NGOs slam Glencore Xstrata over mining project

One claim of the report is that the SMI mine would require resettlement of many members of the local population Bobby Timonera/Fastenopfer

Swiss and German non-governmental organisations have criticised Swiss-based mining giant Glencore Xstrata over a huge planned mining project in the Philippines.

In a report released in Zurich on Wednesday, the NGOs said that the company, based in Zug, was showing “insufficient respect for the rights of the affected population” in its plans for the copper and gold open-pit mine, and called on the Swiss government to take action.

The report, Human Rights Impact Assessment of the Tampakan Copper-Gold Project, was commissioned by three Swiss and German non-governmental organisations – MISEREOR, the Swiss Catholic Lenten Fund and Bread for All – and carried out by the Institute for Development and Peace (INEF), based at Duisburg-Essen University in Germany.

The $5.9 billion (CHF5.4 billion) Tampakan Copper-Gold Project is currently under development on the Philippine island of Mindanao, and would be one of the world’s largest open-pit mines, comprising 28,000 hectares of land and yielding an estimated 360,000 ounces of gold and 375,000 tons of copper per year. The mine is planned to go into operation in 2019.

According to the INEF study, the “human rights to self-determination of indigenous peoples, to food, water, health, life and physical integrity are at stake”. The project would require the destruction of large pristine forests, pose a serious risk to the local water supply, and require the resettlement of approximately 5,000 indigenous people, it said. In addition, military and paramilitary groups are being sent to protect foreign investment in the region, which is known for having a history of conflict. Tensions are rising in the region, the NGOs said.

Lack of balance

Glencore Xstrata owns, through its Australian Xstrata subsidiary, XstrataCopper, 62.5 per cent of the Philippine Sagittarius Mines Inc. (SMI), which is the Philippine government contractor for the Tampakan Copper-Gold Project.

SMI said in a statement released on Wednesday that it is “deeply concerned by the lack of balance and objectivity of the HRIA [Human Rights Impact Assessment]. SMI’s perspective is typically not presented in detail, nor sought in response to some of the numerous claims made against the company….”

According to SMI, the sources interviewed for the report are one-sided, statements from interviews are not clearly attributed, and the project is being unfairly blamed for violence in the region, which has a “long and complex history of conflict… associated with traditional customs, clan rivalries, religious and political insurgencies and internationally recognised terrorist groups….” 

SMI said it had participated in the interview process and had provided INEF with information in good faith. The company urged INEF to revise its report to address the issues it had raised.

For their part, the three aid organisations said in a statement that they were calling on the SMI and the Philippines government to “enter into an honest dialogue with the people concerned – that could even lead to dropping the project”. They said that the Swiss government should also take action and introduce binding standards for Swiss companies over human rights.

Tightening transparency rules

The criticisms come at a time of scrutiny over transparency issues. Following on the heels of a government inquiry and white paper in March, the Swiss House of Representatives agreed on Tuesday to ask the Swiss Cabinet to examine a draft law proposing legally binding transparency measures for the commodities sector.

“The cabinet accepts the proposal, as it is formulated, and will now consider transparency rules for the whole sector, meaning for listed and non-listed commodity companies as well as for commodity trading and extractive activities,” announced Justice Minister Simonetta Sommaruga.

And on Wednesday the European Parliament overwhelmingly passed legislation which would require European oil, gas and mining companies to report payments of more than €100,000 (CHF123,000) made to governments in the countries in which they operate. This would include reporting of taxes levied on their income, production or profits, royalties, and licence fees.

The legislation would not apply to Switzerland, which is not a member of the European Union. 

Disclosure rules were also adopted in the United States in 2012 with the passage of the Dodd-Frank Act. And tax, trade and transparency will be the focus of the G8 summit to be chaired by British Prime Minister David Cameron in Ireland next week.