MAC: Mines and Communities

Fresh Allegations Tarnish Glittering Year For Anglo

Published by MAC on 2007-04-22
Source: The Observer

Fresh allegations tarnish glittering year for Anglo

It may have made $9bn profit, but the metals mining group stands accused of some base practices, reports Nick Mathiason

The Observer (UK) 22 April 2007

Within the rarefied confines of the Royal Society off Pall Mall in central London last Tuesday, the mood was celebratory. At the home of British science, Anglo American's bosses were regaling shareholders at its annual general meeting with the good news that the world's third-largest mining firm had just enjoyed an 'exceptional' year.

Rocketing commodity prices enabled the firm, inextricably linked with apartheid South Africa, to make record-breaking revenues of £16bn, generating £5bn in pre-tax profits - another all-time high. This allowed the London-listed giant to return a special windfall to shareholders as well as a record dividend.

But campaigners flew in from South Africa and the Philippines to outline concerns which threaten to undermine Anglo's newly won image.

Despite the attendence of these spectres at the feast 'The mood was annoyingly self-congratulatory,' said one of the shareholders. And why not? After all, if ever there was a vindication of the strategy put in place by chairman Sir Mark Moody-Stuart, these results were it. The 66-year-old Antiguan-born corporate veteran won his spurs by rehabilitating Shell's battered reputation while he was chairman in the 1990s. Moody-Stuart steadied the oil giant after it was fiercely criticised for its part in the execution of Nigerian Ken Saro Wiwa and eight other activists after they protested against the poisoning of the Niger Delta oil lands.

It was to Moody-Stuart that Anglo American turned in 2002 as it sought a similar rehabilitation. Anglo executives knew which way the wind was blowing. They reached out to ANC leaders well before the apartheid regime fell, and realised that it had to talk the language of community and cohesion with governments if it was to win lucrative licences. Without this and a listing in London, close to northern hemisphere decision-makers and capital, the multi-billion-dollar opportunity that globalisation offered would pass Anglo by.

The strategy worked. Moody-Stuart is feted as a leader of the corporate social responsibility movement. He is convinced that big business can eradicate poverty. A 70-page sustainability document showcases its community projects, including school programmes and free anti-retroviral drugs for workers to combat HIV.

But as the protesters at the AGM made clear, there are problems. Those in South Africa centre on its platinum mining operations. Platinum, used chiefly for catalytic converters in car exhaust systems, has enjoyed a 10-year boom. In the Transvaal in north eastern South Africa * there are allegations that large numbers of people have been relocated and are now living in settlements, built by one of Anglo's subsidiaries, without water or proper sanitation. Other issues centre on community companies funded by Anglo which are said to be unrepresentative of the communities they are meant to act for. Furthermore there are complaints that some of the 7,000 people relocated to make way for an open-cast mine are going hungry as they have been unable to grow crops. Richard Spoor, a white lawyer representing some communities, says mass meetings have been broken up with arrests and beatings.

Phillipos Dollo was one who was arrested. Last week he said: 'Anglo doesn't respect our culture, dignity or human rights. A thousand hectares has been destroyed without consultation.' Anglo vehemently disagrees. The firm says it paid generous compensation packages which include better quality homes and land to grow crops, and that it is endowing communities with a trust fund worth £2m.

Anglo's problems are not confined to South Africa. Two years ago, a Human Rights Watch report claimed AngloGold Ashanti had links with the Nationalist and Integrationist Front (FNI), described as a violent group that helped them get access to gold-rich lands in north-eastern Congo. Anglo says it had little choice but to deal with the group as power was wrestled away from former president Kabila.

The world boom in commodities is set to continue, making Anglo American shareholders and executives ever greater profits. But perhaps Anglo's celebrations should be toned down.

Fight in Philippines

Anglo American is at the centre of an escalating dispute in the northern Philippine region of Cordillera.

Abundant gold and copper attracted firms into the mountainous region dominated by indigenous people who for centuries farmed the rich soil. Indigenous communities twice overwhelmingly voted against Anglo's proposals to mine copper, though many supported the move. Consultation over a third attempt was boycotted by local people. The authorities interpreted this as meaning that opposition had melted away and so permits were given.

Resistance comes against a backdrop of militarisation and rights abuses. Community leaders told The Observer last week that they had received death threats, though not from anyone associated with Anglo. There have been murders linked to mining excavation.

At last year's AGM, Anglo's chairman, Sir Mark Moody-Stuart, made a commitment to meet community representatives. Nothing happened. A meeting arranged was allegedly cancelled by Anglo at the last minute, although the company disputes this.

Tina Moyaen, leader of the Save Apayao People's Organisation in Cordillera, says: 'We are not against development or mining but we want it to help the community.' She points out that indigenous people have been mining in the region for years.

The Philippine government has been pursuing an accelerated extraction policy during the past two years, which is causing widespread concern. Former international development secretary Clare Short led a fact-finding mission to the Philippines last summer. In her report this year, she said: 'I have never seen anything so systematically destructive as the mining programme in the Philippines. The environmental effects are catastrophic, as are the effects on people's livelihoods.'

[* Editorial note: Anglo American/Anglo Platinum's main operations are in fact in north eastern South Africa, primarily Limpopo province.]

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