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Realities and perceptions of human rights and the mining industry : a case study Handelsman, Simon David 2009

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 REALITIES AND PERCEPTIONS OF HUMAN RIGHTS  AND THE MINING INDUSTRY— A CASE STUDY   by SIMON DAVID HANDELSMAN B. Sc., The University of Nottingham, 1967    A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF  DOCTOR OF PHILOSOPHY  in  THE FACULTY OF GRADUATE STUDIES  (Mining Engineering)    THE UNIVERSITY OF BRITISH COLUMBIA  March 2009 © Simon David Handelsman, 2009    ii Abstract Dealing with realities and perceptions of human rights in the mining industry context is important.  Significant socio-economic risks to existing and potential mining operations arise when mining companies are believed responsible for or complicit in human rights abuses.  Mining engineers responsible for projects need adequate awareness and sufficient capacity to manage these risks effectively. This research proceeded in two ways after reviewing the history of the evolution of human rights:  It studied important examples of alleged human rights violations associated with mining companies, large and small.  Historical data and the evolution of attitudes and perceptions within and about the Rio Tinto mining company’s operations worldwide were also examined.  Qualitative research based on interviews with former and current executives and staff in Rio Tinto, other companies, government and civil society provided original data and captured perceptions, awareness, attitudes and practices. A categorized database developed with 178 cases of allegations of human rights abuses shows the breadth of the human rights challenges. Principal reasons why the question of human rights and the mining industry is important, including identified points of conflict between mining and society, were explored.  Case studies were organized by point of conflict (use of security forces, indigenous peoples, labour rights, “pariah” or failing states, and national and regional jurisdiction conflict).  Existing industry safeguard policies, practices, monitoring, verification and reporting were examined. The research determined, from recent evidence and allegations of complicity in human rights abuses, that voluntary initiatives alone are inadequate.  Failures of host governments and companies to protect human rights necessitate effective mechanisms to investigate, and hold accountable, companies complicit in human rights abuses. A method was recommended for the industry to engage positively with all stakeholders in the mineral development cycle.  Policies, codes, principles, checklists, voluntary initiatives, best practices, monitoring, verification and compliance reporting are recommended to exploration and mining companies serious about making commitments to respect human rights.     iii Table of Contents Abstract ..................................................................................................................................................ii Table of Contents ..................................................................................................................................iii List of Tables.........................................................................................................................................vi List of Figures ......................................................................................................................................vii Acknowledgements ..............................................................................................................................xii Dedication ...........................................................................................................................................xiv CHAPTER 1:  Introduction .................................................................................................................... 1 1.1  Statement of the Problem .......................................................................................................... 1 1.2  Significance of the Work........................................................................................................... 4 1.3 Objectives.................................................................................................................................. 6 1.4 Thesis Organization................................................................................................................... 7 CHAPTER 2:  Methodology ................................................................................................................ 11 2.1 Company Archives Review..................................................................................................... 12 2.2 Cases Database Development ................................................................................................. 12 2.3 Qualitative Research................................................................................................................ 12 2.3.1  Interviews ................................................................................................................... 12 2.3.2  Data Analysis ............................................................................................................. 15 2.3.3  Validation/Reliability ................................................................................................. 15 CHAPTER 3:  Issues of Human Rights and Mining – Literature Review ........................................... 17 3.1  What Are Human Rights? ....................................................................................................... 17 3.2 Evolution and Expansion of Human Rights Concepts and Why They Are Important to Mining Companies .................................................................................................................. 20 3.3  Rights and Sustainable Development...................................................................................... 27 3.4  Mine Life Cycle Questions......................................................................................................28 3.5 Roles and Responsibilities for Human Rights......................................................................... 29 3.5.1 Role and Responsibilities of Companies.................................................................... 29 3.5.2  Role and Responsibilities of NGOs............................................................................ 31 3.5.3  Role and Responsibilities of Governments, Legal Instruments and Decision Making Processes ....................................................................................................... 33 3.5.4  Roles and Responsibilities of Others.......................................................................... 40 3.6 Formal Codes of Practice, Guidelines, Voluntary Initiatives, Monitoring.............................. 45 3.6.1  Establishing Benchmarks ........................................................................................... 50 3.6.2 How to Make Standards, Codes and Voluntary Principles Applicable ...................... 51 3.6.3 Skills Challenges ........................................................................................................ 52 3.6.4 Social Audits, Status in Other Sectors, Developments in Mining Industry ............... 52 3.6.5 Standards to Protect Vulnerable Groups .................................................................... 54 CHAPTER 4:  Points of Conflict (Problems of Human Rights and Mining)................................................... 64    iv 4.1  Use of Security Forces ............................................................................................................ 69 4.1.1 Riots of 1888, Rio Tinto, Spain.................................................................................. 71 4.1.2  Bougainville Copper, Papua New Guinea.................................................................. 77 4.1.3 Grasberg, Indonesia.................................................................................................... 81 4.1.4 Amayapampa, Llallagua and Capasirca, Bolivia ....................................................... 89 4.1.5  Morro do Ouro, Brazil................................................................................................ 96 4.2  Respect of Cultures (Land, Environment, Social Development, and Indigenous Peoples)..... 99 4.2.1 Bougainville, Papua New Guinea ............................................................................ 101 4.2.2  Grasberg, Indonesia.................................................................................................. 102 4.2.3  Other Examples of Land Rights Problems ............................................................... 103 4.2.4  Diavik, Canada ......................................................................................................... 106 4.2.5  Fort-Dauphin, Madagascar ....................................................................................... 108 4.2.6  Junior Companies and Canadian First Nations ........................................................ 110 4.3  Labour Rights ........................................................................................................................ 112 4.3.1  Forced Labour .......................................................................................................... 115 4.3.2  Child Labour ............................................................................................................ 116 4.3.3  Labour Relations ...................................................................................................... 117 4.3.4 Health & Safety ........................................................................................................ 127 4.3.5  Gender ..................................................................................................................... 133 4.4  Pariah or Failing States.......................................................................................................... 134 4.4.1 Burma ....................................................................................................................... 137 4.4.2. Mongbwalu, DRC .................................................................................................... 141 4.4.3 Other Countries ........................................................................................................ 145 4.4.4  Dilemmas ................................................................................................................. 146 4.5  National and Regional Jurisdiction Conflict ......................................................................... 149 4.6  Corruption ............................................................................................................................. 152 4.6.1 Rio Tinto, Spain ....................................................................................................... 153 4.6.2  Other Companies...................................................................................................... 155 4.7  Development of Safeguard Policies ...................................................................................... 156 4.7.1  Rio Tinto .................................................................................................................. 156 4.7.2  Other Major Companies ........................................................................................... 164 4.7.3  Junior Companies ..................................................................................................... 170 4.7.4  Rio Tinto and the Voluntary Principles.................................................................... 171 4.7.5 Advocacy NGOs Views of the Voluntary Principles ............................................... 172 4.7.6  Voluntary vs. Mandatory.......................................................................................... 174 4.7.7   Recent Debates: Canadian RoundTables ................................................................. 177 4.8  Summary ............................................................................................................................... 179 CHAPTER 5:  Discussion .................................................................................................................. 182 CHAPTER 6:  New Tools and Policy Recommendations ................................................................. 190 6.1  Practical Approaches............................................................................................................. 191 6.1.1 Risk Management..................................................................................................... 192    v 6.1.2 Conflict Zones .......................................................................................................... 192 6.1.3 Best Practices ........................................................................................................... 192 6.1.4 Voluntary Principles on Security and Human Rights............................................... 193 6.1.5 Implementation......................................................................................................... 194 6.1.6 Monitoring Performance .......................................................................................... 197 CHAPTER 7:  Conclusion ................................................................................................................. 199 CHAPTER 8:  Claim for Originality of Research.............................................................................. 202 CHAPTER 9:  Suggestions for Future Work ..................................................................................... 203 Bibliography....................................................................................................................................... 204 APPENDIX I   Database of Cases...................................................................................................... 237 APPENDIX II  Declarations and Conventions................................................................................... 242 Universal Declaration of Human Rights...................................................................................... 242 International Covenant on Economic, Social and Cultural Rights .............................................. 246 International Covenant on Civil and Political Rights .................................................................. 253 C169 Indigenous and Tribal Peoples Convention........................................................................ 265 Voluntary Principles on Security and Human Rights .................................................................. 274 Statement by the Governments of the United States and the United Kingdom..................... 274 Risk Assessment.................................................................................................................... 275 Interactions Between Companies and Public Security .......................................................... 276 Interactions Between Companies and Private Security......................................................... 278 APPENDIX III  Checklist for Corporations/Enterprises Interested in Investing Strategic Efforts in Human Rights Issues. ........................................................................ 280 APPENDIX IV  Freeport McMoRan: Social, Employment and Human Rights Policy..................... 285 APPENDIX V   Ivanhoe Mines: Values and Responsibilities ........................................................... 288 APPENDIX VI   Rio Tinto plc, “The Way We Work”...................................................................... 294 APPENDIX VII  Anglogold Ashanti Limited: Values & Business Principles .................................. 301 APPENDIX VIII Certificate of Approval, Behavioural Research Ethics Board ............................... 304    vi List of Tables CHAPTER 3 Table 3.1  Rights Mining Companies Should Ensure ................................................................ 25 Table 3.2  Human Rights Principles for Corporations ................................................................ 26 Table 3.3  Extractive Industries’ Violations of Indigenous Peoples’ Rights – Countries Identified by UN (1996-2006).................................................................................... 42 Table 3.4  Participants Initially Identified with the Voluntary Principles on Security and Human Rights, December 2001 ................................................................................. 57 Table 3.5.  Participants in the Voluntary Principles on Security and Human Rights, July 2008 .... 59 CHAPTER 4 Table 4.1  Human Rights Context, Broad Categories and Issues................................................ 66 Table 4.2  Human Rights Issues: Main Groups of Factors.......................................................... 67 Table 4.3 Points of Conflict and Problems................................................................................. 68 Table 4.4 Priorities of Points of Conflict.................................................................................... 68 Table 4.5 Points of Conflict in Principal Cases Described......................................................... 68 CHAPTER 6 Table 6.1 Typical Human Rights Courses for Business........................................................... 196     vii List of Figures CHAPTER 1 Figure 1.1 Key Human Rights Challenges .................................................................................... 5 CHAPTER 3 Figure 3.1  Attributes of 23 Extractive Industry Codes ............................................................... 47 Figure 3.2  Mining Companies Perceived Role in Society........................................................... 47 CHAPTER 4 Figure 4.1 Clusters of Human Rights Issues in Mining............................................................... 67 Figure 4.2 Incidence of Human Rights Issues in Large-Scale Infrastructure and Extractive Industry Projects......................................................................................................... 69 Figure 4.3  Rio Tinto, Spain, Location Map................................................................................. 72 Figure 4.4 Open-Air Calcination 1880s....................................................................................... 73 Figure 4.5  Question of Open Air Calcination in Huelva Province. ............................................. 74 Figure 4.6  Decision-making process when dealing with bad governments............................... 136    viii Glossary AA1000 AccountAbility 1000 Standard ACFOA Australian Council for Overseas Aid ADB Asian Development Bank AGA AngloGold Ashanti Limited AP Associated Press APEGBC Association of Professional Engineers and Geoscientists of the Province of British Columbia AS/NZS Standards Australia/Standards New Zealand AusAID Australian Aid for International Development BBC British Broadcasting Corporation BCL Bougainville Copper Limited BSR Business for Social Responsibility CAO Office of Compliance Advisor/Ombudsman of the International Finance Corporation and the Multilateral Investment Guarantee Agency CASM Communities and Small Scale Mining Initiative CBMM Companhia Brasileira de Metalurgia e Minerção CBO Community-Based Organization CEEST The Center for Energy, Environment, Science and Technology CEM Compania Explotadora de Minas S.A. CEO Chief Executive Officer CESR Center for Economic & Social Rights CERD Committee on the Elimination of Racial Discrimination (UN) CESCR Committee on Economic, Social and Cultural Rights (UN) CFMEU Construction, Forestry, Mining and Energy Union CI Conservation International CIDA Canadian International Development Agency CIDSE International Co-operation for Development and Solidarity COICA Coordinator of Indigenous Organizations of the Amazon Basin COW Contract of Work CRA Conzinc Rio Tinto of Australia CSI Corporate Social Investment CSR Corporate Social Responsibility CVRD Companhia Vale do Rio Doce (now known as Vale) DFAIT Department of Foreign Affairs and International Trade Canada DFID United Kingdom Department for International Development DRC Democratic Republic of Congo DSD Defense Signals Directorate (Australia) ECOSOC Economic and Social Council (UN) EIA Environmental Impact Assessment EIR Extractive Industries Review EITI Extractive Industries Transparency Initiative E&MJ Engineering and Mining Journal ESCAP Economic and Social Commission for Asia and the Pacific (UN) ERA Environmental Risk Assessment ETS European Treaty Series FCO United Kingdom Foreign & Commonwealth Office FFIJD Freeport Fund for Irian Jaya Development FI-FO Fly In-Fly Out    ix FLA Fair Labor Association FNA Front des Nationalistes et Intégrationnistes (Nationalist and Integrationist Front) FOE Friends of the Earth Footsie for Good FTSE4Good (an ethical fund index) FPP/TF Forest Peoples Program/Tebtebba Foundation Freeport Freeport McMoRan Copper & Gold, Inc. FSU Former Soviet Union FTSE FTSE Group (a