Newmont: Keep focus on goal

Newmont: Keep focus on goal

January 01, 2005

Denver Post Editorial

Controversy still surrounds Newmont Mining Corp., despite the company's recent court victories in Indonesia, where it has a large gold mine.

Critics say the Denver-based company has a pattern of environmental problems in Indonesia, Peru, Turkey and Nevada. Newmont says the criticisms should be put in context of what's happening politically in those places, and that it's been targeted by activists (who oppose all mining) because it's the world's largest gold producer. So, the fairest way to evaluate allegations against Newmont is to look for both pattern and context in all four areas.

Newmont has set itself a goal of taking the same level of environmental protection used in the United States wherever it operates in the world. But has it?

Certainly, Newmont is capable of top-notch environmental work. The company owns most of the Idarado Mine in southwestern Colorado, so was responsible for the exemplary cleanup of toxic wastes and landscape repairs on Red Mountain Pass and another site near Telluride. However, the projects took place in a relatively wealthy state, using established law, under the close watch of trained regulators, and in cooperation with environmentalists who didn't have hidden agendas. The setting was ideal.

Indonesia feud is complex

The backdrop is different in Indonesia, a nation plagued by civil strife and widespread corruption. The core dispute is whether Newmont's Minahasa Mine discharged so much mine waste into Buyat Bay that it damaged villagers' health. A World Health Organization study said the wastes didn't harm public health, a court said the detention of Newmont executives was illegal, and villagers who filed a $543 million suit agreed to drop the case.

But should Newmont have deposited mine wastes in the bay at all? The company says the practice is the best way to store wastes in places with lots of rain and seismic activity. (The Asian tsunamis didn't affect Newmont's mine, employees or nearby communities.) But undoubtedly, a plan to dump mine wastes in an ocean bay would ignite public outrage in the United States. The company's image took another hit by recent publication of a 2001 report showing that Newmont released mercury into the air in Indonesia.

Based on these facts, Newmont appears to have fallen short of its goal of doing abroad what it would do here at home. But is there a pattern?

In Peru, Newmont's troubles should be seen in context of the country's dysfunctional government and an impoverished native population whose lands have been damaged by past mining and oil exploration by many corporations.

Local residents became alarmed in 2000 when a Newmont contractor spilled mercury. More recently, they feared an expansion of Newmont's Yanacocha mine would shrink and pollute their water supplies. In September, thousands of Peruvians blockaded roads for two weeks and forced Newmont to retreat from its planned mine expansion. It should be noted that such street protests are common in Peru these days.

Still, Newmont admits it made serious mistakes in not building trust with the locals through better communication and outreach. The issue wasn't just environmental protection, but also environmental justice. Again, the company didn't live up to its own standards.

Then there's Turkey, which wants to join the European Union but must demonstrate, among many things, that it enforces environmental laws. Newmont says a local government decree let it open a mine, but the Turkish supreme court shut it down until the company does environmental studies.

A whistleblower alleged that Newmont had operated the mine without the necessary environmental permits. The whistleblower's backers say he has great personal integrity. But Newmont says he's an ex-employee who lost his job, asked for a large severance package and, when Newmont refused to pay him the money, went public with claims about environmental violations.

Still, could Newmont operate a U.S. mine without all its environmental permits? No.

Controversy closer to home

Finally, there's Nevada. The U.S. Environmental Protection Agency has said Newmont's Battle Mountain mine may cause environmental damage for thousands of years and that the eventual cleanup may cost $33.5 million. But last March, The New York Times reported that the U.S. Interior Department permitted the mine, on the condition that Newmont establish a $408,000 trust fund and a $1 million bond. The pact outraged environmentalists. Nevada activists also have accused another Newmont operation, the Lone Tree mine, of discharging toxins into water.

Would either situation be allowed in Colorado? We hope not.

In the Internet age, grassroots organizations even in remote parts of the world can tap into international networks of environmental and social activists. Given the new reality, companies must actively work with communities in order to operate in relative peace. Environmental compliance and social justice no longer are luxuries but key to a global corporation's survival.

In this context, Newmont hasn't fully realized its goal of doing abroad what it would do here. It needs to think afresh about its relationships with the communities where it operates.