Rio Tinto blasted on three continents

Down to Earth No 57  May 2003

The world's largest mining company, Rio Tinto, has faced severe criticism on human rights, the environment, health & safety and pay & conditions. The company's dismal record in Indonesia has been spotlighted in a new report by WALHI, published to coincide with the company's annual general meetings.

Rio Tinto's annual general meetings in London and Perth sparked co-ordinated protest actions in Indonesia, Australia and Britain. The protesters drew attention to the British-Australian company's poor social and environmental record in a long list of countries including Indonesia, the US, Australia, Britain, Zimbabwe, Papua New Guinea, Canada and Bougainville. Outgoing Rio Tinto chairman, Sir Robert Wilson told shareholders how 2002 had been the company's second best earning performance ever with a record cash flow of nearly US$4,000 million. He attributed this to a consistent strategy of investing in large-scale, long-life and low cost operations. However, it was evident from the level of protest at both meetings, that the people affected by this strategy - local communities and mineworkers - are far from happy with the impacts.

In Central Sulawesi, where Rio Tinto holds the Poboya gold mining concession, local communities and NGOs sent a clear message to Rio Tinto's board and shareholders at the London AGM. A huge 20m x 20m banner saying "Reject Rio Tinto" illuminated by 200 bamboo torches formed the backdrop to the protest. A community "camp-out" to mark Earth Day on the night of April 14th discussed ways to stop gold-mining in the customary forests of Poboya Paneki. The following morning the protesters held a demonstration outside the provincial governor's office, demanding that he sign a petition to reject the mine.

The central and provincial governments have already refused to allow mining within the Poboya-Paneki forest park, but the communities are concerned that this may change. If the central government caves in to pressure from international mining companies and changes the law to allow mining in protected forests, they fear that their area will be up for grabs again. At the April 17th London AGM, Yuyun Indradi of DTE/AMAN asked the Rio Tinto board when the company would return the Poboya concession to its rightful owners - the indigenous communities who live there. He drew attention to the demonstration there two days before and read out part of the community's statement.

Rio Tinto chair, Robert Wilson again denied it has any interest in mining in Poboya and said the company has not been in the area since 1999. However, Rio Tinto has signed a 'farm-in' agreement allowing Australia's Newcrest to use the Poboya concession. It can only sell its interest to Newcrest once mining has been approved. So Rio Tinto remains responsible for Poboya's future and has a clear interest in seeing the ban lifted. (For background see DTE 56)

Another dissident shareholder, Richard Harkinson, drew attention to Rio Tinto's human rights guidelines for managers and asked how this squared with human rights violations at the Freeport mine in West Papua, in which the company has a minority share. He called for an independent review of human rights there, especially in view of the recent revelations by mine operators, Freeport McMoRan that it paid millions of dollars to the Indonesian military last year.

In a press release, Friends of the Earth Corporates Campaigner, Ed Matthew, said that Rio Tinto's environmental and human rights record in Indonesia is "abysmal", but that "UK company law allows them to get away with it...The British Government must change company law to ensure the directors of irresponsible corporations like Rio Tinto are made fully liable and accountable for their destructive impacts overseas. Only then will they take their responsibilities seriously."

Around 2,000 workers held a demonstration outside Rio Tinto's Perth AGM on May 1st in support of union representatives from the US, Canada and Australia. Wayne Holland, a retired worker from Rio Tinto's Kennecott copper facilities in Utah, USA, protested against the threatened removal of health benefits from families of employees, including retired workers. He said they would face misery, sickness and premature death if this threat was carried out and contrasted the plight of Kennecott families with the future healthcare prospects of Sir Robert, who is leaving the company with a US$23.8 million payout.

Robert Wilson has been with Rio Tinto for over thirty years, became chief executive of Rio Tinto plc in 1991 and executive chairman in 1997. Paul Skinner, currently managing director for the Shell Group takes over as chairman. Leigh Clifford, who is also a director of Freeport McMoRan, remains Rio Tinto's chief executive.

(Source: DTE notes from London AGM, CFMEU Media Release, 1/May/03; MPI/WALHI/JATAM Press Release 17/Apr/03; Central Sulawesi Earth Day Committee, Reject Rio Tinto; translation 16/Apr/03; FoE Press Release 17/Apr/03)

New WALHI report on Rio Tinto

After the London AGM, a representative of Friends of the Earth presented outgoing Rio Tinto chairman Robert Wilson with an appropriate leaving gift. WALHI's new critique of the company's mining interests in Kalimantan, Sulawesi and West Papua, Undermining Indonesia: Adverse social and environmental impacts of Rio Tinto's mining operations in Indonesia, will remind Sir Robert of the damage Rio Tinto has done in Indonesia under his leadership.

The report covers four Rio Tinto interests in Indonesia: Kelian, Kaltim Prima, Freeport and Poboya. WALHI says that the PT Kelian Equatorial Mining (PT KEM) gold mine in East Kalimantan (90% owned by RT) will have dumped 100 million tonnes of waste rock into the environment by the end of its operations. It accuses the company of circumventing and violating Indonesian environmental regulations and highlights concerns over the use of cyanide and acid rock drainage.

The report also outlines the history of human rights abuses at the Kelian mine, which includes forced eviction of local people by the military and the police. At least 444 families were displaced from their settlements without any prior informed consent. WALHI points out that under an agreement signed by the community organisation LKMTL and Rio Tinto, the company was supposed to publicly acknowledge its responsibility for human rights abuses, especially those related to the violence and sexual abuse of women, including rape. The company has only put out a press release saying that "KEM states its deep concern for various sexual abuses done by workers and contractors, and for grievances and suffering experienced by the victims."

WALHI points to the unjust mine closure procedure, which is not taking community concerns adequately into account and has failed to provide basic information to the communities. The company will not restore the 450 hectare mine pit and dump sites to their original forested condition, claiming technical difficulties. However, WALHI is convinced that the high cost of proper reclamation is the deciding factor.

Kaltim Prima

On the Kaltim Prima Coal mine (50% owned by Rio Tinto and 50% by BP - another company making claims to corporate responsibility), the WALHI report says that land appropriation has affected 287 local people and that new land disputes are arising even now. Water quality in the Sangatta River has been deteriorating: it is clogged with lime used to neutralise acidity and local people are no longer able to fish in it. The report predicts that another three rivers will be affected by coal-mining at Kaltim Prima.

The report also covers the Freeport mine in West Papua in which Rio Tinto has a 15% share and 40% share in a planned expansion; and the Poboya mining concession (90% owned by Rio Tinto) in Central Sulawesi.

Undermining Indonesia's demands to the Indonesian government are:

• a moratorium on new mining operations in Indonesia and a comprehensive review of the government's policy on extractive industries in Indonesia;
• an independent inspection team to evaluate all mining operations in Indonesia, especially their environmental, social and human rights records;
• a clean-up, rehabilitation and restoration of mine sites;
• a renegotiation of all mining Contracts of Work already signed by the government and foreign investors, involving all stakeholders and based on the principles of transparency and fairness.

And to Rio Tinto:

• a public apology for involvement in human rights abuse and violations;
• the fulfilment of its obligations to all the victims of its operations;
• a clean-up of all its mining operations and areas impacted;
• the disclosure of its contributions given to Indonesia's military and police, either in the form of money or other facilities [this also relates to the revelation of Freeport's payments to the military - see first article.]
• make public the company's mine closure plans for all its operations in Indonesia.

Finally, the WALHI report offers a blunt assessment of the mining industry in general which cuts through companies' PR claims of 'sustainable mining':

"Extractive industries are unsustainable because they are highly dependent on the exploitation of non-renewable resources. While being promoted as a big contributor of revenue to the Indonesian Government, the industries hide their negative impacts on the livelihoods of millions of Indonesian people and future generations."

The full report is on WALHI's website at: www.walhi.or.id/English/reports/riotinto2003.pdf

Kelian case presented at EIR

The Kelian mine's impact on local people was presented by LKMTL leader Pius Nyompe at an indigenous peoples' meeting in Oxford, UK, in April. The meeting was called to review the impact of World Bank involvement in the extractive industries on indigenous communities around the globe, to present evidence directly to Emil Salim, the Eminent Person heading the Bank's Extractive Industries Review (EIR) and to make recommendations on any future role of the Bank in extractive industries. Emil Salim was Indonesian environment minister under former President Suharto.

The Kelian case was included because the World Bank's Business Partners for Development scheme has been involved in developing the Kelian mine closure plan as model of best practice.

In their 'Oxford Declaration', indigenous people attending the meeting, called for a moratorium on further mining, oil and gas projects that may affect them, until their human rights are secure.

Civil society organisations withdrew from the EIR process at the EIR's Asia-Pacific regional consultation in Bali on April 27th on the grounds that their concerns had not been taken up (see Asia-Pacific Civil Society Statement of Withdrawal from the Extractive Industries Review Process, 27/Apr/03).

The Oxford Declaration by indigenous representatives is at forestpeoples.gn.apc.org/briefings.htm

(See also DTE's IFIs Factsheet 20 and Factsheet 21 for background on the EIR and Update 32, May 2003, for recent news on the process).