MAC: Mines and Communities

Squeaky - but far from clean

Published by MAC on 2010-04-24
Source: Nostromo Research

London Calling on Rio Tinto's AGM

London Calling picks over proceedings at Rio Tinto's 2010 AGM

In 1997, mineworkers from Australia's CFMEU union, joined by a representative of the global federation, ICEM, knocked on the door of People Against Rio Tinto and its Subsidiaries (Partizans). They were seeking the assistance of the UK-based network in presenting an authoritative case against what, then, was the world's biggest natural resources extraction company.

With a variety of cases, ably covered in a joint Stakeholders Report, (Rio Tinto: Behind the Façade), the worker-NGO combine went on to blast the company at its 1998 annual general meeting.  This event marked something of a sea-change in what  previously had been a courteous, rather than coordinated, association between mining "Reds" and socio-environmental "Greens".

From the outset, both parties recognised that strategic divergences might emerge in future; particularly were a community campaign against a specific mining project to clash with demands by other locals for employment. Nonetheless, it was a couple of years before any noticeable strain developed in the joint relationship.

This happened soon after the CFMEU thought it had secured important concessions from Rio Tinto, following a ruthless promotion of individual contracts at the expense of union-secured jobs.  This did appear to inhibit the union from attacking the company on other fronts.

However, defeat was soon snatched from the jaws of labour victory, as Rio reneged on these earlier undertakings. Over the next decade, other unions - notably the United Steelworkers of America - began collaborating with Partizans; meanwhile the CFMEU's international networking on Rio Tinto tended to lapse.

When will they ever learn?

This year, a new alliance appeared to be in the offing. On April 14th, workers at Rio Tinto's subsidiary US Boron , backed by the International Transport Workers Federation and ICEM, gathered in London to map out a plan of confrontation at the company's Annual General Meeting the following day. Judging from accounts of that event, posted this week on the MAC website, most of the questions asked, and points made, enjoyed backing from all the dissenting delegates. See:

Particularly sobering to this observer was that several key grievances, exercising protestors  12 years before, were raised yet again: the despoliation caused by the Grasberg mine in West Papua; parlous health and safety conditions at the Rossing uranium mine in Namibia; failure to settle land rights issues in Madagascar; the "hollow rhetoric" surrounding recognition of Indigenous Peoples' rights.

- Not to mention that Rio Tinto continues engineering "divide and rule" tactics against its US employees - notably by using "scabs" to break the ongoing Boron strike and locking employees out of their own mine .

Indeed, accusations that "the company has contrived to achieve different retirement benefits for members of different sections of the union...a strategy designed to break the collective spirit of the union members..." ring as true today as they did in 1998. (This specific quote is taken directly from the 1998 Stakeholders Report, presented at that year's AGM).

Bribes Head Revisited

If the mood of more pedestrian Rio Tinto investors, and the sparse press coverage of the morning after, was anything to go by, the main concerns of this year's shareholders had nothing to do with the plight of workers and their families, whether in California, Namibia or Australia. Nor were they much exercised about numerous ongoing human rights and environmental abuses in West Papua (Hadn't they heard it all before? Yes, they had - and you can bet they'll continue doing so while many of these long-standing outrages remain unaddressed).

Jessica Koski, a young Anishnabe activist from Keweenaw, competently challenged Rio Tinto's proposed nickel-copper mine in Michigan, claiming it would set at risk a sacred rock and jeopardise a precious tribal watershed. She merited passing attention from the Financial Times, whose William MacNamara observed that: "The quirkiest sign that one of the UK's biggest companies has regained its footing this year is that dissent at the meeting was less focused on finances or strategy and more on issues such as 'reinforcing our relationship with the sacredness of Mother Earth', as one speaker [Jessica] put it".

Quirky or not, comments by some of the profit-taking stockholders certainly didn't confirm a view that the company has fully extracted itself from the catastrophic financial mudflows of 2008-2009. There were doubts that Rio Tinto's planned iron ore joint venture with BHP Billiton would now prove as financially attractive as it did last year. In particular, shareholders wanted to know whether, as the company's most important trading partners (and with Chinalco Rio's biggest single shareholder) the Chinese could  be trusted.

After all, hadn't Beijing just sent four Rio Tinto executives - the Stern Hu gang - to jail for bribery? We all know that the regime doesn't play by the same rules as  westerners do!

Well-briefed as they might have been to tackle such knotty questions, neither Rio Tinto chairman du Plessis, nor CEO Tom Albanese, displayed much comfort at having to confront them. The duo pendulumed between accepting the Hu trial verdict; hinting at its dubiety (though they couldn't possibly say so in public); and finally agreeing that the families of Stern Hu and his fellow delinquents should receive support from Rio Tinto while their breadwinners remain behind bars. (Of course, no such backing was offered to the spouses and children of the Boron strikers, even though they've committed no corporate crime).

Permeating this rather aimless "discussion" was a general sense that, whatever might be said or practised in future, the company will do anything to keep intact its commercial pact with China.

The future may not be shining bright - but it will certainly remain yellow.

Clutching his single share, Andrew Hickman of Down to Earth, did try to spread further the  lingering scent of something not being quite right, a greater truth remaining untold. Recently returned from Indonesia, Andrew asked why Rio Tinto's huge Kaltim Prima coal mine in in Kalimantan had been offloaded seven years ago - not just at half the going market rate, but to one of the country's most roguish businessmen and politicians. Came the peremptory response from the platform: It's no concern of ours; anyway, we're no longer in Kalimantan.

Golden Hinde

Because du Plessis cut the questioning short, it was impossible to point out that Rio Tinto, BHP Billiton, and Vale are currently being accused by Eurofer (Europe's steelmakers' federation) of illegal price fixing; the Chinese are also investigating such claims. Whether these charges will stick, or there will be further fallout from the Stern Hu affair, only time will tell.

It's well worth noting that, had the Beijing trial taken place later this year, rather than two months back, Rio Tinto would itself then be firmly in the dock. For, just before last week's AGM, the British parliament passed a new Bribery Bill.

Under this legislation any UK-listed outfit, whose staff are confirmed of corrupt practices, will also be held liable - and fined - even if its top echelons could demonstrate they knew nothing about the criminal acts. Known as the principle of a "controlling mind", it's one that Rio Tinto has clearly already violated.

Earlier this month, a British journalist rounded severely on Mr Albanese's protestation that his company, per se, had been squeaky clean in China; there was little to worry about.

"High salaries carry high responsibilities", he wrote. "The jailing of Rio Tinto's four employees suggests, at best, a complete failure of corporate procedure...More heads should roll, and they should be very senior ones"[our italics].

It's a demand that should be taken seriously, especially since it didn't come from some precocious, axe-grinding corporation-basher, but Chris Hinde.

And Mr Hinde is Editorial Director of Mining Journal - arguably the industry's best-respected global weekly.


[Sources: Partizans-Union 1997 Alliance: see "Rio Tinto, Behind the Façade: 1998 Stakeholders Report; Report of 2010; International Confederation of Chemical, Energy, Mines and General Workers Union, Brussels, 1998; Rio Tinto 2010 AGM, on the background to Boron strike see:; on failure to address environmental issues in West Papua, see:; William MacNamara in Financial Times: 16 April 2010; New Bribery Act in UK: see Press Release from BOND, Cafod, et al: "All parties unite behind landmark new law to fight corruption", London 9 April 2010; Chris Hinde in Mining Journal: 1 April 2010].

London Calling is published by Nostromo Research. Comment made in this column is solely the responsibility of Nostromo Research, and is not necessarily shared by any other party, including the editors of the Mines and Communities website. Reproduction is welcome, provided full acknowledgment is given to sources quoted and to Nostromo Research.

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