BHP held its London AGM (annual shareholders’ meeting) on Thursday 17 October. We aim to publish a full report and commentary on the AGM in the coming days. For now, we report on what the four participants in our October speaker tour said to the company’s directors and shareholders at the AGM and the wholly inadequate responses which they received from the company’s Chairman, Ken MacKenzie, and its Chief Executive Officer (CEO) Andrew Mackenzie (no relation). These two men were very pleased with the company’s record, and became defensive and, at times, irritable when our friends gave testimony about the destructive effects of the company’s operations in Brazil, Chile and Colombia. Our friends were shocked at the ways in which the company failed to respond to their concerns and at the extraordinary imbalance of power between them.
One major concern mentioned in the AGM relates to the stability of tailings dams. Tailings are fine wastes created by initial processing of metallic ores. They are often toxic and frequently stored under water in artificial lakes held back by dams. Often these dams are partially constructed with some of the tailings material.
Many thanks to Diana Salazar of Colombia Solidarity Campaign for this report, and to Benjamin Hitchcock, Paul Robson and Seb Ordonez for assistance in translating our friends’ questions.
The tailings dam collapse at the Samarco iron ore mine, Brazil
Tchenna Maso, of MAB (the Movement of People Affected by Dams in Brazil) spoke about the collapse of the Samarco tailings dam in Brazil on 5 November 2015. She said:
“Good morning everyone, my name is Tchenna Maso, I live in the basin of the Rio Doce near the coast. I am from the MAB (The Movement of People Affected by Dams). This case is important due to its sheer magnitude: It is almost 4 years since the tragedy took place and we still have no rebuilt houses.
“The Renova foundation created to work on the processes of reparation is completely inefficient. All of its 42 programmes are delayed or without clear plans. In almost 3 years of operation, we haven’t even finalized the first cadaster, the gateway to accessing reparations. There are thousands of unfinished registration requests, and thousands of people who have been waiting for answers for years about their registration.
“The slowness in the reparations process for communities has generated several problems for families. There is severe vulnerability in many regions due to not being able to fish. This has profoundly affected households, leading to gender violence, drug and alcohol abuse. It is worth mentioning that there is a gender inequality in the compensation process, given that many entries were made based on the family nucleus, and on the formality of work activities, disregarding women’s income.
“In addition, women, are overloaded with work having to care for the health of their families as well as search for access to water. Last year a study was published by Ramboll and the Public Defender’s Office pointing out the severity of gender inequality and transversality in the policies implemented by Renova.
“Studies on contamination, either by contact with mud or by drinking contaminated water, point to a serious public health issue. Several affected communities and individuals have medical investigations showing high amounts of arsenic, lead, iron, and low zinc rates. This has led to severe gastrointestinal and skin diseases. There are no preventive measures currently being taken. The Health Technical Chamber to date has not completed municipal health plans or the transfer of funds to municipalities for better treatment.
“It was agreed that the companies would be hiring technical advisors to work with the affected families. This process has been going on for over 2 years, and many communities to date have not obtained this. It is shameful to reach 4 years of tragedy without the guarantee of this support.
“Regarding the environmental issue, until today no research entity has been hired to carry out studies in Minas Gerais. In Espirito Santo, the study advanced to a diagnosis of loss of marine biodiversity in some areas, and to high rates of contamination. These studies are not yet conclusive but should serve as a warning that mitigation measures are required.
“The poor reparations policies that have been implemented by the Renova Foundation may not be compliant with international human rights standards, and this may lead to re-negotiation and legal review of the levels of indemnities.
“Can we have your assurance that-
1. The hiring of technical advisors for all affected communities be accelerated?
2. The data held by the Renova Foundation about its programmes be published regularly and rapidly?
3. Precautionary, preventive and mitigating measures for environmental issues be initiated with urgency?
4. Renova Foundation programs will have clear plans and deadlines and these be adhered to?
Ken MacKenzie replied that the dam failure at the Samarco operations in 2015 was a tragedy and BHP is deeply sorry for the impacts and especially the tragic loss of the 19 lives. BHP’s response has been led by a total commitment to doing the right thing, addressing the social, community and environmental impacts of the failure, which is what the Renova Foundation was set up to achieve. It has 42 remediation and compensation programmes in operation. BHP had contributed 872 million US dollars to June 2019 and approved a further 287 million US dollars in the second half of this year. It had made a total provision of 6.5 billion dollars. He explained the governance of Renova, involving government environmental agencies, the public defence office and communities. A consultation process with the communities takes time. Communities have been involved in Renova’s work and had representatives on the board. The company is balancing the need to move quickly with the need to involve the community.
There are more than 6700 people working on these programmes from Mariana to the mouth of the Rio Doce, he said. Environmental restitution is going very well. River margins have been replanted and stabilised. Water quality is improving and is of sufficient quality for fishing and for consumption of fish at usual levels. There are 92 monitoring stations along the river. The company is also helping with municipal water supplies and sewage systems, addressing historical issues which go well beyond the direct remediation works. Before this work, effluent was going straight into the river.
Around 1.9 billion dollars have been spent by Renova so far for environmental remediation, resettlements and compensation, he said. 425 million US dollars have been spent in compensation to date including 244 million dollars for direct compensation to 13,000 families and 75 million for the impacts on drinking water experienced by 260,000 people. Houses were being designed in consultation with community members for the three communities to be resettled. The target date for completion of all houses across the three communities is May 2021. There are always areas for Renova to improve, he said, but strong progress is being made. BHP’s response to the Samarco disaster is a total commitment to do the right thing. Between BHP and Vale, a further commitment of 3 billion dollars had been made.
The impacts of copper mining on water and ecosystems in Chile
Lucio Cuenca, Director of OLCA (Observatorio Latinoamericano de Conflictos Ambientales or Latin American Observatory of Environmental Conflicts) in Chile, explained that he works closely with mining-affected communities, including communities affected by the operations of BHP. He went on:
“BHP Minera Escondida in Antofagasta is the largest copper mine in the world. This project wastes huge quantities of water, more than three times more than any other single BHP operation. The extraction of water for use in this operation has led to the disappearance of the ecosystem of the Salar de Punta Negra.
“Contrary to the water policy announced by BHP, for the use of desalinated water, the company does not intend to stop using fresh groundwater of the Monturaqui Aquifer, intending to extend the extraction for 11 years from the time originally authorized, until 2030, against the will of the Atacameña Community of Peine, by then it will be too late. All of this occurs while Chile is in the midst of a historical drought.
“The company’s report on tailings catalogues the ‘Laguna Seca’ Escondida deposit as ‘High Risk’. This dam already stores 1180 million tonnes of wet tailings, only 25% of what is projected in its useful life. BHP and the State of Chile, through Fundación Chile, promote a cynical policy of tailings management in a programme called ‘Inclusive Tailings’ and another called ‘Adopt a Tailings site’.
“Chile is home to the largest copper and lithium reserves in the world, but behind these ‘reserves’ are climate-critical ecosystems such as glaciers, salt flats, water basins, and territories that are the ancestral homes of indigenous communities that, according to your own BHP reports, ‘compete’ for water and space with the company.
“However, BHP blatantly uses the climate crisis as an opportunity to wash its image and carbon emissions. The company promotes itself as part of the solution to the climate crisis, instead of acknowledging its guilt in actively contributing to this crisis. BHP is increasing its metal extraction, supposedly for the ‘transition’ in an atempt to take advantage of an increasingly lucrative electric vehicle market in the global north.
“At the same time, Daniel Malchuk, head of BHP Americas, was recently quoted in an interview with El Mercurio, a national newspaper in Chile, expressing his scepticism regarding the Chilean state’s legislative debate on glacier protection, engaging undue political interference – the implications of which go in direct contradiction of the company’s claims about its commitment to the fight against climate change, so my questions are:
1) How can you justify practices, such as the extraction of groundwater, that continue to destroy ecosystems in a region of such high water stress, such as Antofagasta?
2) Considering the recent disasters in Brazil, do you consider it responsible to manage high-risk tailing sites with euphemistic initiatives such as inclusive tailings?
3) Will BHP stop hypocritically promoting a greenwashing narrative to justify its projects while simultaneously intervening against pro-glacial policies while continuing to be a major coal miner and carbon emitter?
Ken MacKenzie replied that in 2018 BHP had published a report on its water use, so there is a lot of transparency on where and how it takes water and disposes of it. In terms of water in Chile, he said he was very proud of BHP’s work. It had spent 4 billion dollars for a desalination plant to provide the water for Escondida. It uses a lot of energy but the company had just signed contracts to have it completely powered by renewable energy. The target is for 100% of Escondida’s water requirements to be provided by its own desalination plant by 2030. It had ceased water extraction from Punta Negra in 2017. The company recognises the importance of water to indigenous communities and the environment.
CEO Andrew Mackenie added that BHP is “very transparent” with its plans with local indigenous peoples. It will reduce extraction of groundwater from 1400 litres a second to 400 litres a second, which is the natural replenishment rate of that aquifer. The company is engaged in a consultation process with indigenous peoples to help decide on future activity.
The tailings dam at La Escondida presents some risk but has been managed with great care and attention over some decades. Since the Samarco disaster BHP had continued to increase the rigour of its processes, and Escondida had received all the attention it deserves. The company is looking to make more use of water in the tailings ponds to improve its overall use of water and save power.
If the world wants to totally decarbonise to ensure a global average temperature rise of no more than 1.5 degrees combined with good economic growth, he said, copper mining will have to increase by factor of between 5 and 20 times. The necessary copper is not sitting in warehouses, it has to be mined. BHP taking lead on water, climate, indigenous rights, and if we do not mine others will do so. This is not green washing, he said, this is the reality, and this is BHP’s real contribution to the green new deal.
Lucio attempted to respond, but Chairman Ken MacKenzie tried to silence him. Lucio pointed out that if the company carries on expanding mining of copper and other minerals there will be no planet left to save. The death of the planet cannot be expressed as a value in dollars, he said.
The social and environmental impacts of the Cerrejón coal mine in Colombia
Alvaro Ipuana, the major indigenous authority in the Wayuu community of Nuevo Espinal in the province of La Guajira, Colombia, introduced himself in the Wayunaiki language, and then said:
“The indigenous Wayuu people have been victims of the expansion of the Cerrejón mining company. My community of Nuevo Espinal, a community of approximately 411 people who were involuntarily resettled in the year 1993, are now experiencing new threats caused by the expansion of the Oreganal pit. Our community has been protected by a court sentence ordering the restitution of land that obliges the Colombian state to ensure full reparation and restoration of our violated human rights.
“However, Cerrejón has proposed damming two new rivers, the Palomino and Mapurito rivers, and has bought land for the expansion of the Oreganal pit within the framework of its mining expansion plan. This means a new victimization of our territorial rights and the rights of other surrounding communities such as Manantialito, Tamaquito and others that stand to be affected by this expansion project.
“Therefore, my first question is: The involuntary resettlement of communities has meant irreparable damage to their social, cultural, spiritual and economic fabric as well as their right to a dignified life – why does BHP insist on a mining expansion plan that affects communities which have already been violently displaced and that will therefore be re-victimized, at a time when the world and coal buyers have begun the decarbonization of their economies?”
“In 2017, the Colombian constitutional court ruled in favour of the indigenous and Afro-descendant communities of La Guajira in the case related to the diversion of the Bruno stream. In decision SU698/17 it was decided that an inter-institutional working table would be established. This table would guarantee the participation of communities, organizations and experts to discuss seven environmental and social uncertainties that the court determined had been unresolved.
“The 8th measure in this sentence requires the inter-institutional table to make a collective decision about restoring the water flow of the stream to its natural course, however, this decision was taken without the participation of the communities and other actors – to date the stream remains kidnapped by the mining company.
“In this regard I have two questions:
“How are Mr Andrew Mackenzie and other BHP investors going to ensure compliance from Carbones del Cerrejón with regards to court orders that have been ruled by the Colombian constitutional court, orders which involve a real and effective participation of communities, experts and organizations?
“In the same vein, following the illegal intervention on the Arroyo Bruno that resulted in its disappearance, which is what we found in the verification mission carried out in July 2019 in co-ordination with international groups, communities and NGOs, and with the presence of state institutions and of the company, so my question is, what are you going to do to return the water to the river?”
Chairman Ken MacKenzie called for any other questions concerning Cerrejón Coal.
Catalina Caro said:
“Greetings, my name is Catalina Caro Galvis, a grassroots community environmental defender, and I work for Censat Agua Viva, which is Friends of the Earth in Colombia. We are an organisation that accompany the communities. I am here because coal mining in my country (Colombia) has created an irreparable devastation, and environmental justice for the peoples of my country is a necessity. Despite the fact that you insist that your investment in thermal coal is small, the impacts in my country are big and continue growing. Therefore, my questions are:
“In August, the Colombian State Council agreed to study a nullity claim on the Cerrejón environmental licence presented by the communities, four national organizations and two congressmen of the republic. This lawsuit requests that the State Council evaluate Cerrejón’s compliance with the minimum environmental and legal requirements that any company in Colombia must meet. To date, Cerrejón does not have an environmental impact study that complies with the provisions of the law and through which the new environmental conditions in La Guajira have been assessed.
“The lawsuit also proposes a precautionary measure for the suspension of operations neighbouring the affected communities, and to put a stop to any expansion plans until the authorities verify the protection of the rights of the communities that are at risk, and the validity of all the licensing process.
“Carbones del Cerrejón, and specifically its president, Guillermo Fonseca, has been misinforming by stating that if the precautionary measures requested in the legal action are resolved, this will mean the immediate and total closure of the coal mine, as well as the mass dismissal of workers. This false information circulating in the department of La Guajira through press releases and paid advertising in various media outlets has resulted in direct accusations against the plaintiffs and surrounding communities, and a false sense of economic and social panic in the region.
“Faced with this, we believe that the only way to prevent an increase in the criminalisation of and threats to leaders and to stop the panic generated is through a public retraction of the president’s statement and his immediate resignation.
“Finally, given the recent fluctuations in the global coal market and the requirements that states must meet for the implementation of the Paris agreement, and in light of the planetary and civilisational crisis that fossil fuel use has generated for all of humanity, on what grounds do you base your plans to continue exploiting coal in Colombia?”
Ken MacKenzie said that he wished to inform shareholders about BHP’s participation in the Cerrejón mine. “This is another of those non-operated joint ventures, we only have a 33%, we are shareholders, and the other shareholders are Glencore and Anglo American which also own 33.3% each. So, our involvement here is as a shareholder. This is managed as a joint venture and you have been introduced to Brian Quinn [BHP’s President of Non-Operated Joint Ventures] here today, and therefore it is through this team that we seek to influence Cerrejón, but it is important to recognise that Cerrejón is an independent company and is operated through its own management team and it is pursuing its own standards and it is not controlled by BHP, so it is also important to know that Cerrejón is and has always been operating in a very complex environment and challenges are significant, we have to acknowledge that. I hope I have answered your questions.”
Andrew Mackenzie added that BHP encourages Cerrejón to comply with all legal requirements, “and we will support any additional participation that is required from the communities, but I have to add as a caveat that we are a minority shareholder. We cannot order that, this is an independent joint venture where we have a minority share.”
On the Arroyo Bruno, Andrew Mackenzie said: “There is controversy on what created the loss of the flow of water. For example, deforestation at the top has been a massive contribution to this. I have been there and seen the diversion myself and it seems to have been done in an environmental complying way, and it may have not been the cause of changing the levels of water. Again we will encourage Cerrejón to try to understand the causes of the loss of flow and to see what Cerrejón might do. But if part of the stream is outside of the area of Cerrejón there may be limitations to what they can do. But I think the diversion has been well done, and it is my sense that there is a number of factors that are affecting the flow, rather than the diversion itself.”