Report from Anglo American AGM
Published by MAC on 2003-04-25
Report from Anglo American AGM, Church House, Westminster, London, England
25 April 2003
Friends and supporters of the Mines and Communities Network put questions to the Anglo American corporation’s Board at the company’s annual shareholders’ meeting in London on 25 April 2003. The following report includes the questions that were asked and summarises the company’s brief and unsatisfactory responses. It also includes the text of a statement handed to shareholders by the four questioners, each of whom had registered as shareholders in order to address the meeting.
1. Sister Joan Keitch OSU, a member of the the Ursuline Sisters, a Catholic religious congregation, asked about the company’s operations at El Cerrejon in Colombia.
My question concerns Cerrejon Zona Norte, mentioned on page 5 of the Annual Report. Last April, Mr Bickham, Executive Vice President of External Affairs for the company, kindly wrote to me about the forced displacement of a farming community called Tabaco, which had been demolished in 2001 to make way for mine expansion, and its unarmed inhabitants evicted with the help of large numbers of soldiers and armed police. He stated that the company had deposited 7.7 million dollars with the Banco Agrario, with the implication that this was to be used to compensate the residents. Since then, colleagues of mine have met more than once with community members and their lawyer. It appears that they have never been officially informed of this sum and have been unable to find out anything about it. The compensation actually on offer seems still to be minimal. Meanwhile, the neighbouring Wayuu community of Tamaquito is facing extreme privation as mine expansion destroys people’s livelihood, and I understand that paramilitary groups are now present in the area, intimidating critics of the mining operation. The Colombian Supreme Court ruled last May that the company and the local authorities should arrange the relocation of the community at Tabaco so that people could carry on living and farming together. Nearly a year has passed and this decision has not yet been complied with. Could you tell me why, please?
In response, Sir Mark Moody Stuart, company chair, stated that he would be visiting El Cerrejon later in the year. He agreed that certain aspects of the relocation were unacceptable. He said that the eviction of the community at Tabaco had occurred before the consortium of which Anglo American is a part had assumed operational responsibility for the mine. (He failed to point out that it nonetheless owned 50% of the mine at the time.) He had been informed that earlier in April 2003 the consortium had made land available to the municipality of Hatonuevo so that former residents of Tabaco could be relocated there. Details of what has been paid to whom and when should be sorted out locally. Sir Mark invited Sister Joan to speak to him after the meeting.
2. Francisco Ramirez, President of SINTRAMINERCOL, the union representing workers in Colombian state-owned mining company MINERCOL, and FUNTRAMIENERGETICA, the federation of Colombian energy sector unions, asked about the involvement of Anglo Gold, listed in South Africa but 100% owned by Anglo American, in human rights abuses around gold mines in Colombia.
My question concerns Anglo Gold, whose South American operations are mentioned on page 71 of the Annual Report. Last week a US Federal Court admitted a case brought against the Drummond Coal company by the Colombian energy workers’ union SINTRAMIENERGETICA, which I represent. The court held that the company may have been involved in the commission of war crimes and crimes against humanity. What are the implications of this for our subsidiary Anglo Gold? During 1999-2001 Anglo Gold was involved in a joint venture with Conquistador Mines in the Bolivar department of Colombia. Conquistador has been accused of illegally attempting to take control of gold mining operations there and complicity in the forced displacement of 22000 local residents and the massacre of over 500 people. A case is soon to be brought against the company in the United States. What is the risk that people working on Anglo Gold’s behalf may be accused of complicity in any crimes committed by Conquistador?
In response, Sir Mark Moody Stuart stated that he did not know about this issue. He said that if such terrible things had happened he was surprised that he did not know about them. He thanked Francisco Ramirez for travelling from Colombia to bring the matter to the company’s attention. He passed the question over to Board member Bobby Godsell. Bobby Godsell stated that Anglo Gold’s association with Conquistador had taken the form of financing exploration teams. Anglo Gold had not been involved in operations and no Anglo Gold employees were in Colombia at the time. The suggestion that Conquistador had been involved in human rights abuses was a big surprise. Francisco Ramirez should speak to Mr Godsell about it after the meeting and he would do his best to find out more information about it. (Francisco Ramirez, of course, already has enormous quantities of information about the forced displacements and massacres in the area and is pursuing further evidence of Anglo Gold’s complicity.)
3. Jackie Seymour of the British-based Colombia Solidarity Campaign asked about the company’s involvement in reform of the Colombian mining code.
I would like to ask another question about the company’s operations in Colombia. What has been the involvement of Anglo American in the development of Colombia’s new Mining Code? The new code reduces the payment of royalties at El Cerrejon from 15% to 0.4%. This provision was pushed by lawyers working on behalf of various multinational mining companies. It aggravates the situation of economic misery in which the people of Colombia are living by increasing the losses which El Cerrejon represents for the Colombian State. Those losses now amount to over 1500 million dollars.
In response, Sir Mark Moody Stuart said that he did not know of any involvement by the company in the production of the new Code of Mines in Colombia, although the company does participate in industry bodies which put the industry’s position to governments. If a country lowers royalties, it is usually in order to attract investment, and perhaps to offset high tax rates. Colombia’s tax rates are not low, he said. (He made no comment on the level of hunger, child deaths through malnutrition, catastrophic unemployment or other social ills suffered in the department of La Guajira where the Cerrejon mines are situated and from which the company derives its enormous profits.)
4. Richard Solly of the Mines and Communities Network asked about the company’s involvement in plans to construct a coal port and railway in traditional Wayuu territory in Venezuela without local people’s consent.
In December I visited north western Venezuela where the company’s associate Carbones del Guasare, mentioned on page 69 of the Annual Report, produces coal. In order to allow for an increase in production, Carbones del Guasare hopes to construct a large new port at a place called Pararu on the Gulf of Venezuela and a railway to link it with the company’s mines at Paso Diablo and Socuy. I attended a meeting of representatives of Indigenous Wayuu communities through which the proposed railway would run. There was very strong opposition to the project because of the loss of land and livelihood which would result. Community members stated with great indignation that such a project would violate the Venezuelan constitution, which requires the fully informed prior consent of Indigenous communities before such projects are carried out on their land. Members of local conservation organisations told me that if the port were built it would require continuous dredging to keep the approach open and that this would destroy the rich local fishery, jeopardising the livelihoods of 36,000 families. Could you give us an assurance therefore that Anglo American will use its 24.9% stake in the company to oppose pursuit of this project and press for coal production to be maintained at present levels rather than increased?
In response, Sir Mark Moody Stuart asked Tony Redman, Chief Executive of South African based Anglo Coal, to explain the company’s plans. Tony Redman said that there were no plans currently in hand for the construction of a port or railway, although these projects had been talked about. Any project which went ahead would keep to the laws of Venezuela including the constitutional requirement for the prior consent of Indigenous Peoples. There has been some discussion on the construction of a new mine at Socuy but no decision on the railway, the port or expansion. If an expansion is planned it will go through the normal decision procedures. (This response fitted with information received from Venezuela shortly before the meeting about changes in the power structure of the Venezuelan State energy company PDVSA, which controls Carbones del Guasare, suggesting that locally based officers opposed to mine expansion had gained influence at the expense of Caracas based officers supportive of the new projects.)
Further comments:
Other criticisms of the company were made during the AGM, notably by Desmond D’Sa of the South Durban Community Environmental Alliance in South Africa, who had come to Britain with the assistance of Friends of the Earth to expose the company’s responsibility for pollution from a paper mill in South Durban run by Anglo American subsidiary Mondi.
Common threads in the company’s responses to critical questions were:
1. Extreme politeness (“I am very grateful to you for raising this matter….”) which certainly made the experience of raising questions emotionally more palatable but was bizarre given the company’s history of collusion in appalling human rights abuses.
2. ‘Surprise’ at revelations of which the company either is in fact aware or ought to be, and promises to ‘look into’ these matters.
3. Denial of responsibility for matters where the company did not hold formal operational control, even though the company was deeply involved in profiting from actions taken.
4. Offers to talk privately later.
The assessment of those who asked questions about Colombia and Venezuela was that what had genuinely surprised the company was the presence of a Colombian trade union leader, the level of information provided to shareholders and the involvement of Venezuelan as well as Colombian matters. By the end of the AGM, although the politeness was still powerful, there was an unease among those in the company responsible for public relations. Next year they will be better prepared.
The following statement was deliberately composed as an appeal from some shareholders to others – even though the five of us involved only had one share each!
Statement by Anglo American shareholders concerned about Colombia, 25 April 2003
Mining investment in Colombia
The development of large-scale mining projects in Colombia has usually been preceded by paramilitary operations on behalf of the government for the purpose of ‘guaranteeing’ foreign investment. These operations have devastated the civilian population to the extent that more than 68% of the three million people forcibly displaced in Colombia come from areas in which mining or oil companies are operating already or plan to operate. In the last seven years, 437 massacres have occurred, in which more than 3000 people have lost their lives. 74% of the human rights violations in the six departments (provinces) with the highest mineral production have occurred precisely in those municipalities where mining takes place. The majority of them are committed by paramilitary organisations working on behalf of the Colombian government.
In Colombia, a trade union leader is assassinated every three days. 42% of them work in the mining and energy sector. The US-based company Drummond Coal has been accused in the US courts over the assassination of three trade union leaders. Last week a court in Atlanta allowed the case to proceed, considering that Drummond could have been guilty of war crimes and crimes against humanity. If a definitive judgement is made against the company, the sentence could pose a huge economic risk to its shareholders.
Anglo American’s investment in Colombia
Would it not be wise to ask ourselves, as shareholders, whether it is ethical to invest in a country whose president stands accused of favouring drug traffickers and of having drug traffickers’ agents as his advisers, whose armed forces are associated with paramilitary organisations which commit the majority of human rights violations, and where those paramilitary groups are reputed to commit those violations precisely in order to provide ‘protection’ for multinational companies? Would it not be wise to ask ourselves what might be the repercussions of a court decision against the Colombian government (with which we have signed our mining contracts) or against a company such as Conquistador Mines, with which we were involved in a joint venture from 1999 to 2001 and which stands accused of committing human rights violations?
Our image will affect our investments. Why not ensure that our investment really does produce economic development rather than misery for Colombian people? Why not try to ensure that the indices of human development in that country are improved? Will our returns not increase if we make ethically and socially responsible investments? Have we thought how much we might lose, both in reputation and in profit, if the military and paramilitary forces which at present ‘guarantee’ the security of our mine at El Cerrejon murder, torture or displace unionised workers or local Indigenous and Afro-Colombian residents?
What can we do?
We should condition our investment on strict respect for human, community and workers’ rights. There should be a just distribution of tax returns and profits among the population, respect for the environment and the rights of the Indigenous and Afro-Colombian inhabitants of the region round the Cerrejon mines, and a commitment to respect social and trade union organisations. Our company should not manipulate the process of framing laws or mining regulations. It should not promote corruption among government functionaries. It should ensure that our operations generate social and economic development for the Colombian people. Our profits should have nothing to do with human misery and the committing of crimes against humanity. To pursue any other agenda could have grave repercussions for our investments, our image and our susceptibility to potential legal cases which might even cast us as guilty of human rights violations.
For more information, contact:
Colombia Solidarity Campaign, PO Box 8446, London N17 6NZ. Email: colombia_sc@hotmail.com