MAC: Mines and Communities

Rio Tinto 2015 AGM reports: Behind closed doors at Rio Tinto

Published by MAC on 2015-04-24
Source: Statements, City AM, AFR, New Internationalist (2015-04-24)

The recent London AGM of mining multinational Rio Tinto was covered in the Guardian along with news of the BP AGM, which took place at the same time. City AM and the Morning Star both mentioned the event and Industrial Minerals carried a remarkably positive piece for the trade press.

Meanwhile, our friends in IndustriALL Global Mining Union reported on the AGM on their website – and you can find their new report on Rio Tinto there as well.

Chunky Mark the Artist Taxi Driver recorded video interviews with several of the visitors – Chief Real MacKenzie, from the Innu people of Quebec, Canada; Sukhgerel Dugersuren of Oyu Tolgoi Watch in Mongolia (a two part interview, part 1 and part 2), and Vansler Standing Fox of the Apache people on the San Carlos Resrevation in Arizona. Chunky Mark also made his own comments on the political influence of lobbyists and mining companies.

Some of those reports are reproduced below, along with a full narrative report by London Mining Network.

The webcast of the full AGM is available at http://edge.media-server.com/m/p/q5xxmtf6.

Behind closed doors at Rio Tinto

Richard Solly

New Internationalist

23 April 2015

I can’t say I attend mining company annual general meetings (AGMs) because I enjoy them. They are a kind of liturgy in the Temple of Money, where the worshippers make their obeisance to the Golden Calf. I can’t share in their devotion.

But they are also an opportunity to cry out against the multiple injustices perpetrated by enormous corporations against communities, workers, ecosystems and our common future.

Jan du Plessis, Chair of Rio Tinto, has perfected the art of keeping order by allowing everyone to have their say. He is always polite, says that he values people’s contributions and will look into their concerns. He offers dialogue, respect...

Meanwhile, Sam Walsh fits the mould of the Techno-CEO, whose role at AGMs appears to be to attempt to bore people into a state of catatonia.

Then there are those shareholders who appear to be able to listen to complaint after complaint from communities and workers and still raise questions about how much money they ought to be making, seemingly unmoved by the human suffering they have just heard about.

This year, we heard two statements from the Board that particularly caught my ear. One was Sam Walsh’s statement that the transfer of the company’s uranium operations to its diamonds division was ‘arbitrary’.

The other was Jan du Plessis’ admission that our old friend Roger Moody, fighter against Rio Tinto for over three decades, had reached ‘the limit of [the company’s] knowledge’ about Rio Tinto’s dealings with Ivanhoe over the Monywa mine in Burma.

In both cases, I felt refreshed by their frankness, but disturbed by its implications.

As the great Native American folk singer and rock star Buffy Ste-Marie used to sing, ‘Uranium burns a hole in forever – it just gets out of control.’

You’d have thought that digging up a mineral whose toxic radioactive legacy will remain dangerous for hundreds of thousands of years might warrant decisions which are not simply ‘arbitrary’.

Also, the publication by Amnesty International in February of a weighty report about human rights violations around the Monywa mine, and the public suggestion that Rio Tinto may have been implicated in violation of sanctions against Burma, might have encouraged senior management to extend their own knowledge of the subject so that it rivalled that of our friend Roger – if such a thing is possible.

But the other issues raised by our friends from around the world were just as important.

Indigenous Innu representatives from Quebec accused the company of violating Innu land rights and announced that they want the company to pay the rent on Innu land taken without Innu consent for iron ore mining. Roger Featherstone of the Arizona Mining Reform Coalition accused the company of violating Apache Indigenous rights in the US at its Resolution Copper project, planned for construction on an Apache sacred site.

Concern was expressed about the company’s continuing coal production, which it shows no intention of ending, despite admitting the damaging impacts of coal use on the climate.

The scandal of worker deaths was raised repeatedly in connection with the company’s operations in Madagascar, South Africa and West Papua.

Indeed, the whole way Rio Tinto treats its workers was the subject of the first intervention in the AGM’s Q and A session, when Kemal Ozkan of global mining union IndustriALL stood up, accompanied by representatives of affiliated unions from Australia, Canada, France, India, Indonesia, Madagascar, Mongolia, Namibia, the Netherlands, South Africa, Britain and the United States, and denounced the company for what he said was its disrespect and arrogance towards its workers.

Little surprises me any more about Rio Tinto’s attitude to the workers and communities affected by its operations. But this year’s AGM was actually a sign of hope.

Rarely have we had so many delegates, from so many places, drawn together by their common outrage at the behaviour of one company, connecting directly with one another and sharing their stories, strengthening one another with the power of solidarity, the power of knowing none of us is alone in this struggle.

Company AGMs are an important moment to raise awareness. But it is through actions on the ground, by workers and affected communities, that companies such as Rio Tinto are compelled to change their behaviour.

When communities have the chance to connect directly with each other, and when alliances can be forged between them and mine workers, you never know what impact they could have. And last week’s AGM was a step forward in making those connections.

There is a full report on the AGM here, as well as a webcast.

Richard Solly is Co-ordinator of the London Mining Network.


Rio Tinto AGM: Workers of the world unite!

by Richard Solly, Co-ordinator, London Mining Network

http://londonminingnetwork.org/2015/04/rio-tinto-agm-workers-of-the-world-unite/

21 April 2015

Report on the Rio Tinto AGM, London, 16 April 2015

This year’s Rio Tinto AGM was another three hour marathon, preceded by a lively demonstration outside the Queen Elizabeth II Conference Centre, where the event was held. Our friends at global mining union IndustriALL had brought Rio Tinto workers from around the world to the AGM – all with complaints about the way the company treats them. They were joined by representatives of other communities affected by the company’s activities. Supporters of LMN founding group Partizans (People against Rio Tinto and its subsidiaries) and other LMN groups also raised a number of issues.

Proceedings inside began with a propaganda video about how wonderful Rio Tinto is. The company is learning and improving. It keeps its promises.

Chairman Jan du Plessis then explained that safety is the company’s prime consideration (presumably along with making a profit…) which is why we must listen to the emergency evacuation instructions for the Queen Elizabeth II Conference Centre. We did so. The Chairman went on that Rio Tinto brings prosperity and pays loads of tax. Rio Tinto is open about its tax affairs so as to help undermine the drag of corruption. It pays its fair share of taxes, he said.

Chief Executive Officer (CEO) Sam Walsh then told us that it was a real pleasure to be here, but he said it in a voice so dreary that it suggested that actually it wasn’t. Perhaps his tone was designed to send us to sleep. Rio Tinto provides jobs and livelihoods and values and cherishes its relationships, he said. It listens and is transparent. It is a unique world class business.

Sam Walsh then talked about two fatalities last year and two in the first few months of this. He said all of them were unacceptable. Safety performance is improving but he would not call it a success until all employees arrive home safely after work every day. [This was to be discussed in greater detail later on, when colleagues from Madagascar and London questioned the company’s record.]

He then boasted about the 57 autonomous trucks in operation – all of which, of course, help to reduce the need for human workers.

He boasted of the land exchange at Resolution Copper [a matter which would be raised later by colleagues from Arizona].

And he thanked the company’s 60,000 employees for their hard work.

Immediately afterwards, Director John Varley spoke about executive remuneration – suggesting that, however thankful the company is to its workforce, it is a lot more grateful to its management.

And then the Chairman opened the meeting to questions.

Kemal Ozkan of IndustriALL global union was the first speaker in the question and answer session, and when he was called on to speak all the representatives of IndustriALL-affiliated unions stood up with him.

Kemal said that Rio Tinto has achieved special status for the mineworkers of the world. He said it has been picked out for its anti-worker arrogance as well as damage to communities and environment. He complained of policies aimed at reducing workers’ rights, undermining the right to collective bargaining and outsourcing of work to third party contractors. He drew attention to the report which IndustriALL had just published about the way the company actually works – available at http://www.industriall-union.org/sites/default/files/uploads/documents/Rio_Tinto_Campaign/pre-agm_handout_hires21.pdf. He said that Rio Tinto could set a new industry standard. IndustriALL works together with companies to ensure minimum standards, but when an IndustriALL delegation had recently travelled to Zurich to meet with Rio Tinto, the company had given an enormous display of arrogance. A couple of days later the union had received a letter threatening to sue it over its calls to the company to clean up its act. Kemal asked when Rio Tinto would move beyond simply reporting good practice and make it a reality? Did it intend a genuine dialogue with unions based on mutual respect? (For Kemal’s whole statement, see http://www.industriall-union.org/sites/default/files/uploads/documents/Rio_Tinto_Campaign/rio_tinto_agm_statement_final.pdf.)

Chairman Jan du Plessis answered that Rio Tinto treats its people worldwide with the greatest of respect and that IndustriALL had chosen to campaign against the company that probably sets the highest standards in the industry.

CEO Sam Walsh thanked Kemal for his question and thanked all the representatives of IndustriALL for being at the AGM, prompting one shareholder to shout, “Don’t be patronising!”

Sam Walsh said that discussions with the union had broken down because the company could not engage with it. He did not understand why IndustriALL thought Rio Tinto’s diamonds were ‘dirty. He said that the union’s campaign against Signet jewellery company was a ‘secondary boycott’ against a part of the company’s operations which is doing a good job. He accused the union of trying to boycott Rio Tinto’s customers. [This was at best a misunderstanding of IndustriALL’s campaign, which was not a boycott but a call to Signet to put pressure on its diamond supplier, Rio Tinto, to improve its behaviour across all its operations – it did not single out the company’s diamond operations for particular criticism.]

Sam Walsh said that Rio Tinto’s ‘direct engagement’ with its workers is a response to the fact that people want to hear from the company and know what is going on in the business. Workers want to hear directly from the CEO and others in the company. He said it is important that Rio Tinto does communicate, involve and engage its employees. The company has a range of agreements and operating methods with its employees, including through unions. It offers good conditions and terms of employment, focused on safety. Rio Tinto does not always get it right, and with 60,000 employees that is difficult.

With regard to outsourcing, Sam Walsh said that the company outsources specific tasks because of the particular expertise that a supplier or contractor provides. This may be something that the company needs periodically rather than regularly, for instance to respond to a market upturn. This is not anti-union, he said, but a recognition of the fact that in the business there are core functions that Rio Tinto needs to provide and others it needs to supply with outside expertise.

Keelia Fitzpatrick from Share Action said that Rio Tinto had improved its tax reporting in recent years. She said that in an interview last year the Chairman had called for international tax reform. He had called some corporate practices abusive. Keelia said that she was concerned that Rio Tinto’s tax arrangements in Singapore may fall under this heading. [The Australian Tax Office is investigating Rio Tinto’s tax affairs in Singapore.] Rio Tinto is selling Australian copper and iron ore from Singapore rather than from Australia. The company paid 41 million dollars tax in Singapore. The Annual Report does not state the level of profit connected with this. She said she hoped Rio Tinto would commit to honest and transparent co-operation with the investigation into its Singapore tax arrangements. Would the company commit to greater transparency, including listing the numbers of its employees in each jurisdiction?

Jan du Plessis said that Rio Tinto had begun publishing the taxes it pays five years ago. Many companies in the sector were very critical of them for doing so. He said that Rio Tinto thinks transparency is the right way to go. Many multinationals employ abusive tax practices. Rio Tinto does not. The company’s Singapore operation has nothing to do with tax planning. The company employs 300 people there as a commercial centre close to customers. Rio Tinto has nothing to hide about what it does there. The company has a highly effective corporate tax rate. In Australia for the last seven years it has been either the biggest or second biggest corporate tax payer. It is proud of this and will continue to be transparent.

Shareholder Alan Smith asked how long the current auditors, PWC, have served for. Jan du Plessis said it was more than 20 years. Alan Smith said that this was awful and asked if different auditors could be proposed next year. Ann Godbehere, Rio Tinto’s board member with responsibility for this matter, said that although PWC has audited Rio Tinto’s accounts for many years, the personnel involved ‘rotate’ so that fresh eyes look at the accounts every year. Many pairs of eyes are involved. Many global firms have the same auditors over similar periods. Rio Tinto is satisfied by the quality of the service it receives and the fees it pays. New rules in the UK will force companies to change long-term auditors and the latest year to ‘rotate’ is 2021. Rio Tinto will probably ‘rotate’ by 2020. There is much change in the company at present, and so it is not the best time to change the audit firm. Under new EU regulations, Rio Tinto will have to publish what fees PWC gets in addition to audit fees. This year’s fee was a decline from last year. Non-audit fees were less than 20% of the total. EU regulations say non-audit fees must be less than 70%.

There was a question on profits from aluminium. Sam Walsh gave an answer that was so long and so drearily delivered that I lost track of it….

Jean-Claude Pinette of the Innu Land Rights Protection Office in Quebec said that the Innu own the land where Rio Tinto operates in Quebec. Innu people were part of the team looking for the mine’s train driver who died last year and are deeply sorry for the family. He introduced the Innu Chiefs present, who each spoke briefly in the Innu language. Jean-Claude read a declaration saying that Rio Tinto’s mining operations in Quebec are affecting Innu land and culture. The company shows no respect for aboriginal rights. It is ignoring the Innu people’s constitutional rights. The Innu have not given their consent to mining and have been offered no compensation. That is why they have now begun legal proceedings against the company. Rio Tinto is facing a $900 million dollar law suit. Jean-Claude said that the Innu were the first owners of their beautiful land. When would Rio Tinto negotiate with them and sign an agreement like the one it signed with Aboriginal Peoples in Australia? When will Rio Tinto respect them as the company says it does? Rio Tinto takes all the resources without sharing the benefits with the Innu, the owners of the land. Rio Tinto treats them as a problem. When will the company pay the rent for use of the land?

Jan du Plessis thanked him for his contribution. He said that Rio Tinto has a worldwide reputation for always treating local and aboriginal people with respect. (There were outraged guffaws at this from several shareholders.) Du Plessis said that in Australia Rio Tinto is the most respected company for relations with aboriginal people; and similarly in the Northwest Territories of Canada. He said that the question of legal rights of aboriginal groups is uncertain in Canada. Rio Tinto will fully comply with its legal obligations once legislators agree on what the system should be. He said that as the matter is currently in the courts there was not much more that he could say.

Anne-Marie Williams, an individual proxy-holder, asked how Rio Tinto was addressing the business risks of climate change. She said that it is good that it is using cleaner sources of energy, reducing its greenhouse gas intensity and its absolute emissions. But what are its new targets? It is continuing to invest in coal extraction. This releases fugitive methane as well as causing problems when burned. Does the company plan to reduce its exposure to coal?

Jan du Plessis replied that 65% of the company’s energy mix comes from renewables (although that is only the domestic consumption of energy - and ignores the embedded emissions of its coal, aluminium, steel and other production). The company recognises that the climate is changing and that man-made emissions are principally responsible. That is why Rio Tinto has worked to reduce its carbon footprint. In addition to environmental considerations, the less energy it consumes, the more money it saves. He said that coal is a fossil fuel responsible for a lot of global warming, but that the world will be dependent on fossil fuels for a very long time, until we have developed sustainable energy from other sources. Coal, oil and gas will be very important for a long time. Rio Tinto has a coal business under pressure from a low coal price but the company continues to be committed to coal. The world needs to find credible alternatives before the company starts closing coal, oil and gas operations.

Roger Murray, an individual shareholder, said he was concerned about the future of Rio Tinto’s uranium portfolio in Namibia and Australia. Why had the company’s uranium operations been moved from the energy division to the diamonds division?

Sam Walsh said that the company’s energy group, including coal and uranium, was having a tough time. It was breaking even and the company had reduced its costs by $800 million but the company needed to take the overheads structure out of that business and spread it across the company. The move to the diamonds division was quite arbitrary, he said, and simply because of the geographical proximity of diamond and uranium operations in Australia and Southern Africa. The uranium market continues to be tough post Fukushima. New nuclear stations are being built in China, one in the UK, another in the Middle East. In Japan there are court cases over whether nuclear stations can come back on stream or not. In addition to Namibia and Australia, Rio Tinto has a potential project in Canada.

Roger Featherstone, Director of the Arizona Mining Reform Coalition, spoke about Oak Flat, a sacred and ecologically priceless area of public land in the south-western United States. He had raised this matter at the two previous AGMs and at the last one Sam Walsh had said that he would contact Roger if he visited the area. Sam Walsh did visit a few weeks ago without contacting Roger. The company has finally succeeded in engineering an Oak Flat land exchange law in the US Congress. Destruction of this piece of land was tantamount to destruction of Apache religion. Roger accused the company of resorting to the “worst of dirty and insulting tricks, by applying the land exchange to a defence bill with sixteen hours to go before the vote came up.” He asked whether this was the way the board wants the company to operate. He said that the company says that it seeks to operate in accordance with the United Nations Declaration on the Rights of Indigenous Peoples and to attain Indigenous Peoples’ Free Prior Informed Consent before mining, but that it had done the opposite at Oak Flat. It had worked behind the scenes to scupper the US Forest Service’s attempt to declare Oak Flat a site of cultural and historic interest. The company was also working to influence people among the Apache community. He asked why the company felt that it had the right to destroy someone else’s religion? (Roger’s full remarks can be found at http://www.azminingreform.org/content/statement-roger-featherstone-rio-tinto-agm-4-16-15.)

Jan du Plessis replied that when Resolution Copper is up and running it will provide 25% of US copper and create over 3000 jobs. A lot of work needs to be done before the mine has the right to operate. Rio Tinto continues to be committed to working with local communities on the social and environmental consequences of mining, but a large proportion of local people are supportive of the project.

Sam Walsh said he did undertake to visit Resolution at the last AGM and he had now done so. He had an open meeting with community representatives from a broad range of groups. There were 70 or 100 people in the room. Rio Tinto continues to be transparent in what it is doing. The land exchange was part of the process. Beyond this the company needs to obtain a whole raft of approvals and it could take six to eight years for those approvals or rejections to come forward. The project is important in providing 25% of US copper needs potentially. He said that everyone uses copper. Copper projects are getting harder and harder. They are getting deeper. The Resolution shaft is 2km deep, the deepest in North America, but is high grade.

Sam Walsh said that in addition to visiting the operation and meeting local community members, he had a public meeting in Phoenix with another 200 people. He used that meeting to show what Rio Tinto intends to do. Some people decided not to attend. There were representatives of the San Carlos and White Mountain Apaches and Gila River. They are trying to improve the well-being of their communities, where there is 70 to 75% unemployment. This project will require 3000 workers. It will put some $60 billion dollars into the economy. It is important. Sam Walsh drove through the region, visiting the townships of Superior and Miami and seeing an area in need of reinvigoration. Resolution has the potential of being the largest foreign direct investment into the US. Hence the approach Congress took. Rio Tinto needs to continue to prove out the project and determine whether it is viable and attractive.

Sam Walsh said that, as for the sacred nature of Oak Flat, there is an open debate. Some people believe that it is a sacred site. Others say it is not sacred to them. In their view it has little history as a sacred site. Sam Walsh said he is not an expert and has to rely on people on the ground. Rio Tinto understands the concern and has to go on working with people in the area.

Roger Featherstone asked whether this disagreement gave Rio Tinto a right to destroy someone’s religion. Those Apaches for whom Oak Flat is sacred say that this project will destroy their religion.

Sam Walsh said he had met Apaches who say it is not sacred.

Andy Whitmore, an individual shareholder, said: “Last year, I asked a question about our 68% owned subsidiary Energy Resources of Australia (ERA). I welcome your acknowledgement at Rio Tinto’s 2014 AGM in Melbourne, after last year’s question, that both Rio Tinto shareholders and those of ERA have a common interest in the rehabilitation of the Ranger uranium mine in the Kakadu World Heritage area. ERA’s financial constraints in relation to meeting rehabilitation obligations have been well publicised. Therefore, will you today provide a guarantee to shareholders that Rio Tinto will ensure that the full rehabilitation at Ranger will be adequately funded and that the landscape and people of Kakadu National Park will not be left with a radioactive legacy, nor our company left with a continuing controversy?”

Jan du Plessis replied that he had spoken to the people doing some of the work being done. He said it is hard work to rehabilitate land in a place which gets as hot as this. The Kakadu National Park is staggeringly beautiful. Rio Tinto appreciates the need to take care of that site and make sure it is properly rehabilitated. The board takes the view that the Ranger Three Deeps project should provide the cash required to rehabilitate the land. Should the board of ERA announce a rights issue, Rio Tinto will put further cash into the company so it can meet its obligations.

Ron Thomas, President of the United Steel Workers union (USW) local from Labrador City, Canada, representing 1400 members, said that the video displayed at the beginning of the AGM showed a company very different from the company he works for. USW has been requesting meetings with the management at Rio Tinto subsidiary IOC for years and got nowhere until just now, when the management got wind of the fact that Ron was coming to the AGM. He was given a paper saying that 150 workers would be laid off. The collective agreement is being ignored. Workers are treated with disrespect. There are 2,300 grievances at arbitration. IOC’s record is the worst that the arbitrators have ever seen. Contractors are coming in who are not skilled and would not be hired by IOC directly because of their lack of skills, but the company is paying them four times as much as its own employees. Ron said that the workers are not the enemy. They want to work with Rio Tinto and help save costs.

Sam Walsh replied that IOC was under stress. Old producers like IOC have high costs. Tough decisions have to be made. IOC has to convert the ore body through concentration into pellets and that adds costs in addition to high transportation costs. He said he was not aware of the 2,300 grievances and needed to investigate that and understand what is going on. He understood that the management had asked the union to look at their current agreement. Management was trying hard to keep the business afloat and keep jobs. Nearby operators had moved into liquidation to avoid their obligations, including obligations to Rio Tinto. Sam Walsh said he fully understood the workers’ predicament and how difficult it is in Labrador City and he would investigate the grievances. He said he did not believe Ron’s numbers were right on contractors. He would look into it but it would surprise him if IOC were paying contractors four times what employees were paid. IOC does work with the union and it has been hard delivering tough messages. The agreement put in place should stand but when you are trying to keep a business afloat it is tough. The President of IOC has moved to Labrador City so he can be physically on the ground and take action to keep the business afloat. The office in Montreal was shut. Competitors have taken a different stance but that is what the company is trying to avoid.

Lisa Nathan, an individualproxy-holder, said that she was concerned about lobbying activities and the funding of third party organisations lobbying on climate change. The company had recognised that individual jurisdictions have to set strict rules in the absence of an international agreement. But she noted that research by IndustriALL has shown that the company’s Political Action Committee (PAC) in the US was funding organisations lobbying against strong action, and that research by PSI had found that, in Europe, Rio Tinto belonged to the trade association Cefic, and Rio Tinto Alcan to the trade association Eurometaux, whose lobbying positions seem to contradict the company’s positive public statements. Both have also lobbied against strong regional (EU) climate policy, which goes against the company’s own position. She asked the board to clarify whether the company supports the lobbying position of these two trade associations, and if not, whether the board would be willing to make a public statement distancing the company from them or withdraw its membership. Would Rio Tinto publicly contradict the position of these lobbying organisations or withdraw its membership?

Jan du Plessis replied that Rio Tinto does not fund any political activities. It is part of trade associations though it does not necessarily agree with all their views.

Sam Walsh said that the PAC is permitted by US law and is a form of fundraising by employees. The money raised is relatively modest, $30,000 to $60,000 a year, and is controlled by trustees made up of employees. Management does not control the destination of the funds. There are also charitable funds that employees are engaged in and management does not get involved in those either. Rio Tinto does not make political donations and that is a relief as there are many groups looking for funds. With relation to trade organisations, he was not familiar with their climate change approach. The company would investigate to understand exactly what is the issue. Rio Tinto does take climate change very seriously. It has reduced its greenhouse gas emissions and their intensity since 1998.

Bongani Monyani from the National Union of Mineworkers (NUM) in South Africa, said that shareholders would be voting on an increment to executives but not on pay for workers. Workers are also shareholders. Shareholders should accept greater shareholding by workers. He said that Rio Tinto is selling the Zululand Anthracite Colliery (ZAC) in South Africa. It had tried before and the transaction had collapsed. Workers need to know who are the potential buyers and what will be the benefit to workers and the community of this sale.

Bongani said that only two fatalities had been mentioned as happening this year. But there were two fatalities in the anthracite colliery. A worker died underground and the company said it was from natural causes, but after an investigation it was said it was not natural causes, and people need to know.

Jan du Plessis replied that Rio Tinto has good relations with workers and needed to pay well for the work they do. A man had died a few weeks ago at ZAC and the autopsy was unclear about the cause of death, so the company is getting a second opinion. He assured Bongani that fatalities are taken very seriously.

Andrew Hickman of London Mining Network called out, “What about the seven deaths at Grasberg this year and the 39 others in recent years?

Jan du Plessis said he would come back to that.

Sam Walsh said that a lot of work had been done to improve ZAC, one of the assets Rio Tinto picked up in the Riversdale transaction. If there are people who value assets more than Rio Tinto does, the company will consider proposals. No decision has been made about the sale of ZAC. It depends on the synergies that others see. There is a symbiotic relationship with Richards Bay Minerals, as ZAC supplies anthracite to Richard’s Bay.

Andrew Hickman said that although seven deaths were listed in the annual report over the last year, there had been a total of 39 deaths just at Grasberg, and those were not included in the figures given at the AGM. He asked whether this was good enough, in this one mine.

Jan du Plessis replied that Grasberg was controlled by Freeport. He said that Grasberg’s safety record was appalling, that Rio Tinto’s board is shocked by it and finds it unacceptable. Rio Tinto is working as hard as it can and as closely as it can with Freeport to improve the safety record.

Mamy Rakotondrainibe of the Collective for the Defence of Malagasy Land thanked the Chairman and CEO for showing they were aware of the fatal accident at the QMM mine in Madagascar in January. She asked if the company could share the result of its investigation. How is it possible that such dangerous work was being done during the night? How is it possible that it took 17 hours to find the worker inside the tailings pond? What measures were being taken by QMM Rio Tinto concerning the safety of workers and procedures for emergency?

Jan du Plessis said that Rio Tinto was shocked at what happened there. When they have a fatality, Sam Walsh sends an immediate message to Jan and the Chair of the Sustainability Committee. At the Sustainability Committee meeting they always devote an enormous amount of time to undertsanding why a fatality has happened. They take these things very seriously.

Sam Walsh said that there had been a landslip in the bank of the tailings pond, because of the way that the bank had been built and the unique nature of the pond. This had never happened before and was totally unexpected. 30,000 tonnes of material shifted. This resulted in a huge excavator disappearing some distance into the pond, totally covered by water. Why was the equipment operating at night? It is a 24 hour operation and the work being done was required to make sure the company could continue depositing tailings in this pond. Why was the worker not wearing the life jacket which is a requirement for doing work near water? He said they do not yet know why. This was not first time and there is a need to update procedures and supervision of this kind of work. It took 17 hours to find the worker because the pond had to be drained to get to the excavator and then to the employee. It was extremely tragic. Rio Tinto has made a significant improvement in its injury rate and QMM has an excellent track record of low instances of injuries but this clearly did not help this time. Rio Tinto does have a process to make sure that procedures are really implemented.

John Farmer, an individual shareholder, complained about the clash of the Rio Tinto AGM with that of BP, pointing out that this had happened many times. Would the company undertake to avoid such a clash in future?

Jan du Plessis said that he sympathised but that it was difficult to avoid clashes.

John Farmer retorted that there are 250 working days in the year and that if managers of FTSE companies cannot manage a diary, what else could they not manage?

Mike Franks, an individual shareholder, said that Rio Tinto had been subject to adverse comment in an Amnesty International report about its activities in Myanmar (Burma). He said that it appeared that Rio Tinto was implicated in possible evasion of sanctions through the setting up of a trust, as well as in human rights abuses. Since its inception, the Monywa mine had been built on forced evictions and other violations. Could the Chairman explain how this fits with the company’s public stance about being environmentally responsible and transparent in all its dealings? Will the company quickly settle the forthcoming court cases on this matter?

Jan du Plessis replied that these events took place before Rio Tinto owned Ivanhoe, the company running Monywa. When Rio Tinto took control of Ivanhoe (now renamed Turquoise Hill) Rio Tinto insisted on the disposal of Monywa as it could not stomach such an asset.

Roger Moody, shareholder and mining researcher, made a point of order. He said that under the agreement signed between Tom Albanese of Rio Tinto and Robert Friedland, the owner of Ivanhoe, in 2006/7, Ivanhoe agreed to disinvest from Burma until a democratic regime had been installed. In return for this, a succession of investments would be offered by Rio Tinto in Ivanhoe while Ivanhoe was still operating in Burma. Many of the abuses alleged by Amnesty International continued while Rio Tinto was involved. Who set up and ran the trust which was supposed to manage the Monywa Mine? The allegations in the Amnesty International report implicate Rio Tinto in breach of sanctions and human rights abuses. Rio Tinto could publish details of the transactions that took place between Ivanhoe and Rio Tinto between 2006 and 2009/10. The UK Government is taking this very seriously and shareholders are entitled to this information.

Jan du Plessis said that he was out of his depth. He said that the company in Myanmar was not controlled by Rio Tinto, so Rio Tinto had no ability to influence its affairs.

Sam Walsh said that his understanding was that at the time Rio Tinto moved to acquire control of Ivanhoe, the condition was that divestment should take place. He said he had no knowledge of the agreement. The board could look into this.

Jan du Plessis added that Roger had reached the limit of their knowledge in the matter.

Roger said that Rio Tinto needed to drag up the exact terms of the agreement. Tom Albanese had admitted that what Rio Tinto was after was control of Oyu Tolgoi in Mongolia, controlled by Ivanhoe. Years before, the Chairman of Rio Tinto had said that the company would never invest in Burma while the military regime was in place. Rio Tinto would not increase its investment in Ivanhoe beyond a certain point until Ivanhoe had quit Burma – but Rio Tinto had increased its share in Ivanhoe to over 30% while Ivanhoe was still involved at Monywa.

Richard Greening, representing the Local Authorities Pension Fund Forum, involving local authority pension funds together owning around 3% of shares of Rio Tinto, congratulated the company on its tax transparency. He asked the board to reconsider its approach to the replacement of its auditors, which he said was urgent. He asked the company to redouble its efforts to solve the problems mentioned at the AGM from around the world. In difficult market conditions, he said, local management can often take decisions which are not good for workers and local communities. Lawsuits are not good – the company should make efforts to resolve problems before such lawsuits began. On climate change, he said that it is clear that to restrict global average temperature rises to two degrees and avoid catastrophic climate change we cannot continue to extract fossil fuels, and coal is especially risky. As we have to continue to use fossil fuels to an extent, the use of gas is far more sustainable than coal. How is the company proposing to address the risks being run by thermal coal?

Jan du Plessis replied that there was no doubt that gas is cleaner than coal. Everyone would love to live in a world where clean energy is running everything. He said we should focus on how we use energy, not just on the source of energy: on energy efficiency, as well as developing better sources of renewable energy.

The meeting was then brought to an end after around three hours, without time to raise several other points which Partizans supporters wished to raise on Bougainville, the health impacts of uranium mining and the particular problems connected with the Oyu Tolgoi mine.


Rio Tinto shamed by unions

IndustriALL statement

16 April 2015

World leader in workers’ rights abuses, Rio Tinto was targeted today in London by an angry coalition of campaigners calling for the company to clean up and act responsibly.

IndustriALL Global Union’s network of unions at Rio Tinto took their raft of grievances to the annual shareholders meeting today. The mining giant was shamed by its failures on union rights, worker safety, damage to the environment, and indigenous peoples and other communities.

A number of trade unions from all over the world along with NGOs and groups of indigenous people rallied outside the venue of the Rio Tinto AGM 2015. With chanting and delivering a defiant message that the IndustriALL campaign will continue.

Inside the AGM, IndustriALL assistant general secretary Kemal Özkan delivered the joint message of the union network.

Kemal Özkan says:

Our campaign will continue until Rio Tinto becomes the social actor it describes itself to be. All we seek is respect for workers, indigenous peoples, communities and the environment.

Ron Thomas, USW president at Rio Tinto’s operations in Labrador City, Canada, said to the AGM:

“I’m asking Rio Tinto to treat our members with respect and to stop using contract workers. We want to work with Rio Tinto and get our jobs back.”

Strong criticism came from the floor of the AGM, holding Rio Tinto to account for its arrogant disrespect of other affected stakeholders.

The Innu Nation of Quebec made a strong symbolic gesture by addressing the AGM in their native language, before stating:

“We came here in peace. When will Rio Tinto negotiate and sign an agreement with us. You are taking out the resources without sharing the profits with us. The time has come to pay the rent to the real owners of that land.”

Political funding in the US, non-transparency in numerous deals including in Myanmar, and environmental degradation were strong issues raised.

The Chairman and CEO were required to explain recent events around Rio Tinto workers being killed on the job in Madagascar, Canada, South Africa and Indonesia.

Directly following the AGM, the IndustriALL-led group demonstrated outside two jewellery stores owned by Signet, who source their diamonds from Rio Tinto. Customers of the H. Samuel and Ernest Jones shops on Oxford Street, in the heart of London’s busy shopping area, were told about how Signet’s diamonds are dirtied by Rio Tinto’s unethical behaviour.


Global activist groups gather to protest Rio Tinto investor event

Caitlin Morrson

City Am

17 April 2015

Mining group Rio Tinto held its annual general meeting yesterday against a backdrop of protests against its environmental record.

Representatives from global workers' unions, including Unite and IndustriALL, as well as the London Mining Network, gathered in London to draw attention to the firm's transgressions.

IndustriALL's Kemal Ozkan said: "The company systemticlalyt fails on environmental, social and governance factors and our campaign will continue until Rio Tinto becomes the social actor it describes itself to be".

Richard Solly, coordinator of the London Mining Network, said that while Rio Tinto offers dialogue with protesters every year, "the pace of actual improvement in the company's behaviour is glacial".

The group, which knocked back a takeover bid from rival Glencore last summer, declind to comment.


Trade unions accuse Rio Tinto of irresponsible operation

By Kasia Patel

Industrial Miners

16 April 2015

Protesters gathered outside Rio Tinto’s AGM in London today to raise concerns about the company’s operations, particularly its treatment of employees and communities living in areas from which the mining giant sources its raw materials. Though the company has yet to respond to reports published by IndustriALL, it has previously refuted claims by the trade union regarding its safety records and staff treatment.

Investors arriving today at Rio Tinto’s annual general meeting today in London, UK, were faced by vocal criticism of the company’s mining practices from protestors gathered outside Queen Elizabeth II Conference Centre in Westminster.

IndustriALL Global Union, Unite the Union and London Mining Network brought together a number of trade unionists and communities affected by the mining giant’s operations to call for an end to Rio Tinto’s "poor treatment of workers, indigenous communities and the environment".

Among the accusations made by protesters is the company’s anti-union behaviour, failures in worker health and safety, increased use of outsourced or temporary workers, poor relationships with communities, irresponsible political activity, failure to respect the rights of indigenous people and a lack of transparency.

Speaking to IM, Kemal Ozkan, assistant general secretary of IndustriALL Global Union and one of the protest organisers, said that many Rio Tinto investors do not know exactly what is going on at Rio Tinto operations and that the group was working to bring these issues to the forefront.

"We are demonstrating before the AGM (…) as what we have observed is what Rio Tinto claims to be is not the reality. What we have is the complete opposite to what they report in their documents. This is why IndustriALL Global Union has produced its own report this time called 'The Way it Really Works’," Ozkan said.

Although IndustriALL, an international trade union federation regrouping more than 50m workers in 143 countries in the manufacturing, energy and mining sectors, participated in protests at Rio’s AGM last year, Ozkan said that the company has continued to operate in the same manner without offering a clear response.

"After the protest, we will be going into the AGM and our network has agreed on a joint statement it will personally make to the chairman and CEO, expressing our discontent, anger and outrage about what is going on in Rio Tinto operations worldwide," Ozkan told IM.

Ozkan said that Rio Tinto had been singled out for its anti-worker arrogance as well as its damage to local communities and the environment.

"The company systematically fails on environmental, social and governance factors and our campaign will continue until Rio Tinto becomes the social actor it describes itself to be," Ozkan added.

Rio Tinto’s move

"Year after year at Rio Tinto's AGMs, representatives of communities across the world make clear their concerns about Rio Tinto's behaviour," Richard Solly, coordinator of the London Mining Network, said ahead of the protest.

"Year by year, the company thanks them for coming, says it respects their views, and offers dialogue. But the pace of actual improvement in the company's behaviour is glacial. It needs to walk its talk," Solly added.

Rio Tinto did not immediately respond when contacted by IM for comment, however the company has previously hit back at allegations made by IndustriALL.

In October 2014, Rio Tinto told IM that it was "disappointed" about unfounded allegations made by the trade union regarding its safety record across its operations ahead of a protest held on 7 October.

"In our view, it is misleading to misrepresent workers’ conditions or to call into question the value that Rio Tinto places on the health and safety of its employees," a spokesperson for the company told IM.

Aboriginal rights

Rio Tinto is a leading producer of iron ore, an industry where falling prices are raising questions about the company’s strategy to ramp up production.

The company is also active in mineral sands markets, and in 2014 produced 1.44m tonnes titanium dioxide (TiO2), slightly below 1.5m tonne guidance for the year. For the fourth quarter, output was at 316,000 tonnes in 2014, down 12% year-on-year (y-o-y) and 13% quarter-on-quarter (q-o-q).

2014 borates production for the company 508,000 tonnes, a 3% y-o-y increase, while in Q4 2014, borates production of 123,000 tonnes was 1% up y-o-y, but 3% lower than the Q3 2014 output.

However, today the company was heavily criticised by activists for failing to respect the rights of aboriginal people in the locations from which it sources its raw materials.

Among the protestors were three First Nations chiefs representing the rights of indigenous people in Canada, looking to end a longstanding dispute between the Innu Nation in Quebec and Rio Tinto majority-owned mining company, IOC.

"Rio Tinto began operating without consultation," a spokesperson representing the group told IM. "The Innu Chiefs are looking to negotiate an agreement with IOC as this is their land, or they would just like a meeting to be heard."

According to the group, IOC has reached impact and benefit agreements (IBAs) with other Canadian aboriginal groups but "not with those who hold ancestral title to the territory affected by mining activities".

The spokesperson added that mining activity carried out has devastated communities, having a real impact on the Innu people’s lives, with many families forcefully evicted from their native territory.

Rio Tinto was also accused of not respecting the rights of aboriginal people in Africa.

Speaking to IM, Ebenezer Zarondo, representing the Mineworkers Union of Namibia, said that Rio Tinto was mining in areas belonging to indigenous people and profiting from diamonds extracted and revenues earned without giving back to the community.

"The steps the company needs to take is that they need to realise that indigenous working groups must also be respected like real human beings, and Rio Tinto must also know that the precarious work is affecting the world, not necessarily in individual parts of the world," Zarondo said.

Precarious work

The protest was additionally attended by current or previous employees of Rio Tinto, some of which were represented by the United Steel Workers union, who have been campaigning against Rio Tinto since the company laid off 780 workers in Quebec in 2012.

The union, which represents about 4,000 Rio Tinto workers in North America, was also campaigning for the safety of existing workers, and expressed concerns about the increase in precarious labour.

Ron Thomas, the union’s president, told IM: "We’re here because we’re looking for respect and to get our jobs back."

"We have been campaigning against Rio Tinto since [2012] to try and make them a better company, to try and make them act in a civilised way towards workers and communities," another spokesperson told IM. "They haven’t changed their attitude or behaviour and we will be here until they do."


Mining vs. Aboriginal Rights in Canada - Rio Tinto Told to Pay its Rent to the Innu People

Press Release

16 April 2015

London, United Kingdom - Three First Nations chiefs, dressed in traditional garb and aware of the historic nature of their action, have come to London to address the shareholders of mining giant Rio Tinto directly during their annual general meeting today, April 16, 2015. On the floor of the meeting, they asked Rio Tinto’s president and CEO, Sam Walsh, and its board of directors to intervene to end a longstanding conflict between the Innu Nation in Quebec, Canada, and mining company IOC, majority owned by Rio Tinto.

Inspired by Midnight Oil’s Beds Are Burning, a political song demanding the return to Australian aboriginals of ancestral lands stolen 200 years earlier by British colonists, the Innu chiefs informed Rio Tinto that “it’s time to pay the rent,” 60 years after exploitation of their territory began.

Supported by international law recognizing that indigenous peoples have rights—notably free, prior and informed consent—the Innu chiefs wanted to inform Rio Tinto shareholders that they can shed light on the negligence of IOC in Canada.

The Innu chiefs sought to inform Rio Tinto shareholders that there is specific legal precedent in Canada, where a recent Supreme Court ruling recognized the existence of First Nations ancestral title and stated that Aboriginal peoples holding this title, including the Innu of Quebec, “have the right to the benefits associated with the land—to use it, enjoy it and profit from its economic development” (excerpt from the ruling).

The declaration render to the shareholders:
On behalf of our people, and the Chiefs of Uashat mak Mani-utenam, Ekuanitshit and Matimekush-Lac John, of the Innu Nation, we travelled across the Atlantic to inform you that your mining operations in Quebec, Canada, are affecting our lands, our people and our culture. For more than 65 Years, with no respect of our aboriginal rights, recognized by the United Nations and the Canadian constitution, your companies have exploited our territory’s resources without our consent and without compensation. As a consequence, we have had no choice but to begin legal proceedings. You need to know that, at this very moment, Rio Tinto is facing a 900 million dollars lawsuit. In August 2014, instead of dealing with us, Rio Tinto signed a benefit agreement with people that never lived on this land, our land; a shameful decision from all investors who accepted and supported this decision.

We came here in peace and to be respected as the first owners of this beautiful land. Our question is: when will Rio Tinto negotiate and sign a reconciliation agreement with us like the one signed with our brothers and sisters from Australia? When will you respect us with the highest standard of your industries and the level of ethic that you say you uphold? You are taking all the resources without sharing the benefit with us, the children of the Nitassinan. For decades, our people have been ignored and are being treated as a problem instead of partners.

Our message is clear: the time has come to pay the rent to the real owner of the land: the Innus of Uashat mak Mani-utenam, Ekuanitshit and Matimekush-Lac John.

The mining company’s megaproject on the Innu people’s territory includes 20 mines that have since been abandoned, nine operating mines, a railway, three hydroelectric dams and port facilities. Rio Tinto’s activities have devastated the Innu territory permanently and have forced the eviction of families from their native territory, dispossessing them illegally of what formed the essence of their traditional lifestyle. IOC has reached impact and benefit agreements (IBAs) with other Aboriginal groups in Canada, but not with those who hold ancestral title to the territory affected by mining activities.

After the meeting with Rio Tinto shareholders at the annual meeting, the Innu delegation will head to Paris for other awareness-raising and information activities on April 17 and 18.

For information on this campaign: http://paytherent.info/

-30-

Rio Tinto AGM takes place at Queen Elizabeth II Conference Centre (Broad Sanctuary, Westminster, London)

For more information, and for interview requests:

In Canada
Raoul Vollant
ITUM Communications Division
418-964-6289
Raoul.vollant[at]itum.qc.ca CAN: 1-514-922-9246

In Europe
Éric Cardinal
Communications Advisor
UK: 0203 5952 599
ecardinal[at]national.ca


Appeals court breathes new life into lawsuit against Rio Tinto Alcan

Mark Nielsen

Prince George Citizen

15 April 2015

Two B.C. First Nations will be able to take their claims against Rio Tinto Alcan to trial, the B.C. Court of Appeal has ruled.

An attempt by the the Saik'uz and Stellat'en First Nations to sue the company for nuisance and breach of riparian rights with respect to the Kenney Dam and Alcan Reservoir had hit a roadblock when a lower court threw out their lawsuit.

But that was overturned Wednesday. In reaching its decision, the court rejected Alcan's argument that First Nations have to prove their interests against the Crown before bringing a claim against a third party.

The legal action claims that Alcan's operations of its dam and reservoir, and the diversion of water from the Nechako River since the 1950's, are causing significant impacts to the Nechako

fisheries and harming the aboriginal rights and title of the two First Nations.

The lawsuit claims that the 1987 and 1997 Settlement Agreements entered into by Alcan and B.C. and Canada are not defenses against the First Nations, based on constitutional grounds.

The court agreed these are valid arguments for the First Nations to make in Court.

"We are very pleased with the court's decision," Saik'uz First Nation Chief Stan Thomas said in a statement. "We intend to pursue our action for an injunction to protect the Nechako River, our fisheries and our way of life".

Stellat'en First Nation Chief Archie Patrick said the Court of Appeal has recognized that First Nations' aboriginal title exists, prior to proof in court or treaties with government, and can sustain the same kinds of private law protections as any other individual land owner.

"Our Peoples are determined to continue to seek justice for our rights and the Nechako River," Patrick said.

The First Nations' lawyer, Gregory McDade, said it's a significant decision in aboriginal law.

"It recognizes that First Nations have existing legal rights that are subject to protection now, and that third party industrial interests must respect those rights".


Investigate Rio Tinto’'s role in potential Myanmar sanctions busting

Amnesty International Press Release

16 April 2015

The UK Government must investigate the British-Australian mining corporation Rio Tinto over a possible breach of EU economic sanctions on Myanmar, Amnesty International said ahead of the company’s annual shareholder meeting in London today (16 April).

Rio Tinto was instrumental in the setting up of the secretive '‘Monywa Trust'’ which enabled Canadian-based Ivanhoe Mines (now Turquoise Hill Resources) to divest its stake in the controversial Monywa copper mine project in central Myanmar, where abuses have included forced evictions and extreme pollution. Rio Tinto has been a major shareholder of Ivanhoe since 2006 and took a controlling stake in the company in 2012. The Trust was established in 2007 as a condition for Rio Tinto’s investment in Ivanhoe.

Information obtained by Amnesty International (https://www.amnesty.org/en/documents/ASA16/0003/2015/en/) suggests that the Trust’'s subsequent sale of Ivanhoe’'s stake could have involved a breach of economic sanctions on Myanmar, by making assets available to the military-owned conglomerate the Union of Myanmar Economic Holding (UMEHL) and Tay Za, a ‘'broker’' for the Myanmar government.

At the time the Trust sold Ivanhoe’'s stake in the Monywa Project in 2011, Rio Tinto owned 46.5% of Ivanhoe’s shares and appointed half of its Directors. An employee of Rio Tinto also sat on the board of the protector company for the Monywa Trust between 2012 and 2013.

Amnesty International UK’'s Economic Relations Programme Director Peter Frankental said:

“"Rio Tinto'’s role in the creation of this trust raises serious questions about whether the company was involved in activities which may have had the effect of circumventing EU economic sanctions, a criminal offence under UK law.

“"Rio Tinto has a responsibility to its shareholders. As they meet in London today, the shareholders should demand that Rio Tinto disclose full details of all transactions related to the Trust and the divestment of Ivanhoe’s interest in the Monywa project.

"“If as Rio Tinto claims there was no breach of sanctions, then what does the company have to hide?”"

In a letter to Amnesty International, Rio Tinto states that "it was, and remains, our understanding that the measures required by Rio Tinto and put in place by Ivanhoe on the disposal of the Myanmar asset were fully compliant with all applicable laws giving effect to sanctions”."

The controversial Monywa Project

Since its inception, and throughout various changes in ownership, the Monywa project -– which includes the notorious Letpadaung mine –- has been characterised by serious human rights abuses and a lack of transparency.

In February 2015, Amnesty International released a ground-breaking report exposing how companies linked to the Monywa project have profited from serious human rights violations and illegal activity committed by the Burmese authorities, including large-scale forced evictions.

The report also documents how community protests about the Letpadaung mine have, on multiple occasions, been met with excessive use of force by the police. In November 2012, security forces used white phosphorous, a highly toxic explosive substance, in a deliberate attack on villagers and monks who were protesting about the mine.

The Monywa project was taken over by UMEHL and Chinese company Wanbao Mining in 2010-2011. In August 2011, Ivanhoe Mines announced that the Trust had sold its stake in the project. But, it remains unclear who the Trust sold the project to and how it ended up in the hands of its current owners.

Ivanhoe Mines set up the Trust in the British Virgin Islands – a territory of the United Kingdom – and used secrecy provisions to keep details of the sale secret. Rio Tinto, as current majority shareholder of Ivanhoe Mines (now Turquoise Hill Resources), has never responded to calls to make this information public.


Amnesty Calls for Rio Tinto Probe for Role in Monywa Mine Sale

By Seamus Martov

The Irrawaddy - http://www.irrawaddy.org/burma/amnesty-calls-for-rio-tinto-probe-for-role-in-monywa-mine-sale.html

23 April 2015

London-based rights group Amnesty International has called on British authorities to investigate British-Australian mining giant Rio Tinto for “a possible breach of EU economic sanctions on Burma” over the role it played in a controversial sale of the Burmese assets of a Canadian firm Ivanhoe Mines, a sale that according to a leaked US State Department cable may have involved internationally blacklisted billionaire Tay Za as a middle man.

Vancouver-based Ivanhoe Mines was involved in the Monywa copper mining project by way of its 50 percent stake in a joint venture called Myanmar Ivanhoe Company Limited (MICCL), a partnership with a Burmese state-owned company, which began operating the mine in the late 1990s. When Ivanhoe announced in August 2011 that its Burmese assets had been sold off, Rio Tinto owned a 46.5 percent stake in the Canadian mining firm—founded by mining mogul Robert Friedland—and had appointed half of its directors. Rio Tinto has subsequently increased its stake in Ivanhoe, and since 2012 has owned a majority stake in the firm—now called Turquoise Hill Resources and primarily focused in Mongolia.

The handling of Ivanhoe’s Burmese assets was mired in controversy long before Wikileaks published diplomatic cables implicating Tay Za in the eventual sale. In February 2007, Ivanhoe established what it claimed at the time was an independent third party trust called the Monywa Trust to take control of its 50percent stake in MICCL in preparation for a sale. The Trust was established as part of an agreement between Ivanhoe and Rio Tinto that was reached prior to Rio Tinto buying a substantial stake in the Vancouver-based firm, which already had the rights to a giant copper deposit in Mongolia that underpinned their partnership.

Ivanhoe’s founder and long time chairman, Robert Friedland, has described Rio Tinto’s role in creating the trust as, “a matter of public record, that the creation of the Monywa Trust structure was dictated entirely by Rio Tinto as a condition of its significant equity investment in the Company [Ivanhoe Mines].”

Following the creation of the Trust, Ivanhoe claimed that it no longer had anything to do with the mine’s operations, a claim Amnesty challenged in a lengthy report released in February citing leaked diplomatic cables quoting the mine’s acting general manager as saying that “Ivanhoe Headquarters” was still giving him instructions on how to operate the mine nearly two years after the ostensibly independent trust was created. In a detailed press release issued on April 16, timed to coincide with Rio Tinto’s annual shareholders meeting, Amnesty highlighted Rio Tinto’s connection to the controversial disposal of Ivanhoe’s Burmese assets and the possible violation of sanctions.

“Rio Tinto’s role in the creation of this trust raises serious questions about whether the company was involved in activities which may have had the effect of circumventing EU economic sanctions, a criminal offence under UK law”, Amnesty International UK’s Economic Relations Program Director Peter Frankental said in the press release.

“Information obtained by Amnesty International suggests that the Trust’s subsequent sale of Ivanhoe’s stake could have involved a breach of economic sanctions on Myanmar [Burma], by making assets available to the military-owned conglomerate the Union of Myanmar Economic Holding (UMEHL) and Tay Za, a ‘broker’ for the Myanmar government,” read Amnesty’s press release, a reference to a number of leaked cables which quote MICCL’s acting general manager Glenn Ford detailing Tay Za’s involvement in the negotiations for the sale.

Amnesty’s extensive research found that Ivanhoe established the trust in the British Virgin Islands (BVI), an overseas British territory. Because it was based in BVI the Trust’s activities were subject to British and EU sanctions, which were in effect at the time of the sale, targeting Tay Za, the apparent broker of the sale and the military holding company UMEHL which took over the project. Following Ivanhoe’s departure, UMEHL and a subsidiary of Chinese weapons manufacturer Norinco—called Wanbao Mining—have moved to significantly expand the mine and develop the Letpadaung deposit against the wishes of local farmers whose protests have been harshly dealt with by government authorities. Responding to the Irrawaddy’s questions a spokesperson from Britain’s Foreign and Commonwealth office indicated that Amnesty’s concerns were being looked into.

“The UK is a leading advocate of strengthening financial and sanctions compliance worldwide. We have alerted authorities in the British Virgin Islands to this alleged breach, and requested that appropriate steps are taken to investigate,” read an emailed statement from the UK Foreign & Commonwealth Office. Despite this assurance, it remains far from certain whether the British Virgin Islands, an autonomous jurisdiction known as the home of a financial system with extremely lax regulatory enforcement, will actually follow up on the matter,

Rio Tinto, which did not did not respond to The Irrawaddy’s request for comment, has repeatedly sought to distance itself from the controversy over the sale of Ivanhoe’s assets. In a letter to Amnesty earlier this year, Rio Tinto CEO Sam Walsh took issue with allegations raised in Amnesty’s report on the Monywa mine. “We do not agree with a number of your assertions, or the conclusions you seek to draw from them,” read the letter, which was re-published in Amnesty’s report.

“It was, and remains, our understanding that the measures required by Rio Tinto and put in place by Ivanhoe on the disposal of the Myanmar asset were fully compliant with all applicable laws giving effect to sanctions. Rio Tinto was not aware of any facts or circumstances that would suggest any non-compliance with those laws at the time of, or prior to, the apparent divestment of the interest in mid-2011,” Walsh concluded.

Although Walsh claimed in his letter to Amnesty that the “conditions which Rio Tinto placed on Ivanhoe’s disposal of the Myanmar assets also illustrated our recognition of the importance of meeting the high social, environmental and human rights standards to which we are committed,” his firm has long been the focus of heavy criticism from rights groups over allegations relating to rights abuses and environmental destruction at various Rio Tinto project sites around the world.

In 2008, the Norwegian Government Pension Fund—Global divested itself of its $850 million stake in Rio Tinto, citing environmental concerns over the firm’s 40 percent stake in a massive mine in Indonesian-controlled West Paupa, operated by the firm’s partner Freeport McMoRan. According to the fund, the decision to dump the Rio Tinto shares was made because of the “unacceptable risk that the Fund, through continued ownership in the company, would contribute to ongoing and future severe environmental damage.”

 


 

Tax commissioner Chris Jordan said all of the companies are under audit

by Neil Chenoweth

Australian Financial Review

22 April 2015

Tax commissioner Chris Jordan has challenged parliamentary testimony by senior executives from BHP Billiton, Rio Tinto, Apple, Microsoft and Google, telling a Senate committee investigating corporate tax avoidance their claims they are not profit shifting should not be taken at face value.

Mr Jordan revealed that Rio Tinto had paid more than $100 million to settle a tax bill on initial profits from its Singapore operations, which it set up in 2007 to buy minerals from Rio Australia and sell on behalf of the company, generating big profits in the low-tax city state. He said BHP Billiton was disputing a bill covering the years before 2010 of "multiple hundreds of millions of dollars".

He said the Tax Office was "vigorously testing" Rio Tinto and BHP Billiton's tax payments in ongoing audits covering the last five years, when the marketing hubs reported the bulk of their profits.

Singapore records obtained by The Australian Financial Review show that since 2010 BHP Billiton has earned $US4 billion ($5 billion) in Singapore profits, while Rio has reported $US3.7 billion.

Mr Jordan, who was recalled to the committee following appearances by some of Australia's biggest businesses, made an unprecedented decision to reveal previously confidential information about the tax disputes of those companies. The disclosure and his often-scathing comments suggests a hardening in the government's attitude to international tax avoidance. He limited his comments on Wednesday, to correcting statements made in the inquiry by the companies.

Small settlement not identified

Rio Tinto told the inquiry on April 10 that it had made a relatively small tax settlement on its Singapore operations, though this was not identified in its accounts.

"Paying more than $100 million may not be material to Rio Tinto, but it is material to the Tax Office," Mr Jordan said.

When Senator Nick Xenophon asked BHP Billiton's president for corporate affairs, Tony Cudmore, on April 10, if at any point since 2006 BHP had received an adverse tax bill from the tax office, Mr Cudmore replied: "I do not personally have that information."

"BHP stated that they are in the early stages of an audit of their Singapore hub," Mr Jordan said. "We confirm that there is an open audit in relation to the past five years or so.

"To complete the picture, we would also note that BHP is still currently disputing amended assessments in the order of multiple hundreds of millions of dollars arising from the previous hub audit."

BHP Billiton has until the end of Friday to answer questions as to whether it had received a position statement from the ATO and how much the prospective tax demand was.

Executives to be recalled

Greens Leader Christine Milne said on the basis of Mr Jordan's comments she would ask the committee to recall executives from BHP Billiton, Rio Tinto, Apple, Microsoft and Google for further questioning.

Mr Jordan said all of the corporates had given assurances they were not profit shifting but confirmed they were being audited.

"We do not accept all these statements at face value," he said.

With Apple, he said the audit was contesting the arms-length pricing paid by the Australian operation to other Apple companies.

​"To paint a picture, media reports have suggested Apple had an effective tax rate of 1.9 per cent on $US36 billion in international earnings in 2012," Mr Jordan said.

He noted that Microsoft had told the inquiry most of its Australian sourced income was accounted for in Singapore.

"In one sense it's right, that the money is in the [Singapore] account," he said. "For a moment."

It then is moved to other tax havens as intra-company costs.

Microsoft said it reported $2 billion in Australia-sourced income in Singapore, while $100 million in services was reported in Australia.

Appropriate split focus

"The ATO audit is trying to determine if this is an appropriate split of revenue. We further understand that much of their Singapore profits are paid out as technology fees and end up in Microsoft Bermuda."

He said Google had stated that its Australian revenue from advertising is booked in Singapore and therefore, tax paid in Singapore.

"Whilst some tax is paid in Singapore, we believe it is a very small amount as the revenue booked in Singapore is moved to a secrecy haven through a series of licensing payments," he said.

The majority of profits made in Australia ended up in Bermuda where no tax was paid.

Referring to articles in The Australian Financial Review, Mr Jordan said: "This scenario was also recently covered in media reports, and it would be our view, that these reports were on the money – in terms of the structures and arrangements that we see."

He welcomed the openness of Rio Tinto Australia chief executive Phil Edmands in revealing that Rio earned $US719 million in Singapore last year.

"This is the very question we are robustly testing," Mr Jordan said.

The Tax Office was contesting whether the work done by the Singapore staff in marketing and other services was valued at $US719 million.

Mr Jordan was scathing on selective use of effective tax rates that companies quoted to assert that they paid high rates of tax, disguising their "historically aggressive tax position".

Mr Jordan offered to provide an alternative methodology to the committee to measure effective tax rates.


Dispute with IOC: Innu Chiefs in Europe to meet the shareholders of Rio Tinto

Innu Takuaikan Uashat Mak Mani-Utenam (ITUM) press statement

9 April 2015

UASHAT MAK MANI-UTENAM, QC - With no end in sight in the dispute between the Innu of Matimekush-Lac John and Uashat Mak Mani-Utenam and the Iron Ore Company of Canada (majority owned by the mining giant Rio Tinto), the Chiefs of the Innu First Nations of Ekuanitshit, Matimekush-Lac John and Uashat mak Mani-utenam are travelling to Europe to inform the shareholders and international management of Rio Tinto, convened in London for the upcoming Rio Tinto shareholders' meeting, that it is time that the Iron Ore Company of Canada (IOC) respect the Innu people and pay its rent.

"Faced with IOC's deplorable attitude, we have decided to directly confront the shareholders of Rio Tinto. We want to inform them that their subsidiary is not respecting our rights and our Aboriginal Title and that IOC's mining activities are far from meeting the criteria and principles of sustainable development that Rio Tinto claims to abide by. In an ultimate attempt at reconciliation, we will ask for respect, justice and redress from the Rio Tinto's shareholders," explained the Chief of Uashat mak Mani-utenam, Mike McKenzie.

"Following legal victories at the Quebec Superior Court and at the Quebec Court of Appeal, which confirmed our right to sue IOC for the harm that it has caused to the Innu people, IOC continues to search for ways to hide from its responsibility rather than trying to find a solution and an honourable end to this situation. Worse yet, in a final attempt, IOC just recently asked the Supreme Court of Canada to take up the case", added the Chief of Matimekush-Lac John, Réal McKenzie.

It is important to remember that the Innu have tried since 2010 to reach a reasonable agreement with IOC, just as they have successfully done with all the other mining companies that operate in their territory. The last few years have seen record iron ore prices and record profits for IOC, without the latter showing any real openness to making peace with the Innu. Rio Tinto (IOC) cannot, therefore, legitimately hide behind the current weak iron ore prices, especially knowing that Rio Tinto has been widely accused of having flooded the iron ore market, thus contributing to weak prices.

"All companies that wish to develop the resources in our territory must first obtain our consent. In addition, they must pay rent for occupying our territory. For over 60 years, Rio Tinto (IOC) has ignored the rights of the Innu and has acted as it sees fit, neglecting to treat us with even the slightest amount of respect. The time has come for IOC to pay its rent", stated the Chief of Ekuanitshit, Jean-Charles Piétacho.

"Pay The Rent" Campaign

The Innu delegation will be in London, United Kingdom, April 14 to 17 where it will attend the Rio Tinto shareholders' meeting on April 16. It will also participate in public and private activities in Paris, France, April 18 to 20. This mission is part of a campaign called "Pay the Rent", which is seeking to denounce the activities of a mining company owned by Rio Tinto that are blatantly violating the rights of Aboriginal Peoples, including their Aboriginal Title, as well as running afoul of current international law, particularly the principle of "free, prior and informed consent" as recognized by the UN Declaration on the Rights of Indigenous Peoples. In addition, these activities result in irreversible environmental impacts as well as damaging social and economic consequences for the Innu people.

For information on this campaign: http://ioc-riotinto-innu.com/eng/Attachment Backgrounder

For further information:
INFORMATION: Jean-Claude Therrien Pinette, Director, Office for the Protection of Rights and the Territory, Innu Takuaikan Uashat mak Mani-utenam,
Tel.: 418-962-0327 #5245 / Cell.: 418-409-5681;

SOURCES:
Raoul Vollant, Innu Takuaikan Uashat mak Mani-utenam, Communications, Cell: 418-964-6289, Office: 418-962-0327 #5290, Raoul.vollant[at]itum.qc.ca;
Jean-Alexandre D'Etcheverry, Office. : 514-843-2369, Cell. : 514-910-1328, jadetcheverry[at]national.ca

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