The new Australasian Centre for Corporate Responsibility (ACCR), the Canberra-based shareholder engagement and advocacy body set up in 2013, has filed two resolutions at a Papua New Guinea mine operator that is controlled by extractives giant Rio Tinto.
It comes amid indications that the company – Bougainville Copper Ltd. (BCL), an Australian listed, Port Moresby-based company that is 53.58%-owned by Rio Tinto – could re-open its Panguna mine in the east of the country that was closed due to civil conflict in 1989.
The ACCR, which takes inspiration from the Interfaith Centre on Corporate Responsibility in the US and the UK’s Ecumenical Council for Corporate Responsibility, wants BCL to join corporate citizenship initiatives, remediate environmental damage and ensure ‘free, prior and informed consent’ before the mine re-opens. The company’s annual general meeting is likely to take place in April.
Until its closure Panguna – which is now under the jurisdiction of the new Autonomous Bougainville Government, which backs the re-opening – was one of the largest open-pit copper and gold mines in the world.
The Grasberg mine in neighbouring Papua, Indonesia, in which Rio Tinto is a partner with Freeport McMoRan Copper & Gold, is notorious for alleged environmental and human rights issues. It has led to Freeport being excluded by investors such as Sweden’s multi-billion-euro state AP funds, the New Zealand Superannuation Fund and the Norwegian Government Pension Fund. Rio Tinto itself is excluded by the Norwegian giant.
Alongside Rio Tinto, the Papua New Guinea government has a 19.06% stake in BCL while public shareholders hold the remaining 27.36%.The mine was economically important to the PNG economy but it faced accusations of environmental damage, including claims that it poisoned the Jaba River. A study in 2010 by Ulster University Lecturer Kristian Lasslet examined the company’s role at the time of the conflict.
BCL, where former PNG Prime Minister Rabbie Namaliu is a non-executive director, said this week that it is committed to undertaking remediation and rehabilitation studies and implementing environmental programs “regardless of the future operation” of Panguna. One area of potential rehabilitation was the historical tailings deposits that remain in the Jaba basin.
Company Chairman Peter Taylor, in his 2013 AGM statement, revealed the firm had undertaken an “order of magnitude study” into the possible re-opening of the site, though the plan was “very dependent on robust long-term metal prices”.
Other factors are an ongoing tax dispute with the PNG authorities and litigation involving Bougainville plaintiffs in US Federal Court that was “not helpful in attracting investors”.
The ACCR, launched in May last year, sees the many large shareholders who have signed up to the Principles for Responsible Investment (PRI) as its “natural allies”.
Among the figures behind the new body is Howard Pender, the co-founder of ethical investment specialist Australian Ethical Investment who sits on the board at ESG research house Corporate Analysis Enhanced Responsibility (CAER). “Anybody can put their money where their mouth is, we help investors put their mouth where their money is,” the ACCR says.