Rio Tinto under pressure

Down to Earth No. 38, August 1998

As UK-based mining giant Rio Tinto tries to launch a 'charm offensive', NGOs in Indonesia, England and Australia continue to challenge the company on its human rights and environment records.

Rio Tinto held its London Annual General Meeting on May 13th. Demonstrators from Friends of the Earth, World Development Movement, other environment and development groups and trades unions gathered close to the AGM venue with banners saying 'Rio Tinto dumps on human rights' and an excavator bearing the same message to attract public attention to the company's involvement in a variety of destructive mining projects around the world. Protestors handed out leaflets about Rio Tinto's operations in West Papua and UK investment in Indonesia.

An alternative AGM was held at the Central Methodist Hall in London immediately after the official AGM so representatives of indigenous peoples from Indonesia, USA and Colombia could address concerned shareholders, journalists, MPs, trade unions and NGOs. In Australia, around 200 protesters held placards saying "Union rights are human rights" and peacefully lined the route taken by shareholders attending the Melbourne AGM on May 27th. A large truck displayed posters saying "North, South, East, West - Rio Tinto Fails the Test". A substantial number of stakeholders (indigenous communities and NGOs working with them) entered the shareholders' meetings in London and Melbourne using small shareholdings or proxy forms. As Rio Tinto shareholders entered the AGMs they were handed a copy of the 'Rio Tinto Stakeholders Report: Tainted Titan' - an alternative Annual Report on the company's impact on indigenous communities and their environment world-wide prepared by unions and NGOs.

The Melbourne AGM

At the Melbourne AGM, John Uhrig, chairman of the Australian part of Rio Tinto (formerly CRA) was questioned intensively by stakeholders about various issues including the refusal of the company to link performance bonuses to environmental and human rights performance. Uhrig denied that the Grasberg mine in West Papua had any negative environmental impacts. Rio Tinto is a partner with US-based Freeport McMoran in this giant copper and gold mine which produces nearly 300,000 tonnes of waste a day. He was often dismissive of questioners including John Ondawame, a representative of the Amungme people, who had come to the meeting to explain to shareholders about relations with the Indonesian armed forces and human rights abuses around the Grasberg mine. Security forces prevented Yosepha Alomang from getting on to a plane at Timika to attend the London Rio Tinto AGM and the Louisiana court hearing of her case against Freeport McMoran. This Supreme Court hearing decided in July to deny the appeal Freeport had lodged after a lower court upheld the right of indigenous plaintiffs to sue the company in its home town (see Drillbits and Tailings 7/7/98).

Dayak representative challenges chairman

Pius Nyompe came to England from East Kalimantan to express to shareholders and Rio Tinto's board the views of the community affected by PT Kelian Equatorial Mining. He outlined the problems PT KEM's gold mine (90% owned by Rio Tinto) had caused his community in East Kalimantan: pollution of the River Kelian with sediment and chemicals; air pollution from dust from mining traffic; the seizure of people's land and homes; the obliteration of the small-scale local mining industry; and human violations.

Nyompe said that - for all Rio Tinto's talk of 'working with the community' - the company had only started discussions with the Kelian people in May 1998 after years of ignoring their letters and protests. They wanted a proper independent audit of PT KEM's impact on the community in full consultation with the community and NGOs; full compensation for the loss of their land rights and human rights violations; and proper rehabilitation of their land. The only way of getting Rio Tinto to accept responsibility for its operations in PT KEM was to hand over 20% of the value of its shares to rectify the above. If they were not prepared to do this, then Rio Tinto should get out of Indonesia, Nyompe stated through an interpreter. Before returning to Indonesia, Nyompe met Rio Tinto Executive Director, Leon Davis, at the company's London head office to explain the Kelian people's grievances and demands. A deputation of 14 people from East Kalimantan plus Indonesian NGO staff met with Rio Tinto and PT KEM management twice in May in Jakarta, but were not satisfied with the outcome as company representatives attempted to deny their responsibilities. Their only concession was to invite the Indonesian

environmental organisation WALHI to carry out its own investigation of water pollution down stream of the mine. Another round of talks about fair compensation for land, forests and crops started in the provincial capital Samarinda in late June.

The Way We Work

Earlier this year Rio Tinto published its statement of business practice. Entitled 'The Way We Work', it states that:

Wherever we operate, we work as closely as possible with our hosts, respecting laws and customs, minimising adverse impacts, and ensuring transfer of benefits and enhancement of opportunities. We believe that our competitiveness and future success depend not only on our employees and the quality and diversity of our assets but also on our record as good neighbours and partners around the world. Accordingly we set ourselves high environmental and community standards…We seek to make lasting contributions to local communities and to be sensitive to their culture and way of life.

The company is making strenuous efforts to improve its image with UK-based NGOs. The London office of Rio Tinto has organised two meetings with selected NGOs including OXFAM, Save the Children and Amnesty International to discuss its corporate social and environmental policy. The company's senior management were reported to have been taken aback by the critical comments received. The campaigning group Partizans, which has exposed Rio Tinto's misdeeds world-wide over the last 20 years, was not invited.

Long-term pollution threat

The company's public relations gloss does not match the reality of the people whose lives have been blighted by Rio Tinto operations. Rio Tinto's 1997 Health, Safety and Environment Report reveals that the Kelian mine is causing serious pollution problems which endanger the local community's health. The report - which Rio Tinto Chairman, Robert Wilson, assured shareholders last year would be available for the next Annual General Meeting - was 'not ready' for the London or Melbourne AGMs, denying shareholders the opportunity to challenge reassuring, but misleading statements about environmental improvements.

Indonesian environmentalists fear that when the mine closes early in the next decade, Rio Tinto's legacy will be a devastated environment which the company has admitted it cannot rehabilitate and a 'pollution time bomb' slowly poisoning the local population as metals leached from the mine enter the water supply.

The report reveals that there is a massive acid drainage problem at the Kelian mine. Levels of manganese in water discharged from the mine last year averaged 0.8 milligrams per litre. This would not be allowed in drinking water in Europe or North America and exceeds WHO recommended limits of 100-500 micrograms per litre. On nine occasions in 1997 (and 105 occasions in 1996), manganese levels were more than 200 times the amount permitted in drinking water under European Union Directives (50 micrograms/l). Rio Tinto's research unit is investigating methods of reducing manganese pollution, but a new method currently under trials will not be implemented at Kelian until 1999 at the earliest. Waste water from the mine also contained over 500kg of cyanide in 1997. This is almost half the cyanide emissions for the previous year, but Kelian still has by far the worst cyanide pollution levels of any Rio Tinto gold or copper mine. Cyanide compounds are used to extract the gold from the ore. Rio Tinto implies that high cyanide levels are not a problem "since any residual free cyanide breaks down rapidly in the presence of sunlight and does not persist in the environment".

The Kelian mine also releases huge quantities of 'suspended solids' into the river from which it takes its name. These are fine particles of soil and rock produced during processing the ore and from surface water draining from the site. At 1,600 tonnes, the amount of suspended solids in the water discharged by PT KEM is the second highest of all Rio Tinto's operations world wide. In 1996, levels of suspended solids were even higher at 4,700 tonnes as PT KEM diverted part of the River Kelian. Nevertheless, Rio Tinto puts much of the blame for the high turbidity of the river water on the operations of small-scale community miners whose operations the company has tried hard to ban.

PT KEM has had to provide drinking water supplies for the local population since the start of its operations in the early 1990s. However, not all the indigenous people or more recent settlers have access to piped drinking water and the River Kelian is used for all other household and agricultural needs including bathing, laundry and preparing food.

Rio Tinto made much in its 1997 Annual Report and at the London AGM of the humanitarian aid it is providing for people affected by last year's drought and this year's fires in the area around the Kelian gold mine and Kaltim Prima coal mine (along with the Australian, Canadian, British and New Zealand embassies plus the charity Care International) and its long term contribution to health and education. In an interview on Australian TV Channel Nine in May, Davis said of the crisis in East Kalimantan: "…there's about 60,000 people (in the immediate vicinity) who need assistance with food, with agriculture, with health, and we have been focusing on that."

Rio Tinto's profits before tax increased 15% to US$ 1,983 million in 1997. Like Freeport Indonesia, the company is not worried about the economic turmoil since all production is exported and revenue is in dollars while many costs are in Rupiah.

Any charitable contributions Rio Tinto makes to the people of East Kalimantan should not detract from the way that it has deprived the indigenous community of its land rights, destroyed substantial areas of rainforest and is polluting the surrounding environment. (ICEM 27/5/98; Reuters 31/5/98; pers com.)