TAKING STOCK: BHP'S POOR ESG PRACTICES - TAKING STOCK: BHP'S POOR ESG
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Taking stock:
BHP’S poor ESG
practices
TAKING STOCK: BHP’S
A VIRTUAL HANDBILL FOR INVESTORS
POOR ESG PRACTICES
As civil society organizations and trade unions working directly
with workers and local communities affected by BHP’s operations
globally, we would like to call attention to the suffering of these
populations in relation to the company’s handling of Covid-19,
as well as its poor environmental, social and governance (ESG)
practices dating from before the pandemic. BHP is certainly not the
only major multinational being called out for its inadequate handling
of the pandemic, but as the largest mining company in the world by
market capitalization, and a company that claims to operate with
integrity and responsibility, it should be held to a high standard.
This brief outlines what is happening on the ground at several BHP
assets, highlighting social and environmental risks that the company,
and therefore its investors, face. We are putting specific questions to
the company ahead of its AGMs, and we are asking BHP investors to
take these issues up in their engagement of the company.
IndustriALL calls on BHP to undertake the company acts in a financially Workers at BHP’s Spence mine in
meaningful dialogue with unions and to responsible manner by providing for Chile had to implement a 24-hour
take a less hostile stance toward labour; the cost of its activities right through work stoppage in March to force the
BHP is the only major mining company to the cessation of those activities; company to take adequate protection
that has yet to establish a global dialogue and that costs of rehabilitation are measures against Covid-19. As of late
with IndustriALL. The company must also fully recognized in mining companies’ August, affiliates in Peru, Chile and
uphold its commitments to respect human provisions in their balance sheets Colombia all reported rising numbers
rights, including ensuring worker safety of infections at BHP’s operated and
and health, at all of its assets, and take Mishandling of Covid-19 non-operated mines, with IndustriALL
responsibility at the global level for how affiliate Sintracarbón reporting over 300
its workers are treated locally. IndustriALL has learned from unions in cases of Covid-19 among workers at the
Latin America, Australia and Canada Carbones de Cerrejón mine in Colombia
London Mining Network (LMN) calls on that BHP maintains what can only be alone, and four suspected Covid-19
BHP to ensure that: called a double standard between its deaths there (three direct employees, the
communities affected by BHP response to the pandemic in the global other a contractor from CHM Minería).
operations are able to exercise their north versus the global south. In Australia As of July, in Chile BHP had the second
right to Free, Prior, Informed Consent and Canada, the company seems to be highest number of cases in the mining
implementing adequate occupational industry after Codelco, the state-owned
reporting to communities of social,
health and safety measures in relation to copper mining company. BHP appears
environmental and other relevant
Covid-19. For example, there have been to have ramped up production in South
information occurs in a timely
no reported cases of the disease among America even while cases rise, raising
manner and meets the communities’
the company’s workers in Queensland questions about whether it puts profits
information needs
(with credit due to government protocols above worker safety. In addition, in
the company honours its Code resulting from trade union engagement Chile the company is shedding workers
of Business Conduct with regard and lobbying). with any pre-existing disorder, including
to communities within or near its those contracted at work.
operating sites In contrast, in Peru, BHP claims there
have been no deaths at its assets, while
the company uses its influence to affiliates report three Covid-19 deaths at
insist that its joint ventures fully Antamina mine, one-third owned by BHP.
comply with legal decisions
1 www.londonminingnetwork.org
In July, the Cerrejón
mine in Colombia, jointly
owned by BHP, Anglo
American and Glencore,
unilaterally and without
any explanation demanded
a change in work shift.
Striking workers at Cerrejón, Colombia
Human rights are universal, and the Death shift Cerrejón claims it needs to make tough
current public health crisis demands decisions in order to ensure the survival of
an equal and equivalent response from In July, the Cerrejón mine in Colombia, the business. If that is the case, surely now
multinationals in all of their operations. jointly owned by BHP, Anglo American more than ever the company should abide
Regardless of whether states uphold and Glencore, unilaterally and without by good industrial relations and engage
their duty to protect human rights, any explanation demanded a change in in meaningful dialogue and negotiation.
widely accepted international standards work shift from the 2x1-2x3 system that
of business and human rights establish had been in place for nearly thirty years to
that companies are responsible for 7x3-7x4. This schedule requires workers
respecting those rights wherever they to labour an additional 72 days a year for
operate. In addition, this apparent no extra pay, it will increase worker fatigue Cerrejón sends a negative message
double standard could pose an and imperil worker health and safety, as to the country and the region with its
operational risk to the company, as well as seriously complicating workers’ absence from this meeting. We had
sound governance calls for maintaining family lives by extending the period they hoped you would be here, because we
the same health and safety standards at are away from home and are unable to must face problems and look for possible
all of its assets. Affiliates have pointed carry out family responsibilities. The solutions. We hope that the company will
out that if BHP seems to have dealt new shift, which workers call the “shift
participate in the next public hearing or
properly with Covid-19 in industrialized of death”, will also allow the company
at the technical table. I think we need
countries, it should be carrying out to shed 2,500 direct and indirect jobs in
everyone’s effort to advance in this
the same practices in lower-income times of extreme precariousness due to
negotiation.
countries. How does the company Covid-19. It is against national law for
explain taking a different approach in companies to unilaterally impose such Deputy of the House of Representatives
different countries? changes in matters that have been the (Colombia), María Cristina Soto de Gómez
subject of mutual agreement.
The company made this unexpected
and unwelcome announcement on the Why is BHP imposing an inhumane
second day of what were clearly going new shift without consulting those
With Covid-19, the company did not to be difficult collective bargaining whom it affects most? How does it
respect the national emergency, which negotiations, given that the company respond to the allegation that this
resulted in widespread contagion. was trying to renege on acquired rights. move brings risk to the company itself
Management has often violated the This move set the tone for the rest of the by imperiling the welfare of its own
collective agreement in the past, and we negotiations; by the end of August the two
see the same with the pandemic. The workforce, and that it is attempting
sides had failed to reach agreement and
consequences are also serious for the the workers went on strike. IndustriALL
to undermine the union at a time
communities bordering the company, has called on BHP, Anglo American and when genuine social dialogue is
since they do not take care of people. Glencore to intervene and help resolve vital to tackling the crisis? BHP has
the strike. Cerrejón has rejected the announced its decision to divest from
Representative from FNTMMSP Mining
Ministry of Labour’s roadmap for face-to- thermal coal. Is it now trying to push
Federation, Peru, speaking about Antamina,
a BHP joint venture in Peru face negotiations to break the deadlock. down labour costs at Cerrejón just to
secure a better exit deal?
It appears that Cerrejón is seeking
concessions on the collective agreement
in order to finance the compensation costs
associated with shedding jobs, and in the
process is withholding the information
2 needed for meaningful negotiations.
Residents of Tabaco stand in the ruins of their house after their forced eviction by Cerrejón Coal, August 2001
Pollution from the Samarco tailings dam collapse The Bruno Stream above the point where
The Cerrejón Coal mine flows into the Atlantic Ocean Cerrejón Coal has diverted it
Cerrejón Coal, Colombia Samarco, Brazil: Escondida and
(BHP: 33.3%): continued non- inefficient implementation Cerro Colorado, Chile:
compliance with court orders and lack of transparency water mismanagement
19 years on and the village of Tabaco, Close to five years after the November Communities in Chile continue to raise the
forcibly evicted in August 2001, has still 2015 Fundão Dam collapse, only 43 alarm about poor water management, lack
not been reconstructed despite a court of the 355 planned new dwellings are of environmental assessment information
order in 2002 and an agreement signed under construction in the settlements provided by BHP and irreversible damage
between the company and the community that were destroyed, and none has to local ecosystems forcing families
in 2008. The Constitutional Court ordered been completed. The inefficiency of the to move to urban areas. BHP is being
Cerrejón to adopt measures to protect the Renova Foundation (set up as the entity sanctioned by the Chilean government for
rights to health and a healthy environment responsible for arranging the reparation extracting ten times as much water from
of the Wayuu Indigenous Reservation of of damages caused by the collapse the Monturaqui-Negrillar Tilopozo aquifer
Provincial through sentence T 614 of of the dam) has also meant that the as was permitted over a 15-year period.
2019. The company and the defendant process of compensating communities
Government Institutions have still not is slow, leading to increased vulnerability
How will BHP make good the long-term
complied with the court order to provide of households.
damage that it has done to local aquifers
accurate information and undertake a
Mining waste released by the breach of on which Indigenous communities rely
full and proper consultation with the
the Fundão dam continues to be a cause and which are the foundation of healthy
communities impacted by the mine.
for concern. BHP claims that results ecosystems?
Concern with the diversion of the Arroyo
from water and sediment quality, aquatic
Bruno continues. The Delegate Auditor
habitat and fish surveys demonstrate
for Environmental Affairs of Colombia
that the river ecology downstream of the
recognizes that Cerrejón is not giving
Candonga reservoir and along the coast
“strict compliance with what is required
has recovered from any tailings-related
in Sentence SU 698/17.”
impacts. It is unclear what the evidence
is for this assertion. Scientific studies of
BHP has announced its intention to long-term impacts of the flow of mining
sell its share in Cerrejón. It cannot be waste sediment down the Rio Doce to
allowed to ‘cut and run’ from the mine the estuary and the coast are still in
- it must fulfil its responsibility to repair progress.
and compensate for the social and
environmental devastation caused and As a major funder of the Renova
accept the responsibility of managing foundation BHP must be called to
the clean-up over the coming decades. account for the lack of outcomes and
poor impact the Renova foundation
has had. Furthermore BHP must be
compelled to provide scientifically
robust evidence to support its claims
that the river ecology has recovered
The Bruno Stream below the point where
from any tailings-related impacts.
Cerrejón Coal has diverted it
3
Antamina, Peru: Resolution Copper, USA: County of Apuela, Intag,
need for independent planned violation of Indigenous Ecuador: failure to respect local
verification of water use sacred site communities’ objections
Unlike BHP’s operations in Brazil, Chile In the United States, in the face of In September 2019, a regional assembly
and Colombia, Antamina is considered decades of Indigenous opposition, BHP of 1,500 people in the county of Apuela,
an example of good water management owns 45% of Resolution Copper, which Intag, Ecuador unanimously rejected
by the water authorities in Peru. However, is proposing a large copper mine near mining in the area. In December 2019
Ruth Preciado, an engineer specialising Superior, Arizona. The proposed mine BHP attempted to hold a closed-door
in water management at the Catholic would destroy Oak Flat, an area sacred meeting in the community of Cazarpamba.
Pontifical University of Peru, notes the to Indigenous Peoples and including a Some concerned residents of nearby
calculations of water usage from mining public campground and thousands of communities found out about it and
will always remain low and undervalued additional acres of public land. Besides attended. On seeing the visitors, the BHP
because the water that is lost in open- the destruction of public land, the mine representatives promptly packed up and
pit pumping is not included, nor is the would dump nearly 1.4 billion tons left. Communities raised concerns about
drainage that companies carry out to dry of toxic mining waste into an unlined lack of consultation and transparency
the area and avoid infiltration into their tailings dump. This project would use during the meeting. At a regional assembly
projects. The state has no equipment to significant amounts of water, enough to on 18 January 2020, representatives from
measure the volumes of water used by supply a city of 180,000 people, for 40 the six communities in BHP’s Santa Teresa
mining companies. It is the companies years. Local farmers in particular would 2 concession drafted a formal document
themselves that send an affidavit report be affected by its water extraction. of resolutions. This declares the Intag zone
on the amount of water consumed in a The mine’s proponents say that their free of mining, demands the immediate
year. proposed mining methods are the exit of mining companies and their
only feasible methods for this deposit, representatives, and requests support for
without being willing to demonstrate development of local economies such as
With limited independent monitoring
why this is so. ecotourism and sustainable agriculture in
of water use it is difficult to understand
place of mining.
the impact of the mine on the local
hydrological cycle more generally, In the light of Rio Tinto’s recent Juukan
including the amount of water that is Gorge incident, BHP should abandon BHP must be transparent about the
no longer available to replenish streams this project. tactics used to enter and conduct
in the dry season or to recharge the activities in areas which are strongly
aquifers. How can BHP assure investors resistant to mining and act in accordance
that the information provided is reliable with its code of conduct, which states
if there is no independent verification of that it is respectful of both people and
the data? the law. When local communities declare
their opposition to a mining project, BHP
should not pursue it.
Villagers of Tabaco resist forced eviction
The new course of the Bruno Stream, diverted by Cerrejón Coal by Cerrejón Coal, 9 August 2001
Demonstrating financial responsibility
Financially responsible companies provide for the cost of their
activities right through to the cessation of those activities. The In the interests of transparency and accountability BHP should
costs of rehabilitation need to be fully recognised in mining each year publish site reclamation plans, reclamation cost
companies’ provisions in their balance sheets. Good practice estimates, and related security, for each of its mines and in
would be for mining companies to post full security with aggregate. It should also make publicly available on an annual
governments to cover the eventual cost of reclamation at the basis proof of security provided for unexpected environmental
start of projects, to hold sufficient financial assurance against harm events for each of its mines.
likely environmental damage and third-party losses, and to
publish reclamation plans and estimates in a manner accessible
to all stakeholders.
4 www.londonminingnetwork.org
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