GCM Resources catches flak again at its AGM
Published by MAC on 2013-12-11Source: London Mining Network
Chairman of GCM Resources offered Jobseeker's Allowance claim form by concerned shareholder
Report on the GCM Resources AGM, London, by Richard Solly, Co-ordinator, London Mining Network - http://londonminingnetwork.org/2013/12/chairman-of-gcm-resources-offered-jobseekers-allowance-claim-form-by-concerned-shareholder/
4 December 2013
(GCM Resources has only one active project, the Phulbari coal project: this is a plan for an opencast coal mine in north western Bangladesh. The project has been stalled for years as it awaits permission from the Government of Bangladesh.)
Father Christmas couldn't make it to this year's GCM AGM (you can read what happened when he turned up last year at http://londonminingnetwork.org/2012/12/coal-play-inside-the-gcm-resources-agm-20-december-2012/ and http://londonminingnetwork.org/2012/12/santa-claus-delivers-coal-to-gcm-board-inside-agm-two-arrests-following-coal-dumped-on-institute-of-directors-front-door/) but one kind-hearted shareholder was in giving mood. He said he understood that the company has been going through a difficult time, with the possibility of up to 220,000 people in north west Bangladesh losing out because of GCM's Phulbari project and therefore opposing it, the threat of a general strike, condemnation by United Nations Special Rapporteurs and an investigation by the Organisation for Economic Co-operation and Development. He concluded that GCM's new Chair, Michael Tang, would not be in post long and therefore offered him a Jobseeker's Allowance claim form. Not only that, he was willing to offer him £70 to paint his fence (or he may have said 'shed' - I couldn't quite hear from where I was sitting, and I would hate to create a false historical record) which he thought would take about two days to complete. Michael Tang said he would consider the offer.
Meanwhile, outside, a noisy demo organised by WDM and the UK branch of the Bangladesh National Committee called for GCM to leave the country.
Michael Tang may have had nicer mornings. He only took over as Chair of GCM at the end of June and he looked a little bewildered at times. He got off to a difficult start by passing on apologies for absence from the two other Directors, Guy Elliott and Dato' Md Wira Dani Bin Abdul Daim. Guy Elliott became a Director at the end of June as well; and Dato' Md Wira Dani Bin Abdul Daim at the beginning of October. It has been a year of the long knives at GCM - none of the people on the Board of Directors last year remains on that Board. But the absence of two out of only three Directors sent a pretty dire message about the health of the company.
Tang kicked off the agenda with no introductory speech, went straight to adoption of the annual report, and said that if shareholders wished to ask questions, they should say not only who they were but how many shares they held. When he attempted to get the second bit of information out of the first questioner, another shareholder objected. Brian Mooney, who used to work for GCM in Bangladesh, pointed out that there was no legal obligation on any shareholder to say how many shares they own. So nobody did.
It's clear why Tang wanted the information - if you have only got a few shares, everyone can assume you don't care about the company's profits and they can discount your opinions. But I am sure that shareholders know that those of us who attend its AGMs to raise objections to the Phulbari project have only got a handful of shares between us. We are there to support the tens of thousands of people in Phulbari and elsewhere in Bangladesh who object to the company's plans and deserve to have their views conveyed to shareholders.
The first questioner, Zahanara Akhtar Rahman, asked why the company had appointed a Malaysian businessman to lobby the Government of Bangladesh, and why he had a contract awarding him shares if he gets the Government to approve the project. She asked why the UK Government was investigating the company over the Phulbari project's human rights impacts, and why the United Nations was also concerned. She said that GCM does not respect human rights and that the World Development Movement had, as a result, also taken up the case.
Michael Tang asked which UK Government department was investigating. I chipped in and said it was the UK National Contact Point (NCP) of the Organisation for Economic Co-operation and Development, based in the Department for Business, Innovation and Skills, and that I was surprised he did not know this as it was in the company's own report. He thanked me for the clarification, and asked Chief Operating Officer Gary Lye to comment. Gary Lye said that ‘a couple of activist groups, WDM and the International Accountability Project' had lodged a complaint to the UK NCP in December 2012, that the NCP has a process to follow, that the company is providing the NCP with information and that the company looks forward to hearing the outcome of the review, which he believed would be positive.
That's when the kind offer of a JSA claim form and a temporary job was made.
Michael Tang then wanted to move on to item 2, postponing other general questions until the end of the meeting. This is appalling practice, as the annual report should not be voted on until the company's operations, described in it, have been fully discussed. Last year's GCM Chair, Gerard Holden, tried to get away with it, but we objected and he took questions at the appropriate moment. This year we let it pass.
Item 2 was the re-election of Guy Elliott. I objected: why should shareholders elect either of the two non-executive directors when they couldn't even be bothered to turn up to the AGM? Tang said that Guy Elliott was very knowledgeable and committed and is doing shareholders a favour, devoting his time to the company for little money, and that it was difficult to find people like him. Both non-executive directors were duly elected.
All the other items of formal business were passed without questions and Tang declared the AGM closed.
He then gave the pep talk I would have expected at the beginning, mentioning the company's community engagement and the growth of pro-mining groups in the Phulbari area. The new directors were cutting costs and raising cash. The political situation in Bangladesh is uncertain, with many strikes and an election planned for 5 January 2014; but the fundamentals of the Phulbari project remain strong and both major political parties have said they will increase the use of coal for energy generation. After the election, GCM will work with the new government to progress the Phulbari project and with local communities to get them to accept it.
Matin Sarker said that he is from the Dinajpur district and has family and friends in Phulbari. He said he was concerned that 130,000 people may be evicted and up to 220,000 affected by the project. He asked if investors realised how crowded Bangladesh is. He asked the Chair how he could guarantee that people displaced will get the same amount of land and be able to preserve their livelihood. He said that many indigenous people live in the area and that they are accustomed to live in the same place. How could the company guarantee the continuation of indigenous customs?
Michael Tang said he was very happy that Matin was in the AGM and hoped he would tell shareholders about the living conditions of the people in the area. With the development of this project the company wants to increase the standard of living of people at Phulbari, improving their quality of life and the productivity of their farming and business activities.
Matin said that most of the people in the area are farmers or indigenous people. How could the company ensure that they will get a better life when they are losing their land and their occupations? The company pays money to clubs of hooligans who support its activities. The company's distribution of blankets was seen by come as a form of bribery.
There was a rather sharp exchange between the Chair, the COO and another shareholder about whether blanket distribution was a form of humanitarian aid or a form of bribery.
Zahanara asked Michael Tang whether he had been to Phulbari himself. Had he seen the situation and spoken to local people?
Michael Tang looked rather uncomfortable and said nothing, so I took it that the answer was no.
Gary Lye took up the issue of numbers. He said that there was no basis for saying that 220,000 people could be relocated. The company's resettlement plan is on the company's website and can be examined there. The plan is to be implemented in six stages over twelve years. GCM believes that when the first people have received their entitlements, others will want their benefits more quickly. Not all the local people want to carry on living by agriculture - over half want to leave it. The area has no industry and the community is frustrated by the lack of jobs. Bangladesh needs to create over a million jobs a year to keep pace with population growth. North western Bangladesh is one of the poorest parts of the country and nothing is being done to create new livelihoods for people who want them.
Michael Tang said that the company is committed to the Equator Principles and the UN Global Compact and is bound by the UK Bribery Act. He seemed stung by what he obviously took to be criticism of his nationality by one of the questioners. He said he was Malaysian, that Malaysian companies had invested in Bangladesh in the early years of its independence and had facilitated growth. Malaysian companies were providing 80% of the country's electricity; half the country has no electricity and people live in squalid conditions. More than a millions Bangladeshis live in Malaysia, and the Malaysian Government is investing in Bangladesh.
Brian Mooney said that last year the Chairman had said the company was seeking a meeting with the Prime Minister of Bangladesh. Had it happened? No, said Tang, it had not. Mr Mooney asked why not. Gary Lye explained that he had had informal meetings with the Prime Minister's staff and the problem was the fact that the coal policy had not been finalised. In an election year, Governments do not want to do anything. Mr Mooney said that this sounded like an excuse for doing nothing. Gary Lye replied that the British invented red tape and the Bangladeshis were implementing it. (Gary Lye is Australian.) Governments are more likely to take action early in their mandate so they see the benefit during their own term of office. GCM will engage with the new government. The Finance Minister wants to fulfil the country's energy demand and the government is going in the direction of coal power. So, from GCM's point of view, there appears to be hope.
Another shareholder asked who at GCM is looking after the interests of GCM shareholders now that there is such a crossover with Polo Resources, GCM's largest shareholder. (Michael Tang is Executive Chairman and Managing Director of Polo as well as being Executive Chairman of GCM.) Another one asked what Polo's intentions are - will it lend GCM money so GCM does not have to issue more shares? Tang said he could not comment for Polo in this forum, and thus avoided answering the question at all.
In response to a question by shareholder Zahid Ali, there was a fairly lengthy discussion of the prospects for GCM selling coal from Phulbari to power stations in Bangladesh. Michael Tang said that the government has announced plans for three new coal power stations and awarded contracts for two of them. These would initially rely on imported coal but it is only a matter of time before the government - of whichever party - realises that it is more sensible to use coal from Bangladesh. Gary Lye said that, since any new coal power plant would be sited near a river, it would be possible for Phulbari to deliver coal by barge.
I asked how the company could guarantee the livelihoods of people removed from agricultural land to semi-urban settlements. I pointed out that at the Cerrejon Coal mine in Colombia - a mine run by three mining companies much larger, wealthier and more experienced than GCM - farming families had been moved to such settlements and given help to start up non-farming livelihoods, but that a number of them had got into difficulties once the start-up help finished, and found they had lost both land and livelihood. How could GCM guarantee that things would be different at Phulbari? Gary Lye assured me that GCM's plan did not involve making initial payments and then leaving people to their own devices, but "being there for the duration - 35 years at least." He said there was no doubt that the nearby Barapukuria deep pit coal mine would move to opencast operations and would produce coal for at least fifty years. Companies are wanting to build factories. What is missing is electricity, and Phulbari can provide that. New industrial parks will provide jobs. The region is close to the border with India and local people see a big advantage in being able to trade across the border.
All I can say - though I didn't - is that I'd be surprised if this brave new industrial world will materialise in the way Gary Lye thinks it will, and if it does, it is unlikely to be the paradise he seems to think it will be. Cerrejon Coal told people how wonderful life would be in the new settlements it is building, and people have been disappointed. How can GCM be so sure that its operations are going to be so different from other companies' operations around the world?
Zahanara complained that Michael Tang had still not answered her initial question about why the company employed a Malaysian businessman to lobby on its behalf instead of doing it themselves. Michael Tang explained that the Malaysian businessman in question was himself, and that he was now Chairman of the company!
The shareholder who had offered Michael Tang a JSA claim form and temporary job asked for the reason for GCM's assertion that half of the 220,000 people working in farming and affected by the Phulbari project want to get out of agriculture. Gary Lye said that the figure of 220,000 people affected was an exaggeration based on propaganda and that the percentage of those wanting to leave farming was drawn from a rigorous survey carried out for the projects Environmental and Social Impact Assessment. The shareholder restated his conviction that with the current level of protests against the project, it will never go ahead, and said that as Michael Tang seemed unlikely to accept his offer of a JSA claim form and temporary painting job, he would like to offer them to Gary Lye instead. And with that, the meeting ended.
But the struggle continues...