Richard said that there was a need to have non-executive board members with lived experience of human rights issues. The board needs intelligence on the impacts of its investments, and this should be included in the bank’s Key Performance Indicators.
Douglas Flint said that board member Henri de Castries led insurance companies and that board member Pauline van der Meer Mohr also had experience of these matters. He said that the board’s Conduct and Values Committee deals with these issues.
Move Your Money have written an excellent report on the meeting and you can read all the official papers for the meeting on the bank’s own website. We were able to attend the AGM because of the help of ShareAction, who provided us with proxies. Many thanks to them for their help!