I have been to many mining company AGMs but never to one as ineptly run as Bumi’s first London AGM, held this morning at the Institute of Directors in Pall Mall. It even made Vedanta’s notorious AGMs look good.
AGMs are supposed to be occasions where a company’s shareholders hold the Board to account. Bumi’s Board made that a pretty difficult task.
For a start, Indra Bakrie, who only resigned as Chairman in March this year – and was therefore Chairman for the period being considered at the AGM – did not turn up, despite the fact that he was standing for re-election as a Director.
Then there was the Board’s refusal to answer questions about the company’s impacts on human rights. Those who raised them were told that the AGM was not the correct forum for dealing with these matters and that they should ‘engage’ with the company instead – presumably meaning meeting company officials privately, away from other shareholders and the press. When critics objected that the AGM was precisely the place for such issues to be dealt with, Sir Julian Horn-Smith, Deputy Chairman and Senior Independent Director, accused them of ‘ranting’ and ‘grandstanding’. At one point Sir Julian appeared to have taken over chairing the meeting as Chairman Samin Tan sat quietly while his deputy insulted dissident shareholders.
Horn-Smith attacked critics for not drawing allegations to the Board’s attention before the AGM, claiming that this was the first time they had heard about them. If that’s true, the company’s level of ineptness is staggering. These allegations have been in the public domain for months, including in the Indonesian press, the Financial Times, in London Mining Network’s report published earlier this year, on the Down to Earth website , the Mines and Communities website  and in press releases from ICEM* (the International Federation of Chemical, Energy, Mine and General Workers’ Unions). If the Board is so uninformed about allegations made publicly over a period of months, what does this say about its general competence?
Some of the Board’s behaviour was to be expected: for example, it tried to dodge responsibility for alleged attacks on mine workers on the grounds that they were subcontracted. But in response to some questions, it did not even attempt an answer. Samin Tan responded to one question by explaining in great detail the changes in voting rights among the largest shareholders and was asked why there was no information about this vital matter in the annual report. No answer. Another question was about risk assessments: given the growing possibility of financial and legal sanctions against the biggest contributors to greenhouse gas emissions, had the company conducted an assessment of the risks to shareholders of being so heavily dependent on coal? Clearly not. Chief Executive Officer Nalin Rathod simply said that the company has the approval of the Indonesian Government for the volumes of coal it is producing. Why was there nothing in the Annual Report about problematic health and safety at the massive Kaltim Prima Coal mine? No answer: simply “point noted” from the Chair.
When questions dried up, Chairman Samin Tan announced that we would move on to considering the resolutions. Even when, as at this AGM, voting is to be by poll at the end of the meeting, these are usually read out one by one and the Chair waits a few moments to see if there are any questions on them. Not at this AGM. He simply announced that the voting was by poll and that the results would be announced later via the London Stock Exchange and on the company’s website, then closed the meeting.
Every large mining company AGM I have attended has taken at least two hours. This one was all over in 45 minutes, bar the shouting – and there very nearly was some shouting, when Sir Julian Horn-Smith approached the company’s critics once more to invite them to ‘engage’ privately with the company and got angry when they declined.
If AGMs are meant to be about openness and accountability to shareholders, Bumi’s efforts today were pathetic. Even if you don’t agree with those of us concerned about the company’s environmental, human rights and workers’ rights impacts – is this any way to run a company?
Richard Solly, Co-ordinator, London Mining Network. Thursday 14 June 2012.
* ICEM joined a new, amalgamated global union, IndustriALL, shortly after the Bumi AGM.
See also:
Activists target Bumi’s annual meeting today