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SUMMARY
Glencore in Colombia: civil society’s view on the sustainability of mining operations
This shadow report[1] is intended as a contribution towards civil society’s duty to provide oversight and demand responsibility from large companies and transnational corporations in regards to the multiple impacts that they generate in the world through their corporate, environmental, labor, social, economic, as well as human rights performance. In the case of Glencore PLC in Colombia, Latin Amer- ican and European organizations have been carrying out this monitoring.
Since 2010 Glencore has issued sus- tainability reports on its operations in accordance with the Global Reporting Initiative (GRI) standards and criteria[2]. To date they have published four global reports from their headquarters in Zug,Switzerland as well as two sustainability reports from the Colombian business group- C.I. Prodeco. Al- so, since 2010 the non-governmental organizations Swiss-Colombian Working Group (ASK) and Pensamiento y Acción Social (PAS) began to monitor Glencore’s operations in Colombia through the compilation, documentation and analysis of information from thousands of documents. The information included environmental and industrial proceedings, corporate sanctions, public and independent audits and financial statements, among other sources related to the history of the Swiss multinational in Colombia.
At the same time, we have accompanied the communities and organizations which live in the area influenced by the company’s mining projects. Specifically the community of El Hatillo, in the department of Cesar, which is in the midst of an involuntary resettlement process due to its proximity to the Calenturitas mine; and the Embera Katío indigenous reservations in the municipality of Frontino, in the department of Antioquia, where Glencore is exploring and developing activities to extract gold and other minerals.
The research of archives and records with simultaneous accompaniment and a permanent presence in the regions where Glencore implements its activities, has allowed us to write a shadow report to discuss and question certain aspects, facts and findings of the multinational’s sustainability reports. The report’s intention is to document, analyze and evaluate the material provided by the company in regards to corporate and fiscal issues, environmental impacts and the country’s natural heritage, employment and union guarantees, the relation- ship with state security forces and the involuntary resettlement of communities affected by mining operations.
What is the context of Glencore’s operations in Colombia?
Glencore has been carrying out mining activities in Colombia for almost twenty years, amidst a nearly 40 year armed conflict with more than six mil- lion victims and around five million hectares of abandoned land. According to the Centro Nacional de Memoria Historica[3] this conflict is largely due to weak State institutions and the com- plete political and social exclusion of an significant part of the population, especially in rural areas.
The State has demonstrated little capacity to solve crucial problems such as high poverty rates. Colombia’s social conflicts are also the result of a dispute between economic elites over the nation’s natural heritage. Colombia is the second most biodiverse place in the world and has invaluable natural wealth. More than sixty ethnic groups have preserved natural ecosystems that today are extremely vulnerable as a result of the armed conflict, but also because of a development model that has not been defined or implemented to comprehensively favor all sectors of society.
This report’s main findings
This report’s findings include serious and repeated infractions of national defined or environmental legislation and yet to be quantified environmental damages related to coal extraction in forest reserve areas, the unauthorized diversion of riverbeds and the exposure to air contamination levels, for populations near the mines, which exceed the limits allowed by Colombian law. The environmental damages, solely related to coal mining operations, caused the environmental authorities to sanction Glencore ten times be- tween 2007 and 2010, equivalent to more than 1.4 million dollars in fines. In March of 2013 the National Environmental Licensing Authority (ANLA in Spanish) ordered C.I. Prodeco, the main subsidiary of the business group that controls Glencore in Colombia, to immediately suspend operational and development activities in some areas of the Calenturitas mine, as they were affecting ecosystems without permission and carrying out mining operations beyond the limits allowed in its license. This led the environmental authority to bring charges against the company in January of 2014. The health of more than 600 families that make up the three farming communities bordering the mines has also been seriously affected due to prolonged exposure to contamination.
These are the communities which must be resettled by Glencore and two oth- er companies that extract coal in the area (Drummond LTD and Colombian Natural Resources). These serious damages have not been classified by Glencore as “serious environmental incidents” in their sustainability reports. That is to say, Glencore establishes its own environmental standards, pro- jecting an image that does not correspond with sanctions imposed by Colombian environmental authorities. On the other hand, despite the fact that Glencore adopted the Voluntary Principles for Security and Human Rights, until now the company has not publicized concrete evidence about its implementation of risk evaluation mechanisms, follow up and monitoring on the development of the secret agreements signed with the Colombian Ministry of Defense.
The military units that protect Glencore’s mining facilities in Cesar, despite being in- volved in the murder of four people protected by International Humani- tarian Law, have not to this day, been publicly accused by the company nor has there been a revision of the agree- ments or a request to the Colombian government to avoid the repetition of these serious human rights violations. Monitoring these agreements is more difficult as the company continues to sign them secretly, in open contradiction with the voluntary prin- ciples which recommend that the agreements be of a public nature and freely accessible by civil society. For that reason, recently in November of 2014, more than eight Latin American and European NGOs asked the Voluntary Principles Initiative to suspend Glencore’s application until it demonstrates a real and concrete policy specifically directed to prevent these occurrences and issues a public condemnation in regards to them.
Also, we have found various irregular corporate maneuvers being currently investigated by several Colombian regulatory agencies, like the National Comptroller’s Office. During these investigations over the last four years, the Colombian government has brought sanctions and lawsuits against Glencore for more than 130 million dollars, alleging serious national property damage. The Comptroller’s Office and Business Superintendent’s main findings show business maneuvers such as the concealment of Glencore’s corporate control over their Colombian subsidiaries for more than sixteen years. While the business group was not declared, the Swiss multinational achieved extremely high levels of operational income, reported at 1.8 billion dollars in 2011. At best, the Colombian government receives an average of 0.9% tax on assets and 5% in royalties on this income. Mean- while, poverty rates in the areas that surround the mining operations con- tinue to be among the highest in the country. The bonanza of high coal prices over the last years has not di- rectly increased the nation’s mining revenue nor helped to overcome dra- matic regional and local development levels. The Comptroller’s Office has issued an alert about the serious prop- erty damage that Glencore has caused the nation: combining taxes, other forms of compensation and royalties, only 8.3 dollars per ton of coal stay in the country, compared to an average implied price of more than 85 dollars per ton on the international market.
The findings continue to be critical regarding labor issues. The companies in Prodeco group did not recognize their status as the sole employer of the workers at their subsidiaries for several years, as labor law requires in these cases. In 2013 the Ministry of Labor declared this a business unit, a decision which is being appealed. Thus, Glencore continues to establish differentiated hiring practices in each subsidiary company, with wages, compensations, guarantees and workloads that differ between each subsidiary. Workers thus end up with different wages and guarantees even when they have been contracted to do the same work, which clearly implies a disregard for the principles of equality and nondiscrimination under labor law.
Finally, there have been delays and failures to carry out the Ministry of Environment’s orders in relation to the involuntary resettlement of com- munities bordering the coal mines – in contrast with Glencore’s sustainability reports assuring that a successful process is underway. This has given rise to environmental sanctions against the company. At the present time, there is serious evidence of repeated non-compliance of the timeline established to fulfil the communities’ reset- tlements.
All these findings show a wide gap between the company’s sustainability reports and the reality of the impact of Glencore’s activities in Colombia. This evidence and analysis will be fur- ther developed in each chapter of this shadow report. This undertaking has been without a doubt an initial effort to achieve a crit- ical reading of Glencore’s sustainability reports, in order to obtain changes in their corporate performance and alert the countries involved that it is necessary to increase their supervi- sion and monitoring of the impacts of the company’s operations. For future reports, it is important that further investigation focus on subjects like corporate social responsibility, human rights and the impacts of Glencore’s activities in the El Cerrejón coal mine, as well as on their gold extraction op- erations in the western part of Antioquia, which at the moment is moving forward in the territories of indigenous communities.
Recommendations and conclusions for Glencore International PLC
1. Comply fully with Colombia and Switzerland’s applicable legal ob- ligations in the areas of human rights, equal employment, environ- mental restrictions and manage- ment, royalties and tax payment restrictions, and corporate obliga- tions.
- Issue publications on the effective application of human rights, com- munity relationship and environ- ment policies which account for the manner in which conflicts, eval- uation and follow up have been handled.
3. Carry out a process of due dili- gence, including risk analysis and human rights impact and partici- patory design with interest groups on prevention and risk mitigation - especially concerning the co- operation agreements with the state security forces- incorporating mechanisms to minimize and avoid repeated violations of rights by state security agents.
4. Adjust the agreements signed between the state security forces and private security companies by developing corporate measures in line with risk evaluations and due diligence required by these con- ventions.
5. Ensure a greater openness to dia- logue with the affected commu- nities and better coordination of social investments with the popu lation’s real needs, municipal devel- opment plans and investment. The above can be facilitated through monitoring and follow up on pol- icies, plans and social programs in tripartite forums.
[1] Over a decade ago shadow reports arose as a civil society mechanism to counter balance the annual human rights reports presented by governments to the various United Nations bodies.
[2] Global Reporting Initiative (GRI) is an organization whose aim is to encourage all kinds of organi- zations to elaborate sustainability reports. GRI provides a framework for sustainability reports for uses applied throughout the world. The framework, which includes a Guide to develop sustainability reports, establishes principles and indicators that organizations can use to measure and share their economic, environmental and social performance. GRI is a non-profit organization with various in- terest groups. It was founded by CERES and the United Nations Environment Program (UNEP) in 1997 in the United States. For more information the Global Reporting Initiative webpage can be con- sulted: www.globalreporting.org
[3] For an in-depth look into Colombia’s armed con- flict, the following text can be consulted: CENTRO DE MEMORIA HISTORICA, ¡BASTA YA!: Colombia: Memorias de Guerra y Dignidad.
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