MAC: Mines and Communities

London Calling! October 18 2005

Published by MAC on 2005-10-18

London Calling! October 18 2005

London Calling returns after a break to find not much has changed Or has it?

Are BHPBilliton and Rio Tinto about to become accessories to theft?

One way of claiming you adhere to corporate social responsibility (CSR), while riding roughshod over people's rights is to do what BHPBililton and Rio Tinto may soon do in the Indigenous Malaysian state of Sarawak

The tactic is simple: you let the dust metaphorically (and in this case literally) settle on what, ten years ago, was the most criticised Big Dam project in Asia, hoping no one will notice you're about to exploit its ugly outcome. In the past three weeks, the world's biggest and second biggest mining companies have tendered for power from the Bakun dam to run an aluminium smelter. The market price of the metal is riding high, the location is favourable (not far from the companies' bauxite mines in Australia), and the buyers (primarily Chinese) are fairly close to hand.

There seems little doubt that, without an aluminium enterprise taking the bulk of Bakun's electricity, this vastly over-spent project won't be viable. (Of course, many other hydro-projects strictly aren't economically feasible, because companies take the power at a premium to real costs, the difference being funded from taxation, or export credit guarantees on which South-based nations may still have to fork out). Interest from China's Shangdong Luneng Group (the dam is currently being built by Argentina's leading power company, IMPSA ) seems to have waned. Those still in the running are a company owned by Malaysian businessman, Syed Mokhtar lbukhary, another Malaysian outfit, and our two global miners

Almost everyone troubled by the impacts of Big Dams in recent years will recall the Bakun saga. One thousand seven hundred indigenous (Orang Asli) families - around 10,000 Penan people in all - were "relocated" in 1997 from their ancestral, hunting grounds that were then inundated. An environmental impact assessment had already concluded there was considerable risk of introduced diseases to the communities, and negative impacts on soil structure, water and air quality, vegetation, wildlife and fisheries.

Commenting last May on the Penan's plight, a journalist with the New Strait Times confirmed that "the predicted hardship and consequences of development are already being experienced. For example, not only is the soil in the resettlement area not fertile, it is too sandy for subsistence agriculture."

Bakun's previous completion date of 2007 has recently been set back to early 2009. One suspects the Malaysians may not last the course; there must be less doubt about the staying power of BHPBiliton and Rio Tinto.

We may be less sanguine about the staying power of the Bakun opposition. Despite last month’s re-entry of the UK-Australian gladiators, the only recent NGO critique we could find is contained in a useful August 2005 report by the International Rivers Network.

It seems then that BHPB and Rio Tinto can be confident of entering Sarawak - either separately or together - with barely a flicker of outside protest. Yet, if CSR stands for anything, it must surely include "carried responsibility" for the consequences of any schemes from which a company stands to profit. This is what "Life cycle assessment" of a mineral's "chain of custody" is crucially about. Rio Tinto stated its interest in purchasing power generated form Bakun as far back as the late nineties (even hinting it may buy into a construction consortium); BHPBilliton did so a couple of years ago. Doesn’t this make them accessories, both before and after, the unacceptable fact?

"Terror" infirma

Britons vigorously opposed to the Blair regime’s insidious rightwing shift against dissenting opinion may take comfort from the fact that, were they expressing opposition to mining, or anti-people acts, in the Philippines, they might be murdered or interned, rather than merely apprehended and warned. (Read this week's MAC postings on the responses to "anti mining" protests in the crisis-ridden South East Asian country).

But is there really a marked difference between the two states? The disgraceful and disgraced British prime minister currently intends to create a criminal offence of "glorifying the commission, whether in the past, in the future or generally" (sic) of acts of "terrorism". As Seamus Milne wrote in the Guardian on October 13th: "Terrorism is defined in the bill as any politically motivated violence against people, property or electronic systems anywhere in the world. It makes a criminal offence out of a belief shared by almost every society, religion or philosophy throughout history: namely that people have the right to take up arms against tyranny and foreign occupation."

The proposed legislation could be used to ensnare those praising Mandela as a hero rather than a criminal, or anyone who'd welcome the Burmese junta evaporating in a puff of blue smoke. It would certainly be used to silence those (say) welcoming the assassination of a morally corrupt political leader who has himself illegally and willfully engineered acts of terrorism against civilian populations. (Interestingly, the father of a young UK soldier killed in Iraq earlier this year, and who threatened to bump off Geoff Hoon, the UK "minister for war", wasn't even officially rebuked. However, an old guard Labour party supporter, who cried out “Lies!” to a speech by the foreign minister last month, was manhandled by “security” guards and interviewed by police under the existing Protection of Terrorism Act).

More to our particular point, this putative legislation could render MAC's own UK editorship vulnerable to arrest, simply for circulating a declaration approving the sabotage of a dangerous mine site, anywhere in the world.

Ruffian on the bluff

Last month, India's Central Empowered Committee (CEC) delivered a remarkable document to its bosses, the country's Supreme Court. In it, the committee "recommended" (but with an unusual determination and strength of documentation) that the Court halt forthwith the largest single industrial project underway in the state of Orissa. This is the Lanjigarh alumina refinery of UK-based Vedanta Resources plc. Moreover, declared the CEC, the bauxite-rich Nyamgiri hills, intended to feed this refinery, must never be mined.

On October 13, Vedanta published its half yearly report. The company was cock-a-hoop about expansions at the Tuticorin copper smelter in Tamil Nadu (which another committee of the Indian Supreme Court, the Hazardous Waste Monitoring Committee, declares to have been illegally expanded); at its Chanderiya zinc operations, as well as the Korba smelter in Chhattisgarh. – where state officials accuse the company of appropriating more than 1,000 acres of government land.

You'd have thought that, with these interim successes under its belt, Vedanta would now maintain a prudent silence about its nefarious exploits in Orissa. Not a bit of it! The company has not only announced that construction of the refinery is "progressing on track" and is " currently 60% complete". Even more outrageously, it claims that, following the submission of the CEC report, "the process of obtaining the necessary environmental approval for the mine (sic) will now move forward".

The Mining Journal last week reported Vedanta to be "shrugging off" suggestions that the alumina refinery may be delayed by the CEC "recommendations" (condemnations, more like) to ban mining of the sacred Nyamgiri hills.

It's unfortunate that the world's most authoritative mining weekly hasn't done its home work. The CEC report of September 21 not only urges the Supreme Court to ban the Nyamgiri mine, but also order an immediate cessation of work on the refinery. True, the committee inserts an apparent "let out" clause, in the event that Vedanta's comes up with an alternative source of bauxite. However, even if the refinery were reconsidered at some later stage , the CEC's condemnation of the existing plant is unequivocal:

"The casual approach, the lackadaisical manner and the haste with which the entire issue of forests and environmental clearance for the alumina refinery project has been dealt with smacks of undue favour/leniency and does not inspire confidence with regard to the willingness and resolve of both the State Government and the MoEF to deal with such matters keeping in view the ultimate goal of national and public interest. In the instant case had a proper study been conducted before embarking on a project of this nature and magnitude involving massive investment, the objections to the project from environmental/ecological/forest angle would have become known in the beginning itself and in all probability the project would have been abandoned at this site.

" Keeping in view all the facts and circumstances brought out in the preceding paragraphs it is recommended that this Hon'ble Court may consider revoking the environmental clearance dated 22.9.2004 granted by the MoEF for setting up of the Alumina Refinery Plant by M/s Vedanta and directing them to stop further work on the project. This project may only be reconsidered after an alternative bauxite mine site is identified.".

So what now? Earlier this year, Vedanta was accused of trying to bribe an Indian Supreme Court judge to get the CEC off its back: the judge was not for turning. On the day of the April 29th CEC hearing in Delhi, the company's executive chairman, Anil Agarwal, jetted into Orissa's state capital, Bubaneshwar, holding hands with his pal, Chief Minister Navin Patnaik, and publicly demanding that the Supreme Court get the CEC out of his company's hair: again, to no avail.

You don't have to read between the lines to detect that Vedanta now

expects "commercial considerations" and a central government rampantly in favour of new mining projects, to apply the screws on the country's Supreme Court, and trample the CEC's deliberations underfoot.

Meanwhile, a keen mine-watcher in Delhi tells us that the London Stock Exchange has sent a team to India, to look further into Vedanta's affairs. Watch this space - but don't hold your breath.

Taking the biscuit

The rate at which a penguin shoots shit from its arse may not interest everyone. Or indeed anyone - except for the odd anally-retentive individual. However, three eminent scientists from Oulu, Bremen and Hungary's Lorand Eotvos universities, have just shuffled away with a Nobel prize, for calculating "rectal pressure necessary to expel fecal material over a distance of 40cm". Strictly speaking they didn't get the world's most prestigious gong, but its alternative, the "Ig Nobel", devised by Marc Abrahams, editor of the Annals of Improbable Research (with an emphasis on "annals" perhaps?)

Before pooh-poohing too much, you should be told about the other Ig Nobel awards handed out earlier this month at the University of Harvard. They included one for Literature - to "internet entrepreneurs of Nigeria" for their hugely inventive email scams; the award for Medicine to Greg Miller of Missouri, who devised replacement testicles for neutered dogs; and one in Fluid Dynamics received by two other eminent US professors who examined whether one can swim faster in water than in sticky syrup. These particular finding were no doubt urgently anticipated by thousands of workers, perched on the edge of sugar vats or labouring in dodgy rum distilleries. The researchers thankfully concluded that there is no difference. The lesson is simple: don't go to work for Tate and Lyle or Bacardi, without your rubber duck.

Of most relevance to extractive industries was the Ig Nobel for Physics. This was gifted to a team from the University of Queensland which has been observing a glob of congealed black tar, dripping through a funnel since 1927 (sic) at the rate of "around one drop every nine years". Unfortunately, their lack of precise calibration doesn’t match the utilitarian attributes of penguin poop-avoidance, or an alarm clock that runs away when it rings, thus forcing you out of bed to catch it (Gauri Nanda of MIT, winnder of the Ig Nobel for Economics).

To fine-tune the purposefulness of the Ig Nobel enterprise, London Calling now invites 2006 nominations from readers for the following:

* a study of the relationship between volumes of acid mine drainage and the number of promises made by the industry to contain it (Physics);

* Measurement of the intensity of expletives uttered by benthic fauna as they scramble along the seabed to avoid waste falling from an STD outfall (Chemistry).

* (For the Ig Nobel in Mathematics): a precise answer to the question: "Would the mining industry's published promises to observe Corporate Social Responsibility, if piled on top of each other in the UN Plaza, amount to anything more than a hill of beans?"

Answers on the conventional postcard, please. Or, if you're feeling adventurous p-p-pick up a penguin.

[Sources: Argentinian company in Bakun: Asian Wall Street Journal, 4 May 2005; Chinese interest in Bakun: The Edge Daily, Kuala Lumpur, March 3, 2005.; Rio Tinto’s and other bids for Bakun power: The Edge 26/9/2005; consequences of Bakun project : New Strait Times, May 8, 2004.; Bakun EIA summary: The Star, Malaysia, January 24, 2005.; Current plight of Penan people near Bakun: New Strait Times . 15 May 2005; critiques of proposed UK "anti terrorist" Bill: Independent 12/10/2005; Guardian 13/10/2005; Mining Journal on Vedanta: 14/10/2005]

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