MAC/20: Mines and Communities

London Calling has a tiff with Dfid…and a bouquet for Rio Tinto

Published by MAC on 2006-03-22


London Calling has a tiff with Dfid…and a bouquet for Rio Tinto

by Nostromo Research

22nd March 2006

Last week, Nicanor Alvadora of the Peruvian community organisation, VIMA, addressed a meeting in the British House of Commons (parliament) on the first leg of a European tour, aimed at forcing AIM-registered mining company, Monterrico Metals, to quit northern Peru. He revealed that, on March 12th , goons from the company had attacked community leaders organising a peaceful farmers’ forum. It wasn’t the first time company opponents had been targeted – two protestors have already been killed and around 140 others arrested.(See MAC's latest Latin America Update on this site).

Present at the Commons meeting was a representative of the UK government's Department for International Development (DfID), who didn’t make any comment on the Nicanor’s allegations. Dubbed "the first cousin of the World Bank" at a recent Action Aid conference for “refugees” from a London-based joint Asia Development Bank-DfID "strategy" meeting, the DfID has long tried running with the hares (supposed community leaders, while hunting with the hounds (UK companies).

The Department was, for example, implicated in bringing Britain's most notorious Indian-based mining company, Vedanta, to the market in late 2003. More recently it's been accused of trying to spike opposition to Asia Energy plc's huge open-pit Phulbari coal venture in Bangladesh. As another new posting on this website points out, the company's CEO has now attacked the country's own official advisor on energy policy, even accusing him of being "anti-state".

A fall guy?

For show's sake, the UK ambassador to Bangladesh has "discussed" this storm in an open cut, with Asia Energy's Gary Lye. You won't get many brown coal points for reckoning that Mr. Lye's sally against a respected Bangladeshi citizen is privately endorsed by Her Majesty's representative in Dhaka, with backing from the UK government.

Several months ago, the British ambassador to Peru also went on record as supporting Monterrico Metals' Rio Blanco project. Ambassador Richard Ralph even had the gall to state that UK mining norms are "among the most rigorous in the entire world" - a statement as daft as it is disingenuous (see article below).

Try telling that to the day labourers at Vedanta's bauxite mines in the Indian state of Chhattisgarh. Or to farmers downstream of wastes, spewed from Xstrata's Alumbrera operations in Argentina.

Such diplomatic interventions are by no means exceptional. In 2002, the UK ambassador to Romania intervened directly with the Bucharest government, to push Mittal Steel's bid for the state smelting company, Sidex. No competitive tenders were offered, and Lakshmi Mittal got the plant for a knockdown £300 million. This came shortly after the company's eponymous founder handed a cool quarter of a million pounds to the Labour Party. Although Britain's prime minister claimed he knew nothing about this particular sleazy deal, four years later Tony Bliar himself intervened to support Oxus Gold, when the new, popularly-elected president of Kyrgyzstan cancelled the AIM-listed company's contract. In his rebuke, Bliar berated president Kurmanbek Bakiyev for not "living up to obligations under his [Bliar's] global anti-corruption initiative". Just five weeks later, the UK prime minister himself was under siege, for allowing honours to be sold in exchange for massive secretive loans made to his political party.

Ever since the late 1990s, when DfID joined the World Bank and CARE to sponsor the mining component of the tri-sectoral "Business Partners for Development" programme, sustainable development has been equated by the British government with support for highly dubious minerals ventures overseas.

DfiD also backed Mark Moody-Stuart of Anglo American, and Robert Wilson of Rio Tinto, through the World Business Council for Sustainable Development, when these captains of industry launched so-called "Type Two" partnerships (between businesses, governments and handpicked NGOs) at the Johannesburg World Summit for Sustainable Development in 2002.

There's now little doubt that, when critics upbraid the World Bank, they should also take on board what the DFiD is getting up to.

A nice guy

Is the world's second most powerful mining company undergoing minor policy shifts? First, it denies that recent talks with the Papua New Guinea government may herald a return to Bougainville - despite PNG statements implying the contrary. Now it seems to be distancing itself from the draconian "revision" of labour laws in Australia, which it advocated only four months earlier. Indeed, this new code had largely been by the company as a culmination to the anti-union campaign it launched in Australia around ten years ago.

A swallow doesn't make a summer; nor do a few shafts of sunlight indicate that Spring has finally arrived in the corridors of 6 St James Square.

However, Rio Tinto's chief executive, Leigh Clifford is shortly to retire; a few of his political positions may also be on the way out. This bluff, hard-edged Aussie started honing his mining skills at Rio Tinto's Broken Hill operations in 1970. He became mining director of Rio Tinto Australia in 1996 and, six years later, took over from Robert Wilson as CEO.

Clifford's successor hasn't yet been chosen, though the odds are on Guy Elliott, currently the company's finance director. According to one observer, Elliot is "a lovely bloke, just the kind of person you would want as a next door neighbour. You can't say that about Leigh Clifford."

And indeed, there are numerous locals who wouldn't say that about the current figurehead of the world's most aggressive big mining outfit; not to mention some shareholders.

Former Financial Times mining editor, Ken Gooding, has a "favourite memory" of Clifford. Just after the Australian was appointed to Rio Tinto's main board in 1994, "he was at the group's annual meeting, one that was attended by some particularly rowdy environmental protestors. At one point a man at the front stood on his chair and started shouting at the top of his voice. He then made a dash for the stage on which the directors were arranged.

"Not knowing what the protestor had in mind, most of the directors cringed back, some disappearing behind their table. But not Mr. Clifford who is a very tall, very well-built man.

"Instinctively he was on his feet, chest thrust forward and a clenched first drawn back ready to tackle the protestor.

But then, Clifford “suddenly remembered where he was - at the annual meeting of one of the UK's major public companies - and rather sheepishly...dropped the fist to his side and settled back in his seat".

In just over two weeks time, Clifford will be presiding over his own retirement at Rio's 2006 annual general meeting. These days (alas) no one is likely to approach the platform - except perhaps to offer the lovely Mr Elliott a bouquet of snowdrops.

Rio Tinto's likely "New Face" is as round and benign as a one pound coin; as soft and innocuous as a tin of talc.


British Ambassador to Peru Guarantees Environmental Protection in Río Blanco Mining Project

by La Hora, Piura, Perú

11th November 2005

The government of Great Britain will guarantee the protection of the environment in the hypothetical case that mining company Majaz - subsidiary of British company Monterrico Metals - is able to carry out copper mining project Río Blanco. This is according to British ambassador Richard Ralph, after visiting the mining camps and touring the affected zone located in Piura, Perú, along the border of Ecuador.

Surprised by the beauty of the Piuran mountain landscapes and the friendliness of the people, the diplomat, in a conversation with La Hora, said that the mining project, which represents an investment of $800 million dollars in its operating life, is a way out of underdevelopment. "Obviously Piura is not one of the poorest regions in the country, but this is an opportunity to overcome social deficiencies."

In Piura, "there are various possibilities for development: there is tourism, agriculture, agriculture and livestock exportation, but the fact is that Peru is a mining country; Piura has the wealth of minerals that the globalised world needs", continued the Ambassador. He said that the mining companies of his country, in addition to being obliged to comply with the strictest international norms and standards for protection of the environment and social resonsibility, also comply with the countries where resources are extracted, in this case, legislation of Peru, as well as the laws of Great Britain.

"Our norms are among the most rigorous in the entire world, and in our society there is much pressure on the part of shareholders and the British public for the companies to respect the environment; this is power of public opinion in our country, and this is why I have total confidence that Majaz is going to comply rigorously with all the norms," added Ralph.

Ralph stated that for Great Britain, investments in the mining sector are very important, and that "it is part of my job as Ambassador to try and resolve problems that are generated," mainly by the mistrust held by affected communities towards the mining projects.

He added that his country is concerned by the conflicts that British mining companies Monterrico Metals and BHP Tintaya (in Cusco) have faced, "but our position is that we are resolved to try and solve the problems, to reduce the level of mistrust on the part of the people of Perú." It is the responsibility of his government to create the structures, norms, and the levels of confidence so that the British companies can operate, obviously to their commercial benefit, but also to the benefit of Perú, added the diplomat.

Through many hours of travel throughout the region, the British ambassador got to know the zone where the Majaz intends to exploit the deposits of copper. "In the villages I have heard about the conflicts, of the problems of mistrust and it is obvious that there are some places where the people have developed confidence in mining, and in other places, no. The important thing is that the mines are bringing jobs."

He said that the members of communities who work in the mining projects should act as a sort of ambassadors. "They can clarify the misunderstandings, the lies and all that is said about the implications of the project."


Embajador de Gran Bretaña en Perú garantiza Protección al Medio Ambiente en Proyecto Río Blanco

Diario La Hora, Piura, Perú, 11 de Noviembre 2005

El Gobierno de Gran Bretaña garantiza la protección del medio ambient en el hipotético caso que la minera Majaz - subsidiaria de la británica Monterrico Metals - llegue a desarrollar el Proyecto Río Blanco. Así lo manifestó el embajador de ese país en Perú, Richard Ralph, luego de visitar al campamento y de recorre la zona de impacto de la mina ubicad en la zona fronteriza con el Ecuador.

Sorprendido por la belleza de los paisajes de la sierra piurana y la amabilidad de su gente, el diplomático en diálogo con LA HORA, manifestó que el proyecto minero que representa una inversión de 800 millones de dólares en su período de vida, es una salida para el subdesarrollo. "Obviamente Piura no es una de las regiones más pobres del país peo esta es una oportunidad para superar deficiencias sociales". En Piura "hay varias posibilidades de desarrollo. Hay turismo, agricultura, exportaciones de productos agropecuarios, pero el hecho es que el Perú es un país minero; Piura tiene riquezas que el mundo globalizado necesita" , continuó el embajador británico.

Señaló que las empresas mineras de su país además de tener la obligación de cumplir con las normas más estrictas internaciones en cuanto a la protección del medio ambiente y responsabilidad social, también se ajusta a las leyes del país donde se explotará el recurso (en este caso a la legislación peruana) y alas reglas de Gran Bretaña. "Nuestras normas son entre las más rigurosas en el mundo entero y nuestra sociedad hay mucha presión por parte de los accionistas y el público británico para que las empresas respeten el medioambiente; ese es el poder de la opinión pública en nuestro país, por eso tengo toda la confianza de que Majaz va a cumplir rigurosamente con las normas", agrego Ralph.

Desconfianza

La falta de confianza de los peruanos sobre la explotación de los recursos mineros debe ser solucionada con el diálogo abierto con todos los involucrados, sostuvo el diplomático. "Yo entiendo perfectamente esta falta de confianza y por lo que mi gobierno, mi embajada, otras embajadas, las grandes empresas multinacionales británicos, etc. están tratando de dialogar mas abiertamente, constructivamente con el gobierno, con las poblaciones donde se encuentran las minas. Es un proceso, en el que uno tiene que tratar de reconstruir de nuevo la confianza, pero no es fácil".

Invertir es Importante

Ralph expresó que para Gran Bretaña las inversiones en el sector minero son muy importantes y que "es parte de mi cargo como embajador de tratar de resolver los problemas que se generan", principalmente por la desconfianza de las comunidades involucradas con los proyectos mineros. Añadió que es una preocupación del país los conflictos que ha tenido que enfrentar las mineras británicas Monterrico Metals y BHP Tintaya (Cusco), "pero nuestra posición es que estamos resueltos a tratar de solucionar los problemas, de reducir el nivel de desconfianza por parte del pueblo de Perú". Es responsabilidad de su gobierno crear las estructuras, las normas y el nivel de confianza para que las empresas británicas puedan trabajar - obviamente para su beneficio comercial, pero también para el beneficio del país, del Perú, añadió el diplomático.

El Diálogo es Vital

Tras varias horas de viaje en camioneta, el embajador británico conoció la zona donde la Minera Majaz intenta explotar un yacimiento de cobre. "En los caseríos he escuchado acerca de los conflictos, de los problemas de desconfianza y es obvio que hay lugares donde la gente ha desarrollado una confianza en la mina, en otras no. Lo importante es que la mina esta proporcionando empleo". Señalo que los miembros de las comunidades que trabajan en el proyecto minero deberían ser una surte de embajadores. "Ellos pueden aclarar los malentendidos, las mentiras y todo lo que se dice acerca de las implicaciones del Proyecto".

London Calling sources: interview with Nicanor Alvadarez, March 20 2006; Sidex sale to Mittal: Times of India, February 11 2002; Blair going for Oxus gold: The Independent February 3 2006; Slezy donations to the British Labour party: all mainstream UK media , week of March 192006; Ken Gooding on Clifford and Elliott: Mining Journal, March 3 2006

[London Calling is published by Nostromo Research. Views expressed do not necessarily represent opinions of any other organisation, including editors of the Mines and Communities website. Reproduction is welcomed, with accreditation to Nostromo Research, London.]

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