EIDHR - Training on
Monitoring International Mechanisms
July 2010
Module 4
International corporations, engagement and
examples
Indigenous Peoples Links (PIPLinks)
http://www.piplinks.org
Plan of presentation
1.
Advocacy with companies directly
2.
Advocacy with private financiers and insurers
3.
Advocacy with public financiers and insurers
4.
Legal action on companies at state level
5.
Voluntary complaints mechanisms (OECD Guidelines)
6.
Networking (in home country of company & globally)
1a. Company advocacy – what is it?
• Meetings & writing directly with company staff & board
(even if low expectation, it needs to be done to create a
record of protest & to show you have tried engagement)
• Linking with campaign groups to bring pressure to bear on
the company (with letters & petitions)
• Linking with shareholder action groups, so actions can be
taken by shareholders at AGMs (including community
representatives attending)
1b. Company advocacy – how it works?
•
Re communicating with company, ensure you get right contact
(normally CEO). If meeting be careful to make it collective and
recorded. Also company lawyers will read communications, so
make sure it is facts-based to avoid SLAPP
•
Re linking with campaign and shareholder action groups you
ideally need a public company with a group already in the home
country of the company (or a network that can form one)
•
Activist (“dissident”) shareholder groups can then pass your
letters/complaints to the company, seek meetings with the
company as shareholders (more difficult to ignore), ask questions
& sort attendance at AGMs & finally force a shareholder resolution
at AGM (this is a big ask)
1c. Company advocacy – positive aspects
• Dealing with the company can have fast results as the
company is real decision-maker. They will understand the
risks to their reputation of problems (works better on bigger
companies – some juniors don’t have reputations to worry)
• It may be that head-office, board really do not know what is
happening on the ground, and may take on board
considerations of human rights violations. Also community
relations staff may provide leverage within the company
(especially at head office level)
• Shareholder action groups have direct access to company,
and as they, in theory, own it they should be listened to
1d. Company advocacy – negative aspects
• Company is unlikely to agree to demands willingly unless it
positively affects, or doesn’t affect, their bottom line. If a
community wants to say no to a project, that is a problem
• Governments often support corporations
• Any shareholder activists are likely to be in a real minority,
so difficult to persuade other shareholders (especially if
they see it as not in their interest)
• Questions at AGMs etc. are normally better for raising
publicity. It’s unlikely to change company policy. A
shareholder resolution is another method. But timeconsuming and difficult to do – it requires a minimum of
shareholder support
1e. Company advocacy – meeting examples
• Has anyone had any experience of approaching companies
directly?
• Does anyone know who runs the company, and where it is
based (not just the subsidiary but head office)?
• How would you approach the company, and who would you
approach?
1f. Company advocacy – previous examples
• Partizans – a shareholder dissident group of Rio Tinto has
been voicing protests at the AGM since 1980s. It has highlighted a number of issues, got good press coverage of
visiting community leaders and helped cause a drop in
company share prices at times
• Datu Victor Aying travelled to the BHP Billiton AGM in
London in October 2007. He also attended a meeting in UK
parliament, met other activists and NGOs, got press
coverage in UK & Philippines.
2a. Private finance – what is it?
• A campaign can target as many of those with equity
(shareholders) as practical
• It can also target those who are loaning the company
money – either generally or for the project specifically
• You can also target insurers and those investing in
subsidiaries and/or suppliers (e.g. boycott San Miguel beer
if they invest in mining)
• Work out the scope of your campaign or ambition – are you
trying to get people to disinvest or to influence the
company?
2b. Private financiers – how it works
Cornerhouse uses the following as a checklist before deciding on a
campaign to influence investors:
• Is the company publicly listed? Is it private, it will most likely not
have investors that can be identified.
• Is its finance from mainstream institutions such as banks, which
might be influenced?
• Is the project marginal on financial grounds?
• Is this the best option for influencing the project: are other
avenues closed or difficult?
• What is the level and type of financial institution involved? Will the
company be responsive to a campaign?
• What are the synergies with other kinds of campaigning?
• Can the organization’s resources be more effectively used
elsewhere?
2c. Private finance – positive aspects
• Investors can see it as in their interests to be informed of
your problems (in case they will lose money later if there
are social or environmental problems)
• There are a growing number of ethical investment funds (&
industry bodies), and supporting NGOs in different
countries who could be allies.
• There are often a great variety of different investors in a
project, so some headway can be made by copying in a
number of them
2d. Private finance – negative aspects
• In the end you will most likely have to make a business
case, even for ethical investors. They also care about their
bottom line (in UK it is argued pension funds are not all to
disinvest for moral reasons, only for financial reasons).
However, good business cases can often be made if the
project is clearly not wanted or legally sound)
• The work can be intensive, time-consuming and slow,
especially where there a large number of different investors
or types of investors (or where private capital, or the
company owners, are majority of shareholders)
2e. Private finance – meeting examples
• Has anyone had any experience of approaching investors
directly?
• Has anyone thought of how to approach investors?
• Would you seek to get backers to disinvest or to influence
the company while keeping their stake in it
2f. Private finance – previous examples
•
There were successful meetings with investors, and ethical
agencies, during the visit of Fr Edwin Gariguez and Ramil Baldo to
Norway over Intex. Subsequent campaigns have targeted a key
Norwegian investor, who has had to defend himself on national TV
•
There has been a huge and successful campaign to disinvest from
UK-based Vedanta, because of its activities in Orissa, India (on the
land of the Dongria Kondh). The Norwegian Pension Fund, Church
of England and others have publicly disinvested
•
The WGMP is working on a campaign targeting investors over the
indigenous right to Free, Prior and Informed Consent. A
coordinated plan has been drawn up to engage companies and
investors
3a. Public finance – what is it?
•
Multilateral investment banks include the World Bank (with its
private lending arm the International Finance Corporation or IFC),
the Asian Development Bank among others
•
The World Bank has a development role and huge influence, but
denies it has any human rights obligations. It has also rejected the
recommendations of a study it commissioned in 2002, the
Extractive Industries Review (EIR), including respecting FPIC
•
The IFC has “safeguards” (rules for investing in companies,
covering the environment and social issues), which industry is
using as a standard. They are currently being reviewed – there is a
big argument to get Bank to recognise human rights (& FPIC)
•
The IFC currently has no investment in mining in the Philippines
(although it has announced support for Mindoro Resources)
3b. Public finance – how it works
• As multi-lateral development banks use tax-payer’s money
to invest, supposedly to support development (alleviate
poverty), tax-payers should have a say.
• In the World Bank, money is donated mostly from Western
countries & ‘control’ of the bank is in the hands of
Government board members of those donor countries.
Citizens of those countries can lobby the bank
• The Bank has an ombudsman’s offices – for IFC & MIGA it
is the Compliance Advisor Ombudsman (CAO) http://www.cao-ombudsman.org/
3c. Public finance – positive aspects
• In theory as this is development money from tax-payers it
should not be used to make mines-affected communities
poorer and destroy the environment
• There are normally official bank complaints mechanisms –
like the CAO. The CAO is independent (reporting directly to
the Bank President), and has a clear & well-structured
complaints mechanism, but it initially tries negotiation.
However it will investigate and will say if the Bank is not in
compliance with its own guidelines
• If political risk insurance is used it can also bring in
concerned tax payers from the home country, and there are
many NGOs working on the multilateral development banks
3d. Public finance – negative aspects
• It is unlikely there will be multilateral bank financing or
political risk insurance in a given project. It tends to only be
given for the largest projects, and World Bank direct
involvement in larger projects is becoming less
• Even though the Banks have complaints mechanisms they
tend to be time-consuming, lengthy and without a great
deal of real sanction
• Government Export Credit Guarantee organisations have
no complaints mechanism & can be opaque in knowing to
whom you should complain
3e. Public finance – Meeting examples
• Has anyone had any experience of public financing or
government funding/subsidy for a project?
• How would you get more information on whether there is
public funding for a project?
• How would you then campaign on it?
3f. Public finance – previous examples
•
Indigenous peoples at Glamis Gold’s controversial Marlin Mine in
Guatemala got a review of health and environmental issues
through the CAO
•
At Newmont’s Yanacocha gold mine in Peru, the CAO intervened
over a mercury spill & also set up a round-table with communities
after a complaint over various conflict issues, especially access to
water
•
MIGA withdrew its political risk insurance for Freeport McMoRan’s
Grasberg mine in PNG after serious environmental & social issues
were raised (although by then the mine was so advanced the
company could continue)
4a. State legal action – what is it?
•
Apart from taking legal action in your own country you can
consider – if you have a suitable case - legal civil action against a
company in its home country
•
You could also consider legal action through a stock exchange it
is registered on (if it is potentially in breach of the rules of that
stock exchange)
•
Each home country’s jurisdiction will be different, so there may be
better or worse opportunities depending on the case you have, the
country & the level of support you can get
•
There may also be opportunities for using other international
courts (e.g. European Court of Human Rights)
4b. State legal action – how it works
• You will need good legal advice – both within your country
and the country where you want to take the action
• Generally you will need to prove why you are taking action
in the home country, and not your own. (This means
proving that you cannot get justice in your own country.
Very often this means you will need to have taken legal
action in your own country – which has stalled or failed
because of problems with the courts)
• Point
4c. State legal action – positive aspects
• Legal action, if won, can bring real punishments to a
company, and stop a project. A project could also be
ordered suspended while the court case continues
• It can be possible to get legal and financial support. There
are law firms who specialise in this type of activity (e.g.
Leigh Day in UK or EarthRights International in US) who
offer pro bono (free) advice
• There are opportunities through specific legislation like the
US Alien Claims Tort Act (ACTA) to follow human rights
cases nationally
4d. State legal action – negative aspects
•
Cases tend to be very serious, and need to be well documented.
They can only be taken once the ‘crime’ has happened
•
There are many legal obstacles to pursuing a case, and various
objections could be placed in your way. You may need to ‘pierce
the corporate veil’ (prove that a parent company is responsible for
local issues). Also, much of the law in this area is un-tested
•
It can be a very long process, with potentially many stages and
appeals. Even if a case is winnable it may be possible to lose the
case to get costs covered (which would stop the case)
4e. State legal action – meeting examples
• Has anyone had any experience of legal action (ideally
overseas, but also in the Philippines)?
• What opportunities are there for legal action?
• How would you go about getting advice on overseas legal
action?
4f. State legal action – previous examples
• In 1997, 13 Burmese villagers filed a suit against Unocal
under ACTA over forced labour on building a pipeline. The
case was settled in 2004
• In 2009, 3 Ecuadorian indigenous peoples filed a suit
against the Toronto Stock Exchange for violence committed
by Ascendent Copper’s security guards. It is currently
under appeal
• In 1997, a suit was filed by mine workers against the Cape
Asbestos company in South Africa over asbestos
poisoning, and in 2000 were allowed to get legal aid in UK.
The case was settled before it came to court
5a. Voluntary complaints – what is it?
•
There have been a large number of voluntary mechanisms
brought in. They include…
•
UN Global Compact, set up in 2000, and sets out principles that
signed-up corporations are asked to abide by voluntarily – it has
no mandate or resources to conduct investigations
•
Equator principles are used by the Equator Banks as a voluntary
mechanism for investment, following IFC safeguards – it also has
no complaints mechanism
•
Main one we will concentrate on are OECD Guidelines on
Multinational Enterprises
5b. Voluntary complaints – what is it?
• OECD Guidelines on Multinational Enterprises were
adopted in 1976 as one part of the OECD Declaration on
International Investment and Multinational Enterprises
• All 29 OECD member countries have endorsed the revised
Guidelines (2000) and more importantly enhanced
implementation procedures
• The Guidelines are one of the few voluntary mechanisms
that make reference to the Universal Declaration of Human
Rights – so human rights complaints can be made (as well
as ones on the environment, bribery and others). They will
hear complaints from non-OECD complainants about home
country companies
5c. Voluntary complaints – how it works
• Each country has their own mechanism for implementing
the OECD Guidelines. This is done by a National Contact
Point (NCP)
• The NCPs live inside a relevant government department.
Different countries have different levels of implementation
and track records with regard to cases
• There is an agreed general process, with more guidelines
from the relevant NCP. The guidelines and more information
is available from
http://www.oecd.org/daf/investment/guidelines
5d. Voluntary complaints – positive aspects
• There is a clear mechanism for complaints, often
(depending on NCP) with set time-limits for responses to
ensure it can’t be stalled. It is meant to be easy, and does
not need involvement of lawyers (although advice is good!)
• It allows for human rights-based complaints, among others
• There are a large number of groups with experience of, and
supporting, complaints. There is an international group,
OECD Watch, who can offer advice (& make critiques of the
Guidelines themselves)
5e. Voluntary complaints – negative aspects
•
It is a voluntary mechanism. Companies do not have to engage,
and if they don’t the worst that will happen is a public sanction (as
happened to Vedanta in UK)
•
The purpose of it is to reach resolution. The NCP will often try to
arrange negotiation first, and only where it is clearly not possible
will they move towards making public statements or
recommendations
•
Especially where there is no time limit it can be a long and drawn
out process, involving much written input
•
Much of the complaints will be in writing, and where possible need
written evidence & affidavits, so the NCP can as best as possible
verify there is a genuine complaint from afar
5f. Voluntary complaints – meeting
examples
• Has anyone had any experience of a voluntary complaints
mechanism?
• What aspects of your case could you make a complaint
about?
• How would you then campaign on it?
5g. Voluntary complaints – previous
examples
• The main Philippine case is over Intex Resources’ planned
nickel mine on Mindoro.
• A complaint was jointly filed with the Norwegian NCP by a
Norwegian NGO called Future in Our Hands, ALAMIN &
PIPLinks in January 2009
• There have been numerous rounds of responses to the
complaint, two investigations by the embassy and a
meeting with the NCP in Oslo. The NCP has taken up the
complaint, and is sending an independent team to
investigate. At present it is still on-going.
6a. Networking – what is it?
• It is crucial for any international work that you create and
maintain good relations with overseas campaigners. This
can be with individual groups, but can often most
effectively be done with networks
• International networks are growing & strengthening – on
companies (e.g. Barrick, BHP Billiton, Xstrata…) and across
the industry – Mines & Communities, FoE Mining
Campaign, Extractives and Indigenous Peoples Network
• They exist to share information and experience (to make
more informed decisions, and more effectively campaign),
and to jointly lobby on key concerns. Links can be made
between the local, national and international.
6b. Networking – how it works
• The Internet has greatly increased the power of networking,
as especially as it can now reach directly to communities.
Most materials are now posted on websites, shared via
email lists and meetings held with the likes of Skype
• More materials are being produced – and attempts made to
summarise / bring together different resources and handbooks on websites
• Joint campaigns are being agreed, such as the planned
Month of Mining Action, ideally in May 2011. These can be
used to highlight local cases
6c. Networking – positive aspects
•
Good networking can dramatically increase the publicity around
your campaign. This can build both support nationally, as well as
in the home country of the company, and then ideally with
company investors
•
Networks can be excellent places to learn more about issues
around mining, a specific company and/or lobbying processes
•
Networking should be as much about sharing experience between
mines-affected communities as gaining information from ‘experts’
•
Networks can gain access to other necessities, such as grant
funders, technical or legal experts and legislators from home
countries
6d. Networking – negative aspects
•
Networking, if done correctly, can be very time consuming, and
international networking very often needs access to the Internet,
good language skills and dedicated campaigners in the
community (who run the risk of jealousy or being separated from
the community)
•
Networks can be very broad and made up of groups with different
perspectives or politics. There can be differences of level of ‘antimining’ feelings and many work with or are miners themselves
(notably small-scale miners). This can lead to real tensions.
•
Many Western NGOs, especially environment organisations have
their own agendas, and can over-ride the needs of communities
(or speak for them without permission). Mining companies work to
separate critics out by ‘divide and rule’
6e. Networking – meeting examples
• What experiences have you had with national and
international mining networking?
• When has it been successful and why?
• What are the tensions you’ve faced in mining networks &
how have you overcome them?
6f. Networking – previous examples
•
The Mines & Communities network (MAC) is made up over over 30
editors from 17 countries, and runs the website
www.minesandcommunities.org. Set up in 2001, it has set out its
community-centred manifesto in the London Declaration (revised
in 2007)
•
Partizans has been campaigning since 1978 against Rio Tinto, and
has linked with groups across the world pioneering the practice of
enabling community representatives to challenge companies at
AGMs (more than 100 reps have been at Rio Tinto AGMs since
1981)
•
FoE International’s mining campaign is working with other
networks on a Mining Month of Action, to coincide with the UN
Commission on Sustainable Development talking of ‘sustainable
mining’
End thought
• “the [US] district courts shall have original
jurisdiction of any civil action by an alien
[foreigner] for a tort [wrongful act] only,
committed in violation of the law of nations or a
treaty of the United States”
- Alien Claims Tort Act 1789