Report on the Anglo American plc AGM, England

Report on the Anglo American plc AGM, Church House, Westminster, London, England

Wednesday 20 April 2005.

Two members of the Mines and Communities Network, Richard Solly and Andrew Whitmore, attended the AGM to ask questions about the company’s activities in Colombia, the Philippines and Tanzania.

In his introductory remarks, company Chair Sir Mark Moody Stuart mentioned the World Bank’s Extractive Industries Review and said that he was glad that the Bank had shown considerable skill in using it as a starting point for changing performance standards while rejecting ‘some of the more extreme points of Mr Salim’s report’. He noted that current international processes, such as the G8 meeting, will continue to emphasise corporate social responsibility. He said that while shareholders should not have the responsibilities of government there are challenges in supplying services. There is an opportunity to prove that responsible exploitation of resources is an opportunity and not a curse. He talked about their taking an active part in South Africa’s transformation.

Tony Trahar, Chief Executive, noted that there were challenges in the fact that the company consumes the energy equivalent of a medium-sized country like Chile or Finland. He talked about disposals & acquisitions (notably the US$1.4bn Ashanti merger). He noted that there were concerns about coal use and global warming but saw coal as an important fuel for the global economy for the foreseeable future and the company was investigating clean coal technology. He expressed the company’s deep regret at the 49 fatalities (including contractors) in the company’s operations over the past year – a rise after 4 steady years of decline.

Richard Solly then asked the following questions about the operations of Carbones del Cerrejon (jointly owned by Anglo American, BHPBilliton and Glencore) in Colombia.

“Since the last AGM I have again visited communities displaced or otherwise affected by the mine and was present on 5 October last year at a meeting between representatives of the displaced community of Tabaco and company President Alberto Calderon. Mr Calderon promised at that meeting that the company would, among other things, revisit certain legal issues with the community in further meetings, but some days later refused to do so, allowing only discussion of potential social projects. Community representatives are extremely angry about this and have told me that they now feel it is a waste of time talking with company management in Colombia. They want Anglo American and the other parent companies to open a direct dialogue with them, recognising that the mine has caused irreversible damage which must be mitigated not only through social projects but through legal redress. They want the companies to listen to the community and seek genuine solutions acceptable to the community. They do not believe that local management has acted in good faith. Will you commit to direct negotiations with the community’s representatives, accepting that irreversible damage has been done and with the clear intention of seeking a solution acceptable to the community?

“At the same time, people from the community of Tamaquitos, close to the edge of the mine concession, continually tell me that company representatives are pressuring them to move and offering them pitifully small compensation for doing so. They also tell me that local farmers leasing company land refuse to give them work, saying that the company has told them not to do so. The people are desperately poor and in great need of work and food. Representatives of the company simply contradict all that community members tell me. They say they have no plans to expand around Tamaquitos. That being the case, what will you do to ensure that company employees stop pressuring community members to leave and that local farmers leasing company land stop refusing work to local people?”

Sir Mark Moody Stuart said in reply that Alberto Calderon had made a commitment to meet the Tabaco community representatives and to establish two working groups, one on legal issues and the other on social projects. The community’s legal representative had insisted that they should reopen legal issues that had already been decided in the Colombian courts. Mr Calderon had sought legal advice from the parent companies and the advice had been that this would be unacceptable. Community representatives then withdrew from both working groups. The purpose of the groups was to keep a channel of communication open with the communities and the community’s friends should encourage them to go back to the talks. Sir Mark made the point that Colombia is a democratic country. He did not mention the limitations to its democracy or its legal processes represented by civil war, paramilitary intimidation or frequent favouritism of vested corporate interests over those of poor communities.

On the second question of Tamaquitos, Sir Mark said that he is assured by the local management that there is no intention to purchase land there. It is of no direct or immediate concern to them. However there is a persistent rumour that they are interested and this has led to people speculatively moving into the area in the hope they will be compensated. He would urge the community of Tamaquitos to understand that there is no intention to buy land there. As to any threats to the community he cannot see any reason that company personnel would do that.

On the issue of local employment and people employed on the land he said that it is his understanding that land is leased out for farming by the company – rather poor quality grazing land. Under the traditional work practices the land leasers hire people. It is not up to the company to tell them who to employ on their land. There is the broader question of employment of the Wayuu in the mining operations in general – it is of permanent interest to the company. There are now 83 directly employed, 280 employed in security services and more than 150 employed in maintenance and the clearing of land for the mine’s railway.

Andrew Whitmore told the meeting that he had just returned from Boyongan in the Philippines where he had visited local communities. There were general worries about mining, caused by problems at a nearby mine operated by Philex, but at this early stage of Anglo American’s involvement the main concern was to know future plans.

Sir Mark replied that there had been problems with the perception of mining in the Philippines after some bad examples, but the company was sensitised to this. He passed over to Simon Thompson (Business Unit Head, Base Metals) who confirmed they were still actively looking in the Philippines, including in Northern Luzon. Surigao del Norte was seen as an interesting resource, but arguably not of a size to interest them as it was. They were looking at consecutive land holdings to see if it would be possible to consolidate the landholding.

Andrew Whitmore then said that he had received reports about problems caused by the AngloGold-Ashanti Geita gold mine in Tanzania and wanted to confirm the facts. Apparently, sometime last year AngloGold had applied for enlargement of their 1999 license to cover the Nyamulilima Hills/Ridge 8 and parts of the Forest Reserve. With regard to the Nyamulilima, he had had reports that the company had ejected, and arrested, many artisanal miners from the lands they had lawfully occupied for at least a decade. The area has been the subject of short-term mineral rights issued to artisanal miners by the government at least since 1995. There had been about 5,000 of them in the area. Despite court cases to get rid of them the artisanal miners were able to prove they legally owned the mineworkings. Reports suggested that they were being evicted even though the artisanal miners had filed a court action in the High Court of Tanzania for a temporary injunction. AngloGold’s expansion was also allegedly into a protected forest reserve in the Geita District, which was confirmed by a letter to the Director of Forestry in the Ministry of Natural Resources & Tourism of 28th January 2005. Could Sir Mark confirm the facts? If there were any basis to the allegations, would the company begin an investigation? Could Sir Mark confirm the report that there had never been an Environmental Impact Assessment of the expansion?

Sir Mark began his reply by saying that the issue of artisanal mining is a difficult one as it can provide employment and enable the creation of small businesses, but there are often negative side effects. Safety and environmental standards are much lower than in bigger corporate operations. It could be seen as unacceptable, as indeed could all types of mining in some people’s view. He then passed to Bobby Godsell (Business Unit Head, Gold) to answer. Mr Godsell said these claims were absolutely not correct. He wanted to see the specific allegations, but confirmed that Anglo American worked within the national law of Tanzania. He would be happy to investigate to get at the truth. Anglo American does not mine without doing its own environmental assessment. When moving people they follow local law and International Finance Corporation guidelines on resettlement and the principles in the Global Compact, which they have signed. Mr Godsell was not aware of the truth of any of the allegations made. AngloGold wants to keep local law and international best practice. Wherever possible, they want to work co-operatively with artisanal miners. Mr Godsell said he was happy to discuss the issue later. Andrew Whitmore agreed to send Mr Godsell information and Mr Godsell undertook to investigate it.

There followed further questions. One questioner made the excellent point that 49 fatalities was unacceptable and that maybe a way to deal with it was to dock a large figure, such as £25,000 each, from the salaries of the board for every fatality “to reinforce your undoubted efforts in this area” [an excellent idea]. He also made various points about remuneration of the board (Trahar’s salary equalling nine British law lords’ salaries). Sir Mark said that there was already a link between safety and bonuses. He said that safety was very important and that money was not the biggest incentive to doing something about it. He also said interestingly that Tarmac had taken over a quarry near Shanghai – before five other Chinese companies had had 12-15 fatalities a year and that since Tarmac had taken over they have not had a single lost time incident from accident/injury. Anglo American staff were benefiting from the sharing of information on health and safety matters by staff from other companies.