Report by Richard Solly, Co-ordinator, London Mining Network, and member of Colombia Solidarity Campaign, with assistance from Andy Whitmore and Rodrigo Peret.
Other reporting on the AGM, and reports and press releases associated with it, can be found at:
1. I have never been to such a long company Annual General Meeting. It lasted three and a half hours. Apart from the speeches by the company Chairman, Sir John Parker, and the Chief Executive Officer (CEO), Mark Cutifani (both of which can be found at http://www.angloamerican.com/~/media/Files/A/Anglo-American-PLC-V2/documents/agm-2017-address-to-shareholders.pdf), most of the meeting consisted of serious criticisms of the company’s behaviour by mine workers, representatives of affected communities, and their supporters, and the company’s lengthy, though rarely adequate, responses.
2. Among many other things, Sir John Parker said there was a need to help rebuild trust. Anglo American needed a more integrated operating model to rebuild trust, which is integral to its reputation. He said that the company needs to act with integrity and to respect the life and livelihoods of communities affected by its operations, its workers and the natural environment. Yes, well, we have been telling them that for years. Sir John said the company needs trust to have a social licence to operate. He said it also needs to help address the causes and impacts of climate change and for this reason it is working with the ‘Aiming for A’ investors’ coalition, which includes some of its largest shareholders. In 2015 Anglo American received a B carbon rating and it is making changes to ensure it receives an A rating as soon as possible. He also said that he would be retiring and wanted the board to find his successor during 2017.
3. Mark Cutifani reminded us that 2017 was the 100th year of the company’s existence. He then began a presentation which, at times, was so extraordinarily tedious that I wondered whether he had consulted Rio Tinto’s former CEO, Sam Walsh, on style and delivery. He began by talking about money. He then moved on to safety, regretting the fatalities and other incidents that occurred during 2016. I began to take an interest. He said that water management is a problem. Oh, yes it is indeed! Water is one of the big issues around the Cerrejon coal mine in Colombia, of which, more below. Then he returned to money again…
4. Loud snores were heard during the presentation, but I could not see who had fallen asleep. Whoever it was missed the rather interesting part of the talk about future mining involving no use of water, production of dry tailings and production of less waste. This was really quite interesting. But then he returned to money again, and my attention wandered.
5. When the Chairman opened the meeting to questions, I suspect he did not realise quite how many there would be, and how long it would take to deal with them.
6. Bruce Duguid of Hermes Investment Management said that a shareholder resolution on climate change and company reporting had been passed last year with 95% approval. Anglo American supports the Paris agreement and the national policies that will be necessary to implement it. The company’s new sustainability strategy will include public advocacy. All this, he said, is good. Given this, could the company give investors more details of its public advocacy plans on climate change, including details of its focus, the use of company membership of trade associations such as ICMM, and the ‘levels of resource’ dedicated to these important activities. [I imagine the expression ‘levels of resource’ means ‘amounts of money’; perhaps it also includes hours of worker time.]
7. Sir John Parker said that Anglo American had a constructive dialogue with the Aiming for A coalition and would be happy to continue the dialogue and give more information on its public advocacy plan. The company agrees that industry advocacy can be a powerful voice for public policy and at global level Mark Cutifani has been very active in ICMM [the industry coalition, International Council on Mining and Metals]. Anglo American had played a very important part in shaping ICMM’s position on climate change. The company had joined the Paris pledge for action, which demonstrated its commitment to playing an important part to support the objectives of that agreement.
8. Mark Cutifani said that the work of ICMM involves supporting conversations and making sure that the mining industry is at the forefront of work on climate change. Anglo American is also engaged with a number of national associations in different countries. Chris Griffith from the platinum team is involved with work on fuel cells. The company is a founding member of the Hydrogen council launched in Davos a few months ago – though it may take a while to produce results. The company is working on low energy mining and is much more energy efficient than before. Work on climate is part and parcel of all that it does.
9. Juan Salazar, from the Bank of Montreal, said that the bank was part of the group of institutional investors working on climate change. He was concerned about the resilience of Anglo American’s asset portfolio in different climate change scenarios. It was good that the company was working on the implications for product demand for different commodities and the quantitative financial impacts of different climate change scenarios. He said he would like more detail on the results of this work.
10. Sir John Parker said that the company would continue to provide more detail as time went on. It had completed qualitative assessments of climate change impacts on demand for platinum group metals and copper. Demand was positive under different scenarios. Electric vehicles would increase demand for metals in the company’s portfolio. There would be changes on all the company’s bulk and base metal products. A lot of people were involved in these analyses. The sustainability report was heading in the right direction. The company was launching a supplement on its website about what climate change means to it.
11. Carlota Garcia Manas, Deputy Head of Engagement at the Church of England pensions board, said she would welcome a progress report on climate change, including alternative energy and greenhouse gas reduction targets to 2020 and inclusion in the company’s performance plan from 2017. To show support for work on climate change and the need to limit the global temperature increase to 2 degrees, the Church of England Pensions Board looked forward to more details of targets for 2030 and beyond. More details of the company’s overarching vision for transformation to low carbon would be welcome. There was a need for more details on how this connects with the business strategy, mergers and acquisitions and participation in industry bodies.
12. When my question was called, noting that Sir John Parker had expressed his support for ‘long-term shareholders’, I mentioned that I was such a shareholder, and that I had recently increased my shareholding by 150% (until recently I held four shares; now I have ten, enabling me to appoint as proxies more community and worker representatives). I said, “Last year it appeared that Anglo American would pull out of the Cerrejon Coal mine in Colombia. Now it appears that you will not pull out. My questions concern water and coal dust around the mine.
13. “Diversion of the Arroyo Bruno, mentioned at last year’s AGM, is already at least 80% complete and is apparently likely to be finished later this year. I understand that work on the diversion has continued while supposedly ‘prior’ consultation has been conducted with the Indigenous community of La Horqueta.
14. “How can consultation be regarded as ‘prior’ when the operation under consultation is under way while the consultation is being conducted?
15. “Since it is not possible to guarantee that the diversion will never have any adverse impacts, what will the company do to mitigate and compensate for them?
16. “The trees and other vegetation in the vicinity of the mine are stunted because of the impacts of the large quantities of coal dust emanating from the mine. In the community of Campo Alegre one of my colleagues was recently shown a water butt system for collection of water, constructed, I understand, with the assistance of Cerrejon, but the water emerged from the tap completely black, as the rainwater initially runs off the roof of one of the buildings which is continually coated in fugitive coal dust. This is the only viable natural water supply for the community. Other natural springs on which they depended have disappeared, allegedly due to the severe tremors caused by explosions at the mine. The community therefore depends on the company to provide them with bottled water, but it is not enough. They are provided with 1,000 litres per family every 8 days, but the community says that this is insufficient for all domestic purposes for large families of 8 or more.
17. “Surely the absolute minimum that Cerrejon Coal could do, given the amount of water it is using and the level of profits generated, is to ensure that the communities adjacent to the mine have enough water to live on?
18. “Not only Campo Alegre but other Indigenous communities such as Provincial and San Francisco are very close to the Cerrejon mine and are experiencing health and environmental problems as a result. What are the company’s plans for these communities?”
19. Sir John replied that the company knows that Cerrejon has come a long way. It is a joint venture between Anglo, BHP Billiton and Glencore (he almost forgot the last one – I had to remind him!). “We have been involved in improving standards. We can say that there is work to do, but we feel that Cerrejon’s approach to safety has improved over time. We have made a positive contribution to that. With regard to coal dust and other issues I’ll allow Mark to come in. But before that I want to say we take any issue of coal dust seriously, whether in South Africa or Cerrejon. Similarly with the need for water. Regarding Campo Alegre, there is a problem with water in the mini aqueduct built by local government. We are supplying 1,000 litres of water per week for now, and looking at doing more. It is one example of the good actions of the company. 90% of the water we use is not fit for animal drinking, let alone people.”
20. Mark Cutifani said that I was correct on the matter of the company’s portfolio. “Cerrejon was one of those assets we looked at for sale last year. During this process we did not get a bid reflecting its appropriate value. That is not to say we won’t consider new offers, but at the time we did not consider any of them good offers. We have sold some thermal coal assets as part of sales – climate change is part of our thinking. However, Cerrejon is a long term asset. There is nothing any of us have done that would constrain us from trying to improve things.
21. Jon Samuel of the company’s Government and Social Affairs department added: “On the Consulta Previa issue, which is a Colombian legal requirement about prior consultation for indigenous peoples and also for Afro-Colombian populations, for those of you not so well versed in Colombian matters. The reason why the current Consulta Previa exercise is ongoing at the moment after construction had started is because there was an original Consulta Previa process, prior consultation process, that completed in 2014. And that process, which was run by the government, deemed that there was one community, Campo Herrera, downstream from the mine that was going to be potentially impacted and therefore they needed to be consulted. As you might know, there was a subsequent lawsuit last year which deemed that actually a community called La Horqueta, which is about ten kilometres upstream from the mine, could also potentially be affected. Now, that wasn’t something that the regulators who decide who should be included within the scope of the prior consultation exercise had thought was necessary, but the court ruled otherwise, and obviously in line with the court finding we’re following that. The court didn’t require the suspension of the construction works at the time, and actually suspending construction works mid construction can also pose certain problems in terms of environmental management, obviously social problems too. So, there was no requirement for the mine to step back.
22. “Two other points of detail. You mentioned coal dust. The mine does have dust monitors in those communities and they remain within legal limits. When it looks like there’s going to be an exceedance, as there have been potential exceedances with the recent drought in La Guajira, as you will know, they’ve actually changed the operational plan and ceased operations near host communities, and it is a semiarid environment so there will be many sources of dust in those communities, the mine just being one of them.
23. “And then the final point you mentioned, the water provision. The basis for the temporary water supply that Sir John described is actually a World Bank guideline on potable water supply, but we would stress that that’s a temporary arrangement while a permanent solution is provided for that community. So, thank you.
24. I pointed out that I had still not received an answer to my final question about plans for the three heavily impacted indigenous communities of Campo Alegre, Provincial and San Francisco. I said that I had visited Campo Alegre twice in the past couple of years and a colleague had visited a fortnight ago, and it seemed that people were becoming ever more desperate.
25. Jon Samuel said, “So, there’s ongoing engagement between Cerrejon and those communities, as there is with all of the communities. So, outside the regulated Consulta Previa process there is ongoing stakeholder engagement with host communities around the mine, and there are discussions around livelihoods and environmental management ongoing, we understand from Cerrejon, with those communities. And obviously we’re very happy, Richard, to follow up with management to ensure that that’s being done to the appropriate standards that we’d expect at our sites.”
26. I mentioned that, when I had visited the Cerrejon mine in June 2016, we had driven past the company’s well-irrigated golf course, and the water sprinklers had been on when we were there. Given the shortage of water in communities around the mine, I suggested that Cerrejon Coal might at least stop sprinkling its golf course while anyone is watching. Sir John Parker replied, with some amusement, that the company wishes to be open and honest, and that it would therefore be quite wrong to turn off the sprinklers just because they had visitors. Of course, I agree with him – but that wasn’t really my point. The use of the sprinklers on their golf course while local communities suffer from lack of water demands a completely different response.
27. Andy Whitmore of London Mining Network asked about Anglo American’s shares in Nautilus Minerals, an issue which had already been raised directly with the company by colleagues from the Deep Sea Mining Campaign.
28. He said: “For the benefit of the shareholders, I should state that Nautilus Minerals is trying to develop what would be the world’s first deep sea mining operation – called the Solwara 1 project – in the Bismarck Sea off the coast of Papua New Guinea.
29. “I believe this investment is an unnecessary risk to Anglo American as the Solwara 1 Environmental Impact Statement is very weak and does not contain sufficient analysis and modelling to determine the extent and scope of the environmental impacts of the project. Even Nautilus Minerals admits the high level of risk associated with the venture.
30. “More importantly in terms of risk, the Solwara 1 project is strongly opposed by local communities who are deeply concerned that the project will pollute the marine environment and ruin their livelihoods, health, food security and culture, all of which are strongly linked the sea. Such local opposition could associate our company with a legal and / or public relations disaster, despite it owning a relatively insignificant holding for research and development purposes.
31. “So given this, how do you justify this shareholding in Nautilus, and how is it consistent with the company’s commitments to respecting human rights, and operating only with the free prior and informed consent of indigenous peoples and in an environmentally responsible manner?”
32. Sir John Parker replied that Anglo American had a very minor shareholding in the company, less than 5%, and never any management control. Anglo American’s sole interest is in the area of technology related to information.
33. Mark Cutifani said that he wanted to “acknowledge constructive engagement” from the Deep Sea Mining Campaign. He also acknowledged the importance of livelihood and culture. Anglo American had reduced its shareholding but kept a residual shareholding so it could understand how those issues were being addressed as part of the research, as well as the technical information. This was a work in progress. From what Anglo American had seen, the Nautilus group had followed the processes required and Anglo American could not take a final view until it had completed its work. “We do take the points you’ve made on board,” he said.
34. Andy Whitmore warned that holding that level of risk, especially in something experimental, was something that shareholders should consider carefully.
Frequency of dividends
35. The next shareholder to speak said that he was a happy shareholder, though he qualified this by admitting that he was not a long-term shareholder. He raised a number of points about finance and said he would prefer a quarterly rather than half-yearly dividend as it would help his wife’s expenditure. This raised good-humoured titters.* Sir John said that, since the company’s financial reporting was on a half-yearly basis, half-yearly dividends were appropriate.
Africa, African representation on the board, occupational diseases, and the National Union of Mineworkers in South Africa
36. Peter Bailey of the South African National Union of Mineworkers (NUM) said that he had been attending AGMs since 2012, and it was now 2017. Since 2012 he had not seen the board reflecting where the company’s minerals came from. Africa is its largest investment area. What makes Anglo American is Africa. There are only one or two black faces on the board. Transformation is not taking place. Whoever the new Chairman is should take this into cognisance, and the new board as well. The countries where the company does business must be reflected on the board. Then the board would appreciate the pain and suffering of the people in the areas where it made its profits. It is the 100th anniversary of Anglo American and coincidentally there is a decline in safety. One life lost is one life too many. While there is an emphasis on safety, the occupational health component is neglected. The company needs to report on health. How many people have died since the last AGM of occupational diseases, especially silicosis? Two years ago the Chairman had mentioned the landmark settlement which the NUM had been driving. NUM’s people were bearing the brunt of Anglo American’s operational activities. NUM had been addressing the CEOs of companies involved in the gold sector; but when a settlement had been reached, the company had isolated NUM. “You signed the settlement and set up a trust and you isolated us once again. You must respect the rule of ‘nothing about us without us’.“ The settlement had been signed over a year ago and nothing had happened to date. Not a single cent of compensation had been paid and people were still suffering.
37. “I nearly made the mistake of singing your praises in the public domain,” said Peter, “but I cannot do that, as too many people continue to suffer and we do not hear you report on this to shareholders, though it is these shareholders who gave you permission to make this settlement. The people representing the trust now have nothing to do with those enduring the pain and suffering and you are proud of it! We want you to expedite the process, rewrite the trust deed, accommodate those who are championing this process and expedite payouts. Those in boardrooms who have never worked in industry don’t appreciate the pain and suffering, they have never seen people coughing up blood. The money for shareholders is bloodstained with African blood. I wish you a successful and happy retirement. I am a black mine worker from Africa, where your income was generated. I want to change the image of that board. There are many black and white South Africans who can fill that position. We must resolve this matter – the settlement is not a landmark, and you have increased the pain and suffering of those already suffering.”
38. Sir John Parker replied that since he had been on the board there had always been two or three people on the board representing South Africa, and after today there would be two. The other diversity change made was that there were now three women on the board. The board is not all white males. Sir John Parker said he was also passionate about what Peter had said. He had taken on the difficult job for the UK Government in the last year, looking at diversity, or lack of it, on boards of FTSE 100 companies, and the inquiry’s report would be finalised in the summer. Around 25 to 30% of Anglo American’s assets are in South Africa, and with three South Africans on the board that would make it 25% South African, so the board is not far from alignment with the company’s assets. The company can only be successful if it makes money, as the dividends pay pensioners in South Africa and around the world. The board needs a width of skill sets representing many aspects of mining and business, and that is how the board is built, with a diversity of skills. That is the Chairman’s job. He wanted a world class board and Anglo American had one, and a fine South African was coming on to the board at the AGM, subject to a vote from shareholders. He said that he would have thought that Peter would have given him and Mark Cutifani a bit more credit. They had reported in detail the previous year on the settlement reached with nearly 4,400 claimants on silicosis, without admission of liability, as only two companies had been involved, Anglo American South Africa and AngloGold Ashanti. The trustees are people who will administer funds on the basis of medical evidence. So far, 700 claimants had been paid of those 4,400, so it is being worked through at a pace dictated by medical examinations.
39. Mark Cutifani said that 20 years ago Anglo American had represented around 70% of the Johannesburg Stock Exchange and now it is between 5 and 7%. The company had played a major role in the transformation of South Africa and had been a catalyst for the establishment of Xsaro, African Rainbow Minerals, AngloGold Ashanti, Harmony and other companies. Historically disadvantaged representatives made up 60% of the company’s management team and two had been appointed to CEO positions in the past year. Regarding silicosis, the agreement and the establishment of the trust fund was a first for the industry. With the involvement of governments and lawyers the process was quite challenging. He undertook to follow up on the question of payments made. The trust has been working through criteria for payment and Anglo American would try to speed payments up. The company had been a leader in providing the mobile units which were looking for anyone in South Africa suffering from silicosis.
40. Norman Mbazima, Deputy Chairman of Anglo American South Africa, said that the trust was being developed through discussions with the legal advisers on the other side, and the discussions involved how it should be composed and how it will run, but the company could have another look at it and get back to Peter.
41. Sir John Parker said that Anglo American is active on the health front: 86,350 people had been tested for HIV and AIDS in 2016, and 88% are involved in the company’s wellness programme. To date, 620,000 people had been through the AIDS testing programme. This was not the face of an irresponsible company that ignores the health of its employees, and Sir John was very proud of it.
42. Peter Bailey replied that he had not said that the company was not doing anything, but that is did not report on occupational deaths.
43. Sir John Parker said that he and Peter “could be on the same side of the street.”
44. Peter replied, “We are.” But he pointed out that if the number of occupational deaths were included in the report, rather than only deaths in accidents at work, the figure is higher. He asked that NUM not be excluded from the follow up to the settlement, as that settlement was the result of extensive engagement between the company and the union and the trust excluded the union, and those on it do not understand the issues. “Those mobile units are not functioning the way they should be functioning,” he said. “There are lots of challenges for those suffering from silicosis, and the process excludes some people because the process is long and tiring. Those we target to be compensated, let them be compensated quickly.”
45. Sir John Parker said, “I respect you very much for the compassion you show in these meetings.”
46. Peter Bailey made a final remark, about representation on the board: he had not complained about lack of representation only from South Africa, but from all of Africa.
Worker deaths and silicosis
47. Tony Dykes, of LMN member group ACTSA, said he had been to numerous AGMs. “We agree we have to start with safety,” he said. “The number of deaths is up from six to eleven and a number of them were preventable. We agree you should act with integrity and I don’t want to impugn your integrity. But you are being held to account for inaction on silicosis. A year ago you said you had a settlement involving 4,365 cases. You said it was a landmark. At that AGM I said it would be a benchmark for the rest of the industry, as there are tens of thousands of silicosis sufferers in Southern Africa, and it leaves sufferers much more susceptible to TB, and the combination is often fatal. People with silicosis across Southern Africa often don’t have good homes. What the miners were doing was trying to provide better homes for their families, but by getting ill they could not. They go home to Lesotho or other rural areas. I have visited them in their homes. They don’t get health care or compensation. Let’s not have platitudes about doing the right thing. Put the values Anglo American itself proclaims into action. Thirteen months on from that settlement, I ask Anglo American again to commit to an industry-wide settlement that provides decent health care and compensation for all sufferers from silicosis across Southern Africa. We ask you to commit to doing that this calendar year, by the end of 2017. We request you meet urgently and at least on a quarterly basis with NUM and other stakeholders and discuss the issue at every board meeting. Put your values into action and act with human dignity. These people deserve justice now. We don’t want to have to come to another AGM. No more words: action please!”
48. Sir John Parker said that Anglo American is one of many companies involved in this issue and that the settlement made was without admission of liability as Anglo American was a shareholder in those mines, not the operator. “We need industry, government and lawyers to come to the table, and there are dozens of lawyers, and this has complicated things.”
49. Mark Cutifani said he would like to get this done in days, not weeks or years, and Anglo American was trying to get the industry together on this. “If there is anything we can do, we will do it,” he said. “It is complex and more difficult than we thought it would be. There is no lack of commitment or effort on our part. If you have ideas on how to do it better, please tell us.”
50. Tony Dykes said it would be helpful if Mark Cutifani could make a commitment to set up urgent meetings with NUM and others, as this would get the process going quicker.
51. Mark Cutifani said he could make a commitment to look at whatever angles we take and as part of this we can engage with NUM and other stakeholders. “We will pick up this ball as soon as we can.”
52. Sir John Parker said that if there was something that the company was not doing that it should be doing, Tony let them know, “but we are dealing with a labyrinth, and this is not easy. We are just one company and we cannot carry the whole of South African mining on our back.”
53. Tony Dykes replied that ACTSA had never asked you to do that, but that Anglo American is the biggest miner in South Africa and the company wants to be a leader. He said that he knew that Mark Cutifani was personally committed on this issue.
Minas Rio, Brazil
54. Patricia Generoso, from Brazil, said that she was affected by the company’s Minas-Rio Project. Part of her family’s property had been lost for the construction of the tailings dam. She lives 300 metres from the dam in the community of Conceicao do Mato Dentro. She belongs to the international network Churches and Mining. Patricia spoke in Portuguese and her words were translated by Rodrigo Peret OFM, a Franciscan Friar who works for Franciscans International and for the Churches and Mining Network. Patricia asked the following questions.
55. “According to data contained in Anglo American’s Minas Rio licensing agreement, the mine uses 5,023 cubic metres of water per hour and its activity lowers the water table and destroys the recharge areas and aquifers, because it is in the iron ore layer that water accumulates. At least six communities are already living on pumped water and some are left without water for days because springs have dried up. The project is in a sub-basin of the Rio Doce and its waters are fundamental for the recovery of the river basin after the rupture of the Samarco tailings dam in November 2015. Given all this, will Anglo American maintain and continue trying to expand its Minas Rio project?
56. “The tailings dam at the Minas-Rio Project, with a capacity of 370 million cubic metres, is seven times larger than the Samarco dam that broke in 2015. Three communities below the Minas-Rio dam are in the area defined as a ‘self-rescue zone’ because there would not be enough time for competent authorities to intervene in case of an accident. People’s understandable fear was fueled by the rupture of a containment basin at Minas-Rio as well as by the rupture of the Samarco dam. The company does not seem to acknowledge the danger faced by these communities, and Step 3 envisages heightening of the dam. Does Anglo American intend to continue ignoring the danger and to bear its civil and criminal liability if a disaster occurs?
57. Sir John Parker said that Silvio Limo, who leads community engagement in Minas Rio, was present in the room and would be happy to meet Rodrigo and Patricia after the meeting to follow up on specific points. [However, by the time the AGM ended, he appeared to have legged it, and Rodrigo and Patricia, who had waited until the bitter end of a marathon meeting, could not find him.]
58. Sir John Parker said that mining often takes place in water stressed areas so it has to be managed in a responsible way. Anglo American now recycles something like 75% of the water it uses across the world. This is monitored on a regular basis. Regarding Minas Rio in particular, the beneficiation and filtration plant was designed to have the best world class design for water efficiency. The pipeline which transports the ore and slurry 525 km to the coast comprises 70 to 80% ore and the rest is water which is filtrated at the port and treated before discharge into the sea. Anglo American adopts efficient water management everywhere, focusing on sustainable use of water. The improvement of its catchment of 2,500 cubic metres per hour from the Peixe River was given after strict studies from the Minas Gerais state authorities considering population growth and other projects in the area. He said that Minas Rio’s consumption would not affect anyone else’s consumption in the area. The mine will continue tracking water from the river and joint decision-making with various other users. Anglo American has obtained all the necessary water use licences for the tailings dam and mine dewatering. The company is acting in accordance with the licences in that area. Minas Rio operates an efficient water resource management system with a full-time team of specialists which continues to improve water efficiency and access for neighbouring communities.
59. Mark Cutifani said that the technical design and the construction of the tailings dam is very different from that of the Samarco dam. It has been reviewed by numerous technical experts with regard to safety. The company has received very good support on the nature of the design and how it has constructed and operated it. It is a downstream construction as opposed to the upstream construction at Samarco. In building a dam there is a process of informing local communities, and Anglo American has gone beyond the legal requirements. The company has purchased land and paid people on an agreed basis. This has been relatively positively received. Anglo American is not talking about going beyond the approvals in the stage 3 licence, which is the final step in building the mine. Anglo American has not talked about going beyond this in the future. If in the future the iron ore market is good, the company may consider this, but it has not gone beyond the original parameters. More than 90% of the community is very supportive of the project. Even with the most recent attempts to engage the community, the company has had great support.
60. Silvio Limo added that the company is very keen to explain to communities its approach. It invites communities to come and visit the mine and see its equipment [I was reminded of the traditional invitation by a gentleman to a lady to come upstairs and see his etchings, and indeed perhaps the two invitations do share a common aim….] so they can “understand the interface between themselves and the equipment” [what?]. The company has a room set up within one of the communities to receive people there and talk to them. He said he would make himself available to the visitors after the AGM. He then spoke in Portuguese so that Patricia could understand, but regrettably my Portuguese is insufficient to have understood.
61. Patricia replied that the company had never answered her question about how many minutes they would have in the event of a dam rupture. Already the communities are reliant on water delivered by Anglo American because their water supply has been affected. Anglo American’s risk management plan says that during the phase of operation and disactivation of the mine there are a lot of risks in the dam. It identifies fifteen situations characterised as high risk, so communities are worried and even the company recognises that some families are in a high risk area – it is called a ‘self rescue zone’ because in the event of an accident there would not be enough time for the competent authorities to intervene.
62. Mark Cutifani said that this was an important point. Anglo American is committed to full and open transparency. The document quoted from is an Anglo American document. The company works with local communities and explains every possibility, and then partners with organisations to mitigate the risk. The engineering in the mine is of the highest level and the possibility of failure is extremely, low but the company explains the potential ramifications in the unlikely event of a problem. In some cases the company finds that people prefer to move, in others not. In recent conversations more than 90% of the local community has supported the project and want to stay. Not everyone wants to be there so the company will work through the possibilities. A big problem is when the company has community days planned and then small groups stop hearings, which hinders the conversation with the local community. The company has great support and will continue to do that work and it asks that all interested parties at least allow it to talk to everybody.
63. [Most shareholders present would not have been aware that this remark was like throwing down a gauntlet. Members of the Churches and Mining Network had been involved in getting a recent public hearing postponed on technical grounds. The notice of hearing had been inadequate, which is why a judge ordered it to be postponed a few hours before it was due to begin. But the issue of greater concern to those who applied for the postponement was that the company’s environmental impact documents, running to thousands of pages, had not been published early enough for community members to have sufficient time to read and understand them before the hearing; and their view was that the hearing should allow a genuine conversation about the project’s impacts rather than function as a propaganda opportunity for the company. The company had nonetheless behaved as if the postponement of the hearing for a few weeks threatened the future of the project.]
64. Sir John Parker said that all of this had been well published in the company’s environmental plans and everything had made public since 2015 [this is disputed] so nobody should be in the dark about what the company’s proposals were or about the potential impact. Since 2015 the communities have been taken through everything, and the company wants to operate in a way in which risks are managed in a satisfactory way. Anglo American examines all its ninety dams on a regular basis with third party intervention and Minas Rio is no different from that. “We don’t want a structure that will not withstand the shocks that might occur in the normal course of operations,” he said – leaving me wondering whether that meant that it was acceptable if anything abnormal happened and caused a catastrophic failure.
65. Rodrigo Peret then asked two further questions. He said:
66. “The Minas-Rio venture is marked by a lack of transparency and constant changes in its projects and studies. This prevents the population from understanding the real size of the enterprise and its impacts. For example, although the Operating License given in November 2014 provides for activities for 5 years, the license for Step2 was granted in October 2016. Only one year later, still within the 5 year period foreseen in the first license, the licensing process for step 3 was started. The lowering of the water table was supposed to begin in the 5th year of mining, but the application to do só was filed in March 2014, even before the granting of the Operating License. In the early studies it was argued that there would be no need for new areas for sterile disposal. But the Step 3 application says that there will be. Are the studies flawed or is it a company strategy to deceive the population and the state?
67. “Public meetings to deal with Anglo American activities have been marked by the presence of heavily armed police and other forms of pressure. Peaceful community demonstrations are suppressed by a disproportionate police force and community leaders are sued by the company. The company often hires retired high-ranking police officers for corporate security, maintaining a permanent influence on the local security system. The Federal Public Prosecutor’s Office has expressed concern about militarization and the State Public Ministry has recommended moderating the use of the police force in peaceful demonstrations. What does this say about Anglo American’s understanding of the right to participate?
68. Rodrigo then spoke about the postponement of the public hearing scheduled for April 11, 2017, in Conceição do Mato Dentro, during which STEP 3 of the Mine expansion of the Minas-Rio project was to be presented.
69. “The Public Hearing was suspended due to an injunction filed against the State of Minas Gerais, the municipalities of Alvorada de Minas, Conceição do Mato Dentro and the mining company Anglo American. The court accepted the reasons given in the application for the injunction, related to failures in the public announcement of the hearing and the late availability of environmental impact studies. The public announcement did not mention that part of the enterprise is located in the municipality of Alvorada de Minas, even though the mine expansion has already reached into this municipality. This omission constitutes one of the formal irregularities pointed out by the injunction applicants. The Federal Public Ministry and the City Hall of Conceição do Mato Dentro had also previously recommended postponing the Public Hearing, based on the same irregularities.”
70. Rodrigo said that after the suspension of the Public Hearing, the five people representing communities and social organizations who signed the injunction application that led to the judicial decision began to be physically threatened and their reputations attacked. Messages were shared in the social media networks of Conceição do Mato Dentro and Alvorada de Minas revealing the names of the authors and reproducing the entire official statement by Anglo American, which states that the suspension is causing problems for the licensing process and jeopardizing the operational continuity of Minas-Rio. Anglo American needs to respect the legal process and the rights of the citizens to take legal action.
71. “To date, one of the five people who applied for the injunction has already been physically assaulted. These five people, together with civil society organizations, have filed a crime complaint and requested an investigation at the Federal and State Prosecutor’s Office, and inclusion in the Programme for the Protection of Human Rights Defenders. We denounce the constant intimidation of communities, the criminalization of the movements and people who defend the communities, putting their own lives at risk.”
72. Rodrigo said that a meeting was taking place that day with the state ministry and the programme to protect human rights defenders, who are taking care of those five people exposed by Anglo American. “You spoke about trust,” he said. “We need more trust.”
73. Sir John Parker replied that Anglo American has a lot of dealings with church groups around the world because the company builds relations with groups, and it would love to have a closer relationship with Rodrigo. “You have presented some facts that we completely disagree with,” he said. Anglo American does not ask for a police presence at any of its meetings. The meeting Rodrigo mentioned was one where the company asked to convey to the whole community what it would like to do, and nearly 1000 people came to the meeting, which was organised by the state authorities. Anglo American did not bring the police, the state brought the police. It would be counter to what the company stands for. The company was holding that meeting in the interests of transparency. It was voluntarily offered, as the company wants to go beyond normal compliance. “We don’t want to operate somewhere where people don’t want us,” he said. “Nobody should be in the dark about what we want to do. It has all been made open since 2015 and is on the website. We want to add value to that community but there are a small group of protesters who asked a judge at the last minute and the meeting was suspended at the last minute. All we are interested in is an open dialogue as we have nothing to hide. We would be interested in talking to you.”
74. Rodrigo replied, “I was in the hearing and it was suspended four hours before.” And that was the end of the conversation.
Precarious work and subcontracting in Australia
74. Jeff Scales, of Australian union CFMEU’s mining division, said that he was an employee of Anglo American in central Queensland. He offered his congratulations on the performance of the business, “as without that I would not have a job,” but he said that he questioned some of the actions of the company. There had been business interruptions which had caused financial losses as a result of the ideological position of the company. He had bargained for three years and interruptions could have been avoided. The company had gone to precarious work arrangements instead of staying with loyal employees who had provided much of the profit for shareholders over the years. Matters of job security and long term employment could have been dealt with better. “Will my work and my family suffer as a result of decisions made in London, 22 hours’ flight from where I work?” he asked.
75. Sir John Parker replied that the only job security that management and workers together could provide was based on competitive units. A number of Anglo American’s businesses had to have radical action to survive, and Metallurgical Coal survived because action was taken to put it on a more competitive footing, “and if we don’t do that then the business is killed and workers don’t have a job. It always takes two to tango and we don’t solve wage negotiations in an AGM.”
76. Mark Cutifani said he wanted to acknowledge Jeff’s attendance and commitment. He said that the company does all it can to ensure the workplace is safe and healthy. It still has more work to do. Agreements also need to guarantee productivity and competitiveness. He said that Jeff would criticise management if they agreed to anything impacting on competitiveness in the long term. “We will make sure that in any of those conversations we hear both sides of the argument, but unfortunately we don’t always agree,” he said.
77. Jeff Scales said that his mine was one of the most productive met coal operations at the time. The new arrangement was not working and it would become a cost. “The message you deliver to shareholders is not the message we hear at the coal face. You talk about the code of conduct and care and respect, but we do not feel this as employees of Anglo American or at operations that you’ve divested from. Our community that is an Anglo town is a ghost town because you’ve gone to precarious arrangements that push people out of town.”
Black lung disease among Australian mine workers
78. Mitch Hughes, also of the CFMEU, said it was good to hear Sir John Parker speak about trust. It was good to hear about coal dust management and about openness. Black lung disease has resurfaced in Australia and has occurred at each Anglo American operation in Queensland but one. Workers submitted their x-rays to Anglo American twelve months ago. What does Anglo American commit to do or propose to do on these issues? The union is happy to sit down with Mark Cutifani next time he is in Australia to work through these issues.
79. Seamus French, CEO Bulk Commodities and Other Minerals, said that there had been two confirmed cases of pneumoconiosis. One of the affected workers had worked in various mines over twenty years. The other case was low level and the worker been with the company for seven years. Anglo American had invested a lot of time, effort and money to reduce exposure of workers to coal dust. There had been one low level exceedance this year but that was all. The issue was to get coal mine workers away from any potential dust sources and the answer was remote operation of the longwall to take workers away from the coal face, and this would become operational at Grosvenor in the next eighteen months.
80. Mitch Hughes replied that Anglo American had had a confirmed case at each Queensland operation other than Grosvenor.
Dialogue with IndustriALL global union on worker deaths and injuries, subcontracting and diversity
81. Glen Mpufane, of global union IndustriALL, said that IndustriALL is a shareholder in Anglo American. There had been a 24 % decrease in the company’s total recordable injury rate. There had also been a tragic loss of colleagues across operations, and one death is one death too many. IndustriALL was engaged with Anglo American in a global dialogue around health and safety, and hoped that some of the concerns raised in the AGM would become part of this dialogue, assisting in saving lives and ensuring occupational health across operations. What is Anglo American’s commitment to this joint collaboration and how will this be reflected?
82. Glen Mpufane said that his second question was on precarious employment and subcontracting. IndustriALL’s affiliates had fought this. Anglo American was doing a lot of subcontracting, which is why IndustriALL and some affiliates had written to Mark Cutifani with concerns about the continuing large-scale of use of subcontractors by Anglo American, which included the right to join a union, access to fair wages, and health and safety requirements. What was the relationship between the company’s use of contractors and safety breaches?
83. Glen Mpufane also asked about the integration of women across the business, not just at board level. Women at board level should be a reflection of women’s employment across the business.
84. Finally, Glen asked about the coverage of the sustainability report 2016. Did it include joint operations such as Cerrejon? What is included under ‘significant incidents’? Given the emergence of market-driven sustainability reporting standards such as IRMA [the Initiative for Responsible Mining Assurance], in which IndustriALL is heavily invested as is Anglo American, is it foreseeable that the Anglo American sustainability report may include guidance from IRMA?
85. Sir John Parker said that he had already commented on board diversity. IRMA was seeking to construct a responsible mining scheme like the Forest Stewardship Council, FSC. On the issue of jointly forming health and safety initiative moving towards the shared goal of zero harm, the company aims to ensure that union workers are aware of risks and know and apply the requisite controls and know about their right to escalate situations within companies. This is consistent with ILO [International Labour Organisation] conditions and the board is fully committed to the principles of the joint venture with IndustriALL and continues to review it through its sustainability committee. On diversity, 18% of workforce are women and 25% of women are managers.
86. Mark Cutifani said that improvements had been made and more were to be made. “On IRMA, we are the last mining company still engaged and committed to working groups around standards. Other companies have said the standards are not practical. We have said we will continue working with the team to try to come up with something practical and implementable and I think we can get there. Arcelor Mittal has come back into the process. We have resolved a number of issues but still have some to do. On commitment to joint processes on safety and health, we must do this together. We have to continually improve and we do that with our local teams, and if there is additional value to be added we are open to those conversations, but it has to be teams on the ground that find the solutions, Re contractors, we are sensitive to make sure that anyone brought on site is brought in a way that meets minimum conditions and we have terminated contracts where conditions are not met, and we did this in Minas Rio a few years ago. If people are working on our sites they have to meet our conditions. We are very open to input. On non-managed joint ventures the disclosure is different. De Beers is fully disclosed because of history and the way joint ventures have been structured. In other areas we make a judgement call, but if we have a fatal incident or travel injury we would highlight the injuries as being non-managed joint venture incidents in our reporting.
87. Glen Mpufane asked whether the company would report intractable labour disputes. Mark Cutifani replied that the company prefers to err on side of openness.
Why are workers dying, and what can be done?
88. Caroline Bowder, a private shareholder, asked whether the company had worked out why fatalities happened and what could be done.
89. Sir John Parker replied that every fatality is fully investigated and those investigations are reported to the board, with a full report. There may also be a third party investigation. The most important thing is to learn lessons. The company would do what it could, including providing any new training to implement change. “To see the number of deaths rise again is completely against the grain of what we have been working towards.”
90. Sunit Bagree, from ACTSA, said that he had heard a lot of excuses around resolving the problems of South African gold miners with silicosis and TB. He said he had a few concrete questions to get to the heart of the matter and would appreciate concrete responses. First, why had there been no movement forward on the class action? Second, when was the last time the company met with the legal representatives who brought the class action? Does Anglo American agree that the broad terms of the class action should be as good as the March 2016 settlement? Finally, it was good to a get a report on what is happening, but would it be possible to receive more regular updates with more details?
91. Sir John Parker said that as there were a number of companies involved in the class action, he could not speak to the question on legal action. From the working group perspective progress had been made, but they had not been able to make much progress on the class legal action side.
92. Mark Cutifani added that they would consider if there is a clear way the company can better report back to people from the working group, but would have to check in with the other members of the working group. He accepted that reporting was not adequate at the moment. “I can’t give you a date on last meeting with legal representatives. We will have to get back to you on that.”
93. Sunit said that he had asked for four concrete answers, and only received two. “I appreciate you are in legal action. I am not expecting you to speak for other companies, just from your perspective. Anglo American accepted the inheritance principle in the March 2016 settlement but then appealed a ruling in favour of this same principle when it came to the class action. And on top of that Anglo American is now appealing the whole certification of the class action. The Legal Resources Centre, who are part of the legal case and with whom ACTSA work, are confused by this.”
94. The final question was from a Mr Botha. He said: “My question is on fatalities and whether more should have been reported. There are systematic issues and no-one seems to be taking responsibility. Mr Cutifani, do you accept full responsibility? I note the differences between AngloPlats and what they are repeating. At Anglo Plats there has never been apologies or explanations in a Chairman’s letter. Mr Chairman, you have reported, and so can you ensure they do so too?
95. “I have a question on remuneration, that despite the increase in fatalities big bonuses are still being paid out. The company has lost 103 employees since you started, and 11 just in the last year. What payments have been made to families? What is the actual quantum that families of fatalities receive?”
96. Sir John Parker replied that on safety and remuneration, he did not think the presentation in the annual report was very good. There was a 7.5% reduction in bonuses because of fatalities but it was offset by the reduced injury rate and environmental accidents. Every detail is pored over …
97. At this point, Mr Botha interrupted, noting that these details were not in the report.
98. Sir John Parker replied that many things were not in the report. But Mr Botha was not to think that the company was not taking this seriously. “We do take this very seriously.”
99. Jack Thompson then added, “We need to close the loop in order for the learning to actually lead to actions. That is our main focus, together with how we get the same level of performance and standards at joint ventures. It has been a real frustration for us. We did so well moving towards zero harm. We have cut the rate of accidents leading to injury in half. We are trying to reach a conclusion as to why the rate of fatalities went up, but if we can find any single thread it is that the policies weren’t followed, so we are trying to get to the bottom of that.”
100. There was another exchange, with Mr Botha asking whether there were findings, as they do not appear in the report. Sir John replied that Anglo American’s reports were already up to 200 pages long. He said that the board had indicated that processes had not been followed. Mr Botha asked whether it was a question of a systematic issue or employee fault. In either case there did not seem to be anyone accepting responsibility. Sir John said that people had been removed. “We all accept responsibility on this board for this.”
101. Getting back to another question, the one about the Chairman of AngloPlats, Sir John said he had a high opinion of him, but that he was chairmain of his own company. Sir John noted that the AngloPlats Chair had given Mr Botha an undertaking. Mr Botha replied that there was an argument then as to whether Sir John had control of the company such that he could force the chairman to report. Sir John argued that he did not, but said that if he missed the opportunity to do something then he was responsible. Mr Botha thanked him.
102. Mark Cutifani said, in reply to an earlier question, that he was fully accountable. “We do not really know how this has happened and we are looking at it. We may have missed things, especially when we were ‘out there for sale’. But some of that is speculation, we just don’t know. We take it very seriously and I take full responsibility, including for how we report,” he said.
103. Regarding cover for employees, Sir John said that the company was sure that cover was at an appropriate level. The families did not want disclosure and the company had treated it as a confidential matter. Mr Botha said he accepted that, but the company should disclose what the lowest amount was. Sir John said that it would thenbe easy to extrapolate up.
104. Mr Botha, responding to the earlier point made by Jack Thompson, said that it would be good to find ways to ensure there are long term targets. Jack Thompson replied that it was about mapping out the short term but having long term goals and he would not support that point.
105. And that was that – the end of a marathon meeting which had really raked over the company’s multiple inadequacies.
* A similar remark was made by a male shareholder at the recent Rio Tinto AGM. I am always astounded that shareholders can listen to so much testimony about environmental destruction, human rights abuses, destruction of livelihoods, worker deaths and injuries and industrial disputes and still feel happy, or take the view that the most important issue is how much money they are making; but I have been taken aback afresh this year by the attempt to blame this approach on their wives. Perhaps the fact that I find such remarks a tasteless and patronising remnant of an outdated incarnation of a sexist and patriarchal society mired in complacent, self-satisfied, self-indulgent, self-regarding bourgeois materialism simply means that I should get a life, or get out more; perhaps it’s just the embittered ranting of a clapped-out never-was envious of the ability of society’s alpha-males to provide material prosperity for their dependants while I lack dependants precisely because of my inability to provide them with material prosperity, on account of the fact that I spend my time working against the structures of power rather than working for them. However, it still turns my stomach. [This is a personal observation by the author and in no way represents the views of London Mining Network or its constituent groups or funders….]