London Mining Network, the International Accountability Project and the World Development Movement have now sent GCM Resources a joint response to its statement.

February 26, 2010

Steve Bywater, Chief Executive
GCM Resources plc
Foxglove House, 166-168 Piccadilly
London, W1J 9EF
United Kingdom

Re:    Statement to the U.K. Joint Committee on Human Rights

Dear Mr. Bywater,

We are writing in regards to the memorandum you submitted to the U.K. Joint Committee on Human Rights on 26 June 2009. We would like to seek clarification on several of the statements you make in the letter and ensure that GCM is aware of best practice and international guidelines on displacement and resettlement, the rights of Indigenous Peoples, and environmental assessment.

First, we would like to request more information on the independent review which you state has been conducted on the Environmental and Social Impact Assessment (ESIA). We are concerned that this review incorrectly verifies that the project’s ESIA is in compliance with the Social and Environmental Policy and Performance Standards at the International Finance Corporation (IFC) and meets the requirements under the Equator Principles. This is evident in a number of ways. For example:

·    IFC guidelines require that dissemination of project information, including the draft Resettlement Plan, to local, affected communities should take place in languages preferred by the communities.  In addition, accessibility to information is a primary component of free, prior and informed consultation, also a requirement in IFC policy.  However, it is our understanding that project planning documents, including the 2006 draft Resettlement Plan and Social and Environmental Impact Assessment, were never produced or distributed to local communities in their local languages, significantly limiting the ability of local community members to effectively participate in the consultation process.

·    Prior to financing a project, the IFC requires that, for projects with significant impacts or with direct impacts on Indigenous Peoples, consultations with local communities must lead to broad community support.  Based on the widespread opposition to the project, it is difficult to conclude that such support for the project exists locally, and therefore we believe it would not meet the benchmark for IFC financing. We are concerned that GCM may continue to seek the support of communities which have already clearly expressed their dissent to the project when instead, the company should acknowledge that such support does not exist.

·    IFC Performance Standards also make special consideration regarding consultation when the property rights of Indigenous Peoples are impacted. IFC standards state that where relocation of Indigenous Peoples is unavoidable:

“the client will not proceed with the project unless it enters into a good faith negotiation with affected communities of Indigenous Peoples, and document their informed participation and the successful outcome of the negotiation.”

It is unclear from GCM’s Indigenous Peoples Development Plan (February 2006) whether or how such good faith negotiations were conducted and, if they were conducted, the results from these negotiations.

Second, in your statement to the Joint Committee, you refer to 40,000 people who will need to be resettled. Furthermore, you state in the project’s draft Resettlement Plan (December 2006) that the total number of those to be displaced (both physically resettled and economically displaced by loss of land) is almost 50,000. However, we believe this estimated number of potentially displaced persons is underestimated. This is for a number of reasons:

·    While the draft Resettlement Plan identifies almost 1,000 people in host communities who will be affected due to land consolidation and acquisition for the creation of resettlement sites to be established in the first phase of the project (roughly project years 1-2), there is no mention how many community members will be affected in subsequent phases (roughly project years 3-10). How many host community members will be affected by the ongoing resettlement, over the course of 10 years, envisaged by the project?

·    Furthermore, according to the draft Resettlement Plan, it cannot yet be determined whether nearly 800 households (roughly 3,500 people) in 11 villages bisected by the mine will require relocation as a result of mine disturbances. Although the aim will be to exclude these villages “as far as possible” from the resettlement program, the draft Resettlement Plan explains, mine disturbances including “excessive noise levels” may necessitate their relocation.

·    In regards to access to water, it is our understanding that trials to test the feasibility of re-injecting and infiltrating water have still to be carried out. Moreover, it is likely that, even with the planned forty-seven re-injection wells, the water table will be lowered to a degree that cannot be fully compensated for. It is unclear how many thousands of more people will be affected by the decreased water table.

Third, we would like to ensure that GCM is aware of the United Nations (UN) Basic Principles and Guidelines on Development-based Evictions and Displacement. These Guidelines provide detailed standards regarding the rights of communities threatened with forced resettlement, land acquisition, and the loss of livelihoods due to development projects. Among other things, the Guidelines state that:

“Cash compensation should under no circumstances replace real compensation in the form of land and common property resources. Where land has been taken, the evicted should be compensated with land commensurate in quality, size and value or better.”

Cash compensation is a primary feature of GCM’s draft Resettlement Plan as lack of available replacement land is a significant factor in Bangladesh. However, cash-based compensation, as opposed to land-based compensation, has been found to rarely improve the livelihoods of displaced persons and most often leads to impoverishment.  Furthermore, while the draft Resettlement Plan makes clear that replacement lands will not be provided to displaced households, it repeatedly suggests that some of these households will use cash compensation to purchase new lands.  This glaringly ignores the fact that potential replacement agricultural lands equal in size and value to those acquired for the coal mine simply do not exist in Bangladesh.

As currently designed, the project does not meet UN guidelines on development-based evictions and displacement. Land-dependent communities and communities with a special attachment to their land, as is the case for many communities affected by the potential coal mine, should not be displaced without the option of replacement land.

Fourth, GCM should also be aware of the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), adopted by the General Assembly in September 2007. Among other things, UNDRIP states that Indigenous Peoples should be consulted:

“through their own representative institutions in order to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources.”

Again, the Indigenous Peoples Development Plan prepared for the project is unclear as to how the consent of Indigenous Peoples affected by the project was obtained. We would welcome additional information from GCM on whether or how Indigenous Peoples affected by this project were given the opportunity to provide their free, prior and informed consent.

Finally, regarding environmental assessment and sustained agricultural practices, we have several concerns and questions:

·    We are concerned the “improved farming practices” that are to be developed to take advantage of the “year round availability of water for irrigation” resulting from the dewatering of the mine, will not be sustainable after mining stops when that source of water is no longer available.

·    The original characteristics of the Dupi Tila aquifer, and the impermeable strata below it that currently support the overlying aquifer (i.e., the Gondwana sediments that are to be mined for their coal), can never be re-established within the area of the mine footprint after mining stops, regardless of the rehabilitation practices adopted.  Neither the original porosity characteristics of the aquifer sediments, nor the impermeability of the layers below it, can be re-established by the simple process of returning the extracted rock material back into the mining pit after mining stops.  We fear there may be the potential for contamination of groundwaters as waters from the Dupi Tila aquifer interact with the unconsolidated sediments that have been placed back into the mining pit.

·    The fact that the original hydrological conditions can never be reestablished is in part proven by the planned lake that is to occupy the site of the mining excavation after mining ceases.  What is the size of the proposed lake, and what real value does it offer to the community with respect to the loss of valuable agricultural land?  Does the community want or need such a lake?

We believe that these issues amount to significant concerns about the social and environmental sustainability of the project, particularly regarding the livelihood impacts for locally affected people. We look forward to your response and thank you for your attention.

Sincerely,

Richard Solly
London Mining Network, U.K.

Jennifer Kalafut
International Accountability Project U.S.A.

Mark Muller
Advisor to Mines and Communities
and the London Mining Network, U.K.

Tim Jones
World Development Movement, U.K.

CC:     Andrew Dismore MP, Chair of the Joint Committee on Human Rights
Dr. Mark Egan, Clerk to the Joint Committee on Human Rights
Business and Human Rights Resource Centre

London Mining Network and a number of its member groups and associates made submissions to this inquiry.

Volume 1 of the Committee’s report includes conclusions and recommendations. The cross-party Committee of both Houses of Parliament is very critical of what it sees as the UK Government’s lack of commitment to improving the human rights record of UK companies operating overseas, and the incoherence of Government policy on the matter. See http://www.publications.parliament.uk/pa/jt200910/jtselect/jtrights/5/5i.pdf.

Most of the oral and written evidence submitted to the Committee is included in Volume 2 of the report
(see http://www.publications.parliament.uk/pa/jt200910/jtselect/jtrights/5/5ii.pdf) though there are some omissions.

For materials related to the inquiry, including some of the individual submissions made to the Committee, see also http://www.business-humanrights.org/Documents/UKJointCommittee.

For comments on the Committee’s report, see http://www.business-humanrights.org/Documents/UKJointCommitteereport.

The role of London-listed mining companies, and mining companies raising finance in London, in human rights abuses around the world is clear from the amount of material on such companies that was submitted to the Joint Committee’s inquiry. Twenty of the eighty-seven published submissions and one of the two unpublished submissions deal wholly or partly with human rights abuses allegedly linked to mining companies with a London connection. Three of the remaining published submissions are responses by mining companies to the serious allegations made against them.

The Committee’s report notes (Volume 1, page 94, section 7): ‘Our terms of reference do not permit us to conduct a full investigation into any specific allegations against individuals and companies. However, in the light of the seriousness of many of these claims, we are persuaded that further action is necessary and we hope that our conclusions and recommendations will contribute to advancing the debate in the UK, both among parliamentarians and the wider public.’

Committee Chair, Andrew Dismore MP, said: “UK multinationals may present a compliant face at home but show quite a different approach when operating elsewhere and some have a woeful record abroad. We were most concerned about the range and seriousness of allegations both in the press and in the evidence we received, including against 18 British companies which are household names.”

In a press release dated 15 December 2009, the Committee called on the UK Government ‘to develop a strategy that clearly sets out the human rights standards which UK businesses are expected to meet. The objective should be an international agreement on business and human rights.’ The Committee called on the UK Government to continue supporting UN Special Representative Professor John Ruggie in his work on business and human rights, and noted that few UK firms meet the ‘due diligence’ standards he recommends.

The press release continued: ‘The Committee notes that the UK’s current strategy gives undue priority to voluntary initiatives, without clear guidance. Business compliance with the voluntary OECD Guidelines for Multinational Enterprises is monitored by “National Contact Points” or NCPs. The Committee says the UK’s NCP “still falls far short” of being an effective remedial body. The Committee considers that the UK Government should clarify its policy on business and human rights both at home and overseas.’

London Mining Network draws readers’ attention particularly to the following submissions included in Volume 2 of the report.

• Holly Hill Trust, page Ev 110; deals with Rio Tinto in Ecuador; makes a number of general comments about Rio Tinto’s behaviour which are borne out in the written submissions by Dr Mika Peck and the Colombia Solidarity Campaign and also by the comments of Rio Tinto Representative Sir Brian Fall when giving oral evidence to the Joint Committee: see Volume 2 of the report, pages Ev 27-51
• Dr Mika Peck, page Ev 119; deals with Rio Tinto in Ecuador
• Colombia Solidarity Campaign, page Ev 121; deals with Rio Tinto in Colombia and the right of Indigenous Peoples to Free Prior Informed Consent (FPIC) under the UN Declaration on the Rights of Indigenous Peoples
• Vigeo, page Ev 124; deals with Anglo American and Rio Tinto and mentions also BHP Billiton
• World Development Movement, page Ev 135; deals with UK Government support for mining companies and with GCM Resources in Bangladesh
• Action Aid UK, page Ev 137; deals with Vedanta in India
• Survival International, page Ev 161; deals with Vedanta in India, Gem Diamonds in Botswana, and FPIC
• War on Want, page Ev 164; deals with Anglo American and UK Government support for mining companies
• Forest Peoples Programme and Middlesex University Business School Law Department, page Ev 174; deals with FPIC
• Working Group on Mining in the Philippines, page Ev 179; deals with BHP Billiton, Crew, Rio Tinto and Xstrata
• London Mining Network, page Ev 182; deals with Anglo American, BHP Billiton, GCM Resources, Monterrico Metals, Rio Tinto, Vedanta and Xstrata
• CAFOD and Peru Support Group, page Ev 189; deals with BHP Billiton in the Philippines, Monterrico Metals in Peru and UK Government support for mining companies, and mentions Vedanta-owned Konkola Copper in Zambia
• Harrison Grant, page Ev 193; deals with an unnamed diamond mining company registered on London’s Alternative Investment Market (AIM) and active in Sierra Leone
• Margo Drakos, Tarek Maassarani and Jenik Radon, page Ev 236; mentions South African diamond company De Beers, in which Anglo American is a major shareholder
• Latin American Mining Monitoring Programme, page Ev 257; deals with BHP Billiton and Xstrata in Peru
• Global Witness, page Ev 260; deals with Afrimex, Amalgamated Metal Corporation and Anvil Mining (a Canadian-Australian company with some British connections) and UK Government support for mining companies in the Democratic Republic of Congo; also contains recommendations for tackling abuses
• RAID, page Ev 274; deals with UK Government support for mining companies, particularly Anvil Mining in DRC, and the role of AIM; also contains recommendations for tackling abuses
• Leigh Day and Co, page Ev 293; mentions Afrimex and Rio Tinto
• Business and Human Rights Resource Centre, page Ev 297; mentions Anglo American, GCM Resources, Metals Exploration, Rio Tinto and Vedanta
• Amalgamated Metal Corporation, page Ev 323; response to allegations
• BHP Billiton, page Ev 325; response to allegations; as usual with BHP Billiton, it claims that the allegations contain ‘errors’ without specifying what they are, and that some of the claims are ‘out of date’, without specifying which ones
• GCM Resources, page Ev 342; response to allegations

See http://www.journal-online.co.uk/article/5956-landmark-case-against-treasury-chucked-out. Further coverage at http://www.environmental-finance.com/onlinews/2210ukt.html and http://www.journalonline.co.uk/News/1007154.aspx.

Redesign the Royal Bank of Scotland for Sustainability
Open brief from Amelia’s Magazine and PLATFORM • Closing date: 2nd Nov 2009
The Royal Bank of Scotland. RBS. Formally known with pride as the “oil and gas bank” due to their close alliance with the fossil fuel industries. What on earth would I have to do with them? They may have lost the unfortunate moniker, partly due to a hugely successful campaign by People and Planet student activists who launched a spoof ad campaign and website named the Oyal Bank of Scotland before delivering a host of greenwashing awards – but they’re certainly not due for any special ethical mentions yet. See http://www.ameliasmagazine.com/amelias_blog/2009/08/redesign_the_royal_bank_of_sco.php.