In 2008, it pulled out of the Gag Island project in West Papua. See: http://www.minesandcommunities.org/article.php?a=8921.

The following year, the company also sold a major nickel refinery in Australia. See: http://www.minesandcommunities.org/article.php?a=9384.

Then, last month, BHP Billiton withdrew from a controversial nickel joint venture in the Philippines.
See http://www.minesandcommunities.org/article.php?a=9778.

BHP Billiton quits Philippines mine after CAFOD campaign

BHP Billiton has pulled out of a nickel mining project in the Philippines following a campaign by CAFOD. BHP Billiton’s 40 percent stake in the US$22.7 billion project was sold to local joint-venture partner AMCOR (Asiaticus Management Corp), UCA News reports. “It looks like (AMCOR) will proceed with the nickel mine,” said CAFOD’s extractives policy analyst, Sonya Maldar. CAFOD is continuing its call for a new consent process before work starts on the mine at Macambol in Davao Oriental province. “Given the serious flaws in the official consent process, AMCOR and any future partners in the project cannot use this to push ahead with mining in the area,” Maldar said. “There must be a new consent process that is genuinely free and fair.”

Read more at http://www.cathnewsasia.com/2010/01/12/bhp-quits-philippines-mine-after-caritas-campaign/.

See http://www.minesandcommunities.org/article.php?a=8921 and http://www.minesandcommunities.org/article.php?a=8929.

Summary

At its AGM (annual shareholders’ meeting) in London on 23 October, BHP Billiton was attacked over its record in the Philippines, Indonesia, Guatemala and Colombia, its failure to endorse the UN Declaration on the Rights of Indigenous Peoples and its role in worsening climate change and producing a radioactive legacy for future generations.

The company’s responses were characterised by
• failure to listen to complaints
• failure to answer many detailed questions with anything more than vague generalities
• failure to admit that consultation processes in many countries are affected by corruption and intimidation
• and blank denial, without evidence, of informed and well-documented criticism.

Company Chair Don Argus repeatedly told critics to read the company’s ‘Sustainability Report’ without dealing adequately with examples showing that the company is not living up to it.

Argus and company CEO Marius Kloppers both asserted that ‘We won’t mine in World Heritage Sites’ – but would not commit to ditching prospective mining projects in UNESCO’s proposed World Heritage Site at Gag Island in Papua. So what’s going on behind the scenes? Lobbying to ensure that Gag Island is excluded from UNESCO’s proposed site?

Full report

We’re loaded

The sparsely attended AGM began, as always, with lengthy speeches by the Chair and the Chief Executive singing the company’s praises and defending its record on climate change and its involvement in uranium mining. Chair Don Argus assured shareholders that the company remained in a strong position despite the current financial turmoil because of its ‘uniquely diversified portfolio of high quality, low cost assets’ and its strong balance sheet, which enables it to invest throughout the economic cycle. Chinese growth, the motor of the minerals industry, is ‘softening’ but still strong, and industrialisation and urbanisation will mean continued strong demand for the company’s products.

Zero Harm

Chief Executive Marius Kloppers echoed the Chair’s enthusiasm but tempered it with deep regret at continued work-related deaths and injuries in the company’s operations, which he said were unacceptable. The company continues to aim for ‘zero harm’ among its workforce.

Vote first, ask questions afterwards

Argus then announced that the business of the meeting would be taken before general questions on the Annual Report and Accounts – so shareholders could re-elect directors without any examination of their collective conduct.

Thirty-four agenda items later, he called for questions on the annual report. The majority of the questions concerned human rights and environmental issues.

Macambol, Philippines: community division, dubious associates and potential environmental damage

Sonya Maldar of CAFOD (Catholic Agency for Overseas Development) managed to read a brief statement from communities in Macambol on the island of Mindanao in the Philippines concerning the community divisions which have been caused by mining in the area by BHP Billiton’s joint venture partner AMCOR – despite being interrupted by Don Argus and told that she should ask a question, not make a statement. Sonya said that CAFOD’s report on the Hallmark project had revealed bribery by AMCOR, flaws in the process of obtaining community consent and serious environmental problems.

Don Argus said that the company was in the early stages of studying the feasibility of mining nickel in the area. The company follows the guidelines set by the Philippine Government and the Free Prior Informed Consent process. The company has listened to CAFOD’s criticisms and undertaken its own private study. It rejects any allegations of impropriety.

Marius Kloppers added that no work was being done by BHP Billiton on the Hallmark project because of a legal dispute with AMCOR. He said it was in the company’s interests to ensure that all parties are content, because the company will be co-operating with them for decades to come. Projects go through pre-feasibility and feasibility stages before being approved, and before the stoppage this project was at the earliest stage. The company needs to ensure ‘maximum harmony’ before proceeding.

Sonya Maldar repeated that CAFOD’s studies show that there are major problems with the project. Don Argus repeated that the company’s study contradicts CAFOD’s findings. He did not offer to publish the results of the investigation that he claimed the company had done, and after the meeting company representatives refused to make the results of their study available. It is therefore impossible to judge the worth of the company’s study against the published, well-documented report by a widely respected Church development agency, and if the company is going to claim that CAFOD’s report is inaccurate, it should provide evidence. Nor did Argus or Kloppers mention the intimidation and violence to which opponents of mining in the Philippines are often subjected by its supporters in order to manufacture ‘consent’.

Protected areas in Indonesia – to mine or not to mine?

Andrew Hickman of Down to Earth (the campaign for ecological justice in Indonesia) raised the issue of mining in protected areas in Indonesia. He said he was representing JATAM (the mining advocacy network in Indonesia) and WALHI (Friends of the Earth Indonesia). They are concerned about Gag Island, which UNESCO is proposing as a World Heritage Site. Gag Island is in West Papua, which itself raises human rights concerns (because of the Indonesian response to Papuan demands for independence) as at the Freeport-Rio Tinto mine at Grasberg. JATAM and WALHI are demanding that BHP Billiton stop its projects in Gag Island and in protected areas of Kalimantan (Indonesian Borneo). They are demanding that shareholders stop profiting from destruction and bad governance. How will BHP Billiton dispose of tailings at Gag Island and how will it avoid human rights abuses associated with its operations?

It was difficult for Andrew to make his points because of repeated interruptions by Don Argus, who attempted to prevent him from conveying the very brief JATAM/WALHI statement of opposition, telling him that the AGM was ‘not a political meeting’ and that he should hurry up and ask his question. Don Argus then said that he had answered the question on six previous occasions and that the answer on this occasion was the same: the company will not use marine tailings disposal and will not mine in World Heritage Sites.

Marius Kloppers added that if Gag Island is designated a World Heritage Site by UNESCO, BHP Billiton will not mine there. (The ‘if’, of course, is important. UNESCO has already told the Indonesian Government that Gag Island is at the top of its list of proposed sites, so the company’s failure to abandon its plans begs the question of whether it is lobbying UNESCO or the Indonesian Government to ensure that the areas it wants to mine are excluded from the proposed World Heritage Site. It has already successfully lobbied the Indonesian Government to alter legislation on mining in protected areas.)

Don Argus said nothing about the widespread violation of human rights in West Papua. All he said was that BHP Billiton is not involved at Grasberg. He did not mention that Rio Tinto, which the company wants to buy, is heavily involved at Grasberg, a mine with an appalling record of Indigenous rights and human rights violations and of environmental destruction.

Andrew handed over the full statement from JATAM and WALHI to BHP Billiton’s Vice President for Sustainable Development and Community relations, Ian Wood.

Exploration in Guatemala: threat to ecosystems, livelihoods

Baroness Miller of Chilthorne Domer, a Liberal Democrat spokesperson in the House of Lords (the second chamber of the British Parliament) and member of the All Party Parliamentary Groups on Central America and Latin America, stated that she had made two visits to Guatemala, one as part of a parliamentary delegation and the other privately. She was particularly concerned about the Lake Izabal region. There are plans for increased mining activity in the area and a nickel smelting plant is proposed. The area is a protected area. The lake is the largest in Guatemala and is particularly rich in biodiversity. Many people make their living from it. BHP Billiton has been exploring for nickel in the area. Baroness Miller asked whether the company would accept that it should not mine any nickel it found because of the threat to biodiversity and livelihoods.

It was interesting to note that Don Argus did not interrupt Baroness Miller while she made the series of statements leading up to her question.

Don Argus said that ‘the company has a process which it goes through’ and has a good record on the environment. It only owns 2.5% of the project at Lake Izabal. (He did not mention that, although it owns only 2.5% of the project being developed by HudBay Inc, it has also itself been exploring for nickel to the north and west of the lake in recent years, and has failed to answer specific questions as to whether it is still exploring there.)

Baroness Miller pointed out that the Guatemalan Government has fined BHP Billiton’s subsidiary Maya Niquel $25,000 for not carrying out a legally required Environmental Impact Study. She said that communities have made a number of representations about mining projects but that in Guatemala when people do this they get shot dead or are otherwise intimidated. What might apply to community consultation in Australia does not apply in Guatemala. And if even the Guatemalan Government believes that BHP Billiton has not completed a proper Environmental Impact Study, it reflects badly on the company. The company’s concern for the safety of its workers should extend to the people in the communities which its operations affect.

Don Argus said that he totally agreed with the Baroness. He advised her to read the company’s Sustainability Report. She replied that she had done so already.

Cerrejon, Colombia: community removals and worker health

Richard Solly, of Colombia Solidarity Campaign, spoke about the Cerrejon mine in Colombia. He noted that since the Independent Panel of Investigation into the mine’s impacts published its report early this year there had been progress towards a settlement with the people of Tabaco and negotiations had begun with other communities facing relocation. He said there is concern about how people in those communities will make a living during the couple of years before they are able to move, given the impact of mine expansion on their farming activities. He asked what Cerrejon Coal is doing to ensure that livelihoods will not suffer during the transition period. He also said that the mine workers’ union, SINTRACARBON, is concerned at the lack of progress on concerns raised at last year’s BHP Billiton plc AGM, particularly on recognition of work-related illnesses and injuries and social security payments. The union says that the higher rate contributions required by law for workers exposed to carcinogenic crystalline silica are not being paid and that this prevents workers from limiting their exposure through earlier retirement. When will Cerrejon Coal accept the union’s demands on these issues?

Marius Kloppers said that the company would scrupulously follow the World Bank guidelines on removals, including on managing transition. BHP Billiton is aware that union is trying to get work at the mine declared hazardous but Cerrejon Coal disagrees with it, and BHP Billiton supports the view of the management that the work is not hazardous.

Philippines: deaths and even dodgier associates

Andy Whitmore, of PIPLInks (Philippine Indigenous People’s Links), said that he had warned the company about the Hallmark project and that if they had listened to him they would not now be having problems with AMCOR. As for the Sibuyan project, the community had sent a statement calling for the cancellation of the contract (not simply its suspension) with its Philippine associate Sibuyan Nickel Properties Development Corporation Ltd (SNPDC) because of the killing of Councillor Marin at a peaceful anti-mining protest in October 2007 by an SNPDC security guard.

Marius Kloppers said that BHP Billiton has a supply agreement with SNPDC but is not taking any ore from them at present and has to await the outcome of the legal dispute in court. He would not comment further.

Andy Whitmore handed a copy of the Sibuyan community statement to BHP Billiton’s Vice President for Sustainable Development and Community relations, Ian Wood.

Indigenous rights to Free Prior Informed Consent

Geoff Nettleton, of PIPLinks, pointed out that there is a major problem of ‘social licence to operate’ in Indigenous territories. Since the last AGM, the United Nations General Assembly has passed the Declaration on the Rights of Indigenous Peoples, making Free Prior Informed Consent a minimum standard for operations on Indigenous lands. Neither BHP Billiton nor the International Council on Mining and Metals, of which the company is the biggest member, has endorsed the declaration. If BHP Billiton takes over Rio Tinto, this will represent a step back in terms of recognition of Indigenous rights. The company should endorse the Declaration.

Don Argus said that not all governments have accepted the Declaration and it is governments that determine the company’s procedures. He said that the company’s behaviour is first class, that it is just as aware of Indigenous issues as Geoff is, that it spent $141 million on community projects over the past year, and that it has no lack of commitment to Indigenous Peoples.

Geoff said that it was an issue of rights, not money. He pointed out that only four governments voted against the Declaration, and one of those – Australia – has now announced that it will accept it. The UK has accepted it and so have most of the countries where BHP Billiton operates. It is up to the company to take responsibility to go beyond government requirements when these are inadequate, as the company says it does and which it has in fact done in some cases. It needs an independent element in its monitoring processes so that it is not being evaluated only by itself.

Don Argus repeated that the company had a good record and does not lack commitment. He said that in the Philippines they work according to Government guidelines. Geoff suggested that the Philippine Government had a very poor record of respecting people’s rights. Don Argus said that was just Geoff’s opinion and he disagreed with it. Geoff countered that his own opinion was shared by many, including the UN Special Rapporteur on Extrajudicial Killings, so it was fairly solidly grounded.

Climate change

Fr Frank Nally, of the Society of St Columban (Columban Fathers) pointed out that the company’s increasing production of oil and coal is contributing to climate change and that the total carbon dioxide emissions caused by its operations and the use of its products worldwide approach the carbon emissions level of the whole of the UK. Production of uranium at Olympic Dam in South Australia already accounts for 10% of South Australia’s total power consumption and this would worsen with mine expansion – and then there is the legacy of radioactive waste. He asked what alternatives the company is investigating.

Don Argus told Fr Frank to look at the Sustainability Report. The company has an emissions reduction scheme in place. It works with Governments throughout the world. Governments have to make choices about the mix of energy their populations need. Emissions trading is being proposed for Australia. There is not a universal view at present. The company has invested $300 million in research into technology such as carbon capture and storage. It will be technology that changes people’s behaviour.

Marius Kloppers said that although energy was used in the production of uranium, over the whole life cycle uranium use compares favourably on carbon emissions with other energy sources. Each nuclear power station takes carbon emissions equivalent to those of a city of a million people out of the air. (He did not mention that a serious nuclear accident could take a city of a million people out of existence; or that the radioactive wastes left by mining, processing and use of uranium will remain deadly for many times longer than the entire course of recorded human history.)

Fr Frank appealed for the company’s Zero Harm policy towards its workers to be extended not only to communities, as Baroness Miller had rightly advocated, but towards the planet itself.

Report written by Richard Solly, Co-ordinator, London Mining Network. Opinions expressed or implied in this report do not necessarily reflect those of all member groups of London Mining Network.

Appendix

Press Release by JATAM (Indonesian Mining Advocacy Network) and WALHI (FoE Indonesia), 23 October 2008

Stop destroying our protected forests and small islands

On 23rd October 2008, BHP Billiton will hold its shareholder meeting in England. In Indonesia, the company is turning a protected forest in Central Kalimantan into a coal mine. It is also going to devastate Gag Island, Papua, by mining nickel and dumping tailings in the sea – a sea which contains the richest biodiversity in the world. This is bound to make BHP Billiton shareholders feel ashamed.

Gag Island, in Papua, covers an area of just 9,200 hectares, lying in the Raja Ampat Island cluster, which is known to host the highest level of marine biodiversity in the world. Four hundred and fifty types of coral, 950 types of reef fish and more than 600 species of molluscs of various size can be found here. Two years ago the area was proposed as a World Heritage Site.

Gag Island also contains one of the world’s biggest laterite nickel deposits. In 1998 BHP Billiton signed a contract of work with the repressive Suharto regime to acquire the nickel deposit in a joint venture with PT Antam Indonesia. The companies established PT Gag Nikel, with a concession covering the whole island and the surrounding waters. The company will develop an open-pit mine, excavating 660,000 tonnes of ore per day and dumping 627,000 tonnes of tailings into the sea. Gag Island could well disappear.

Despite its status as a protected forest, with soil extremely prone to erosion, PT Gag Nikel is pressing ahead with a mine. The island’s topography is also susceptible to landslides, because 27% of the land consists of steep slopes and rainfall is quite high. It is certain that the corals and other marine biodiversity will end up being destroyed by sedimentation.

PT Gag Nikel’s contract was signed without any agreement whatsoever from local people. From 1999 to 2004 BHP Billiton along with other multinational mining companies, put pressure on the Indonesian government to change Forestry Law No 41, 1999, which prohibits open-pit mining in protected forests. The companies’ move led to public protests across the country. At the time, the company even threatened to take the Indonesian government to international arbitration if it prevented open-pit mining from going ahead on Gag. In the end, the pressure worked and in 2004, a new law was issued which permitted PT Gag, among others, to go ahead with open-pit mining.

Tension in the area has increased since PT Gag Nikel appeared. On April 24th this year, for example, local people blockaded the door of the company’s office in Sorong. Given that West Papua is a region of conflict and military brutality, people fear that PT Nikel will worsen human rights conditions there.

In another part of Indonesia, in Central Kalimantan, BHP Billiton’s coal mine is changing the nature of 65,858 hectares of protected forest, which cover the upper reaches of the area’s main rivers. The coal is being sent to generate electricity, creating greenhouse gas emissions and contributing to global warming.

At the upcoming shareholders meeting, this morning at 10.30am local time in the Queen Elizabeth II Conference Centre, Westminster, England, JATAM and WALHI are demanding that BHP Billiton stop these mining projects. Stop destroying protected forests and small Islands in Indonesia, both in Central Kalimantan and West Papua, and in other parts of the world.  Also, we ask shareholders to stop profiting from this destruction and bad governance.

Sibuyan community statement

No to BHP Billiton!

Early October, the Taclobo (San Fernando, Sibuyan Island, Romblon) village chief received notices of small-scale mining applications (July 9, 2008) of two previous holders of small-scale mining permits (SSMP) which expired in May 2008.

All Acacia Resources Inc. (AARI) is applying for another 20 hectares for utilisation of nickel ores and SunPacific Resources Philippines Inc. (SRPI) for another 15.58 hectares. They seek for another two-year permit from the Provincial Mining Regulatory Board (PMRB) of the province of Romblon.

We strongly oppose the application for small-scale mining permit of SunPacific Resources Philippines Inc. (SRPI) and All-Acacia Resources Inc., (AARI) stockholders of mining conglomerate Sibuyan Nickel Properties Development Corp. (SNPDC), venture partner of Pelican Resources Ltd (ASX-PEL) of Australia. SNPDC has a Memorandum of Agreement with QNI Philippines (QNPH), as agent for Queensland Nickel Pty. Ltd. (QNPL) acting for and on behalf of the joint venture participants of QNPL Resources Pty. Ltd. and QNPL Metals Pty. Ltd., which are subsidiaries of the global mining giant BHP Billiton. SNPDC further has a Memorandum of Understanding (MOU) with Altai Philippines Mining Corp (APMC), which is connected to Altai Resources Inc (TSX-ATI) of Canada.

The agreement grants BHP Billiton or its related entity the exclusive rights to purchase laterite nickel ore mined by SNPDC. BHP Billiton in return shall finance the exploration and drilling evaluation upon the issuance of Mineral Productions Sharing Agreement (MPSA) permit by the Philippine Government. The total cost of financing is $250,000.

Both AARI and SRPI (with Mabuhay Gold Project in Mindanao) are partners of Pelican Resources Ltd.

“Because MPSA and Exploration Permit cannot be issued quickly, SNPDC tries to use SSMP to access the areas as they did before. These small-scale mining applications show the aggressive push for the financed further exploration and drilling of BHP Billiton” opines Rodne Galicha, Executive Director of Sibuyan Island Sentinels League for Environment Inc. (Sibuyan ISLE).

“BHP Billiton through its subsidiaries and partners can be described as an island-swallowing Godzilla”, says Taclobo village resident Lando Tan, a former Kabang Kalikasan ng Pilipinas-World Wildlife Fund (KKP-WWF) staff.

Late last year, the chief security officer of SNPDC shot to death a newly-elected councillor, Hon. Armin Rios-Marin, during a picket against mining.

The ice-age Sibuyan Island, dubbed as Galapagos of Asia, is where the world’s densest forest flourishes, the Philippines’ cleanest inland body of water flows, and the majestic Mt. Guiting-guiting dwells.

Rodne R. Galicha
Sibuyan Island Sentinels League for Environment, Inc. (Sibuyan ISLE)
Website: www.sibuyan.com

BHP Billiton is the largest mining company in the world. Jointly listed on the London and Australian Stock Exchanges, it has a market capitalization of 180 billion US dollars, more than twice the size of its nearest rival, Brazil’s Vale Inco. In the financial year 2008 its earnings before net finance costs and taxation were over 24 billion dollars and its attributable profit (excluding exceptional items) over 15 billion dollars. It produces and markets aluminium, coal, cobalt, copper, diamonds, iron ore, lead, manganese, nickel, petroleum, potash, silver, titanium and zinc.

The company likes to claim a good reputation for corporate social responsibility. But is it justified?

1 Communities and the environment

The company’s 2008 Annual Report (2.9 Sustainable Development – Health, Safety, Environment and Community) says:

One of our strategic drivers, ‘Licence to operate’, recognises the intrinsic link between sound sustainability performance and long-term business viability. We aspire to Zero Harm for our people, our host communities and the environment, and strive to achieve leading industry practice. Sound principles to govern safety, business conduct, social, environmental and economic activities are integral to the way we do business. As a global company, operating in many different countries, we are subject to extensive regulation surrounding health and safety of our people and the environment. We make every effort to comply with the regulations and, where less stringent than our standards, exceed applicable legal and other requirements. We have a number of systems and supporting documents to implement our commitment to sustainable development. The Sustainability Committee of the Board continues to oversee the Group’s sustainability strategy, policy, initiatives and activities. Management holds responsibility for our Health, Safety, Environment and Community performance and for driving our commitment to Zero Harm.

How well does the company live up to its principles? Let’s investigate some examples…

1.1 Chile: excessive water use at Minera Escondida

The Escondida copper mines (57.5% owned by BHP Billiton) in the Atacama Desert of Northern Chile are in desperate need of water. Plans to draw large quantities of groundwater from areas near the mine were turned down by regulatory authorities after massive opposition from local communities who feared for the survival of their settlements and farms if so much scarce water were diverted to the mines. The company now plans to expand its desalination operations on the coast and pipe the water to the mines.

But communities over the border in Argentina fear that the company may be seeking to transport water over the Andes from the Argentinian province of Salta. This would be cheaper than relying entirely on desalination. According to Salta’s El Tribuno newspaper (16 April 2008), an Argentinian company began drilling at the end of last year, without approval or even an environmental impact study.

According to the newspaper, ‘details emerged about a project that BHP Billiton had developed in early 2000 in Santiago, Chile. There, in the offices of a company named “Inversiones El Alamo SA” (El Alamo Investments, Inc.), consultants working with Minera Escondida began creating a “technical and economic feasibility study for the production and distribution of industrial water for mining projects from the province of Salta (Argentina) and the II Region of Chile.” ….  A team of journalists from the Salta newspaper El Tribuno has revealed that holes are being drilled near Capie and the Socompa and Llullaillaco volcanoes, which are only ten kilometres from the Chilean border and the region of Antofagasta. The team verified that at least five wells have been drilled and are ready to be connected to an aqueduct that will carry the freshwater to Monturaquí, the Trans-Andean settlement located some 25 kilometres from Socompa and 75 kilometres from La Escondida.’

Local communities in Salta are concerned about the possible diversion of water and the Secretary of Mining of the province is apparently opposed to it. The company should abandon the plan.

Source: Latin America Editor, Mines and Communities (www.minesandcommunities.org)

1.2 Colombia: community removals round the Cerrejon Coal mine

BHP Billiton was part of a consortium of three multinational companies which in late 2000 bought the Colombian Government’s 50% share of the massive opencast Cerrejon coal mine in northern Colombia. The mine, operated by Exxon subsidiary Intercor (which owned the other 50% share) had a history of forced relocations of communities, with inadequate or non-existent compensation, to make way for mine expansion.

In August 2001, the small farming village of Tabaco, inhabited mainly by Colombians of African descent, was bulldozed by the mining company in a brutal operation accompanied by hundreds of armed soldiers and security personnel. In February 2002, the consortium of which BHP Billiton was a part bought the remaining 50% of the Cerrejon mine from Intercor. BHP Billiton now owns 33.33% of Cerrejon Coal, the mine’s operator.

In response to a sustained campaign of community opposition, supported by dissident shareholders in BHP Billiton plc and others around the world, last year BHP Billiton and the other two multinational companies involved in Cerrejon Coal (Anglo American and Xstrata) commissioned an Independent Panel of Investigation to look into Cerrejon Coal’s social programmes and its general impacts on local communities. The Panel found substance in much of the criticism that had been levelled at the company. It made a number of recommendations, particularly concerning a just settlement for the people of Tabaco. The Panel recommended, among other things, that Cerrejon Coal work with the Tabaco Relocation Committee as well as with other former residents of the village to ensure just compensation, buy collective land for agriculture and help construct a church and community centre for common use by former residents. The Panel also recommended that in future open, transparent negotiations take place with communities badly affected by the proximity of the mine, leading to collective relocation with community consent.

The company has broadly accepted the Panel’s recommendations. Negotiations with the Tabaco Relocation Committee and with communities facing imminent relocation have begun. Some progress has been made towards the relocation of Tabaco but Cerrejon Coal and its multinational owners still refuse to accept the full legal and moral implications of their purchase of a company which had treated communities with such brutal lack of respect. Too much is being left to the good will of the Colombian State, which has over the years demonstrated its complete lack of interest in a just settlement.

Difficulties also remain for communities currently facing displacement. There are disagreements over the quantities of replacement land needed for communities to continue their agricultural activities and worries that while the relocation process is under way – a process which may take two years – people will have no means of supporting themselves.

At the same time, Cerrejon mine workers who are members of the SINTRACARBON trade union are concerned about the inferior working conditions of non-unionised contract workers at the mine. SINTRACARBON is also worried about exposure to coal dust. The union says that coal dust is a hazardous substance under Colombian law and that because of this the company is legally bound to pay higher social security contributions than it is currently paying, in order to facilitate earlier retirement for mine workers.

The Panel’s report can be found on the Cerrejon Coal website at http://www.cerrejoncoal.com/formas/425/Cerrejon%20Panel%20Final%20e%20v%20%20260208%20(2).pdf and the company’s detailed response at http://www.cerrejoncoal.com/formas/441/Response%20to%20the%20independent.pdf

Source: Colombia Solidarity Campaign, based on information from various community contacts

1.3 Guatemala: nickel production threatens pristine lake, local livelihoods

BHP Billiton is exploring for nickel in Guatemala and is believed to hold a number of leases in the Lake Izabal region, where there has been strong community opposition to any activities which run the risk of polluting the lake. Opposition has been based on the destructive history of nickel mining and processing in the area, which left areas of land without vegetation and contaminated ground water. A proposed ore processing and smelting plant, taking material from several planned mines, would inevitably affect the lake.

Over 1,000 fisherpeople and their families depend on the 40 species of fish and other aquatic resources of Lake Izabal, the largest of Guatemala’s four lakes. The lake is part of a major national reserve. All the communities surrounding the lake will be affected by the proposals, particularly the largest town, El Estor. ASALI (the Association of Friends of Lake Izabal) has campaigned to defend the fishing culture of the communities and the unique natural resources of the Department of El Estor, especially the river systems associated with the lake. Members of ASALI have been harassed and threatened by local supporters of mining.

Eco-tourism and solar energy projects are considered priorities for the region and are incompatible with large-scale resource extraction. Opposition to the plans comes not only from fisherpeople but from doctors, community workers and officials in the Guatemalan environment agency.

Baroness Miller of Chilthorne Domer, a Liberal Democrat spokesperson in the British House of Lords and member of the All Party Parliamentary Groups on Central America and Latin America, visited the Lake Izabal area in February 2008. Baroness Miller doubts that the companies proposing mining and mineral processing in the area will be able to carry out adequate Environmental Impact Assessments or valid community consultation. She says: ‘The trouble is that it depends on the EIA being in a country which has the infrastructure, resources and will to make community consultation a reality. Given the problems Guatemala is still facing, not so many years after a bitter and terrible civil war, in governance and judicial probity, the companies proposing mining activity there must be aware that it is a very different matter from operating, say, in Australia.’

Sources: ASALI; Ken Luckhardt, Board Member, Mining Watch Canada; Baroness Miller of Chilthorne Domer.

1.4 Papua: Gag Island nickel project threatens forests, coral, communities

BHP Billiton’s planned nickel mine on Gag Island in Indonesian-controlled West Papua will tap one of the world’s richest nickel deposits – bringing profits for shareholders and revenues for the Indonesian and Papuan governments. But the US$4.5 billion plus plan, which includes a smelter on Halmahera in the neighbouring Moluccas, could very well also destroy livelihoods, forests, and the world’s richest marine environment.

The project has been highly controversial since exploration work was started in the mid-1990s. The company secured a government-issued Contract of Work covering the tiny Gag Island (12 km by 8 km) in February 1998, during the turbulent last months of President Suharto’s brutal and corrupt 32-year rule.

But the Gag project was put on hold after the island’s forests were classified as ‘protection forest’ and a 1999 Forestry Law made open-pit mining in such forests illegal. The mining industry launched a high pressure counter-campaign to overturn the ban, and thirteen projects eventually got the go-ahead in 2004 – one of them Gag.

Meanwhile, in 2002, a study by international conservation organisations had revealed that the Raja Ampat Islands, which include Gag, contain the richest coral reefs – 64% of all known coral species, with the highest marine biodiversity – in the world.

Raja Ampat is considered so important to protect, that it is first on the list of proposed UNESCO marine World Heritage Sites. When Indonesian parliamentarians were deliberating whether or not to permit mining in protected forests, UNESCO wrote to them to point this out. The letter said:

‘While media reports of decimated and degraded marine ecosystems in western and central Indonesia are common, this survey shows that there is still a chance to conserve globally significant, high quality island and reef ecosystems in Indonesia and to ensure future sustainable income sources for the local communities.’ (UNESCO Office, Jakarta letter to Akbar Tandjung, Speaker of Indonesian Parliament, 25 June 2003)

Local Papuan civil society organisations are today still calling for the sustainable development of eco-tourism and fisheries to improve local people’s lives. They want all mining in the area to be stopped immediately.

If BHP Billiton’s planned project goes ahead (it is a 50-50 deal with Indonesia’s state-owned company Aneka Tambang), it will be a giant among around 16 other nickel projects in Raja Ampat, a few of them already in production. According to local reports, mining is already muddying the clear coastal waters of other Raja Ampat islands, leaving islanders with the impacts while the nickel is shipped to Australia and China.

The groups are concerned that large-scale mining will have irreversible impacts on land, in the forests and in the surrounding waters, ruining prospects of sustainable, marine-based development.

There are also serious social and human rights concerns: an influx of workers or people looking for work from other parts of Indonesia could lead to tension or conflict with the island’s existing population, and competition for jobs.

On the wider political level, Indonesia’s security forces are quick to put down any expression of the Papuan desire for political self-determination – a right that has been denied ever since the sham ‘Act of Free Choice’ in 1969 was orchestrated by Jakarta in order to hang on to resource-rich Papua. But brutality against Papuan independence activists only fuels resentment against Indonesia profiting from Papuan resources. One scenario, which has already been played out at the notorious Freeport-Rio Tinto Grasberg mine on Papua’s mainland, is that the ‘separatist threat’ will be used as a justification for repression – courtesy of the Indonesian security forces. At Grasberg and in other parts of Indonesia, this has led to well-documented human rights atrocities committed against local people.

For more background on BHP and mining in Indonesia see Down to Earth’s website at http://dte.gn.apc.org/news.htm.  Source: Down to Earth

1.5 Peru: a legacy of injustice at Tintaya

Until 2006, BHP Billiton owned and operated the Tintaya copper mine in southern Peru. There was widespread opposition to the mine on health and environmental grounds. In 2005, after two days of public demonstrations, some protesters broke into the company’s offices, causing damage to company property. The company pressed for widespread prosecutions, and the legal process continues to this day. The State prosecutor is calling for harsh prison sentences of up to seven years against anti-mining activists who were not involved in any violence. BHP Billiton, sensing reputational damage, pulled out. The mine is now controlled by London-listed Xstrata plc.

Source: Latin American Mining Monitoring Programme

1.6 Philippines: violence and community conflict

BHP Billiton is involved in several controversial existing and planned nickel projects in the Philippines, with serious potential social and environmental impacts.

Islanders on Sibuyan in the Central Philippines have been protesting against an agreement between BHP Billiton and Pelican Resources of Australia, which is seeking to develop a massive nickel mine. During a peaceful protest on 3 October 2007, local councillor Armin Marin was shot dead by the head of the security guards employed by Pelican’s Philippine subsidiary Sibuyan Nickel Properties Development Corporation Ltd (SNPDC). Local people allege intimidation by the company in its efforts to silence opponents.

Sibuyan is a small (46,000-hectare) island in the province of Romblon. One-third of it is a protected area. Having been separated from the mainland as far back as the last Ice Age, Sibuyan has been dubbed the “Galapagos island of Asia.” Home to one of the densest forests in the world, the local people are well aware of the value of their unique ecology.

The 3 October 2007 protest was part of a continuing campaign by islanders to show their rejection of plans to develop mining on their island. BHP Billiton had an agreement to purchase 500,000 tonnes of nickel from SNPDC, in exchange for a loan of US$250,000 for exploration activities. BHP Billiton was therefore providing financing and incentives to drive the project forward despite strong local opposition.

Councillor Marin, who was married with five children, is a former employee of the World Wide Fund for Nature (WWF), Philippines. As a result of his killing, BHP Billiton has withheld funds under the ore-supply agreement, pending the outcome of an investigation. The company needs to ensure that its partners, suppliers and contractors adhere to the highest of standards.

At the same time, according to Catholic development agency CAFOD, ‘people living in Macambol on the island of Mindanao claim BHP Billiton’s joint venture partner, AMCOR, and Philippine government officials, have offered members of the community bribes in return for supporting the proposed mine and to silence opposition. One community leader was allegedly offered as much as one million Philippine pesos (around £12,000) by an AMCOR representative and a government official to support the project, in an area where the average family income is around £1 a day. BHP Billiton’s £13 billion project, which is in an area of outstanding natural beauty, home to rare and endangered species including the Philippine eagle and sea cow, is not due to start production until 2014 but  has already deeply divided this close-knit community. Some people living in Macambol are in favour of the mine while others think the potential risks to their livelihoods and the environment are too great. Many say they haven’t been properly consulted and some are afraid to speak out. At times, this tension has threatened to spill over into violent conflict.’

CAFOD will launch a report on this project at the same time as the BHP Billiton London AGM on Thursday 23 October. The agency is calling for ‘a new, independently-monitored consent process to be carried out and for the Macambol community to be given sufficient information about the mine and all its potential impacts so that they can make an informed decision about whether it should go ahead or not. CAFOD, which has been supporting the Philippine people’s struggle for justice for nearly 40 years, also believes that if the risks to the environment are too great, the project should not continue.’ (CAFOD’s report has been produced separately from London Mining Network.)

For further details of the CAFOD report, see www.cafod.org.uk/inthedark.

Sources: PIPLinks, CAFOD

2 Impacts of the proposed merger with Rio Tinto

BHP Billiton is eager to merge with rival Anglo-Australian mining giant Rio Tinto. Whether the merger is practical in the current financial climate is questionable. But is it wise, given Rio Tinto’s own track record? At its April 2008 AGM in London, Rio Tinto came under heavy fire for its involvement in projects in Alaska, Argentina, Bougainville, Madagascar, Michigan and Papua. In each case, communities affected or potentially affected by the company’s operations were opposing its activities because they believe they are causing or will cause significant damage to communities’ lives and livelihoods.

On 9 September, the Norwegian Government announced its decision to exclude Rio Tinto from its massive State pension fund ‘due to a risk of contributing to severe environmental damage’ at the Grasberg copper and gold mine in West Papua, in which the company is heavily involved. BHP Billliton is on record as admitting the damage caused by the riverine tailings disposal method which it used at Ok Tedi in Papua New Guinea. This is precisely the method used at the Grasberg mine. If it succeeds in its takeover bid for Rio Tinto, how could BHP Billiton reconcile its admission of the damage done at Ok Tedi with involvement at Grasberg?

3 Climate Change and radioactive wastes

On page 23 of the company’s Concise Annual Report for 2008, the company says:
‘Our challenge is to meet the growing global demand for resources while addressing the challenges of climate change…. Our new five-year targets … reflect out intent to further reduce the energy and greenhouse gas intensity of our business. We are also working with others to find technological solutions to manage our emissions and to address the impact of our products in relation to climate change.’

But the same Concise Annual Report announces (page 2) the ‘Commissioning of six major growth projects and other volume growth in our high-margin oil and gas, iron ore and manganese businesses expected in FY2009’ and (page 7) ‘We expect volume growth from our petroleum business to continue at around 10 per cent a year…’ And the Annual Report (section 2.2.2 Petroleum Customer Sector Group) boasts that ‘Our total oil and gas production in FY2008 was 129.5 million barrels of oil equivalent, an increase of 13 per cent over our total production of 115.05 million barrels of oil equivalent from continuing operations in FY2007.’

According to the Carbon Disclosure Project Leadership Index 2008, BHP Billiton’s ‘scope 3 emissions’ (‘indirect emissions that you cause but that are not from emission sources that you own’, which would include emissions attributable to the use of its products*) were 330,165,000 tonnes. According to the British Government’s Department for Environment Food and Rural Affairs (DEFRA) the UK emitted 557 million tonnes of carbon dioxide from all sources during 2006**.
* See http://www.puretrust.org.uk/Business/EmissionsScope.aspx)
**See http://www.defra.gov.uk/environment/statistics/globatmos/gagccukem.htm.)

Then there is the company’s planned massive increase in uranium production. The mining, transport and processing of uranium are themselves important contributors to climate change, as documented by Germany’s Oeko-Institut in 2007 in a report prepared for the German Environment Ministry. (See http://www.minesandcommunities.org/article.php?a=1695; German language report available at http://www.bmu.de/files/pdfs/allgemein/application/pdf/hintergrund_atomco2.pdf). The mining and use of uranium also leave a legacy of radioactive wastes remaining deadly for hundreds of thousands of years.

The company’s Olympic Dam mine in South Australia contains the largest uranium ore body in the world. The company plans to expand the mine, creating a hole three kilometres across and one and a half kilometres deep. The mine already creates large quantities of deadly waste. About 35% of the uranium remains in this waste. The waste (‘tailings’) is put into a pit lined with plastic to prevent leakage, then covered with a layer of earth and then water. According to documentary film maker David Bradbury in his film A Hard Rain, the liners used in these tailings dams will last around 30 years. According to journalist Ty Pedersen, writing in Australian publication Green Left Weekly on 26 January 2008 (see http://www.greenleft.org.au/2008/737/38157), three billion litres of this radioactive water leaked into the ground in 1994, under the mine’s former owners WMC. Pedersen also points out that in 1982 the South Australia Government signed the Roxby Downs (Indenture Ratification) Act, exempting BHP Billiton from the Aboriginal Heritage Act, the Development Act, Environmental Protection Act, Freedom of Information Act and Natural Resources Act.

Pedersen encapsulates the mine’s double impact on radioactive waste production and climate change: ‘Olympic Dam also releases deadly radon gas from the uranium. Even the smallest doses of radon gas can cause cancer and birth defects. It is seven times heavier than air so it remains close to the ground and is odourless and tasteless. A Hard Rain explains that the radon gas has a half life of 3.8 days, which would be enough time to be blown to the nearby service town of Roxby Downs, the 550km to Adelaide or even as far as Melbourne and Sydney. Olympic Dam is already responsible for 10% of South Australia’s total power consumption. The proposed expansion would increase this to 25%, adding to the massive greenhouse gas emissions of the site — everything is taken in and out of Roxby by truck; every chemical, kilo of food, litre of diesel and all the minerals that are produced that head back out.’
Further information

For much more information about BHP Billiton, see www.minesandcommunities.org.