Shareholders, NGOs say company’s flawed community engagement poses risks to reputation and bottom line
April 25th -Washington, DC: At Newmont Mining Co.’s annual general meeting yesterday, faith-based shareholders and DC-based NGO Earthworks urged the company to improve the way it engages with communities, and to provide greater transparency to shareholders and the public. The groups noted that the company’s failure to adequately inform and consult with local communities has resulted in strong community opposition and the suspension of the Conga mine project in northern Peru, costing the company – by its own estimation – hundreds of millions dollars in losses so far.
At the Wilmington, Delaware meeting, the groups urged Newmont to seek the Free, Prior and Informed Consent of local communities in which it operates, to publish reports and updates more frequently, and to conduct human rights impact assessments of its operations.
“The costs of doing ‘business as usual’ are unacceptable to communities – and hurt Newmont’s bottom line and reputation as well,” said Earthworks’ No Dirty Gold campaign director, Payal Sampat. “Newmont simply cannot afford to mine without the consent of local communities impacted by its projects.”
“As one of the world’s largest gold mining companies. Newmont must demonstrate its leadership by adopting a free, prior and informed consent process that is implemented through independent and credible means,” she added.
At the Minas Conga mine in the northern Cajamarca region of Peru, community groups have voiced opposition to the project due to the quantity of water used and the potential for water pollution in the fragile watershed area. Construction has been halted since November 2011 in response to ongoing protests and conflicts, including a shooting incident by the Peruvian National Police that led to a national state of emergency. Newmont announced it will spend approximately $150 million at Conga in 2013, including on reservoirs to replace water supplies that the mine would destroy.
In December 2012, Newmont released an independent study it had commissioned from Queensland University’s Centre for Social Responsibility in Mining to gauge community attitudes and perceptions of the company in Cajamarca province, Peru. The study concluded that stakeholders in the region felt that the company “suffers from an inability to listen effectively to the community.” Newmont made those findings public, stating: “We are not proud of the current state of our relationship with the people of Cajamarca. We want to take this opportunity to acknowledge the mistakes we have made in how we have conducted ourselves and conducted business.”
This is not the first time Newmont’s community relationships and engagement have been called into question. In 2007, in response to a shareholder proposal filed by members of The Interfaith Center on Corporate Responsibility (ICCR), Newmont agreed to conduct a global review of its policies and practices related to community opposition to its mining operations. In May 2009, the “Community Relationships Summary Report” was released that included an extensive review of recommendations to improve Newmont’s policies and practices relating to its relationships with local communities. According to the company’s website, the findings revealed that Newmont “must improve its relationships with local communities; build its capacity to resolve conflict and address grievances; and develop global policies, standards and programs that better guide its behaviors.”
Earthworks’ Payal Sampat attended the shareholders’ meeting representing Newmont stockholder Missionary Oblates of Mary Immaculate. Also in attendance were representatives of other faith-based Newmont stockholders, including Christian Brothers Investment Services, Maryknoll Sisters, Mercy Investment Services, Inc., and Tri-State Coalition for Responsible Investment.
Earthworks is dedicated to protecting communities and the environment from the impacts of irresponsible mineral and energy development while seeking sustainable solutions.