Published by MAC on 2021-05-16
Source: London Mining Network (2021-05-20)
A large number of critical questions.
Because of continuing COVID-19 restrictions, Anglo American held a ‘hybrid’ AGM on Wednesday 5 May, with a quorum of four shareholders (all Anglo American directors or management) in their London offices and other board members and shareholders joining online using the Lumi platform favoured by a number of large companies. This was an improvement over last year’s closed doors AGM. For the first time, Anglo American has made a complete recording of its AGM available via its website. This also is a welcome step forward in accountability.
See full report here
MAC page for Anglo American Corporation (699 articles)
“Next question, please!” Anglo American’s 2021 AGM Report
Report by Richard Solly, Co-ordinator, London Mining Network, with assistance from Aldo Orellana, Andrew Hickman, Diana Salazar, Fiona Watson, Gabriela Sarmet, Javiera Martinez, Paul Robson and Rodrigo Peret.
May 5 2021
The good news
The company took a large number of critical questions, provided responses, allowed follow-up questions and promised to publish more detailed written answers to some of the questions on its website some time after the AGM, together with written answers to written questions submitted in advance of the AGM and not dealt with at the meeting.
Since it was not possible for shareholders to address the meeting, written questions submitted in advance or via the question box on the Lumi website were read out – with admirable clarity, I must say – by an anonymous ‘third party facilitator’. He would get my vote in any contest to do announcements in noisy public places.
Furthermore, company personnel were assiduous in their efforts to ensure that London Mining Network’s proxy holders received the necessary log-in details for the AGM so that they could listen and interact. These efforts were helpful because the company’s registrars, responsible for sending out papers for the meeting, were clearly a little confused about the new AGM arrangements. I spent many hours on the phone prior to the meeting trying to ensure that our proxies would be able to attend. At least it helped establish who really, really wanted to attend the AGM
Right, that’s it for the good news. You’ll note that the bad news below is rather longer.
The bad news
On a number of issues, the company’s Chair Stuart Chambers was evasive and managed to avoid answering questions while appearing to answer them fully, and usually finishing with the words, “Next question, please,” as though the matter were now closed.
Anglo American selected and grouped the questions on Peru into three blocks and Stuart Chambers responded in a general way. However, he made technical claims that require technical and hydrological analysis to produce an adequate and forceful answer. Our colleagues in Peru are working on this.
On the company’s Minas Rio iron ore project in Brazil, Stuart Chambers did not adequately address the point being made, that they had heightened a tailings (fine wastes) dam in violation of a recent law forbidding such heightening when there are communities living downstream. He simply asserted that the company’s actions were legal. But that was what was being disputed!
On Anglo American’s interest in Amazonia, the company was asked a crystal clear question: Will Anglo American and its subsidiaries commit to not mine in any indigenous territory in Brazil that has not yet been officially identified, including those of uncontacted indigenous peoples? The reply was that they will “undertake to seek FPIC”. So, they give no commitment/guarantee to obtain FPIC, merely to seek it. This is the standard position of the mining industry. It is the position of ICMM (International Council on Mining and Metals) in their new Global Tailings Dam Standards, and the story of the process leading up to the publication of the Standards (August 2020) shows that the industry will fight tooth and nail to defend that position. Anglo American also said they will “also always seek to obtain Free Prior Informed Consent (FPIC) prior to activities that may significantly impact on indigenous peoples’ land, livelihoods and cultural heritage.” But how do they define “may significantly impact”? They have a track record of denying and minimising impacts. And what about the impacts in regions near indigenous territories, which have an effect also on indigenous territories themselves?
On Cerrejon Coal in Colombia, the company avoided answering many of the questions. We knew that they would not have time to answer all the questions presented, but their choice of what to answer and what not to answer was instructive. They did not say whether they had any statement to make on the complaint filed with the OECD (Organisation for Economic Co-operation and Development) in January of this year for some of the mine’s impacts. Perhaps they thought it would make them look irresponsible if they mentioned the existence of this new OECD complaint, brought by various human rights organisations from the UK, Ireland, Switzerland and Germany.
Anglo American also failed to respond to the following question: ‘In addition to Colombia, in which other countries and mining operations in which Anglo American is involved have there been complaints and petitions regarding health problems caused to communities near the mines? Does the company have a consolidated study on this subject?‘
We consider that this kind of report is vital for the company to fully understand and respond to the negative impact that it creates in the whole region of Latin America and in many countries of the world. We hope this question will cause Anglo American at least to start documenting this information.
They also missed two questions on just transition and neighbouring communities:
‘In the company’s transition plans for the coal business, what plans are in place so as not to evade its responsibility for environmental and social liabilities that still remain unremediated at the time of its departure?’
‘What do you have to say regarding the complaints of the lack of comprehensive reparation to the African descent community of Tabaco in La Guajira, which, according to Constitutional Court’s Sentence T-329/17, has not been justified by the Carbones del Cerrejón company, despite the actions that it claims to have carried out?’
We consider that not answering these questions at the AGM is evidence of a lack of responsibility on these very urgent issues.
It is also worth noting that they did not respond to the following from mine workers’ union Sintracarbon:
‘Unjustified dismissal of workers
‘Within the framework of the same economic strategy, in February 2021, the company, unjustifiably and without consulting the workers, carried out a massive dismissal of more than 200 workers. Sintracarbón has sought legal help to respond to this violation of Colombian and international labour laws with legal actions. Sintracarbon demands the immediate reinstatement of all employees dismissed from their positions and has managed to reinstate nine of them by legal means.
‘If there are already nine workers reinstated by legal means, how does Anglo American recognize its responsibility in the massive and unjustified dismissal of more than 200 workers in the midst of a global pandemic?
‘Stigmatization of communities affected by the mine in claiming their rights
‘The company’s economic strategy proposes the expansion of the mine. Communities affected by such expansion have claimed their rights to a clean environment, health and water.
‘Why has Anglo American stigmatized the communities that have made claims, many of them protected by court decisions, making them seem the cause of the company’s economic problem?’
On Chile, our colleagues tell us:
Anglo American’s responses seem completely inadequate to us. In their answers they deny any impact on our glaciers and our water resources. It has been widely documented (1) how the actions of the mining company have destroyed the Infiernillo glacier, whose equivalent loss in water up to 1997 was calculated between 6 million cubic metres and 9 million cubic metres, however, foundations such as Glaciares Chilenos currently estimate that this impact could be even greater as the natural advance of the glacier is accelerating due to the 14 million tons of debris deposited by the mining company on its surface (2).
Another concern is the effects on the La Paloma reservoir due to a 9-kilometre exploration tunnel underneath it in the direction of the Río Olivares valley, in Río Colorado. As Sara Larrain, Director of Chile Sustentable (3), said, “This mining operation is in an area of glaciers that constitute the water reserve for the Metropolitan Region. It is a brutal project, insofar as it destroys strategic reserves of fresh water and at the same time it is tremendously dangerous, where with any alluvium or hot rain pollutants can come along with the removal material, as happened in Copiapó, a region in the North of Chile, two years ago” (4).
Chile is facing one of the most terrible water crises. There are studies that suggest that the water scarcity in certain territories is closely related to the presence of mining operations (5). This is the case of the El Melón Community near the El Soldado mine. In that region, around 90% of the inhabitants are supplied by truck tanks, since there is no other way to access drinking water. The community sued Anglo American because they did not have access to drinking water. The Supreme Court ruled that the State must supply 100 litres of water for the community. However, it is public knowledge that it is the actions of Anglo American that have left the population without water(6). As Greenpeace Chile indicates “The excessive use of the company’s water rights through the El Soldado Mine is brutal. While Anglo American reaches more than 453 litres per second in total rights granted to water, the entire population of El Melón must settle for only 55 litres”(7). It seems unacceptable for Anglo American to deny any responsibility for the impacts they are having on the lives of hundreds of people and the ecosystem.
The Question and Answer session
The following account concentrates on the issues of direct concern to the communities and organisations with which we work in Brazil, Chile, Colombia and Peru. Very important issues were also raised by other organisations working on climate change, community evictions around the Kumba iron ore mine in South Africa, and Blood Diamonds and the connection with the Israeli government. Do listen to these in the AGM webcast. They are in the earlier part of the Question and Answer session, which begins at minute 25. (The webcast begins with presentations by company Chair Stuart Chambers and Chief Executive Mark Cutifani.)
You can find all the questions which we submitted in advance on our website.
Blaming the messenger
Stuart Chambers began the Question and Answer session by saying that there were one or two shareholders representing NGOs and community groups who had submitted a great many questions, more than sixty, very detailed, and some of them were the same as last year. [He appeared to imply that the number of questions was unreasonable and that ‘repeat’ questions were unnecessary; our view is that the fact that some questions are repeated year by year shows that the company’s responses, in words and in actions, are inadequate.] There would not be time to address all these questions properly at the AGM, he said.
The company respects the role of these shareholders in voicing communities’ concerns, he said. [He did not mention that the company’s board are profoundly irritated by them, but I suspect that they are. And the way in which questions were read out – not that I blame the reader – suggested that a very large proportion of the questions were mine, personally. In fact, none of the questions was mine: they were all from the communities and organisations with which we work in Latin America, and in normal circumstances would have been put either by community representatives or other proxies appointed for the purpose, not by me.]
Stuart Chambers said he would respond to the broad themes of these NGO and community questions at the AGM and reply in more detail after the AGM. He said that Anglo American’s teams in the countries concerned are best placed to respond. [Doubtless: but the level of mistrust between these teams and the communities with which we work is very great in most cases. That is why our friends wanted to present questions at the company AGM.]
He said he would respond first to questions submitted in advance, grouped by topic, and then to questions submitted during the meeting. All questions would be read out by a third party facilitator.
Questions submitted by London Mining Network on behalf of communities affected by the Minas Rio iron ore mine, Brazil
How does company’s interpretation of new legislation on tailings dams in Brazil ensure that the needs of affected communities are central to the approach that the company takes on this issue?
In the context of the raising of the height of the dam, why is Anglo American not complying with the safety precept nor meeting the demands of families that would like to be moved to safety?
How does Anglo American intend to deal with the suffering of communities living beneath the tailings dam in fear of the dam falling?
What is the purpose of the independent technical advisory organisation for affected people and will the company adapt its programmes if they are considered insufficient by the communities?
Stuart Chambers: We have total confidence in the integrity of the Minas Rio tailings facility. This is an embankment dam built using compacted imported earth fill material with carefully selected granular materials for the drainage and the filter zones. Tailings are not used to build the dam and construction materials are carefully selected and placed in controlled layers. This is a conservative design for a tailings dam being designed and built as a water retaining dam. The team follows a comprehensive dam safety management programme as required by the internal Anglo American technical standard and in line with best practice around the world which includes daily inspections, weekly instrument reading, geotechnical inspections at least every fifteen days and quarterly inspections performed by the Engineer of Record. Also an independent technical review panel composed of three independent specialist engineers provides an independent review at least once a year.
Through dialogue, sharing of documents and three emergency drill simulations so far involving the authorities and communities surrounding Minas Rio we have worked with communities to ensure they are fully prepared in the unlikely event of a breach. Emergency sirens are situated in the relevant communities. We recognise that the concern of communities increased after the disaster in Brumadinho in 2019. However, since 2017 we have initiated dialogue with communities which resulted in a voluntary resettlement programme for all the communities located in the risk zone of a dam break scenario which is, in this case, within 10 kilometres downstream of the Minas Rio tailings dam. We did this before the enactment of the new federal and state laws that the question referred to. To date, 46 households, representing around two thirds, have joined the resettlement programme. Any resettlements are carried out following relevant internal policies and international best practice as well as Brazilian law.
In the agreement with the state environment agency and the public prosecutor’s office Anglo American appointed independent technical advisors to help communities better understand the socio-environmental impacts of the Minas Rio operations as well as the status, results and the technical information regarding the socio-environmental plans programmes and porjects developed by the company. Anglo American is responsible for financing those entities and for providing information and clarifications that can strengthen the technical support for the communities.
Questions submitted by London Mining Network on behalf of communities affected by Cerrejon Coal in Colombia
Shareholders in Cerrejon Coal have received the English translation of court ruling T-614 regarding the protection of the health and environment of Wayuu communities in La Guajira. Do you consider that the construction of a medical centre, and washing the roofs of the houses in the indigenous reservation of Provincial, is an effective measure to control the health risks that the children of this community have suffered due to mining contamination, as reported by their indigenous mothers?
Stuart Chambers: Cerrejon is a Joint Venture in which Anglo American has a 33%share and is run by an independent management. Nevertheless as a shareholder we can attempt to influence things for good outcomes. In January 2020 Cerrejon was served with this ruling on Tutela 614 regarding the community of Provincial and shareholders were made aware of the details of that ruling. We support Cerrejon in complying with the ruling in full and this work is under way. A tutela is a legal mechanism in Colombia where individuals or a community can claim breach of their human rights. Cerrejon was found not to have been violating Colombian air quality standards. In March 2021 Cerrejon reached agreement with all the traditional leaders of the community of Provincial. The agreement covers much more than the measures you have listed and goes beyond the actions listed in the ruling. Rather than too much detail now, we will put a more detailed answer to this question on our website following this AGM.
In the diversion of the natural channel of the Bruno stream in La Guajira, Colombia, has the spiritual effect caused to the Wayuu and African descent communities been considered?
Stuart Chambers: I remember two years ago this was discussed in quite a lot of detail. The diversion of the Bruno Creek is 3.6 kilometres of the course of a seasonal creek that has been diverted about 700 metres to the north. It was fully permitted in 2014 and completed over the following two years. It has been carried out according to leading technical standards and is becoming an increasingly established biodiversity corridor with flora and fauna expanding naturally. The Colombian Ministry of the Interior did decree that the community of Campo Herrea was the only community that required consultation prior to the diversion. Cerrejon carried out this consultation, which took both spiritual and cultural impacts into consideration. In 2017 a Constitutional Court ruling stated that three further communities should be consulted. I am assured that all ongoing consultations also take both spiritual and cultural needs into consideration.
Questions submitted by London Mining Network on behalf of Colombian coal mine workers’ union Sintracarbon
During 2020, despite a 91 day strike the Carbones del Cerrejon company tried to impose what some termed a ‘death shift’ that abruptly increases the number of working hours for workers, reducing mental and physical wellbeing and increasing time away from their family. The shift change affects the employability of approximately 700 workers and reduces the total number of employees by 25%. In February, in the midst of the pandemic, the company went on to unjustifiably dismiss over 200 workers. Nine have been reinstated by legal means. Why does Anglo American allow these changes in the business at the expense of labour rights?
Stuart Chambers: These are management issues, including negotiations with the unions on pay and benefits, and they are best addressed by the Cerrejon management. However, of course it is of interest to us. Over the last two years Cerrejon has had to respond to a very challenging market and market conditions for Colombian thermal coal by transforming its business. This plan began by optimising processes, reducing costs and finally it became necessary to redesign the size of the organisation. The challenges were discussed in the 2020 collective bargaining discussions.
I recognise how hard this situation is for those most closely affected. As a shareholder Anglo American has supported Cerrejon management in acting responsibly for the future of the company and La Guajira and the largest possible number of employees and their families. The strike that you mentioned was concluded on 1 December last year. However, the introduction of the new roster was not under discussion during the strike, but it was mentioned significantly in the media. It is a roster that is used across other extractive sector operations in Colombia. The resizing of the organisation has been unavoidable. It has been carried out in accordance with labour regulations and in good faith. Conversations were carefully planned to ensure that they were respectful and recordings were held and shared by former employees. Workers were offered an initial comprehensive voluntary package with the emphasis being first on those who were interested in leaving the organisation.
In the company’s transition plans for the thermal coal business, What plans are in place not to evade responsibility for environmental and social liabilities at Cerrejon and how willing is Anglo American to engage with communities and workers for a just transition?
Stuart Chambers: We have been very clear that we intend to exit our 33% shareholding in Cerrejon. We have been transitioning away from thermal coal in a responsible way that always takes the needs of our stakeholders into account and this inevitably looks different in different mines. At Cerrejon any action will need to take into account the specific shareholder dynamics bearing in mind this is a Joint Venture with BHP and Glencore. It also needs to take into account the regional and local complexities including requirements under Colombian law.
Questions submitted by Doug McMurdo and Lara Blecher of the Local Authority Pension Fund Forum (LAPFF)
Stuart Chambers was thanked for meeting with LAPFF. On Anglo American’s ESG update call last week, it was noted that the company is evolving its position on non-operated Joint Ventures. It appears from Anglo American’s reporting that the Social Way programme applies to Anglo American managed sites only. Does this mean that it does not apply to the Cerrejon Joint Venture? If not, how does Anglo American approach the ongoing labour and community concerns at Cerrejon which appear to be inconsistent with Social Way 3.0?
Stuart Chambers: Our policies, including our Social Way, do apply to our managed operations. With regard to non-operated Joint Ventures, we do seek the influence the relevant site to adopt a framework commensurate with the requirements of our policies and, as a minimum, to comply, of course, with local laws. In the case of Cerrejon and the Social Way, we seek to influence its management of social issues as per our standard and in 2017 we carried out a gap assessment against the Social Way and Cerrejon has since improved its performance against this assessment and this is why we have focused on ensuring that all resettlements respect the IFC Performance Standards including Standard Number 5 on land acquisition and involuntary resettlement. It is also why we support Cerrejon in carrying out its third human rights assessment which had to be postponed for a year due to COVID and this work is due to begin in the next two months. Community engagement and socialisation will form an important element of this work.
LAPFF has heard from affected workers and community members at Cerrejon that, of the non-operated Joint Venture partners, only BHP has sent a board member to meet with them and discuss their concerns. Would Anglo American be willing to send a board member this year to meet with affected workers communities at Cerrejon and would this board member then be willing to report back to workers, community members and investors on how these engagements will inform Anglo American’s strategy and business decision making?
Stuart Chambers: At the moment, the Sustainability Committee of the board receives a report on all noteworthy social and governance issues across our business, and that includes Cerrejon, on a quarterly basis. I follow those closely as do my fellow members of the board.
Mark Cutifani: It’s important to note that I have actually visited the site. I have spoken with residents that have been resettled and also employees and I do understand how difficult it is going through a restructuring, particularly in times such as we have today and in particular at our operations in thermal coal where it is becoming very difficult and quite challenging but at the same time these things are being done, we think, in the right way. In our case, Seamus French, who is responsible for our bulk materials operations across the globe knows the site and has been a regular visitor though not in the last twelve months or so given COVID restrictions but as soon as we are able to get back on site Seamus will consult with those people that people request for us to talk to and he will provide us with feedback at our Sustainability Committee and the board and certainly he would be prepared to provide feedback to local management and employees and others who wish to be consulted as part of the process. Certainly we acknowledge how difficult these things can be and we will do everything we can to make sure we are a constructive part of the conversation.