Cref Resolution On Divestment From Gold Mining

Original Resolution

CREF RESOLUTION ON DIVESTMENT FROM GOLD MINING - May 2003

For both ethical and financial reasons, participants request CREF:
1) To announce that CREF will make no additional gold mining-related investments, and
2) To begin an orderly divestment of all gold mining investments.

Participant's Supporting Statement

Central banks and international financial institutions hold more than 34,000 tons of gold. This is more than 13 times the annual production of the world's mines; if sold, these reserves could satisfy gold demand for more than 8 years (current demand is approximately 4,000 tons per year). Of this demand, 85% is typically used for jewelry.

Gold mining companies cause environmental and social impacts. For example, Louisiana-based Freeport-McMoran Copper & Gold recently disclosed in a report to the Security Exchange Commission that it paid the Indonesian national military, Tentara Nasional Indonesia (TNI) an estimated US$5.6 million in 2002 for security purposes at its mine in West Papua, Indonesia.

"It is clear from a number of incidents that the states' security forces and the transnationals stand shoulder to shoulder in committing violence and human rights abuses. Still worse, such payments only promote current practices by the state apparatus with very harmful consequences for the people," reads a joint statement put out by a coalition of twelve human rights groups active in Indonesia.

Since 1967, PT Freeport Indonesia Company (PT-FI) an operating unit of Freeport McMoRan Copper and Gold, Inc. (FCX) has been operating on lands traditionally inhabited by indigenous people, especially the Amungme and Komoro. In May 2000, just days after an environmental audit praised Freeport's mining practices, a landslide at its Wanagon Lake waste dump cost the lives of four Freeport workers.

PT-FI has discharged over 110,000 tons of tailings per day into local Irian Jaya rivers and has expanded its milling operations to exceed 190,000 cubic tons per day. In 1995, prior to a settlement with PT-FI, the Overseas Private Investment Corporation, a U.S. government agency which provided political risk insurance to this operation stated that the mine "created and continues to pose unreasonable or major environmental, health, or safety hazards with respect to the rivers that are being impacted by the tailings, the surrounding terrestrial ecosystem and the local inhabitants."

PT-FI has attempted to ameliorate the social and environmental damages by proposing the "one Percent Trust Fund Offer" and the establishment of an Amungme Foundation, but the Amungme Tribal Council (LEMASA), an organization representing one of the indigenous communities affected by PT-FI's operations in Irian Jaya, issued a resolution "unconditionally and absolutely" rejecting these two proposals. It is unclear how much environmental liability, cleanup responsibility, and remediation costs may exist, and no existing audit contains information on any actual environmental liability;

Should TIAA-CREF financially co-sponsor the manufacture and promotion of such mining activities? If not, vote for orderly divestment.

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