Analysis of the 5 May 2020 AGM of Anglo American plc by LMN volunteer Agnes Schim van der Loeff
Due to the Covid-19 pandemic the AGMs of some of the biggest mining companies could not happen in their usual format this year. While Rio Tinto still allowed shareholders to ask questions by phone – albeit with many technical difficulties – Anglo American simply reverted to written questions and answers. We previously published in full our questions for the AGM covering a wide range of issues communities are currently facing due to the company’s mining activities. Here we provide an analysis of Anglo American’s answers, which they published on their website.
The lack of any type of virtual meeting meant there was no chance of actual engagement with the company’s chairman and CEO, nor the chance for follow-up questions when answers were inadequate, misleading or simply incorrect. On the other hand, the written format makes it easy to point out all these flaws while it also removed the limit on the amount of questions and the time to ask them. Nevertheless, many questions were ultimately published in diluted versions, in particular those about Peru and Chile. Anglo American is clearly happy to take advantage of the situation by leaving out the parts that highlight the company’s wrongdoings – something they cannot control when community representatives can speak for themselves at open AGMs.
Brazil: contradictory answers and avoiding the question
President Jair Bolsonaro has presented a new law PL 191/20, which proposes to open up indigenous territories to the exploitation of minerals, water resources and agriculture. When asked what Anglo American’s position is on this, the answers are rather contradictory. It first states that the company does not operate in indigenous territories, next that they have four requests for exploration that ‘overlap’ with indigenous territories, and finally that they only operate in ‘authorised tenements’. This seems to completely undermine the initial claim of not operating in indigenous territories. It also fails to answer the question, implying that once the law is passed, Anglo American would have no problem operating in indigenous territories as it would be ‘authorised’.
Our second question was more direct: does the company intend to explore for minerals or mine in the indigenous territories opened up by this new law? Sadly we didn’t get an answer as it was simply left out. Perhaps it was a mistake, or perhaps the company preferred avoiding this question, particularly as it referenced a survey which found that Anglo American ‘submitted six requests for mineral exploration on indigenous lands in 2019, and 46 over the course of the decade’.
Regarding legal challenges to the company’s operating license in Minas Rio, the company responded that the particular provisions of the law in question are not applicable. Therefore, it is not violating any laws. However, legal technicalities aside, the company still has a responsibility to inform shareholders of relevant risks including those posed by tailings dams. Besides, our question was whether the company had made shareholders aware of this issue and to this we received no answer.
We also asked about the company’s response to the Covid-19 pandemic and the municipal decree allowing only essential activities. Anglo American gladly referred to a federal decree which classified mining as essential, thus making the continuation of their operations legal. However, does it really find such a decree which was declared under a president who has consistently downplayed the pandemic a good standard for public health? How essential is mining in comparison to the health and safety of workers and local communities? This is not just a question about legality, but about ethics and social responsibility.
Peru: no understanding of ecosystems
Our friends at TerraJusta and DHUMA wrote a comprehensive critique of the company’s responses to our questions regarding their operations in Peru. Here we summarise the key points about water usage, diverting the Asana river, and Covid-19.
Anglo American’s Quellaveco project is situated in a region dealing with water scarcity. Therefore its high water consumption could lead to potential conflict as local communities are worried about their own water needs. The company’s answers to our questions are based on the mistaken assumption that so-called surplus waters have no use, which ‘is an absolutely arbitrary statement that ignores the basic concepts of hydrological cycles’ and the environmental services depending on this water. Moreover, the company claims that the Tambo basin’s water quality would even improve thanks to the Vizcachas dam’s role in maintaining water levels. Yet this completely ignores the environmental impact of building a dam in the first place. Overall the company’s water management plan is still inadequate and in need of a more comprehensive evaluation which takes a broader look at water cycles and the complexity of the local desert ecosystem.
A similar lack of understanding of ecosystems is reflected in Anglo American’s response to the question about the diversion of the Asana River. It shows an ‘attempt to separate, in its management of water, the surface resource from the subterranean’ and focuses on how the river will not be affected. But what about the springs and lagoons that are close to and depend on the river? It is almost inevitable that they would be affected by the diversion, yet the company completely neglected this in their response. Concerns about the Asana river’s diversion are validated by the impacts that the diversion of the Bruno stream has in Colombia for another mine in which Anglo American is involved, the Cerrejón mine. Altering the river’s natural course is likely to have long-term consequences and must therefore be studied much better, by independent researchers rather than the company’s.
As for Covid-19, although the company stated it halted all non-essential activities, it in fact continued to operate almost as normal since most mining activities were classified as ‘essential’. Meanwhile, what is truly essential for people’s health and livelihoods is clean and sufficient water for hygiene and agricultural purposes. Instead of highlighting their food donations and medical aid as a whitewashing strategy, the company should work on guaranteeing that its Quellaveco project will not affect water availability for local communities.
Chile: evasive and misleading answers
We submitted many questions relating to Anglo American’s operations in Chile, both the El Soldado mine affecting the community of El Melón and the Los Bronces mine. The exact questions and detailed context of the issues can be found here.
Regarding the El Soldado mine’s water usage, Anglo American stated that it currently recirculates 80 to 85% of water used in its operations and is looking to reduce water usage further. It was also keen to emphasize that while it owned the water rights to 400 L/s it was only licensed to use 30% of that – as if we should applaud the company for not violating its permits. We do welcome of course the commitment to reduce its water usage. However, we would also welcome a straight answer to our question on returning groundwater and surface water to their natural course as well as ceasing water consumption from the Aconcagua river basin aquifer and contributing to its recharge. Moreover, the company’s statement that mega drought ‘is a multi-regional phenomenon affecting the whole country’ and is ‘mainly due to lack of precipitation’ completely misses the point. No one claims that the mega drought is caused by Anglo American, merely that its impacts are greatly exacerbated by the mine’s high water consumption.
Besides reducing water usage, other commitments they made include improving water availability for local communities and engaging with them in relation to psychological assessments and a new emergency plan. Additionally, the company said it would replant 700 hectares of native forest this year to combat desertification. In relation to the loss of biodiversity caused in 2005 the response was that ‘Anglo American, as part of its commitment to return all land to its original state, has replaced every plant or tree and will of course contribute to improve the natural hydrological cycle of the basin.’ Such commitments are of course welcome and we will make sure to check whether they are actually implemented.
We also asked about the pandemic’s impact on the El Melón community. Anglo American was happy to talk about their ‘long running and successful programmes’ for entrepreneurship and employability as a way to compensate for loss of employment due to the pandemic. However, they only included that particular question, omitting the part about El Melón’s lack of water necessary to wash hands and prevent spread of the pandemic, Anglo American’s failure to comply with Articles 14, subsection 2, 22 and 65 of the Water Code, and its denial of responsibility to ensure El Melón’s access to drinking water.
Anglo American’s other mine in Chile is the Los Bronces mine in Lo Barnechea. In 1989 the Chilean government demanded that EXXON remove the tailings dams in the San Francisco river basin within 25 years due to the serious risks they pose. This responsibility was transferred to Anglo American when it bought the mine. Although the term expired 5 years ago, only 40% has been removed. In response to this failure the company blamed ‘technical difficulties and water scarcity’ for the delay, ignoring how the mine itself contributes to the problem of water scarcity. Saying that they ‘remain committed’ is not enough when 30 years later the people in Santiago are still at risk because of the remaining tailings.
We then asked many questions about the impacts of the mine on the nearby glaciers. The company replied that they were ‘conscious of the importance of glaciers for the ecosystems’ and that ‘the Los Bronces Integrated Project has been specifically designed so as not to impact glaciers.’ The responses cite many technical details on how the glaciers’ protection is ensured, which to a layman sounds very convincing. However, an investigation by DeSmog UK revealed that the studies mentioned have nothing to do with potential impact on glaciers. It exposed that the mine’s design ‘uses an entirely unrelated contamination measure for estimating impact to glaciers’ with experts saying that ‘there is no known standard for measuring such contamination impacts on glaciers.’ This begs the question how often Anglo American and other mining companies bluff their way out of questions with seemingly valid evidence.
Similarly technical and misleading answers were also given in response to questions about water usage in Los Bronces. In April this year the Chilean president decreed a state of water shortage lasting for 6 months, implying a reduction of water usage for mining activities. The response we got simply stated their average water use of 780 L/s and water sources including rivers. Not only does this contradict the company’s sustainability commitment to not incorporate freshwater, it also ignores the question of responsibility to continue using the same amount of water despite the national water shortage. Their statement that ‘water scarcity is a problem that affects us all’ seems like a further attempt to avoid taking accountability for the company’s role in ensuring local communities’ access to water. It conveniently ignores the huge power differentials determining who can access water. The provision of sanitation kits to prevent the spread of Covid-19 means little if there is not enough water for basic hygiene needs.
Cerrejón: avoiding responsibility on multiple fronts
All questions related to the Cerrejón mine were referred to Cerrejón management, with Anglo American keen to emphasize it is only a one-third shareholder and therefore not directly responsible for this ‘independently managed and operated joint venture’. The question is, if BHP and Glencore (the other two owners with equal shares) say the same, who will ultimately take responsibility for the range of issues affecting the local communities in La Guajira?
Regarding Covid-19 and the restarting of operations in April, Cerrejón management explained how it had complied with the new regulations, contributed to humanitarian efforts and minimised the risk of transmission in its workforce. What they didn’t cover was how the mine’s operations contribute to the current issues. For instance its daily use of 16 million litres of water and its negative effects on 19 rivers and floodplains as mentioned in our report Voices from the Ground. One of these rivers is the Arroyo Bruno, which the constitutional court ordered had to be returned to its original course by Cerrejón. In response to our question why this had not been done yet, Cerrejón management stated that this had not actually been ordered, citing possible ecological harm as one of the reasons. However, a report by Colombia’s highest fiscal body published in July yet again concluded that the Bruno stream should be returned to its natural course. It states that the technical report presented in support of the diversion is very weak and does not respond to the research requested by the ruling. The control body also points out multiple breaches of a 2017 ruling by the Constitutional Court ordering the protection of the Wayúu indigenous communities’ rights to water, food sovereignty and health.
There was a similar ruling in 2019 on the effects of mining on water resources, which amongst other things ordered Cerrejón to translate the court’s judgement into English for its three multinational shareholders. In response to our question why Cerrejón had not yet provided this translation we were happy to hear that it had. We now expect it to be published on their webpage so it is publicly available to all stakeholders. However, Cerrejón also re-emphasised its disagreement with the court’s decision and its determination to press on with an appeal against it.
As for our question about the continuing need for replacement livelihoods in the community of Roche, Cerrejón said, among other things, that it had provided seed money for 25 community businesses. This is in fact old news and most of those community businesses failed. The question therefore remains how the company is going to help families whose livelihoods they have destroyed develop new and genuinely sustainable ways of making a living. Cerrejón management did not respond to our point about the need for communal lands despite the devastating effect the loss of these lands has had on the relocated communities.
We also submitted a number of questions about the community of Tabaco which was violently evicted by Cerrejón in 2001 and is still seeking redress. We asked Anglo American what it would do to ensure that Cerrejón accepts the community’s elected representatives and stops trying to foment division in the community – which is the impression that the community has formed, given the company’s behaviour. Cerrejón responded that it would never try to foment division in the community. Nonetheless, over the years its behaviour has produced it. Anglo American on its part said it cannot intervene further as it does not manage the operation. The result is that the people of Tabaco are still waiting for justice 19 years later because the owners of Cerrejón refuse to take responsibility.
Finally, we asked about closure plans for the Cerrejón mine and specifically how the participation of workers and communities would be guaranteed. Unfortunately Anglo American gave no such guarantee and merely provided a link to Cerrejón’s annual sustainability reports. Two questions (about electricity and about collective bargaining with the Sintracarbon union) were referred to Cerrejón but did not include an answer when Anglo American published them. These have still not been answered.
The written format of this year’s AGM made it easier for Anglo American to avoid responsibility and being publicly criticised in front of other shareholders for the harmful impacts of its mining activities. Yet it also gave us their commitments in writing as well as (incorrect) technical details which could then easily be checked, such as the glacier impact studies. Although the pandemic has resulted in attempts to whitewash mining activities, it has also exposed mining companies’ true priorities. We hope next year we will be able to invite community representatives again to directly address the company’s CEO and chairman.