Rio Tinto under fire from all sides

Down to Earth No.80-81, June 2009

A report from Rio Tinto's AGM in London, April 2009, attended by DTE.

This hasn't been a very good year for Rio Tinto. The UK-based mining multinational is facing growing criticism, not just from established critics of the company's operations in places like Grasberg, the huge copper and gold mine in West Papua. It is also coming from its investors and shareholders who have seen the company's share price tumble and investments made last year at the height of the natural resources boom collapse. Consequently, criticisms that were levelled at the company's social and environmental record appeared to achieve greater traction at this year's Annual General Meeting (AGM) in London, given that lower profits increase the shareholders awareness of the company's fallibility. Also, media attention, including an article in the UK's Guardian newspaper did not result in welcome publicity for the mining company.1

Down to Earth, together with fellow campaigners and the London Mining Network, took some of these complaints back to the annual shareholder meeting in London on 15 April 2009. The record of the Grasberg joint-venture (in which Rio Tinto has a 40% stake), raised for many years now, was highlighted again this year. From Rio Tinto's perspective, their involvement in this mine has been particularly damaging over this last year. The environmental destruction that is continuing to be caused by the dumping of the mine's tailings directly into the river, has led to the Norwegian Government Pension Fund disinvesting from Rio Tinto, following on from a similar disinvestment from Freeport McMoran, the joint-venture partner in the Grasberg mine.2 The Norwegian Government was a significant shareholder in Rio Tinto. The disinvestment will hurt Rio Tinto both financially and reputationally. This pronouncement of environmental ill-health flies in the face of Rio Tinto's assurances of best practice and concern for the environment.

Also mentioned at the AGM, was a recent report of a Freeport McMoran spokesman admitting to continued payments to the Indonesian military.3 Given that direct payments to the military by companies seeking protection are now illegal in Indonesia, this admission is shocking. It becomes more serious still, considering the continued concern over human rights abuses committed by the Indonesian military in the ongoing conflict in West Papua.4

No consent

Finally, reference was made to the underlying concern that the Grasberg mine continues to operate without the consent of the local Papuans. Consent for such operations by the indigenous population is now assured as a right under the recently adopted UN Declaration on the Rights of Indigenous Peoples (UNDRIP) - in particular their right to Free, Prior and Informed Consent. The lack of respect for these rights in places like Grasberg, is increasingly evident. As at last year's AGM, this AGM heard reference to a statement by the Free West Papua Campaign which condemned Rio Tinto for this and asked the company to withdraw its presence from West Papua.5

These concerns have been raised repeatedly over the years and in many places, so it is difficult not to get cynical about progress on these issues. It is fashionable for companies to talk about 'corporate social responsibility' (CSR). Often this talk is used to justify further investment in projects such as the Grasberg mine. Rio Tinto is one company that trumpets its record on CSR, making it difficult for the public and investors (who fuel such enterprises) to see the truths behind all the talk. The company and its executives, like many multinationals, are also adept at deflecting any criticisms. At this year's AGM, Paul Skinner, the Chairman of the Board, attempted to undermine a question on the Grasberg mine, by asking if the questioner had ever visited the mine, knowing that access to the mine is extremely limited. Last year, this approach worked well in his favour, allowing him claim more direct experience of the realities than the questioner. However, this time, the tactic backfired on him: the mile-wide scar on the landscape that the Grasberg tailings cut into the Papuan jungle is difficult to miss from the air and consequently even more difficult to deny.

Slowly, by chipping away at this corporate facade, progress can be made. The Norwegian Government's disinvestment - which hit Rio Tinto where it hurts - is one significant step in the right direction.6


1 Guardian:
2 See DTE Newsletter 76/77 for Norwegian Government's disinvestment from Freeport McMoran. A motion to the Freeport McMoran AGM in June 2009 to install an environmental expert on the board of directors is being proposed by some investor groups. The motion is being resisted by the current board.
3 See AFP 22/Mar/09. 'US Mining Giant still paying Indonesian military.'
4 See DTE 68 for background to this issue.
5 A statement was delivered to the Rio Tinto Board asking for Rio Tinto to leave West Papua. A copy of the Free West Papua Campaign Statement on Freeport and Rio Tinto from 2008 can be seen at:
6 For a further account of the 2009 Rio Tinto AGM held in London, see London Mining Network website: