Introduction
This was Jan du Plessis’ first AGM as Chairman, and he gave plenty of time for questions on the annual report. There were numerous questions on the convictions of Rio Tinto officials in China for bribery (see Rio accused of abandoning Stern Hu, http://www.abc.net.au/news/stories/2010/04/16/2874320.htm), on the clash of timing of the Rio Tinto AGM with the BP AGM, on executive pay and on the proposed Joint Venture with BHP Billiton on iron ore in Western Australia. One question was asked about the nature of the housing construction market in China, so important to Rio Tinto’s profits.
Du Plessis was asked to comment on the possibility of a UK Government Serious Fraud Office probe into Rio Tinto’s practices. He declined, saying the company would never comment publicly on any conversations with regulators anywhere in the world but would co-operate if approached by regulatory bodies.
Three questions were asked about the company’s commitment to aluminium smelting at Saguenay-Lac St Jean in Quebec, Canada. Du Plessis and Rio Tinto CEO Tom Albanese assured questioners of the company’s commitment to aluminium production in Quebec but would not commit to ‘downstream processing’ into engineered products, which questioners wanted. Tom Albanese said that such products are not part of Rio Tinto’s business and that he hoped other businesses in Saguenay-Lac St Jean could provide what is necessary.
London Mining Network groups were well represented inside the AGM and worked closely with trade unions supporting locked out mine workers from Rio Tinto’s Borax mine in Boron, California. Between them, they were able to raise a number of concerns, but not all those which they intended to raise, as the question period was brought to a halt after a marathon session of over one and a half hours and the whole business of the AGM was only concluded towards two o’clock, nearly an hour later than usual.
Jan du Plessis promised, as he brought the question and answer session on the annual report to a close in order to proceed with other business, that once all the other resolutions had been proposed and discussed he would give more time for questions on the annual report. He did not do so, however. As one shareholder was attempting to get the Chairman’s attention in order to ask about radioactive spills at the Ranger Uranium Mine in Australia, the Chairman declared the meeting closed, despite his earlier assurance.
The following notes cover only those matters raised by the Borax workers, LMN guests from overseas, groups with which LMN is working, and others connected with LMN groups. A video of much of the meeting is available at http://www.thomson-webcast.net/uk/dispatching/?event_id=c25341fbb0ef9398a61e0922a83d00a7&portal_id=f826a5de35b59aa5342937a4348256d3. Slides and an MP3 audio recording of the Question and Answer session are available at the same link.
Eagle Mine project, Michigan (for video, see http://www.youtube.com/watch?v=vWtNAg8VR5A)
Jessica Koski, from the Keweenaw Bay Indian Community in the Upper Peninsula of Michigan, spoke about Rio Tinto subsidiary Kennecott’s proposed Eagle Mine. She said that mine construction would involve destruction of Eagle Rock, which is a sacred site for her community. She said that the mine’s design plan is unfeasible and could lead to collapse, and that because the material to be mined is a sulphide ore body, there is a high risk of acid mine drainage. Kennecott is asserting its ability to move ahead without approval under the Clean Water Act. Jessica said that her community is determined to defend Eagle Rock and asked for a commitment from Rio Tinto not to destroy the rock, so that her people could continue practising their religion.
Jan du Plessis said he respected Jessica’s strong feelings. He said he was convinced that his colleagues take seriously their responsibility to respect local people’s views. As Chairman, he was well aware of the issue which Jessica had raised. He wanted to assure her that the USA has some of the toughest environmental laws in the world, as does the State of Michigan, and the company would comply with them.
Tom Albanese said that he had visited the area. The Eagle Mine project is the first to be subjected to Michigan’s new mining regulations. The company has taken each step complying with the regulations and engaging with stakeholders. They recognise that the rock outcrop which Jessica had referred to was important and so the company has moved the mine portal away from the rock. The company is required to allow safe access to the rock and will meet with the tribe to discuss how this can best be done. He said that he was aware of the litigation around the project and that the company respects the US legal process.
Jessica asked again whether the company would commit to not destroying the rock and the water.
Tom Albanese replied that a condition of the permit is to respect the air and the water and to move the mine portal. He did not explain, however, how mining operations would affect people using the sacred site – whether there would be noise, dust, blasting or visual disturbance affecting a place used for religious retreats needing silence and solitude.
Borax workers’ lockout, California (for video, see http://www.youtube.com/watch?v=2Q_jxO_hCFw and http://www.youtube.com/watch?v=lpRYwCDneyI)
In response to a question from a shareholder about the dispute with workers at the Borax mine in Boron, California, Tom Albanese claimed that the borates mine there had suffered progressive loss of market share to its Turkish competitor over the past ten years. It was a good business but had suffered progressively lower productivity and lower market share. The company must modernise all aspects of the business, including contracts, especially regarding seniority, to bring it into line with other Rio Tinto operations elsewhere in North America. He stated that lockouts are enshrined in US labour law. The company wants to talk about key issues, he said, especially seniority. They need to talk about this in the context of experience and qualifications. All other things being equal, seniority would still apply.
Dave Irish, a Borax worker, noted the company’s stated commitment to safety, reminded the Board that over the past decade the Borax mine had twice won safety awards and pointed out that by locking out experienced workers and employing less experienced temporary workers the company was throwing safety out of the window. He said that the company was getting rid of permanent jobs and health benefits. He noted that although Tom Albanese had mentioned the global recession he had not mentioned the 15% unemployment rate in Kern County California, where the Borax mine is. Borax had been a good support to the community in the past, providing a number of community facilities. Now Tom Albanese was blaming the workers for the lockout. The company had not met with the workers since the lockout until now, when the workers had sent representatives to the AGM to find out why the company is behaving the way it is. Dave said that the workers want to work but cannot because of being locked out. On 31 January, when the lockout began, they were met by security company personnel who prevented them entering the mine. Sales of borates are increasing around the world but because of the lockout the Borax mine is only producing 35 – 50% of full production.
Jan du Plessis replied that safety is important to Rio Tinto and that he was content that no proposal being discussed would impact safety. The company will not increase temporary positions but wants flexibility.
Tom Albanese claimed to remember meeting Dave Irish when he visited the mine site two years previously (Dave later said that he certainly had no recollection of meeting Tom Albanese). He said that there was a lot to be proud of at Boron over recent years and that the person in charge at Boron had gone on to head Rio Tinto’s global health and safety work. Albanese said he welcomed the fact that the union had come back to the bargaining table.
QMM Ilmenite Mine, Madagascar (for video, see http://www.youtube.com/watch?v=HHyoc6OI6uI)
Vola Parker from Madagascar noted that the Rio Tinto Review claims that the company’s operations in Madagascar are exemplary and received an environmental award. She said that the company needs to pay attention to the report Madagascar: Voices of Change published last autumn (see http://www.andrewleestrust.org/hepa.htm and http://www.andrewleestrust.org/Reports/Voices%20of%20Change.pdf). She said that the people around the ilmenite mine in Madagascar had put their testimony into this report. She asked whether the 20/80 ownership agreement between the company and the Madagascan Government still stood or whether the company now owned 100% of the mine. She said that this is very important for the Madagascan Government. She said that she had received an email from a representative of the World Bank in Madagascar who is investigating an allegation of fraud around the transfer of land around the ilmenite mine. She asked if the Board was aware of this allegation. She also asked what was the growth outlook for mineral markets given that only 6% of the company’s profits come from diamonds and minerals. Is there hope for this ilmenite venture in terms of tax revenue for the Madagascan Government and employment?
Jan du Plessis replied that he hoped to travel to Madagascar in the last quarter of the year. He thanked Vola for recognising the mine’s environmental award. He confirmed that the ownership arrangement with the Madagascan Government is still 80/20.
Tom Albanese said that the World Bank is associated with the project through supporting the government’s 20% interest and is part owner of the port facility. The port is shown on the cover of the 2009 Annual Review. There is a dispute resolution process regarding the land transfer to ensure that the land was properly priced. USAID is also involved in this. Regarding markets, 90% of titanium dioxide is used for whitening paint. This market is driven by new construction. With the coming of the summer repainting season in the Northern hemisphere and the continued growth of construction in China there should be strong growth in titanium dioxide sales.
Yvonne Orengo of the Andrew Lees Trust said that a company representative had stated that there were no outstanding issues on the land transfer. Testimonies in the report which Vola had mentioned speak of poor land compensation, lack of forest access and extreme poverty as a result of the mine. The company has made no response to the report even though it had been sent to them. Yvonne wanted to know whether the company would show enough respect to local people to answer the criticisms which they have made.
Tom Albanese said that he could not answer individual comments but would be happy to talk further. He said that poverty and deforestation in the area were extreme before the project began. With the presence of the mine, he claimed, communities are on the whole better off – an assertion contradicted by the testimony in the report, as Vola and Yvonne pointed out after the meeting to Tom Albanese and Harry Kenyon-Slaney (CEO, Diamonds and Minerals, in charge of the Madagascar mine).
Panguna Mine, Bougainville (for video, see http://www.youtube.com/watch?v=yb8G-x_ioBk)
Clive Porabou from Bougainville said that the company’s BCL subsidiary had caused massive destruction to land in Bougainville and its operations had led to a war which had cost 20,000 lives. A court case had been brought against the company in the USA. Would the company compensate the people of Bougainville for the destruction it had caused? BCL was now trying to go back in and reopen the mine, which would repeat the whole process. Would Rio Tinto warn them of the dangers of doing so?
Jan du Plessis said that the company had not operated in Bougainville since 1989. When it did operate, it employed 2800 people and contributed 10% of Papua New Guinea’s GDP. In 2001 a peace agreement was signed between the PNG Government and the separatists. The company understands that it cannot recommence operations without proper consultation with the stakeholders.
Tom Albanese said that the company respects the long-term peace process and the actions of the Government of Bougainville, the landholders and the Government of Papua New Guinea.
It is noteworthy that neither the Chairman nor the CEO commented on the lawsuit brought against the company in the USA.
Rossing Uranium, Namibia (for video, see http://www.youtube.com/watch?v=0xGTEYXkLzw)
Dr Natasha Posner of LMN member group Partizans asked about the Rossing uranium mine in Namibia. She asked whether Rio Tinto planned to increase production and if so, whether studies had been done on the impact on the environment and worker health. She asked whether the company could explain why workers cannot get access to their medical records.
Tom Albanese replied that the Rossing mine is important both to Rio Tinto and to Namibia. He said that the company could like to see increased production but need access to water, electricity and skilled labour. Most workers are Namibian and there are restrictions on foreign workers. It would take 5 to 10 years before expansion can take place. He said that Rossing has worked on biodiversity. He would get back to Dr Posner on the issue of employees’ access to medical records.
Dr Posner reminded Tom Albanese that he had earlier spoken of ‘our goal of zero harm’, and asked if the company would commit to that goal.
Tom Albanese replied that everyone was doing everything they could to reduce harm.
Coal and nickel mining in Indonesia (for video, see http://www.youtube.com/watch?v=04t-ZpsDpaY)
Andrew Hickman (of LMN member group Down to Earth) said that, in response to questions about the recent bribery case involving company officials, the Chairman had spoken about the importance of building relationships with China. Did the company also think about the importance of building relationships with producers, including workers and communities? According to colleagues in Indonesian environmental organisation JATAM, on Tuesday 13th April the Indonesian Attorney-General’s office had found substance in corruption allegations in the divestment of Rio Tinto from Kaltim Prima Coal in 2003. Andrew asked why Rio Tinto had sold its shares in Kaltim Prima Coal for half the price being offered by the Kalimantan Government. Why did it sell all its shares to Bumi Resources, controlled by Aburizal Bakri, the second richest man in Indonesia, who was a government minister at the time and has been accused of major tax evasion, corruption and business malpractice? One of his operations controls the Lepindo mud flow, which has made 100,000 people homeless. It is reputed that he tried to sell that operation to an offshore company for as little as $2 in order to avoid compensation obligations. [NB Aburizal Bakri has recently become head of the Golkar Party, one of the two biggest political parties in Indonesia and the party of former President Suharto.]
Jan du Plessis replied that the manner in which the company does its business is of great importance and that it has to be good or the company would not be in business. Four employees in China were accused of accepting bribes from local steel magnates who wanted to make sure they got hold of steel.
Tom Albanese said that Rio Tinto had been in a 50/50 Joint Venture with BP at Kaltim Prima until 2002-03. They had been faced by Indonesianisation requirements. They went through a process of examining not only the amount of money offered but the liquidity and experience of the bodies making the offers. Rio Tinto and BP concluded that the Bumi offer was overall the better offer. Rio Tinto is no longer in Kalimantan. The company made the disposal according to the law. There is a conflict between the Governments of Indonesia and Kalimantan but the decision was made on commercial grounds.
Andrew then said that in its relationships with local elites in Indonesia the company’s operations there were all related. At present Rio Tinto is planning a nickel project in Sulawesi. Andrew said that Tom Albanese’s answer led him to believe that Rio Tinto is complicit in the corruption of local elites.
Tom Albanese stated emphatically that Rio Tinto is opposed to corruption.
Grasberg Mine, West Papua (for video, see http://www.youtube.com/watch?v=a_nXZP-a09g)
Benny Wenda, from West Papua, said that he represented 250 tribes from that country. He said that the company said all manner of good things but ignored his people in dealing with Indonesia. He said that Rio Tinto was dealing with an occupied country and supporting the occupying power, Indonesia, and in so doing was indirectly supporting the rape, torture and killing carried out by the Indonesian military. Benny asked what guarantee the company would give for his people’s future, for the Ajkwa River which has been filled with mining waste and turned to copper, and to their scared mountain which had been dug up and turned into a lake.
Jan du Plessis said that Benny was discussing political differences which the company could not comment on.
Tom Albanese stated baldly that Papua is part of Indonesia. This, he stated, had been ratified by the United Nations in 1966. The Grasberg lease is 10km by 10km in an area the size of the UK. It makes an important contribution to jobs and taxes. Since 1995, when Rio Tinto became involved, the company had been involved in social and environmental programmes.
Roger Moody pointed out that the Norwegian Government had accused Rio Tinto of being responsible for abuses committed around the Grasberg mine. Why had the company not satisfied the Norwegian Government in its criticism of the mine?
Tom Albanese said that Rio Tinto had had discussions with the Norwegian Government about this issue and implied that the Norwegian Government now took a more positive view. Roger Moody replied that he knew from inside information that this was not the case.
Indigenous Peoples’ right to Free Prior Informed Consent (for video, see http://www.youtube.com/watch?v=7vCbk68CKB8)
Geoff Nettleton of LMN member group Indigenous Peoples’ Links said that he had been a shareholder for more than twenty years and that at every AGM there were problems with Indigenous rights. He welcomed the statement in the Rio Tinto report that the company operates in accordance with the United Nations Declaration on the Rights of Indigenous Peoples. He said that the problem is that it is not true. He said that it is good as a statement of intent. But the UN Declaration on the Rights of Indigenous Peoples gives the right to Free Prior Informed Consent and this is not being respected. It also gives protection to Indigenous Peoples’ sacred sites. Without genuinely independent monitoring, respect for Indigenous Peoples’ rights will not work. There are reputational advantages to doing this. It would avoid litigation and confrontation. He asked whether the company would work with Indigenous organisations like the UN Permament Forum on Indigenous Issues to arrange such independent monitoring.
Jan du Plessis replied that it is possible for the company to make mistakes (a welcome admission) but said that he visited many operations and was impressed by the commitment of Rio Tinto personnel to working with local people. He said that in Australia, Rio Tinto is the biggest employer of Aboriginal People, and that at every Rio Tinto mine in Australia he had met with Aboriginal People and listened to their concerns.
Geoff reiterated that an independent element was necessary. He said that he believed what the Chairman was saying about Australia but that an independent element was needed.
Tom Albanese said that he respected that and stated that the company was taking a lead in the International Council on Mining and Metals about this, to develop industry standards. He said that Rio Tinto has independent assurance of its systems, though it is not as crisp black and white as a financial statement.
Pay differentials within Rio Tinto
Albert Beale of LMN member group Partizans said that Conservative Party leader David Cameron had recently said that in public organisations the ratio between the top earner and the bottom should not be more than 20:1. Albert said that there was no moral reason why this should not apply to private practice as well. Why did Rio Tinto not publish the pay differential between its top and bottom earners?
The answer given by the Board was that this information would be meaningless. Albert responded that this was for shareholders to judge rather than for the Board, who are employees of the shareholders, and that the company should do so.
A personal reflection on the AGM by Richard Solly, LMN Co-ordinator
As usual, the company’s responses to many of the concerns raised were vague or evasive. Rio Tinto continues to hold a high view of its own virtue, despite the Chairman’s admission that sometimes it makes mistakes.
Jan du Plessis was more emollient than his predecessor. But the vision of the future set out by Tom Albanese in his presentation and in his answers to questions was the stuff of nightmares.
His belief that the number of new mines that will be necessary over the coming years in order to keep pace with minerals demand, replicating themselves at an ever increasing rate, suggests a future in which more and more of the planet’s surface is scarred by this highly destructive activity, with consequent impacts on water quality and food production; and, in the case of Rio Tinto, with predictable impacts on human rights, rural and coastal livelihoods, traditional cultures and Indigenous control of land. It is a very bleak picture. Why should the world trust this company, of all companies, to make decisions on such expansion when it is clear that these decisions will influence numerous other companies and be to the detriment of so many people?
He spoke enthusiastically of the development of robotics in mining. So the increasing number of new mines would not necessarily lead to an increase in satisfying employment for mineworkers. Rather, there is the possibility that more and more jobs will be lost as robots take over from human beings in gouging more and more minerals from the earth without the inconvenience of health care costs, health and safety considerations or worker organisations demanding rights and dignity.
Albanese also spoke of hundreds of millions of rural Chinese people ‘needing’ to be urbanised. He did not say why they ‘need’ to be urbanised or whether they have expressed a wish to be moved into cities. He did not speak of the desperation that often forces people to migrate to cities even when they do not wish to do so. And the picture of future cities which he painted was horrifying. The cities of which he spoke will consist of enormous high-rise apartment blocks into which huge numbers of people can be crammed. This, he said, is ‘greener’ than traditional low-rise housing, because it takes up less space and therefore lowers the total carbon footprint. He did not speak of the carbon footprint of the steel production necessary for the construction of such towers or the carbon emissions produced in heating and cooling them.
He also spoke of the company’s desire to increase uranium production, with no mention of the legacy of deadly radioactive pollution which will be left for thousands of generations to come.
The company’s past is one of repeated and serious abuses of human rights, Indigenous rights, worker rights and local and regional ecosystems. Its present is one of continued greenwashing of its unacceptable behaviour. And its vision for the future is one which many millions of people will surely hope never comes true.
Questions which we were unable to ask for lack of time….
Oyu Tolgoi Project, Mongolia
Rio Tinto has a minority stake in this project.
Mongolian-based environmental organisations are calling for a delay in the implementation of the Project on a number of grounds.
The Investment Agreement for the Project was signed on October 6, 2009, before a technical and economic feasibility study was accepted by government, as prescribed by law.
On March 26, the Minerals Expert Council granted conditional acceptance of the technical and economic feasibility study regardless of the fact that Ivanhoe Mines had failed to demonstrate availability of, and access to, the water resources necessary for production, infrastructure and social needs of the project.
The Oyu Tolgoi deposit lies in the Gobi Desert in close proximity of the Gobi Small and Galbyn Gobi Strictly Protected Area (SPA) zones, overlapping Important Bird Area and Critical Natural Habitats. This fragile arid ecosystem does not have enough water to carry this huge mine. There is apparently the possibility that the flow of the rivers Herlen and Orhon/Onon may be reversed from north to south to provide for the mine’s needs. There is much resistance by scholars and local residents to these ideas, which will have an adverse effect on the ecology, economy and livelihoods of people living in these areas.
There are a number of other mines in the area and scarcity of water is a problem for all of them.
Trucking of minerals from these mines is already causing significant dust pollution, affecting human health and the environment. Opening the Oyu Tolgoi mine will worsen this.
Will Rio Tinto agree to delay the start of mine construction until environmental, social and economic, and water impact assessments are carried out in compliance with international norms and standards applicable to large scale mining?
Mande Norte Project in Colombia
There is concern about Rio Tinto’s relationship with La Muriel Mining at the Mande Norte copper, gold and molybdenum project in Colombia.
In response to a question at last year’s AGM, CEO Tom Albanese confirmed that Rio Tinto had an arrangement with US-Colombian company La Muriel Mining which might lead to some kind of Joint Venture in the future. At that time, exploration had been halted because of widespread opposition from local Indigenous and Afrocolombian communities.
Shortly after last year’s AGM, in response to criticisms of the Mande Norte project submitted to a British Parliamentary inquiry, La Muriel Mining publicly implied that peace groups working with local communities, including British-based peace groups, were in league with the Colombian guerrillas. The British Government intervened to urge La Muriel Mining to withdraw these false allegations, which could have led to political assassinations of British citizens working in the area. The company withdrew them, and has not begun exploration again because of the strength of local opposition.
In March, Colombia’s Constitutional Court ruled that La Muriel Mining had not carried out adequate consultation with Indigenous and Afrocolombian communities, and ordered a halt to the project. Before it can continue, proper consultation must take place with these communities according to the law, and environmental impact studies must be completed.
La Muriel has proved all the points made at last year’s Rio Tinto AGM about its scant regard for human rights and the law. When will Rio Tinto pull out of this project and dissociate itself from this irresponsible company?
Ranger Uranium Mine, Australia
The Ranger uranium mine is operated by Rio Tinto subsidiary Energy Resources of Australia.
An estimated 100,000 litres of water has been seeping from the tailings dam every day into the rock below. The Senate Committee in February this year confirmed that there is 5,500 times as much uranium in that water as there is in the surrounding environment, but so far there has been little work (at least published) on what will be done to rehabilitate it. Can you confirm what steps you have taken to effectively monitor this issue, ensure it does not reach the surrounding Kakadu National park and what will be done to rehabilitate once the dam is removed?
Recent total production for the first quarter of 2010 slid by 27 percent or down to 888 tonnes compared to the output of the same period last 2009. Some of this at least is the result of a 41 per cent drop in ore grades as the mining operations proceeded through the open-cut. Would you confirm whether this affects the plan to extend the mine life to 2021 and that you are sharing any changes to your plans openly with nearby traditional land owners?
Protests outside the AGM
Outside the AGM, Borax workers and supporters from the International Transport Federation and other trade unions demonstrated against the company, assisted by representatives of London Mining Network.