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Range of human rights abuses by extractive companies allegedly tied to European financial institutions: companies respond to Facing Finance report

Dirty-Profits-6-cover-image

"The global extractives industry is heavily involved in some of the worst labour, environmental and human rights violations. The rights of communities, farmers and indigenous people are being trampled in the push for ever more extraction. Indeed all businesses must respect and contribute to the society where they operate, and investors too have a critical role to play, particularly in the current mining upturn.

In Dirty Profits 6 Facing Finance shows how extractive companies have dealt with human rights and environmental violations shown in Dirty Profits reports since 2012, as well as how selected European banks have reacted to these violations in their provision of finance over time."

Business & Human Rights Resource Centre invited 10 extractive companies and 10 banks mentioned in the report to respond - the following 18 companies responded:

  • Anglo American
  • Barrick Gold
  • BHP Billiton
  • Eni SpA
  • Glencore
  • Goldcorp
  • Rio Tinto
  • Vale
  • Barclays
  • BNP Paribas
  • Credit Agricole
  • Credit Suisse
  • Deutsche Bank
  • DZ Bank
  • HSBC
  • ING
  • Rabobank
  • UBS

Gazprom and Grupo Mexico did not respond.

Concerns are related to human rights impacts including labour rights, environmental pollution, indigenous rights, land rights, intimidation of project opponents, and violence including rape and murder by security forces at project sites.

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Company response
16 July 2018

Deutsche Bank response

"Deutsche Bank aims to avoid environmental and social (ES) risks that might result from its business activities. In our publically available ES Policy Framework1 we explain our approach to identifying risks related to new business opportunities and which measures we undertake in case we see a need for action. Furthermore, we explain which transactions are generally prohibited.

In case issues occur in connection with an existing business relationship, we generally consult the affected stakeholders. In this context, we seek the exchange with the company and the affected people as well as with NGOs, who might dispose of a good knowledge of the conditions on the ground. In our assessment, we also consider the political and legal circumstances in the respective country, to what extend the affected people have the opportunity to defend their own interests. In specific cases, we also make use of independent experts to evaluate the situation. Based on the results of the analysis we decide on the further procedure. However, this is still depending on our contractual obligations as well as on our leverage. As a last resort in some cases, this can lead to a termination of the business relationship..."

Download the full document here

Company response
16 July 2018

DZ BANK response

“DZ BANK places a lot of emphasis on sustainability. For example, promoting renewable energies is important to us – we are one of the leading banks in this field in Germany. Moreover, when granting loans we have been checking the sustainability of the borrower or financing project for many years now. This involves ecological and social risks. We also want to continue to improve in the future - regular dialogue with NGOs such as Facing Finance helps us to do this. Of course, we are also in contact with the companies themselves, observe very closely what is happening in individual sectors and expand our exclusion criteria accordingly. In 2017, we decided to reject new requests to finance coal-fired power plants.”

Download the full document here

Company response
16 July 2018

Eni S.p.A. response

"In connection with the oil spill which allegedly affected the Ikebiri community in 2010, NAOC has actively engaged with representatives of the Ikebiri community and confirms that it has promptly and effectively cleaned up the affected area which was re-inspected by the relevant regulatory agencies in Nigeria and confirmed as satisfactory. NAOC has also been addressing compensation issues with the affected members of the Community. It is necessary to note, however, that in view of the numerous illegal activities carried out in the area, it is impossible to establish a correlation between the alleged harm suffered by the Ikebiri population and the oil spill in question. More generally, the difficult environmental situation of the Niger Delta is a regional issue, which the Government of Nigeria is addressing as a matter of policy; NAOC company standards have been continuously improved over the last years to ensure a more effective response to oil spills, even if (as is normally the case) the same are attributable to third party actions (bunkering, thefts)..."

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Company non-response
16 July 2018

Gazprom did not respond

Gazprom did not respond to allegations of violating indigenous rights.

Company response
16 July 2018

Glencore response

"Glencore has had a presence in Zambia since 2000, when we acquired a shareholding in Mopani Copper Mines (Mopani) through a competitive tender. This was part of a general privatisation of Zambian copper mining assets, supported by the World Bank.

Prior to privatisation, Mopani experienced years of under-investment, safety performance was poor and its smelter had been emitting sulphur dioxide (SO2) unconstrained for over seventy years, with a significant effect on local air quality. To date, its corporate shareholders have spent over $4 billion in redeveloping and expanding operations...

At all of our operations, we believe that all occupational fatalities and injuries are preventable, and that we can create and maintain safe workplaces for all our people with strong safety leadership..."

Download the full document here

Company response
16 July 2018

Goldcorp response

"Goldcorp welcomes initiatives that seek to encourage continuous improvement in responsible mining practices,  especially initiatives who do so by transparently comparing the policies and practices of large‐scale mining  companies on a range of environmental, economic, social and governance issues. In our view, this report in its current form is unlikely to incentivise continuous improvement which is why we chose not to engage when contacted  by the authors.   

While the recommendations of the report were directed towards financial institutions and to a lesser extent to  regulators and governments, Goldcorp recognizes that the spirit of many of the recommendations is to increase  transparency of information related to the impacts of mining and extractive companies. Goldcorp is committed to  conducting our business operating responsibly at all times and our company commitment to transparency and  accountability is embodied in our annual Sustainability Report..."

Download the full document here

Company non-response
16 July 2018

Grupo Mexico did not respond

Grupo Mexico did not respond to allegations of environmental pollution.

Company response
16 July 2018

HSBC response

"Samarco

Your letter asks about our own due diligence and any engagement with the company.  As you expected, we are unable to provide further information on these subjects, because of our ongoing duty of client confidentiality.

More generally, our 2007 Mining and Metals policy did explicitly cover the issue of tailings, and our revised policy (2016)  recognises that the mining sector ‘can have unacceptable adverse impacts on people or on the environment’ and includes specific restrictions, requiring enhanced due diligence, around  human rights issues and where there is a poor sustainability track record, including material accidents, spills or pollution.

HSBC works with clients who meet its sustainability standards and those who are making credible progress towards meeting them; but where clients are unwilling or unable to meet those standards, we will end the relationship.

Financial data

We do not generally comment on the financial information used by Facing Finance in compiling its reports.  We most frequently appear on shareholder registers where we are the nominee holder or custodian for our clients’ assets - we have not made the underlying investment decision and are not the beneficial owner of the assets.”

Download the full document here

Company response
16 July 2018

ING response

“The report states that ING has sufficient mining policies. At the same time, suggestions for improvement have been made in the report, notably in the area of transparency. We welcome these suggestions. Sustainability is a dynamic topic that is influenced by societal changes and therefore correspondently changes over time. This year (2018) we are revising our policy framework and have also requested input from NGO’s on our policies. In this manner we hope to cover the most relevant concerns related to extraction. An example thereof was already published late last year when we were the first global bank to publish a target on financing to coal power generation, reducing our exposure to close to zero by 2025. This was on top of our earlier (2015) announced policy to no longer finance new coal fired power plants and thermal coal mines.”

Download the full document here

Company response
16 July 2018

Rabobank response

“The report acknowledges Rabobank as a frontrunner in its policies regarding the extractive industries we appreciate that our efforts are noticed. Rabobank has a robust sustainability policy framework with thematic and sector policies both addressing the issues relevant for the extractive industries. We continuously evaluate and benchmark our policies and practices to further improve them. In the recent 2-yearly update of our policy framework we further strengthened  our stance on arctic drilling and mountain top removal mining by including them in our list of excluded activities. Rules regarding client confidentiality restrict our ability to disclose information regarding our clients and any engagements with them. We monitor our clients on an ongoing basis, and if we have reason to believe that the client does not meet our policy criteria we enter into an engagement process. We report on these engagements in our annual report. The report couples data on investments over years to ESG performance, we would be cautious to draw conclusions regarding the effectiveness of engagements of banks. Please note that engagement trajectories take their time as the issues raised are often complex with no simple solutions, also loan tenure tend to be fixed for a certain period of time. A longer monitoring period than the 7 year period the report currently bases its findings on, would be necessary to be able to say anything meaningful about possible trends. Finally, we would like to add that the majority of the recommendations and demands of the report to the financial institutions are already part of Rabobank’s daily practice. We are happy to see that especially our efforts regarding transparency and the reporting structures for our engagement process are taken as an example of a good practice.”

Download the full document here