Protestors call for end to Glencore’s mining abusesPublished by MAC on 2015-05-09
Source: Statements, YLNM, Reuters, Mining.com
Glencore recently held its annual general meeting at the "Theater-Casino Zug" in Zug, Switzerland. (Can there be a more fitting place for the company to hold its AGM than a Swiss casino?)
Mainstream media primarily covered the gripes of chief executive Ivan Glasenberg, placing the blame for less a impressive share price on the drop in commodity prices, such as iron ore, caused by over-proudction by other top miners BHP, Rio and Vale.
Less well reported in these cursory summaries were the protests that coincided with the meeting, which highlighted a range of on-going concerns regarding human rights, workers' rights, the environment, taxation issues and climate change.
A new publication has been published by the Swiss group Multiwatch, "Billions from the Exploitation of Raw Materials – the Swiss multinational corporation, Glencore Xstrata". It is now available as a free PDF download at http://www.multiwatch.ch/cm_data/20150505_GlencoreBookMultiWatch.pdf
Glencore? No More! London protestors call for end to Glencore’s mining abuses in the Philippines and worldwide
8 May 2015
Today protesters gathered outside commodities and mining giant Glencore Xstrata’s London offices to call for an end to the company’s anti-people, anti-environment practices in the Philippines and worldwide.
Organised by the Campaign for Human Rights in the Philippines, War on Want and PIPLinks, the protest was timed to coincide with Glencore’s AGM in Switzerland.
Protestors in London were joined worldwide by affected communities, trade unions, NGOs and individuals in a coordinated international protest calling for investors to divest from Glencore and for national legislatures worldwide to take a tougher stance on the company’s abuses.
Speaking on behalf of the Campaign for Human Rights in the Philippines and UNISON, the UK-based union, a campaigner named Susan described Glencore’s malfeasance:
“We here to protest human rights violations that Glencore is doing in the Philippines. They are digging gold mines without regard for peoples rights or livelihoods… the company have admitted that they’ve given money to military groups that have been committing human rights violations in the Philippines. They are fully aware of what they have done and of our protests, but they deny any wrongdoing.”
Recent protests in the Philippines have focused on Glencore’s planned Tampakan copper-gold mine on the southern island of Mindanao. The last mining venture belonging to a major multinational company in the Philippines, the Tampakan project is slated to produce 2.4 billion tons of copper and gold. It would also denude 4,000 hectares of land, directly displace 4,000 people and cause another 40,000, mostly farmers, to lose their livelihoods, according to KALIKASAN Peoples Network for the Environment.
Speaking outside Glencore’s headquarters from the picket line, Andy Whitmore from PIPLinks described how Glencore has repeatedly ignored opposition from indigenous inhabitants in the region of the planned mine.
“The Tampakan project has been railroaded through against the Indigenous Peoples wishes. Outside of environmental concerns, including the large amount of rainforest that would be cleared for this project and the potential for disasters with tailings and waste spilling out into local rivers and farmland, the key concern is that indigenous Peoples have the right to give or withold their free prior and informed consent, it’s in the law. Despite the fact that the communities have consistently said no (to the mine) the company is still proceeeding and there have been multiple human rights violations”, he said.
According to Whitmore, Glencore’s disregard for the Indigenous peoples’ right to Free Prior and Informed Consent (FPIC), as enshrined in the UNDRIPs, to which the Philippines is a signatory, has led to the area becoming “highly militarised”.
Glencore has admitted making payments to paramilitaries implicated in the murders of indigenous anti-mining activists. Accused by global mining union IndustriAll of “consistent brutality and disrespect for workers rights”, the murders of several filipino trade unionists have also been connected to paramilitaries linked with Glencore.
This brutality has caused the B’laan Indigenous peoples to take up arms in defence of their lands and communities. Glencore is accused of similar human rights abuses in Colombia, South Africa and other nations.
The world’s tenth largest company, Glencore has also come under criticism for environmental destruction and contamination. As well as the direct ecosystem impacts of its mining operations, Glencore is the world’s largest exporter of thermal coal. To boot, it’s operations in forty different countries accounts for 3% of global oil consumption, making the company a major contributor to climate change.
Speaking at the protest in London, Father Claro Conde, a catholic priest, called for action to end Glencore’s environmental abuses.
“Following the inspiration of Pope Francis, the great issue of our day is environment. This is god’s gift to us, the beauty of nature. People in the UK should protest the actions of Glencore. We must pressure the stockholders. Glencore must stop displacing and making money out of my peoples’ suffering.”
Though Glencore operates worldwide, the company is registered to the London Stock Exchange and operates from the tax haven of Jersey. This makes London a critical arena put pressure on the company to clean up its act says Liam Barrington-Bush of London Mining Network.
“London is the global centre for mining finance. Glencore is one of many companies registered on the London Stock Exchange that are financially and politically unaccountable to the British public and most importantly to the communities they are destroying. London Mining Network works to bring the voices of communities standing on the front lines to the shareholders and the pubic bodies that can hold these companies to account in the UK.”
Outside Glencore’s offices, campaigners were keen to stress that members of the British public can and should play an active role in opposing Glencore’s activities, in solidarity with communities in the Philippines and beyond.
Andy Whitmore, also a member of the London Mining Network, advised UK citizens to inform themselves about Glencore.
“It’s a company with a bizarre history and one of the worst records in terms of secrecy and sanction busting. Make yourself familiar with the monster that’s sitting here in the heart of London. Then take action where you can, join us on the protests.”
Calling for solidarity that is growing internationally, Susan from CHRP added, “people must imagine a company coming in through their back door and saying, ‘right mate, we are digging something here: gold. Now we’re kicking you out of your home.’ What would people think if that happened here in the UK? People must be aware of such things.”
Whitmore described how a network of organisations and individuals is now organising to challenge Glencore with greater intensity.
“It will be a network focusing specifically Glencore. Right now we are reaching out to those who could share a common platform and discuss different issues and abuses, and come together to campaign globally.”
Despite Glencore’s bleak track record in the Philippines, Whitmore feels that the growing intensity of local and international solidarity and resistance to the Tampakan mine will mean it never becomes a reality.
“There have been huge demonstrations and resistance from local communities. Everything from marches in the streets through to barricades. Glencore is the only major mining multinational left in the Philippines as a result. Rio Tinto, BHP Billiton, Anglo American have all left… they can’t continue to pursue projects when the local people are so mobilised against them. I actually don’t believe the (Tampakan) mine will go ahead. Glencore themselves have said they don’t have much stomach to continue with it,” he said.
In the struggle to stop Glencore’s deadly mines, local communities and their allies worldwide are proving once again that resistance is fertile.
Stop Glencore global plunder and destruction. Glencore out of the Philippines!
Kalikasan PNE statement
7 May 2015
Kalikasan People’s Network for the Environment stands in solidarity with the communities, people’s organizations, and workers unions in their protest actions denouncing the monster mining company Glencore. The Annual General Meeting (AGM) of Glencore’s stockholders will be held today.
As in their past AGMs, Glencore will boast of their billion-dollar profits resulting from their extraction and trading of people’s resources and products across the globe. Glencore will also continue to deny that their presence and operations in different countries like Colombia, South Africa, and the Philippines result in many incidents of community displacement, environmental destruction, and human rights violations.
In the Philippines, Glencore owns the $5.9 billion Tampakan Gold-Copper Mining, the biggest mining project in the country. Glencore and its local cohorts are raring to plunder the estimated 2.4 billion metric tons of gold and copper deposits in the area. Since 1992, predecessors of Glencore have tried to occupy mineral lands and start commercial mining operations in Mindanao island.
With national government consent, Glencore has land-grabbed 24,000 hectares of ancestral lands, forests, and agricultural lands of indigenous people and peasants. Along with their para-military and military forces, the company is a suspected perpetrator of gross human rights violations in the mining-affected communities. These include the massacre and assassination of at least 10 indigenous people, children, and environmental activists since 2001.
If Glencore succeeds in forcing their commercial operations in the area, almost 4,000 hectares will be denuded, 5,000 individuals will be displaced and another 40,000 people, mostly farmers, will lose their livelihood.
Despite their persistence, however, Glencore has failed to start actual commercial operations in the Philippines because of the continuing and growing resistance of the Filipino people. The collective and steadfast action of indigenous peoples, peasants, Church people, environmentalists, and patriotic individuals has been key in defending our communities, lands, and resources.
The people continue to employ various actions and methods in their struggle against Glencore. They continue to hold street protests in which thousands of people participate. B’laan, an indigenous tribe, is waging an armed defence to protect their communities. The South Cotabato Provincial government is still asserting their local ordinance prohibiting open-pit mining. Furthemore, environmental organizations like Kalikasan PNE continue to initiate actions of support and solidarity.
We believe that in the end, Glencore will fail. Glencore is a powerful and monstrous giant, but will not succeed in the face of the united and principled action of the people.
Stop Glencore plunder and destruction of people’s resources and environment. Glencore out of the Philippines! Long live international solidarity!
Reference: Clemente G. Bautista
KALIKASAN PEOPLE'S NETWORK FOR THE ENVIRONMENT
26 Matulungin St. Central Dist., Diliman, Quezon City, Philippines, 1100
Tel./Fax; +63 (2) 924-8756
“Enough is enough”: international protests against notorious multinational Glencore
Joint press release on behalf of Campaign for Human Rights in the Philippines, War on Want, Indigenous Peoples Links
7 May 2015
Affected communities, trade unions, NGOs, and individuals will join forces today in coordinated international protest actions against anti-people and anti-environment practices across the globe by the notorious commodities and mining giant Glencore. Glencore stands accused of union busting, environmental destruction and complicity in human rights violations against communities in which it operates. The protestors are calling upon investors to divest from Glencore, and for national legislatures around the globe to take a tougher, more joined up stance on Glencore’s abuses around the world.
- Human rights: Glencore has been accused of human rights abuses in countries such as the Philippines, where it has admitted that its Tampakan mining project has made payments to armed forces who are accused of murdering indigenous activists opposing the project; in Colombia the global union federation IndustiALL has reported that a group of former army officers have linked Glencore to a paramilitary group responsible for murdering trade unionists. It is alleged that the paramilitary group trained at a camp located inside a Glencore mine.
- Environment: the company has come under criticism for environmental destruction/contamination in numerous countries in Africa, Asia and Latin America.
- Labour issues: IndustriALL has accused Glencore of “consistent brutality and disrespect for workers rights”, and a brutal anti-union drive. In the USA management at Glencore’s Sherwin Alumina plant in Texas has locked out trade union members since 11 October. Glencore is demanding drastic concessions, including stripping retirees of health care benefits. In Peru, workers at the Antamina mine are subjected to health and safety violations on a regular basis and are being denied fair payment for bonuses and overtime.
- Climate change: Glencore's operations in 40 countries handle 3% of the world's oil consumption and the combined entity was the world's largest exporter of thermal coal.
Graciela Romero, Director of International Programmes, War on Want, said: “Glencore operations around the globe have been heavily contested by local communities, workers and trade unions because of the sheer scale of destruction to livelihoods and the environment. Yet there is no action from the UK government and international bodies to hold Glencore accountable for their human rights violations. It is irresponsible to allow the company to hide behind its corporate social responsibility. Governments should ensure that legally binding regulations are urgently put in place and communities’ rights to demand justice and stop future mining operations in their territories upheld. ”
Andy Whitmore, Coordinator of Indigenous Peoples Links (PIPLinks), said: “Although the company AGM will take place in Switzerland, it is incorporated in the tax haven of Jersey and registered on the London Stock Exchange. It is a commodities giant whose actions the British people should feel responsible for.”
Notes for journalists:
After its merger with Xstrata in 2013, Glencore became the fourth largest miner in the world, with an annual turnover of US$232 billion and an estimated 110,000 workers worldwide. The company’s CEO Ivan Glasenberg’s net worth, according to Forbes, is US$5.8 billion. Glencore is headquartered in Baar, Switzerland, and incorporated in the tax haven of Jersey. It is registered on on the London and Hong Kong Stock Exchanges. According to a Reuters article on the day the merger completed, “The combination of commodities trader Glencore and producer Xstrata ... creates a mining and trading powerhouse with over 100 mines around the world…and an oil division with more ships than Britain's Royal Navy.”
Glencore's name has become synonymous with the corporate abuse of power. Its historical roots are with the much criticised trader Marc Rich, and as a private company until 2011 it prided itself on doing business in developing countries where few others dared to tread. It stands accused of illegal dealings with rogue states, including apartheid South Africa. At the time of its launch as a public company the Times Business Editor, Ian King, described Glencore as "...a business with dubious morals. It trades grain amid food riots and has been accused of profiteering and environmental offences in numerous poor and war-torn countries”.
For further details contact:
Andy Whitmore, PIPLinks – Email: comms[at]piplinks.org
Unions deliver strong message to Glencore shareholders
7 May 2015
A delegation from the United States, South Africa, Australia and Colombia attended Glencore’s Annual General Meeting (AGM) in Zug, Switzerland on 7 May. Together with IndustriALL they delivered a strong message in response to the company’s perpetual disrespect for workers rights globally.
IndustriALL’s international delegation met in front of the venue in Zug, distributing flyers exposing Glencore’s many violations of workers rights globally to shareholders just before and after the delegation entered the AGM to deliver their message.
Trade union issues dominated the meeting and it was impossible for the company to continue sweeping them under the carpet. Some shareholders, unaware of the violations, left the meeting outraged at Glencore’s behaviour.
“Even the CEO considered that there are legitimate issues being raised and committed to go back and talk to people on the ground. One way or another these issue have to be resolved,” says Glen Mpufane, IndustriALL director of mining.
“Their response to my intervention on workers rights violations in Colombia was not acceptable, the company claims that workers are free to choose to be a part of a union but in reality they are being intimidated,” says Igor Diaz, education officer at Sintracarbon and Glencore network coordinator.
Rey Herrera, vice president at USW Local 235A urged the company to immediately end the lockout at their operations at Shermin Alumina in Texas, and put them back to work and continue to bargain to make a fair an equitable contract.
“They claimed they would make an effort to talk to us, but what they say and what they do are two different things,” says Herrera.
“I’ve been to a lot of AGM’s and I must say that we managed to get all of our issues through. I was happy to get a face-to-face meeting with Glencore CEO Yvan Glasenberg to discuss the issues in the USA, Colombia, South Africa and Australia and we can only hope that it gets to management,” says Wayne McAndrew, national vice president of the CFMEU mining and energy.
The international delegation composed of IndustriALL affiliates from The United Steelworkers (USW), The National Union of Mineworkers (NUM), The Construction, Forestry, Mining and Energy Union (CFMEU), and SintraCarbon spent the entire week holding solidarity events and meeting with political leaders and human rights activists in Switzerland.
In the build up to the AGM, the goal was to expose Glencore and to make it clear that the company’s practice is very different from its rhetoric.
Glen Mpufane says: "Glencore claims to respect communities, collective bargaining and the right of employees to freely choose a union, but IndustriALL has testimonies from affiliates, in over 14 countries of the consistent brutality and disrespect of workers rights throughout it’s operations."
A public conference on a corporate social responsibility's initiative by Swiss based multinational corporations (MNCs) held on 4 May heard heart wrenching stories about Glencore's vicious attack on workers and communities in Texas, Colombia, South Africa and Australia.
On 5 May, the delegation met with the International Labour Organization’s (ILO) Actrav division to press their case and explore solutions by the ILO.
The delegation's mission was boosted by an invitation to address members of Parliament of the federal government in Berne on 6 May. The meeting confirmed the urgent and appropriate need for the Swiss initiative on Swiss MNCs. A protocol for engagement, consultation and communication with IndustriALL was agreed.
Statement of the NUM to deliver at the Glencore AGM on the Closure of the Optimum Coal Mine in South Africa
4 May 2015
South Africa is a developing economy with the following features:
High rate of unemployment between 26 – 30 per cent
Dependent on coal to generate electricity
Constant load shedding because of electricity shortage
It means that South Africa cannot afford any closure of a coalmine for a minute, as a result of the above-mentioned challenges.
Core of the challenge:
The decision by Glencore to close the Optimum coalmine, potentially causing a loss of 1,065 direct jobs. Notwithstanding the social challenges it will have on the surrounding communities.
We view this as literally sabotage to the South African economy. This is precisely on the basis that, if Glencore can be allowed to close a coalmine on the basis of the coal price it would mean that other coalmine operators can follow suit and also close. Again this will exacerbate the social economic challenges that the South African government is grappling with.
It will further create more job losses than the current high unemployment challenges we are facing.
Our message to the government of Switzerland:
Switzerland is a modern economy. Can they allow a company of Glencore’s magnitude to inflate a social economic catastrophe to South Africa? Can she allow the destruction of a developing economy? The answer is no. That would be immoral and wrong.
It is against this background that we call upon the Swiss government to reign over Glencore. If Glencore cannot operate Optimum Coal under the current coal prices, they must do the right thing and render their mining license to a company that can operate it. This will save thousands of jobs, and is the moral thing to do.
USW, Allies Call on Glencore to End 7-Month Lockout at Sher win Alumina
Union Members to Deliver Message at Corporation’s Annual Meeting
4 May 2015
GENEVA, Switzerland - Members of United Steelworkers (USW) Local 235A in Corpus Christi, Texas, along with allies from other industrial unions from around the world, are traveling to Switzerland this week to deliver a message to commodities giant Glencore: End the lockout at Sherwin Alumina.
The union members plan to speak on May 7 in Zug at the annual shareholders meeting of Glencore, the corporate owner of the Texas alumina facility where 450 workers have been locked out of their jobs since Oct. 11.
“Over the past seven months, we have repeatedly offered to return to work while we continue to bargain a new contract that is fair to both the company and its workers. We have always been ready, willing and able to continue to work,” said Local 235A Vice President Rey Hererra. “The company has refused these offers and continues to keep us out of work.”
The union will report to shareholders that the lockout has had a negative effect not just on their South Texas community, but on Glencore’s production and profitability.
“The company says the pay and benefit cuts it demands are necessary for Sherwin to remain competitive. However, this makes no sense when you look at the bottom line,” Hererra said. “Before the lockout, Sherwin was already a profitable company. Productivity was on the rise, and labor costs were down. Since the lockout, Glencore’s own numbers show that production and productivity have dropped off substantially.”
“This loss of production has cost the company approximately $40 million in revenue,” Hererra said. “The good news is there is an easy solution: Glencore must end the lockout at Sherwin Alumina.”
USW members will spend the week in Switzerland with fellow union members and Glencore workers from South Africa, Australia and Columbia, holding solidarity events and meeting with political leaders and human rights activists. In addition to the Sherwin lockout, Glencore has been accused of launching anti-union campaigns against mine workers in South Africa and Columbia, subjecting workers at Peru’s Antamina mine to regular health and safety violations, and refusing to re-hire union workers at Australia’s Collinsville mine.
The USW is the largest industrial union in North America, representing workers in a range of industries including metals, mining, rubber, paper and forestry, oil refining, health care, security, hotels, and municipal governments and agencies.
Contact: Ben Lilienfeld: (832) 556-0370, blilienfeld[at]usw.org
Glencore in Zambia: The Tax Questions That Persist
Christian Aid press release
6 May 2015
Just over four years ago, Glencore faced acute embarrassment when the European Union’s bank announced an investigation of tax evasion allegations against one of Glencore’s subsidiaries in a painfully poor country: Zambia. According to one estimate by ActionAid, the alleged tax evasion may have cost Zambia as much as £76 million a year between 2006 and 2008. Assuming the estimate is correct, it is roughly double the country’s health budget in 2007.
Announcing its probe in a press release dated 31 May 2011, the European Investment Bank (EIB) added that ‘due to serious concerns’ about Glencore’s governance’, which went beyond the Zambian allegations, it would refuse any further loans to Glencore companies. The Bank had lent $50 million to Glencore’s Zambian subsidiary Mopani Copper Mines in 2005, to help pay for new equipment which would help clean up the mine’s then massive emissions of sulphur dioxide gas. The clean-up was actually achieved in 2014.
This report tells the troubling story so far of how, despite these grave allegations against it, Glencore has thwarted attempts to investigate its taxes in Zambia. It also tells of how the European Investment Bank, which is wholly owned by EU member countries including the UK, has repeatedly refused to reveal what it knows about the controversy.
The report ends with four questions for Glencore, whose AGM will take place this Thursday 7th May in Zug, Switzerland.
At a time when the commodities giant is seeking to take over Rio Tinto and become still more powerful across the world, such questions are all the more urgent.
2011: Leaked Audit Report Turns the Spotlight on Glencore in Zambia
The first signs that something may have been seriously wrong with the taxes of Glencore’s Zambian subsidiary emerged in early 2011, with the leak of a draft report by auditors Grant Thornton and Econ Poyry. It has never been clear who leaked the report. Even by the standards of 2015, when revelations about multinationals’ tax affairs are commonplace, the 23-page document is an extraordinary one.
It highlights irregularities around the mine’s operational costs, revenues, transfer pricing, employee expenses and overheads and covers the years 2006-7 and 2007-8. The auditors who wrote it also complained bitterly about the obstructiveness they faced when they attempted to do their job, which was commissioned by Zambia’s tax authority, the ZRA.
“It should be noted that the international team leaders have not experienced such a lack of compliance in any other country, and Grant Thornton Zambia confirmed that this attitude is also not typical for other industries/companies in Zambia,” they said.
Glencore has always dismissed the report as a flawed draft which contained major mistakes and it and Mopani have always denied wrongdoing.
However the EU’s bank, which had lent Mopani $50 million, was sufficiently concerned to launch its own investigation of the tax allegations. It first sent investigators to Zambia in March 2011, when they met with Mopani managers as well as the Zambian Revenue Authority.
On May 31st, the Bank announced its investigation in a widely reported press release which has since been removed from its website. Then in August 2011, investigators for the Bank again travelled to Zambia in an attempt to find out what had really happened at Mopani. An investigation report was finally presented to the Bank’s management committee in November 2011, although so far the Bank has refused to publish it.
The Zambian authorities’ reaction to the leaked report has also been unclear at best. In June 2011, The Guardian newspaper quoted the country’s then finance minister state's finance minister, Situmbeko Musokotwane: "The Zambia Revenue Authority (ZRA) has asked Mopani to pay more money in underpaid taxes, but they must be given a chance to respond," said Musokotwane. "If their answers are satisfactory we will go by what they submit, but if they are not satisfactory we will adjust their tax liability upwards to the figure the ZRA has asked them to pay. We are very confident that this matter will be resolved amicably and are just waiting to hear from Mopani."
Christian Aid has been unable to find published evidence of what happened next between the mine and the Zambian government. In 2012, Bloomberg news agency reported a Zambian government finance minister complaining that tax avoidance by mining companies was costing the country as much as $2 billion a year although he did not appear to be pointing at Mopani in particular. Much more recently, the European Investment Bank has said that it had failed to get information about the outcome of the controversial audit from the ZRA.
2012 – 13: Secrecy at the European Investment Bank
As one of the many organisations campaigning for tax justice, as well as working to support people living in poverty in Zambia, Christian Aid was troubled by the tax evasion allegations against Mopani and concerned to hold the EIB accountable for its actions towards its borrower. In November 2012, Christian Aid asked the Bank to publish the findings of its Mopani-Glencore investigation. The Bank refused.
It is worth noting that the Bank is not an ordinary investment institution. Rather, it is wholly owned by the UK and other European Union member states. The board of directors is therefore made up of UK and other civil servants while its board of governors includes finance ministers such as (until the UK election on 7th May 2015 at least) George Osborne.
In June 2013, Christian Aid formally complained to the Bank about its secretive approach, pointing out that it was at odds both with the Bank’s own transparency policy and with the public interest in the truth about whether a major multinational had paid its taxes in an extremely poor country. We urged the Bank to reconsider its refusal to reveal its findings about Glencore in Zambia. Christian Aid complained to the Bank’s internal Complaints Mechanism, which – as became all too clear - is independent of the Bank’s managers but can be overruled by them.
Other organisations working on the Mopani-Glencore affair
Christian Aid is one of many organisations, in Europe and in Africa, which have worked on this case. In April 2011, five organisations including Christian Aid’s Zambian partner the Centre for Trade Policy and Development complained to the Organisation for Economic Co-operation and Development (OECD)’s Swiss National Contact Point about a possible violation by Glencore of the OECD’s guidelines for multinationals. Christian Aid regards the outcome of the complaint as inconclusive. Others including Oxfam International, Tax Justice Network Africa, Berne Declaration, Alliance Sud, Counter Balance and Eurodad have also publicly called on the European Investment Bank to publish its investigation report on Glencore-Mopani.
Counter Balance, a Brussels-based campaign which focuses on the EIB, has closely followed the Mopani case as a major test of the EIB’s avowed commitment to transparency. Counter Balance has worked to influence the Bank’s new policy on transparency, which the Bank launched in 2015 to warnings that it had become more secretive than ever, partly in response to its own embarrassment around Mopani-Glencore.
2014 – 15: Europe’s Bank says no and the European Ombudsman intervenes
When in February 2014 the Bank had still not responded to Christian Aid’s complaint about the secrecy surrounding its Mopani-Glencore report, Christian Aid turned to Europe’s official watchdog, the European Ombudsman. Christian Aid again argued that the Bank should have to publish its findings into a matter of major public interest and concern in Africa and Europe.
The information that since emerged, as a result of our complaint to the Ombudsman, has only strengthened our belief that the Bank should reveal what it knows about the conduct of Glencore-Mopani in Zambia.
Then in July 2014, the Bank finally responded to Christian Aid’s request that it publish the secret report. It had taken more than a year to do so. The Bank’s official Complaints Mechanism – its complaints handling department - recommended that the Bank should publish a redacted version of the document, with some information removed.
However the Bank’s more powerful Management Committee rejected their own colleagues’ recommendation and refused to publish any part of the report. The Committee argued that to do so would damage future investigations by the Bank and that EU law did not clearly require them to reveal the report.
The Ombudsman Emily O’Reilly made her first public statement on the case in December 2014, when she asked the Bank to reconsider its refusal to publish its investigation report and give access to a redacted version of it or else provide Christian Aid with ‘a meaningful summary of the main findings of the investigation report’.
Then in response to the Ombudsman’s recommendation, in January 2015, the Bank published a brief but disturbing document which it described as a ‘summary’ of its Glencore investigation. In its ‘summary’, the Bank revealed that when it sent investigators to Mopani in August 2011, they met were with clear and repeated obstruction. Their experiences sound remarkably similar to those complained of by the auditors from Grant Thornton and Econ Poyry.
The EIB’s ‘summary’ states:
…Documents which had been requested by the EIB team more than two months in advance of the review were not made available and access to essential information during the review was not provided, despite repeated requests. As a result, the number of issues investigated by the EIB Review Team had to be limited and IG/IN [the Bank’s Inspectorate General’s Fraud Investigations Division] was forced to break-off the mission almost two days earlier than planned. The work of the EIB Review Team was non-conclusive due to the difficulties faced in the investigation of the case. As not all of the necessary information could be obtained, it was not possible to comprehensively prove or disprove the allegations raised in the Leaked Draft Report regarding Mopani’s costs, revenues, transfer pricing, employee expenses and overheads…
According to the same ‘summary’ document, Glencore argued that the investigators’ inability to get the documents they sought was due to the fact that staff at the mine was responding to a simultaneous audit by the Zambian Revenue Authority. Given that Glencore is a well-resourced, major multinational, Christian Aid finds this unconvincing.
We were also unconvinced that what the Bank had published amounted to a ‘meaningful’ summary of what it knew about Glencore in Zambia. Surely the Bank had reached some sort of tentative conclusion about the tax allegations that had been made against Glencore-Mopani? The Bank’s own summary of its secret report hints that it had.
…On the basis of the difficulties encountered, IG/IN [the Bank’s Inspectorate General’s Fraud Investigations Division] concluded its investigation in November 2011 and the EIB started discussions with Mopani’s parent company, Glencore, which resulted in the latter deciding to voluntarily prepay the loan in 2012, thus closing its contractual relationship with the EIB…
Despite this possible hint of what the Bank really concluded, Christian Aid put our concern that the Bank’s ‘summary’ omitted important information to the Ombudsman. She had seen the Bank’s secret report in full and could therefore assess whether its ‘summary’ was meaningful.
In a damning final ruling in March 2015, Ms O’Reilly confirmed that it was not. She concluded:
1. The summary released to the complainant and published on the EIB's website on 29 January 2015 does not constitute, with regard to the substantive findings into the allegations of tax evasion by Mopani, a meaningful summary of the EIB's Inspectorate-General's investigation report of 16 November 2011.
2. In its handling of the request for access to the report in question, the EIB failed to meet its obligations under its own Transparency Policy.
She also sharply criticised the Bank’s argument that publication of its Glencore-Mopani report would damage its future investigations, pointing out that the Bank’s own website carried a document about the procedures used in its investigations.
The Ombudsman cannot force the Bank to act on her findings. However within six months of her final ruling, she expects the Bank to tell her of anything that it has done in response.
Christian Aid is very grateful to the Ombudsman and her colleagues for their meticulous work on the Glencore-Mopani tax case. Their efforts have exposed what high levels of secrecy and uncooperativeness investigators faced when, in 2011, they attempted to get to the bottom of the tax evasion allegations facing Mopani-Glencore. The Ombudsman’s work has also shown that the European Investment Bank has further, significant information on the Glencore-Mopani tax case. Christian Aid believes it should make the remaining information public without further delay.
Glencore meanwhile claims to have conclusively disproven the allegations in the report, which it says ‘contained fundamental factual errors’. Christian Aid is not satisfied that Glencore has done any such thing, because Glencore-Mopani has failed to allow independent investigators free and full access to relevant records. Nor is the company sufficiently transparent to enable citizens to identify financial irregularities which could indicate tax evasion or avoidance, if they were occurring. Full, public country-by-country reporting would be a minimum condition for this.
The company cites in its favour the opinion of accountants Deloitte, whose letter argues among other things that the leaked auditors’ report ‘contains fundamental flaws’. As Mopani’s own auditors in 2011 (and apparently now), Deloitte would know the company’s finances better than most. However Christian Aid notes that as the mining company’s auditors, Deloitte can hardly be said to have an independent view of other accountants’ suggestions that Mopani may have been guilty of systematic tax evasion.
QUESTIONS FOR GLENCORE AND THE EUROPEAN INVESTMENT BANK
1. Why did Mopani-Glencore blatantly obstruct the independent investigators who came to examine its financial records, not once but twice? The first team of investigators were from Grant Thornton and Econ Poyry and the second were working for the European Investment Bank.
2. Why did Glencore apparently ask Deloitte to write an attack on the leaked draft audit report? Deloitte were and apparently still are as of April 2015 the auditors of Mopani, so could be thought to have a conflict of interest.
3. Why has Glencore failed to ask the European Investment Bank to publish its secret report, so all is out in the open? Glencore could then - if it is as innocent as it claims to be – move towards countering existing allegations.
4. Will Glencore produce public country-by-country reports of its worldwide operations, to help tax authorities, journalists, civil society and other companies determine whether or not it is paying its fair share of tax in all the countries in which it operates?
5. Why has the EIB repeatedly refused to reveal what it knows about the affair? As the European Ombudsman has shown, the reasons given by the EIB are unconvincing. The example of the World Bank Integrity Vice-Presidency shows that edited versions of its investigation reports – with identifying details removed - can be published.
For more information contact Rachel Baird on 0207 523 2446 or 07850 242950
Notes to editors:
1. Christian Aid works in some of the world's poorest communities in around 40 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects.
2. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, sustainably. Our strategy document Partnership for Change explains how we set about this task.
3. Christian Aid is a member of the ACT Alliance, a global coalition of more than 130 churches and church-related organisations that work together in humanitarian assistance, advocacy and development. Further details at http://actalliance.org
4. Follow Christian Aid's newswire on Twitter: http://twitter.com/caid_newswire
5. For more information about the work of Christian Aid visit http://www.christianaid.org.uk
Glencore boss blames iron ore top miners for share price fall
7 May 2015
Glencore outspoken chief executive Ivan Glasenberg blamed a decline in the company's share price on "external factors," including a fall in commodity prices, such as iron ore, caused by top miners BHP, Rio and Vale overproduction.
In a new and open critic to his rivals for flooding the market with raw materials, Glasenberg said they needed to understand the basics of demand and supply, adding he was doing all he could to get Glencore's shares back up.
"Unfortunately our competitors in the world have produced more supply than demand and commodity prices are down for that reason," Glasenberg was quoted as saying by Reuters at the company's annual meeting in Switzerland.
“The share price is also very important to us,” he added, noting Glencore had returned $9.3 billion to investors through dividends and share buybacks since its flotation. “That’s similar to the amount we raised in the IPO.”
The miner and commodity trader’s shares, which are up 2% this year, have lost about 5% of their value in the last 12 months and over 40% since first listed in 2011 on the London Stock Exchange.
Glencore boss blames iron ore top miners for share price fall
Glencore sees looming deficits in copper, zinc and nickel helping to underpin future profitability and enhanced returns. The company expects copper supplies, which account for about 40% of its sales, to move into a "deficit" shortly, partly because of declining ore grades in South America.
Glasenberg is also optimistic about the future of coal, one of the company’s key commodities, which he thinks "looks good going forward,” as Indonesia exports taper off with the country consuming more coal domestically.
Last month he said governments would fail to implement measures to cut carbon emissions, such as forcing miners keep its reserves in the ground, adding that growing demand for cheap energy would secure demand for fossil fuels.
Glencore blames rivals for creating metals glut
By Silvia Antonioli
7 May 2015
LONDON - The head of global mining and trading company Glencore said rivals were to blame for an oversupply of metals which depressed its share price.
Despite a partial recovery in the last few months, Glencore's shares are down about 6 percent from a year ago, under pressure from a rout in prices for most of the commodities it produces and trades.
"Unfortunately our competitors in the world have produced more supply than demand and commodity prices are down for that reason," Glasenberg said at the company's annual meeting.
"I am doing my level best to convince my competitors we should understand the words demand and supply," he added in response to a question from an investor about the share price.
Glasenberg has criticised rivals such as Rio Tinto and BHP Billiton at various times, blaming them for oversupplying the market, particularly in iron ore, a commodity Glencore has little exposure to.
Glasenberg said he was optimistic about the outlook for its key products: copper, nickel and zinc.
Coal, another main commodity for Glencore, also "looks good going forward", Glasenberg said, as Indonesia exports taper off with the country consuming more coal domestically.
Coal prices have been battered by a large supply overhang in the last couple of years.
Glasenberg has said unlike his rivals he would not aim to "cannibalise" his own market by adding to the glut.
The world's largest exporter of thermal coal said in March that its 2015 coal output was expected to fall by around 6 percent on the year after production cuts at some of its coal operations.
But London-listed Glencore's coal output rose by 4 percent in the first quarter this year from the same period a year ago.
In January the company said it could shut down production destined for export from its Optimum Coal Mines in South Africa, which would put 1,070 jobs at risk.
In reply to a shareholder who asked the company to prevent such a blow to the country, South Africa-born Glasenberg said if the company goes ahead with the Optimum closure it would expand capacity at another lower cost South African mine.
"So the net net effect should be the same but (would) just provide more benefit for shareholders, more benefit for the country, larger taxes being paid," he said.
(Additional reporting by Sarah McFarlane; Editing by Pravin Char and Keith Weir)
Glencore shareholders approve Lonmin shares distribution
7 May 2015
LONDON - Glencore's shareholders have voted in favour of the proposed divestment of the company's 23.9 percent stake in platinum producer Lonmin through a share distribution to Glencore shareholders.
Miner and commodities trader Glencore proposed in February to divest its stake in the troubled platinum producer which it inherited from its 2013 takeover of mining firm Xstrata. (Reporting by Silvia Antonioli; editing by David Evans)