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Swiss mining transnational Glencore in the Andes

The mining giant's activities in Latin America and how they demonstrate the need for a binding instrument on Business and Human Rights

In June 2020, a statement signed by more than 200 organizations around the world publicly denounced transnational mining companies for ignoring the threat of the Covid19 pandemic and continuing to operate normally. The communiqué, based on extensive research, also revealed how many governments were taking extraordinary steps to suppress protests in mining contexts, as well as how companies and governments were taking advantage of the crisis to establish new regulations for industry.

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Transnational mining in Espinar - Structural problems and the presence of Glencore
Just as transnational mining didn’t go into quarantine, neither did the conflicts inherent to it. One of the companies that made the most news during the pandemic was the Swiss mining transnational Glencore. Some of the most important of these developments regarding Glencore’s operations and interests in South America include the mining of coal in Colombia and new international actions about this; high levels of conflict at Glencore operations; repression, human rights violations and children with metals in their blood in Peru; and outsourcing, child and labor, and a million-dollar lawsuit under an Investor-State Dispute Arbitration (ISDS) case in Bolivia.

Glencore is one of the world’s largest transnational dedicated to the production and marketing of raw materials. It has mining operations in more than 50 countries and its revenues in 2019 exceeded $215 billion – five times more than Bolivia’s GDP, 95% of Peruvian GDP and two-thirds of Colombia’s GDP for that year. The company is seeking to jump on the bandwagon of the energy transition: limiting coal extraction and focusing on transition minerals (e.g. for renewables infrastructure) – although without changing its damaging practices on the ground.

While extensive documentation exists, along with complaints in national courts and international efforts to ensure that Glencore assumes responsibility for its impacts, the landscape in the territories does not seem to have changed much. For this reason it is necessary to support the push for mechanisms that can force transnationals such as Glencore to have full accountability for their activities. Through the voices of the stakeholders involved, we share here the key points from before and after a popular consultation on the Initiative on Corporate Responsibility carried out in Switzerland in November 2020, as well as an update on the negotiation process at the UN for a Binding Treaty on Business and Human Rights.

International complaints about coal mining in Colombia 

In Colombia Glencore has interests related to the exploitation, transport and export of thermal coal, mainly to markets in Europe, Asia and countries on the American continent. In La Guajira, it is a shareholder in Latin America’s largest open-pit coal mine El Cerrejón,  a Joint  Venture  whose shareholding package is split equally with other mining giants Anglo American and BHP. The exclusive marketer of Cerrejón coal worldwide is the Dublin-based CMC (Coal Marketing Company) owned by the same three corporations.

Debris and waste from the Cerrejón mine forms giant mountains. Credit: TerraJusta

The environmental, social and cultural impacts of coal mining have been widely documented in Colombia. More than 25 Wayúu and Afro-descendant indigenous communities have been dispossessed and displaced by force from their ancestral territories. In this region, where water is the most valuable asset, more than 20 streams have dried up or been diverted. This includes the Bruno Creek, a major tributary of the Ranchería River, on which several communities depend to survive.

Open pit exploitation by blasting with explosives generates polluting particle emissions, noises and odours that affect the health of communities. They impact as well on the cultural development of Wayúu communities, because they destroy the modes of organization and way of life of their inhabitants. Spiritual damage has been done through the desecration of sacred territories, even disturbing the dreams of spiritual physicians who can no longer guide their communities as a result.

In addition to the systematic violation of the rights of communities and environmental degradation, communities and organizations in La Guajira suffer constant death threats for defending their territory. This is a huge concern, considering that Colombia is one of the most dangerous countries in which to be a defender. 64 community and social leaders were killed in 2019 according to reports from Global Witness, while Front Line Defenders affirms that of the 177 Human Rights defenders murdered in Colombia in 2020, two thirds were leaders who work in the defense of land, the environment and the rights of indigenous peoples.

Over the years, various organizations have denounced these impacts in national courts and in different human rights forums at national and international levels. Nonetheless the situation doesn’t seem to have changed much. That’s why in January 2021 organizations in Colombia and beyond carried out new actions internationally. They filed formal complaints with the Organisation for Economic Co-operation and Development (OECD), to which Switzerland and most rich countries in the global North are party. The OECD has Guidelines for Multinational Enterprises, which are voluntary recommendations to multinational companies to adopt responsible business conduct at the international level.

Cerrejón thermal coal sample. Credit: TerraJusta

In a joint statement, the organizations list the targets of their complaints: ESB (Electricity  Supply  Board) – an Irish state-owned company that buys coal from Cerrejón; the Dublin-based Coal Marketing Company (CMC); and BHP, Anglo American and Glencore, as the owners of Cerrejón. The complaints to the OECD denounce the impacts on the environment and human rights that communities in La Guajira have historically suffered as a product of Cerrejón’s coal activity. The aim is for companies based in Ireland to suspend their business relations with Cerrejón, and for the three transnational companies that own the mine to acknowledge their responsibility for these impacts, in order to seek redress.

The communiqué also warns of the parent companies’ announcements regarding putting their shares up for sale. “An assessment of both corporate conduct and the environmental and social liabilities left by these companies before their departure from the country needs to be made to avoid consolidating scenarios of corporate impunity,” the statement states. This comes a few months after the UN Special Rapporteur on Human Rights and the Environment appealed to Colombia and the company to protect the communities affected by Cerrejón, particularly during the pandemic.

In Colombia, Glencore also controls the business group Prodeco, which owns coal mines and associated infrastructure in the Cesar and Magdalena departments. Prodeco has five mining titles across two mines in Cesar, La Jagua and Calenturitas. In February, Prodeco announced they were returning their mining contracts to the Colombian government and halting operations in the country, due to the low price of coal making their operations “economically unviable”. This has raised the alert for several national organizations, because there is no “progressive closure plan respectful of international standards, based on rights and guarantors of a just transition”. In a public statement, the organizations said that, after almost 30 years of exploiting and taking advantage of the Calenturitas and La Jagua coal mines by Glencore, Colombia “runs the risk that this company will leave without having presented a mine closure plan –  as is mandatory – and without solving the social and environmental problems that it generated over time, as has been denounced by communities and organizations for years”.

Conflict, human rights violations, and metals in the blood of Peruvian children  

In Peru Glencore holds several interests. One of its most important projects – because of its size and the conflict it has generated – is undoubtedly the Antapaccay mining operation located in the province of Espinar, in Cusco. This mine produced a total of 205,414 fine metric tons of copper in 2018, plus 44,306 fine kilograms of silver and more than 4.1 million grams of fine gold. Its sales in 2016 exceeded $1 billion, making it a very profitable operation for Glencore.

View of the open pit mine the town around it in Cerro de Pasco. Google Earth

Mining activity in Espinar began more than three decades ago, and the province still suffers from many basic deficiencies. Over this time, a number of conflicts have arisen due to reports of contamination of water, air and soil sources around the mining zone. Over the years several studies have been carried out by both national authorities and civil society organizations which have demonstrated environmental pollution associated with mining activity. Testing of the local population has also shown the excessive presence of toxic metals in the blood of dozens of men, women and children in rural communities in the area.

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A Giant in Espinar - Glencore and the patterns of corporate power in the South of Peru
An important detail regarding the conflict in Espinar is the existence of a “framework agreement” between the company and the municipality, whereby 3% of the profits from mining activity are destined for the development of the province. Since its inception, organizations have unsuccessfully demanded the amendment of this Agreement so that the province has autonomy over the management of these resources, which are currently managed by the company.

For years communities and social organizations have demanded full attention to their demands from the State and governments of the day. However, State and company apathy have led to high-intensity conflicts, notably in 2012 and 2020. In 2012 the population mobilized and was violently repressed by the police, resulting in the deaths of four people, dozens of injuries and several arbitrary arrests. Subsequent complaints and investigations demonstrated the existence of a secret protection agreement between the police and the mining company, whereby the company provided resources and logistical support during police interventions in exchange for the protection of its facilities. Moreover, as a result of these conflicts protest has been criminalized and unfair prosecutions have taken place against social leaders in the provinces.

The latest conflicts in Espinar occurred between July and August 2020. The population called attention to their demands over health and the environment, but also regarding a one-time payment of 1000 Soles (approx $265) from the resources of the “framework agreement” to meet increased needs resulting from the economic impact of the covid pandemic. Faced with the company’s refusal, the population was mobilized and brutally repressed by police. In August of that year, the National Coordinator of Human Rights in Peru published an extensive report in which they denounced the violation of human rights, mistreatment and torture of the population. The report also urges Glencore to assume its responsibilities, but the company denies responsibility for such events.

Protest in Espinar in 2012. Credit: Miguel Gutierrez

The conflict in Espinar remains dormant, since the government does not meet the demands of the population in a timely and comprehensive manner. In addition, Glencore has expansion plans through its new “Coroccohuayco” project – which has not been adequately consulted on with local communities and which would involve 25 more years of mining and potential conflicts.

Espinar is not the only province where impacts from Glencore-related mining operations are reported. In November 2020, the Peruvian research outlet Ojo Público published a report entitled: “The lead poisoned children of Cerro de Pasco expect justice“, based on a field investigation in the town of Cerro de Pasco where the company Volcán operates – a company controlled by Glencore which extracts zinc, lead, silver and copper, and which has been fined many times for its environmental violations. This report reveals the presence of high levels of lead in the blood of children, along with anemia, learning problems, headaches, nosebleeds and even leukemia. The affected families hold the company Volcán responsible for these damages. According to the German outlet Deutsche Welle (DW), up to 2018 around 3,000 cases of children affected with up to 14 heavy metals in the blood have been registered. The company denies any responsibility, claiming that it is a matter for the Peruvian state.

Child labour, pollution and a million-dollar ISDS lawsuit against Bolivia 

In Bolivia Glencore has a particularly interesting history. The transnational has interests not only in disputed operations under its control, but also in a million-dollar international lawsuit against the Bolivian State under the Investor State Dispute Settlement system (ISDS).

Glencore’s operations in Bolivia are carried out through the mining companies Sinchi Wayra and Illapa (the first is a holding company that owns the second). Together they control tin, zinc, silver and lead mining operations in the Oruro and Potosí departments.

Miner inside the Porco mine. Credit: Christian Lombardi, PublicEye

An important detail in Bolivia is the existence of so-called “mining cooperatives”, a form of mineworkers’ societies with legal permission to exploit mining resources, often with little oversight by the State. The point being that Glencore is legally allowed to sign contracts with mining cooperatives to work on its operations. It is a setup that has been classed as one-sided in serious research, due to how it frees Glencore from its labour and environmental responsibilities, which are outsourced to the mining cooperatives.

To exemplify the problems that arise around this way of working, we have to travel in our imaginations to the Porco mine in Potosí, an operation under Illapa’s control. In November 2020 Swiss media outlet Public Eye published an article based on field research at this centuries-old mine, titled “We’ve simply been forgotten“. In the note the author describes the precarious and risky way in which mining cooperatives extract zinc, lead and silver. Some of the extracted ore is subsequently sold to Glencore. It is known that this operation often employs child and  teenager labour. Glencore for its part has only said that the purchase agreements between its subsidiary and the cooperatives are subject to a due diligence requirement that includes safety and the risk of child labor.

Bolivian paper Página Siete also reported on the matter in January 2021, saying “Child labour is an open secret in the Potosí mining region”. The report states that, working without protection, even 11-year-olds have suffered work accidents.

According to Public Eye Illapa, which employs around 400 workers, initially uses machinery to extract minerals. However when that is no longer profitable the cooperatives – employing around 3000 workers – enter to extract the ore manually, often at their own risk, without work or life insurance. The report notes that accidents at the mine are very common, especially when mineral prices are good meaning more workers come to the mines. The balance over the last four years is 20 mineworkers killed on average each year, including some minors. Glencore denies any responsibility for the matter and asserts that its operations are subject to the law – something which, according to the reports cited, is not upheld at the Porco mine.

Río Agua Castilla in Porco. Credit: Christian Lombardi, PublicEye

In addition to labour affairs, this mine may also be polluting the Agua Castilla river, affecting agricultural production in the area. Public Eye’s report notes that laboratory samples taken from the river confirm excessive amounts of zinc, iron and manganese in the water, which exceed by up to 6, 28 and 50 times the permitted legal limits. This level of metals in the water can cause a range of health conditions for people consuming it including damage to vital organs and cognitive problems.

A March 2021 publication revealed that Glencore could be considering selling several of its assets in South America, including Sinchi Wayra and Illapa. There is no confirmation from the company.

From the Porco mine we travel to the Permanent Court of Arbitration (PCA) in The Hague, where Glencore is pursuing an Investor-State Dispute Settlement (ISDS) case against Bolivia. The lawsuit was filed in 2016 for the reversal of two assets owned by Sinchi  Wayra: the metallurgical company of Vinto (2007) and the Colquiri Mining Project  (2012). Glencore argues that this represents a violation of the Bolivia-UK Bilateral Investment Protection Treaty (BIT), for which it originally demanded compensation of $675 million – although some media reports suggest the amount could have risen to more like $778 million, approximately a quarter of the 2021 budget for health in the country, according to official figures.

In April 2020 the Bolivian government requested the CPA to suspend proceedings, explaining that the defence could not be prepared due to the pandemic. However the CPA refused the request. The Bolivian case was picked up in an open letter signed by more than 650 organizations around the world, as an example that it was necessary to “suspend all ISDS cases on any issue against any government while fighting against Covid-19 crisis”, in order that states could focus their efforts on pandemic response.

Just Transition, Corporate Responsibility and the Swiss Initiative 

Glencore has already said it wants to limit coal extraction to reduce its carbon emissions, supposedly due to the growing international pressure over the climate crisis. The company is looking to get on the energy transition bandwagon. In February 2021, its outgoing CEO, Ivan Glasenberg, said that copper demand will double to reach 60 million tons per year by 2050.  It also sees a good future for zinc, nickel and cobalt – all metals needed for transition infrastructure and manufacturing, and which Glencore already produces in significant quantities. But a just transition means respecting human rights, the rights of communities and the environment in the territories from which the minerals are extracted. Moreover, a transition is required that not only seeks to change the energy matrix, but also questions and rethinks the model of excessive production and consumption that underlies the ecological crisis, and which requires structural solutions. Otherwise the so-called transition is just a good business deal – and in Glencore’s case, the company’s behaviour on the ground says it all.

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INTERVIEW: Efforts in Switzerland to hold Transnational Corporations accountable
Over many years, dozens of reports and field investigations have been published on human rights violations, environmental impacts and damage to health related to Glencore’s operations. Many of these complaints have even reached national courts and international bodies that have ruled in their favour. However it has not been enough, which is why there has been a push for the construction of binding regulations at national and international level, to force companies like Glencore to be effectively responsible. One such is the Responsible Business Initiative, brought to a referendum in November 2020 in Switzerland.

In an interview with TerraJusta, Swiss activist Stephan Suhner, member of the Swiss-Colombian Working Group  Ask!, told us that “civil society organizations in Switzerland had been observing for several years what the Swiss government was doing in relation to business and human rights”. Obtaining no answers, it was decided to promote an initiative which, through “due diligence” measures, forces Swiss companies to identify, prevent and be held accountable for the potential risks of human rights violations and negative environmental impacts that their activities may cause. Although the authorities called for a “No” in the referendum, 50.3% of voters said “Yes”. However, 17 of the 26 Cantons [Swiss regions] voted for No and so the Initiative was rejected, because to approve any initiative in Switzerland a double majority is required: both of the population through the popular vote, and from the Cantons that make up the country.

Not all is lost however, as a counter-proposal is emerging in the Swiss parliament which, although with many limitations, can provide some opportunities to monitor companies like Glencore. There are also other initiatives on businesses and human rights that can be worked on, as in the case of the Binding Treaty on Business and Human Rights being negotiated at the UN. Suhner  points out that Switzerland has been a bit passive in relation to this process, and there is no negotiating mandate from the Swiss government. “So one idea is to demand that Switzerland be more closely linked to this treaty in order to push it forwards…to pressure the government for a negotiating mandate,” said the activist.

The Binding Treaty on Business and Human Rights – where is it currently at?

We know very well that Glencore-related cases in Colombia, Peru and Bolivia are just a few examples of what Glencore does in the world – and at the same time, what Glencore does is just one example of what corporations do around the world. All this makes it necessary that binding instruments on business and human rights continue to be developed, so that communities which resist and denounce transnationals like Glencore have protection mechanisms and an effective international path to access justice and reparations.

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INTERVIEW: For a Binding Treaty on TNCs and Human Rights
In June 2014, the United Nations Human Rights Council adopted resolution 26/9 for the development of a legally binding international instrument for transnational companies in relation to human rights. The objective of the Binding Treaty is to help put an end to impunity and abuses committed by transnational companies in territories mainly in the Global South.

In 2021 the Treaty entered its seventh year of negotiations. In an interview with TerraJusta, activist Raffaele Morgantini – representative of the Swiss organization CETIM and the Global Campaign to Dismantle Corporate Power at the UN – said the main challenge today is to develop the content of the Treaty so that it really helps meet the goals for which it was driven.

Morgantini notes that while attempts to slow down the process have now stopped, there is currently on the negotiating table “a draft Treaty whose content accommodates the proposals and interests of the lobbies of transnationals and their political partners”, EU countries, the US etc. The activist emphasizes the need to build a Treaty that helps “regulate activities and sanction transnationals when they violate human rights.” If not it would be a “toothless” Treaty.

One of the problems with the current draft has to do with its scope, since it would now focus not only on transnational corporations, but on all kinds of companies – large and small, public and private. “A Treaty was sought which focused on transnational corporations – who are the largest source of human rights violations internationally – and not on just any kind of business. Now we have a more general treaty, which can hardly be effective given that it could not deal with all the violations of all commercial companies around the world,”  Morgantini says.

“Another fundamental element is that the current draft of the Treaty does not foresee direct obligations on transnationals, but only obligations on States.” This is problematic according to Morgantini, because companies are often richer and more powerful than the States themselves (for example, Glencore’s income for 2019 exceeded $215 billion, a figure much higher than Bolivia’s GDP, and a significant percentage of the GDP of Peru and Colombia). Or because there is not enough political will or technical capacity to regulate transnational companies; or finally because transnationals can easily escape the jurisdiction of the States or incur commercial blackmail, etc. “Due to all this we have to establish direct obligations to respect human rights on transnational corporations. And if they don’t, it is necessary to have binding legal mechanisms to prosecute and punish transnationals that violate their human rights obligations. ” As such, “the Global Campaign proposes the creation of an International Court on transnational companies, where states and civil society organizations can present complaints over their human rights violations.”

Morgantini points out that the Campaign’s task this year is to continue working on the content and lobbying battle to secure more allied countries in the UN. “We need to strike a balance between the need to go fast – because affected communities need that treaty – but at the same time make sure that the content of the Treaty is consistent and can really help communities in the territories.”