Tag: Glencore

British firms linked to severe human rights abuses

Hundreds of British firms operating abroad may be implicated in severe human rights abuses such as modern slavery, poverty-level wages, beatings, killings and environmental damage, an international NGO warns.

The NGO probed one such British firm, Glencore, regarding its conduct in the Democratic Republic of the Congo (DRC).

A report released by the Business and Human Rights Resource Centre on Wednesday found that British businesses impact heavily on communities and individuals around the globe.

The NGO’s research suggests UK firms are linked to human rights scandals worldwide, many of which occur in developing nations.

This improper conduct is compounded by “critical weaknesses” in UK regulation that leave victims in foreign states defenseless against firms’ “negligent or reckless” practices, the research found.

Out of sight, out of mind?
The Resource Centre monitors the human rights impacts of more than 6,000 firms in over 180 states. When human rights concerns are raised by civilians, it approaches the firms in question and sounds them out.

Since 2005, the Resource Centre has contacted 303 UK-based firms across the world about allegations of human rights violations.

The NGO’s report says the majority of these allegations center on UK firms’ practices abroad, particularly in the Global South. Its research uncovered “critical weaknesses in UK Government policy and action on business and human rights.”

While firms’ conduct in Britain is regulated, improper practices of UK companies operating abroad regularly “go unpunished,” the NGO said.

The Resource Centre warned that victims of “corporate abuse” face diminished access to justice in Britain, particularly since the coalition government introduced the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

The NGO’s report said UK firms operating within the extractive industry require particularly “urgent attention.”

“Allegations against extractive companies were 47 percent of the total against UK companies,” it said. The NGO probed Glencore in the Democratic Republic of the Congo (DRC).

“While London has become a global hub for mining and extractive industries, these companies are often implicated in some of the most egregious allegations of human rights abuses, including displacements, killings, and large-scale pollution.”

Among the charges leveled at the firm were claims it had contaminated local communities’ water supplies, and was linked to brutal beatings and killings by police.

Glencore insisted it “is committed to upholding human rights,” and refuted allegations that it “manipulates DRC regulation to suit its interests.”

The Resource Centre’s report also uncovered UK firms’ links to allegations of labor rights abuses, particularly within the fashion industry. Allegations of modern slavery also surfaced in its study.

“UK companies are linked to allegations of labor rights abuses and modern slavery, particularly through complex global supply chains,” the report said.

“Among non-extractive companies, these issues emerged as the key area of concern, particularly for apparel companies.”

“Allegations [also] linked UK companies to forced labor, union busting, poverty wages, and workplace deaths – like the Rana Plaza factory collapse that took the lives of 1,129 workers in 2013,” it added.

The Resource Centre’s report called upon the next government to encourage and compel British companies to respect their staff’s basic human rights, and ensure abuses are met with accountability.

Economic Relations Programme Director Peter Frankental of Amnesty International UK, said the message of the Resource Center’s report is clear.

“When it comes to respecting human rights, businesses need to raise their game and the government needs to hold them accountable when they don’t.”

Phil Bloomer, director of the Resource Centre, said UK businesses severely impact upon communities worldwide.

“As a leading economy our companies should be setting the standard for corporate conduct on human rights, not being implicated in everything from poverty wages to beatings and killings,” he said.

“The next government must encourage and push companies to respect human rights and ensure abuses do not go unpunished.”

Glencore accused of funding Colombian terrorist group

Glencore, the largest mining company listed on the JSE and headed by South African Ivan Glasenberg, has been accused in a new 245-page report of mining and exporting “blood coal” from Colombia.

The report, “The Dark Side of Coal”,  published by Dutch nongovernmental organisation PAX in Germany last week, says that Glencore’s Colombian arm, Prodeco, secretly supported the right-wing United Self-Defense Forces of Colombia (known by the Spanish acronym AUC) during that country’s bloody civil war.

The AUC was listed by the US State Department as a terrorist organisation in 2005 and demobilised in 2006 after peace negotiations with the Colombian government. Colombia has not resolved its problems yet and the government is still negotiating with left-wing FARC guerrillas in Cuba.

Although the accusations against Glencore date back more than a decade, the report is likely to heighten scrutiny of the way it operates in some of its coal markets.

It has faced claims of tax dodging in Zambia and the Democratic Republic of Congo and of selling materials to Iran for its nuclear programme.

In South Africa, communities who live on its coal mines in Belfast, Mpumalanga, accused Glencore of trampling their rights to blast for new mines in March. Glencore, which is South Africa’s largest exporter of coal, has denied all these claims.

In the Colombian case, Glencore is said to have supported the AUC to counter kidnappings and attacks on infrastructure conducted by left-wing guerrilla groups FARC and the ELN.

The new Colombian accusations are based largely on the testimony of José del Carmen Gelvez Alvarracín, known as “El Canoso”,  who was first hired as an intelligence agent by the Colombian army and then became a defence contractor for Glencore’s security department in 1996, before joining the AUC in 2003.

Gelvez described meetings that took place since 1996 between the AUC and Glencore’s security department head, Manuel Gutiérrez.

He testified that he and Glencore’s managers, Manuel Gutiérrez and Luis Ochoa, “drove in a pick-up truck to a farm named La Ucrania …

“On entering, we saw approximately 30 people dressed in camouflage, who introduced us to the commander who went by the alias Lucho,” says the PAX report.

“Manuel Gutiérrez, as head of the security department, spoke on behalf of the company, Prodeco, about providing this group of the AUC with whatever support it might need.

“It was clear that there was a direct link between the company and the AUC.”

Glencore has criticised the report for being one-sided and uncritical in terms of evaluating the testimonies of former paramilitaries.

The company said it had contacted the human rights organisations involved in March, when the report was being written, but PAX did not include its objections in the final draft.

Last month, Glencore’s head of sustainability, Dr Michael Fahrbach, sent a letter to PAX saying: “The report is distorted and unbalanced, and blindly follows accusations made by a condemned criminal, which came up years ago, in a judicial hearing to which we had no access and didn’t have the right to be heard.” – South African Sunday Times Business Report

Glencore and Xstrata agree $90 billion merger

(Reuters) – Glencore and Xstrata agreed an all-share merger worth $90 billion (56 billion pounds) on Tuesday in the industry’s largest ever deal, creating a commodities powerhouse spanning mining, agriculture and trading.

Glencore, the world’s largest diversified commodities trading house, will issue 2.8 new shares for each Xstrata share in a deal they said was a “merger of equals.”

The ratio is a 15.2 percent premium to Xstrata shareholders compared with its share price last Wednesday before word leaked out about the merger talks, a joint statement said.

“A merger between Glencore and Xstrata offers a unique opportunity to create a new business model in our industry to respond to a changing environment. It is the logical next step for two complementary businesses,” said Xstrata chief executive Mick Davis, who will be CEO of the enlarged Glencore.

Glencore CEO Ivan Glasenberg will be deputy CEO and Xstrata chairman John Bond will retain his post.

Xstrata shareholders other than Glencore, which already has a 34 percent stake in the mining group, will hold 45 percent of the new group.

Bringing together Xstrata, the world’s fourth-biggest diversified miner, and Glencore will create a group looking to ride an extended surge in demand in coming years for commodities from China and other emerging nations.

As the world’s biggest exporter of coal for power plants and a top copper producer, the combined firm aims to have the bulk to compete with mining sector leaders BHP Billiton, Vale and Rio Tinto.

On Monday, Xstrata shares closed down 1.7 percent while Glencore declined 4.5 percent, against a 1.0 percent fall in the sector, with both still above the level they were at before the potential deal was announced.

(Reporting by Eric Onstad)