Why is mining giant BHP able to dodge its responsibilities?

The British-Australian company is complicit in the harms its joint owned Cerrejón mine has wrought on people and the environment in Colombia, writes Claire Hamlett

November 21, 2019 · 7 min read
Frontline human rights defenders from Chile, Brazil and Colombia join the demonstration outside the BHP AGM in London. By Mark Kerrison

When Alvaro Ipuana, an indigenous Wayuu community leader from Colombia, travelled to London to address executives and investors of mining multinational BHP he knew not to expect much.

Alvaro was due to attend BHP’s annual shareholders’ meeting (AGM) on 17 October to talk about the Cerrejón opencast coal mine in the northern Colombian region of La Guajira.‘We came here to be listened to, so investors know the negative impacts of this mine,’ he said, speaking two days before the AGM, as part of a week of action called Unmasking BHP. He still hoped to see concrete action taken to address the impacts.

British-Australian BHP jointly owns Cerrejón, along with other British multinationals, Anglo American and Glencore. Cerrejón is the largest opencast coal mine in the whole of Latin America and the cause of a bleak catalogue of suffering for local communities, including Nuevo Espinal, where Alvaro lives. Nuevo Espinal was forcibly displaced to make way for Cerrejón mine in the early 1990s.

Alvaro stood up near the end of four-hour AGM, alongside Catalina Caro Galvis, who works for Friends of the Earth Colombia (CENSAT), to ask the questions and bring the demands of communities affected by the mine to those that hold the power: the BHP board and its investors.

Hard to quantify

Local organisers and community leaders like Alvaro are being threatened by mine employees for their opposition to the mine. As a result, communities are demanding, among other things, protection against retribution, and a commitment from BHP to restore the natural course of a vital water source, the Arroyo Bruno stream, which has been diverted to expand Cerrejón. According to Catalina and Alvaro, so far none of the companies that own the mine have done anything to help those whose lives it has impacted.

Some of the impacts are visible: increased rates of cancer and respiratory infections due to coal dust pollution; children dying of hunger and lack of clean water because water sources have been contaminated. Conditions in the areas to which communities have been moved are poor, with no running water and crumbling housing.

Other impacts, described by Alvaro, are hard to see and quantify. Many people who were displaced and now have no livelihood have become depressed. Rifts have opened up between community leaders who have received payment from Cerrejón to support the mine – and those who speak out against it.

As the mine has expanded, sacred sites and cemeteries have been destroyed, which has been a source of trauma for the Wayuu people. In the Wayuu culture, cemeteries and the funerary rituals that happen in them are extremely important, and their loss has caused a ‘spiritual imbalance’ and broken connections with ancestors. ‘These impacts are considered irreparable,’ says Alvaro.

‘I don’t expect the company will do anything,’ Catalina said, who works with mine-affected communities in La Guajira and other parts of the country as part of her role at Bogata-based CENSAT. ‘But I want the affected people to be represented here.’

‘Whose fault is it?’

In La Guajira, the name ‘BHP’ is not well-known. Communities that have been forcibly displaced from Wayuu indigenous territory to make way for the mine and its recent expansion, that are unable to make a living from the land they once farmed, do not know anything about the board of directors and shareholders that Catalina and Alvaro came to confront.

This local anonymity enjoyed by BHP suggests it has failed to engage properly with the people whose lives have been uprooted and, in many cases, devastated by the Cerrejón mine. Indeed, the company refuses to take responsibility for these problems. ‘They say they are not the majority owners,’ says Richard Solly, coordinator of London Mining Network, one of several groups which organised Unmasking BHP. ‘Each of the three companies own a third of the mine. If it’s not their fault, whose fault is it?’

So how can BHP avoid taking responsibility for what is happening to people like Alvaro and his community? The answer partly lies in the way governance is structured between multinational parent companies like BHP and the ones they part-own like Cerrejón. It is a system which looks almost deliberately designed to distance multinationals from lax standards or corruption in the countries in which they mine, such as are found in Colombia, while allowing them to make a profit by extracting the resources of those countries.

Lack of transparency

Though Cerrejón is jointly owned by three companies, it is registered as a national company in Colombia in its own right. BHP designates Cerrejón as a ‘Non-Operated Joint Venture’ (NOJV), meaning it has its own governance framework separate of BHP’s. The dynamic between BHP and its NOJVs was established by BHP itself.

BHP claims to be committed to having its NOJVs act in a way that is in line with BHP’s own pledge to ‘operate with integrity’. On BHP’s satellite Cerrejón website, it says that it ‘maintains a key focus on HSEC [Health, Safety, Environment, Community] standards and continuous improvement, leveraging Shareholders know-how and best practices.’ It further states:

‘Together with the other shareholders, BHP is committed to supporting Cerrejón to be a high performance Operation, consistent with best industry practices and standards. In order to do so, BHP has a dedicated team supported by relevant subject matter experts who play an active role on the Cerrejón Board and the various joint venture committees’. (Emphasis added.)

So BHP has a responsibility to support its NOJVs to uphold standards on par with its own. However, it is completely unclear what the process for remedy is or what the consequences are, if any, for a NOJV that fails to uphold best industry practices and standards.

This lack of transparency around how BHP addresses inadequacies, violations, or failures of a NOJV indicates a serious flaw within the structure of the relationship between the NOJV and BHP. Either the ‘dedicated team’ that sits on the Board of Cerrejón is ineffectual, or it is wilfully ignoring the failures of Cerrejón to uphold certain standards, or those standards are sorely inadequate. As Richard Solly puts it, this structure allows BHP to ‘wheedle its way out of responsibility for the fact that Cerrejón does not keep to BHP’s stated policies.’

Apparently by design, BHP does not have direct control over all the decisions made by Cerrejón as a company. Nonetheless, by failing to ensure any accountability of Cerrejón for its impacts or to enforce compliance with its own purported standards, it is complicit in the harms Cerrejón has wrought on the communities and environment of La Guajira.

Inside the annual meeting, Catalina’s prediction that BHP wouldn’t do much was proved correct. In response to questions from her and Alvaro about how the company can justify exploiting La Guajira and taking the coal, BHP’s Chairman Ken Mackenzie said: ‘Cerrejón is an independent company and is operated through its own management team, it is pursuing its own standards and it is not controlled by BHP. It is also important to know that Cerrejón is and has always been operating in a very complex environment and challenges are significant. I hope I have answered your questions.’

Claire Hamlett is a freelance writer and climate campaigner based in London.

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