1. BACKGROUND

The following position paper has been prepared by Australian based NGOs, with a view to providing a basic set of principles which should be followed by minerals companies regardless of where they are operating or under what circumstances. It is intended to have a general application for the operations of mining and oil and gas companies.

In addition we hope that the paper will provide a useful resource document for governments, communities and non-government organisations which are dealing with minerals companies, environmental and human rights issues.

It is important to stress that this paper is primarily directed at providing a broad set of principles. It cannot and does not attempt to set prescriptive standards for individual projects which minerals companies may undertake. Nevertheless there are aspects of these principles that provide definitive guidelines (as opposed to technical standards) which companies should follow, such as the guidelines applying to the management of tailings, waste rock and acid mine drainage.

2. GENERAL/OVER-RIDING PRINCIPLES

PRINCIPLES:

Companies should be bound by the jurisdiction of the territory in which they have their headquarters, regardless of where they are operating (The principle of extraterritoriality).

Australian companies operating overseas should adhere, at all stages of operations to the highest standards of environmental protection and management that are required and practised in Australia.

Companies should comply with local and international standards where these are higher than in Australia.

2.2 Public disclosure/community right to know

PRINCIPLE:

Companies should fully disclose all commissioned reports by governments, companies and other stakeholders relating to environmental, social, human, political, civil and social rights and health and safety issues.

2.3 Community participation

The Rio Declaration (Principle 10) states “Environmental issues are best handled with the participation of all concerned citizens”

PRINCIPLES:

Companies should include community participation at all stages of project identification, development and monitoring.

Companies should include NGOs/communities and/or their nominated representatives, in the community's right to know and participation in the development of environmental impact statements and social impact statements.

2.4 Confidentiality clauses and issues

PRINCIPLE:

Companies should avoid binding parties to extensive confidentiality clauses.

In general companies should be required to specifically nominate which documents and/or meetings it wishes to keep confidential and should be required to explain why. In all other cases documents and meetings are assumed to be public.

2.5 Company involvement in legislative and political issues

PRINCIPLE:

Companies should not becoming involved in the drafting of legislation for governments in which they have a vested interest.

This does not exclude companies from openly and publicly advocating particular courses of action for Governments but such involvement should be transparent.

2.6 Standards for lending, insurance and investment

PRINCIPLE:

Companies involved in the mining industry, including banks, insurance companies, investment funds, superannuation funds should establish ethical guidelines which preclude investing, insuring or lending to companies which are not prepared to abide by acceptable codes of conduct. Such codes should be in line with community standards and endorsed by community groups.

2.7 Funding for community participation (trusts etc)

PRINCIPLE:

Companies should establish trust accounts in order to ensure resources to enable adequate levels of community and NGO participation when requesting such organisation to help them in their work. Such trusts should be administered independently of either company or NGOs by a Board of trustees, which should include representatives of companies, and of community groups but which has a majority of independent representatives.

If mining companies want to use expertise of NGOs and Community groups then they should be willing to pay for it. This is to facilitate NGOs in fulfilling roles that companies may request. This is to be completely separate from any money for compensation of communities or victims. It is then up to NGOs as to whether they should accept such money.

2.8 International treaties and codes, including compliance

PRINCIPLE:

Companies should abide by all relevant international treaties and codes such as mentioned in this document..

An internationally binding code of conduct should be developed for Trans National Corporations.

2.9 Community (local) employment

PRINCIPLE:

Companies should implement programs for the employment of the local people.

This means working with landowners, unions and relevant community organisations for the employment of local people such as landowners, indigenous groups, affected people, nationals and others depending on the desires expressed by stakeholders. Targets should be agreed to and regularly reviewed with reasons for any shortfalls on the targets identified. Where appropriate compensation clauses or penalties should be provided where companies fail to meet targets.

2.10 Education and training (eg cultural awareness)

PRINCIPAL:

All employees involved (including CEOs etc.) in decision-making should be required to undertake appropriate training/cultural awareness and environmental workshops. Employees should be bound by codes of conduct as a condition of employment with appropriate penalties for breaches.

¨ These codes need to cover the activities of contractors and suppliers.

¨ Small-scale miners associated with the company should also be included

¨ Meeting environmental standards should be an important part of job descriptions and evaluation

¨ Cultural awareness workshops should be run in ways that engenders respect for local communities, their culture and customs, and where possible involve local communities.

2.10 Conduct of AGMs

PRINCIPLE:

Companies should accept AGMs as suitable forums for discussions and questioning on key matters of public interest and should extend a broad invitation to affected communities and community groups to send representatives.

A defined process for asking questions over a reasonable period of the meeting should be accepted by companies. Transcripts and/or full and accurate minutes should provided to interested parties on request. In return such stakeholders and their representatives should follow mutually agreed rules.

3. LAND RIGHTS, LAND OWNERSHIP AND INDIGENOUS ISSUES

3.1 Resettlement

PRINCIPLES:

Companies should not forcibly remove or be a party to others who want to remove indigenous people from their land or territories. No relocation shall take place without free and informed consent of the indigenous peoples concerned and after agreement on just and fair compensation.

(Article 10, UN Draft Declaration on the Rights of Indigenous Peoples, UNDRIP)

Companies should not operate any project in areas where any forced removals from land have occurred.

Companies should ensure that if the development of a mine means that people have to be moved off the mining site, then the resettlement and rehabilitation of those people, should be agreed to by the people of the affected community. Such removals should be carefully planned and implemented by the mining company, so that no affected person, group or community has their standard of living, economic, culture and social cohesion diminished as a result.

This applies equally to communities that have agreed to move (“involuntary resettlement) and to host communities at the resettlement sites.

The World Bank's policy, contained in its Operational Directive 4.30 “Involuntary Resettlement”, states:

3.2 Royalty and compensation agreements

PRINCIPLE:

Companies should ensure that all royalties and compensation agreements are based on international best practice in terms of terms and conditions being the highest achievable by landowners for equity, participation, employment, royalties and compensation.

3.3 Traditional land rights

PRINCIPLE:

Companies must recognise indigenous people and their traditional or customary ownership of land especially where a host government does not recognise the legal status of customary land.

Customary ownership of assets including land should be given the same status as legal ownership and compensated for in the same way. The absence of legal title to land by indigenous groups should not be a bar to compensation.

3.4 Protocols for negotiations

PRINCIPLE:

Mining companies should develop and publish a code of practice for negotiations over exploration and mining with communities and NGOs.

This would include mechanisms for:

Mining company staff involved in consultations with indigenous groups should have appropriate training in cross-cultural communication issues.

3.5 Right to negotiate and veto

PRINCIPLE:

Companies must recognise that every community has a right to negotiate over the use of its land and impose a veto on development that it does not support.

This right is implicitly recognised under Article 17 of the UDHR (protection against arbitrary interference with property). In addition the Human Rights Committee has interpreted Article 27 to include the protection of “a particular way of life associated with the use of land resources”

This rights is also recognise under the International covenant on Civil and Political Rights (Article 1), as part of the right to self-determination.

3.6 Negotiations with and participation of other land owners

PRINCIPLE:

Companies must ensure that all landowners are fully involved in any negotiations concerning any minerals operations which affects or has the potential to affect them.

The rights of such landowners should be recognised as being similar to those of affected people under the (Australian) Aboriginal Land Rights (NT) Act. Under this legislation no mineral exploration or mining can take place on Aboriginal land or on registered sacred sites unless the owners or custodians have been fully consulted and have agreed to such activity. The Aboriginal Land Councils are required by law to fully involve landowners and to ensure that they have consented to any exploration or mining on their lands.

3.7 Disjunctive versus. conjunctive agreements

PRINCIPLE:

All agreements with indigenous people or other landowners should be based on the disjunctive agreement process whereby a separate agreement is required at both mining and exploration stages.

Conjunctive processes are not acceptable because land owners are being asked to agree to a mining proposal prior to being provided with the full information on the size, nature and full impact of the mine.

3.8 Small scale mining

The small-scale mining industry is a legitimate and valuable part of the minerals industry in many non-industrialised countries and a traditional provider of employment and subsistence. Its role, however, is often poorly understood, its value is under-recognised, especially when it relies for its economic competitiveness on low wages and zero environmental and occupational health and safety regulations. Statistics on such a mining industry are often not collected and definitions of the industry are usually imprecise. Because of this the industry is often technically illegal.

Often when large foreign or domestic companies seek to develop a minerals project where there is existing small-scale mining, the local miners are either forced from their land or marginalised in other ways.

3.8.1 Regulation and licensing

COMMENT:

Governments should seek to regulate and licence small-scale mining operations. This not only provides recognition and legitimacy but can provide a significant improvement in safety and proper working conditions if carried out effectively.

3.8.2 Safety standards

COMMENT:

Governments need to properly inspect and monitor small-scale mining operations to ensure acceptable working and processing conditions. Such inspection and monitoring should follow the introduction of appropriate regulation and taxation regimes.

3.8.3 Environment

COMMENT:

Small-scale mining has the ability to cause major environmental damage particularly in situations where potentially damaging pollutants such as arsenic and mercury are widely used. The Government should regulate and inspect small-scale mining, using the proceeds of taxes collected to ensure environmental protection.

3.8.4 Company obligations

PRINCIPLE:

Companies should recognise the legitimate role and rights of small-scale miners and not seek to obtain minerals leases that involve their dispossession. Where appropriate companies should negotiate agreements with small-scale miners for compensation, where such miners are prepared to relinquish their land. Where the activities of large companies adversely affect small-scale miners appropriate compensation should be paid.

4. ENVIRONMENTAL STANDARDS

Environmental standards should aim towards ever increasing international best practice. There are no international environmental agreements specifically governing how mining and other mineral industry projects should be managed. There are a variety of international agreements, which may be directly or indirectly relevant in a general sense, as well as various codes and standards promulgated by the World Bank and by the industry itself.

These include:

1. The 1972 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (the London Convention).

2. The 1990 Convention for the Protection of the South Pacific Region (the South Pacific Convention) and Protocol for the Prevention of Pollution of the South Pacific by Dumping (the South Pacific Protocol)

3. The Paris Convention for the Prevention of Marine Pollution from Land Based Sources, 1974

Montreal Rules for Trans-frontier Pollution (the Paris Convention on LBS)

4. The Convention on Wetlands of International Importance (the Ramsar Convention)

5. The World Heritage Convention

6. World Bank Guidelines for Mining

7. The Convention on EIA in a trans-boundary context

8. Helsinki Rules on the Uses of Waters of International Rivers

9. The International Council on Metals and the Environment Charter, 1993

10. The Berlin Guidelines: Mining and Environment Guidelines, 1991

11. The Business Charter Sustainable Development (International Chamber of Commerce), 1991

12. Agenda 21, United Nations Conference on Environment and Development, 1992

13. United Nations Revolving Fund for Natural Resources Exploration, 1973

14. UN Convention of the Law of the Sea,

15. The Rio Declaration on Environment and Development, 1992

16. The Stockholm Declaration, 1972

COMPANIES MUST ABIDE BY THE FOLLOWING PRINCIPLES BASED ON INTERNATIONAL TREATIES OR CONVENTIONS

4.1 Baseline data establishment

PRINCIPLE:

Companies should establish baseline monitoring programs at a very early stage.

Current practice of commencing operations prior to proper collection of baseline data is not acceptable. In most cases collection of such data will need to commence at least a full year, if not longer prior to any substantial disturbance of either the social or environmental situation.

4.2 Waste management, treatment and disposal

PRINCIPLE:

Companies must recognise and take action to prevent any type of ocean and/or riverine tailings disposal that is not acceptable. Companies should recognise that mineral deposits must not be developed unless tailings containment is available and acceptable, from safety and other perspectives.

In order to ensure that companies properly control wastes all mines should ideally be required to conform to a closed loop system. Where any waste, other than tailings, (eg sewage) are discharged water intakes for the mine should be located downstream of waste discharge points, so as to ensure that the company does not discharge wastes that are unacceptable for further use.

PRINCIPLE

Companies must ensure that pollution of riverine, ground-water and marine environments does not occur from waste rock dumps.

The World Bank mining guidelines provide that “Marine discharges must not have an adverse affect on the environment”. The Lihir Mine run by Rio Tinto was refused political risk insurance by the US Federal Agency, the Overseas Private Investment Corporation on the grounds that the it could not fund projects which breached the London Convention on dumping of wastes and the South Pacific Protocol.

The Basel Convention provides that “..polluters causing trans-frontier pollution should be subject to legal or statutory provisions no less severe than those which would apply for any equivalent pollution occurring within their country” and that states should “(take) all practicable steps to ensure that hazardous or other wastes are managed in a manner which will protect human health and the environment against the adverse effects which may result from such wastes”

The Stockholm Declaration states that “The discharge of toxic substances or of other substances and the release of heat, in such quantities or concentrations as to exceed the capacity of the environment to render them harmless must be halted”

Principle 21 of the Stockholm Declaration states “States havethe responsibility to ensure that activities..do not cause damage to the environment of other states or of areas beyond the limits of national jurisdiction”

Article 194 of the Law of the Sea requires that “States take.all measures consistent with this Convention.to prevent, reduce and control pollution of the marine environment from any source”

4.3 Areas closed to exploration and mining

PRINCIPLE:

Companies must ensure that they make a firm commitment to putting various areas off limits to both exploration and mining. These should include all world heritage listed areas, all national parks, conservation reserves, international sites (such as Ramsar sites) and most areas listed for indigenous cultural reasons. Where possible there should be buffer areas around such parks and reserves.

The World Heritage Convention and the Ramsar Convention require states to protect sites of World Heritage value and to protect Ramsar listed wetlands.

4.4 Precautionary principle

The Rio Declaration provides a relevant definition where it states that, “Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost effective measures to prevent environmental degradation”

PRINCIPLE:

All companies should operate according to the precautionary principle, which provides that in the event of doubt about the potential impacts of an action or operation, the company should avoid taking that course of action, in particular:

Mining or exploration should only occur where a company can demonstrate that such activity will not jeopardise the long-term viability of a species, ecosystem or the health of landowners and employees

A pro-active approach to minimising risk should be adopted.

4.5 Intergenerational Equity

The Rio Declaration states “The Right to development must be fulfilled so as to equitably meet the development and environmental needs of present and future generations”

Principle:

Companies should ensure that all mining operations adhere to the principle of intergenerational equity.

If necessary resource companies must undergo a major organisational and cultural shift in the way in which they operate, in order to move towards mineral efficiency practices, including vertical integration to accommodate re-use and recycling of minerals products.

COMPANIES SHOULD ADHERE TO THE FOLLOWING PRINCIPLES AT ALL TIMES EVEN WHERE THERE MAY BE NO RELEVANT INTERNATIONAL TREATY OR OBLIGATION.

4.6 Sustainable development

PRINCIPLE:

Companies must publicly recognise that mining in its basic form of simple extraction of a non-renewable resource cannot be considered sustainable and should not be portrayed as such.

Companies wishing to move towards concepts of sustainability should provide public disclosure of steps towards achieving this including independently verified environmental reports with best practice targets.

PRINCIPLE:

Companies that are vertically integrated companies, should produce reports showing how the company is achieving recycling of metal products. Non-vertically integrated companies (ie mining companies without manufacturing/retailing arms) should demonstrate agreements with other companies which set out goals for metals recycling targets of goods produced from company minerals.

PRINCIPLE:

Companies should set goals for waste minimisation, recycling and life cycle targets for minerals/mineral products.

As discussed above, this means that where a company is not involved in manufacturing or retailing activities which would allow it so set such goals within the company, it should make agreements for such targets with companies which it supplies.

4.7 Acid Mine Drainage

PRINCIPLE

Companies should not mine high sulphide ore-bodies unless steps are in place to prevent the effects of Acid Mine Drainage (AMD).

AMD is potentially the most serious, widespread and long-lasting of all environmental impacts.

The World Bank guidelines note that “On-land disposal systems should be designed to isolate acid leachate generating material from oxidation or percolating water”

4.8 Uranium and nuclear fuel cycle

Uranium is a very poisonous mineral. All uranium that contributes to the nuclear fuel cycle or is used for military purposes ends up as radio-active waste. The problems of waste disposal have not been solved. There are serious health problems for workers who work in and communities who live near mines and nuclear installations. There is no safe level of radiation and radioactivity can not be contained. It leaves an unmistakable irreversible legacy causing mutagenic effects many of which are only just beginning to become evident. The end uses of uranium in unsafe nuclear reactors and for military purposes should also preclude uranium mining.

PRINCIPLE:

Companies should not be involved in the mining, milling or processing of uranium.

The potentially damaging environmental effects of radioactive mine wastes, and the failure to find any acceptable way to isolate those wastes from the environment over the tens of thousands of years in which they remain dangerous precludes uranium mining.

Uranium mining breaches many of the most important environmental principles such as ecologically sustainable development, the precautionary principle and intergenerational equity.

4.9 Definitions of environmental best practice

PRINCIPLE:

Companies should agree to best practice targets being defined not by companies, but by independent committees comprising scientists, other experts (eg social scientists) NGOs community representatives, and company representatives.

4.10 Rehabilitation and rehabilitation bonds

PRINCIPLE:

Companies should be required to rehabilitate land as closely as possible to its pre-mining condition.

This should include as close an approximation of prior species diversity as feasibly possible and will entail extensive baseline studies. Rehabilitation bonds should be sufficient to cover all rehabilitation costs and should also include an amount for accident remediation.

4.11 Social value of minerals

PRINCIPLE:

Companies should include in their assessment of investment options the social usefulness of minerals to be extracted.

For example, some consideration needs to be given to the social usefulness of minerals such as gold and diamonds. It is arguable that since these minerals are mainly used for decorative purposes (such as jewelry) or can be produced artificially, they have less social value than minerals with wider social and industrial applications (eg iron, copper). Against this the cultural role of minerals such as gold in India, for example, needs to be taken into account.

In addition the social value should be evaluated against the environmental impacts of mining processes. Gold mining, for example, produces much larger volumes of waste than most other mineral extraction and also uses toxic materials such as cyanide and mercury.

Proposals to mine minerals which have major global impacts (eg global warming) such as coal and other hydrocarbons should be subject to a full assessment of available alternatives prior to any consent being given for a project to proceed. Simply assessing these minerals on the basis of local impact is not acceptable.

4.12 Transport and trade

PRINCIPLE:

Companies should identify mechanisms by which all the environmental and social costs involved in transport and trade operations can be avoided or minimised.

The transport and trade in minerals involves high environmental and social costs. These include energy costs and oil spills.

4.13 Polluter pays

PRINCIPLE:

Companies should ensure that all environmental costs involved in mining, milling, transport and processing of minerals should be borne by the company as polluter/generator and should include these costs as part of their feasibility assessment. These should include all external costs such as impacts on recreational values or tourism, costs of remediating accidents and other associated social costs. Advance compensation agreements should be negotiated, where appropriate. Full costs of rehabilitation and ongoing monitoring should be borne by the developer.

4.14 Continuous environmental improvement

PRINCIPLE:

Companies should operate under the concept of continuous environmental improvement. This concept provides for continual annual review of environmental targets. Community groups should be involved in setting these targets at all levels.

The process of review and target setting must be transparent and independent

Performance targets should be quantifiable wherever possible

4.15 Hazards and contingency planning

PRINCIPLE:

Companies should prepare a plan to deal with a range of potential accidents and environmental emergencies associated with mining. These should include off-site activities such as transport.

Contingency plans should be prepared and tested

Appropriate information on health and environmental hazards and relevant protective measures should be promptly reported to authorities, employees and the public.

4.16 Environmental cost accounting

PRINCIPLE:

Companies should ensure that accounting practices identify all costs, such as environmental and social costs, associated with company operations and these are taken into account in actual pricing of resources and, where appropriate lodged in trust funds for post mine rehabilitation.

4.17 Environmental and social impact assessment

PRINCIPLE

Companies should carry out environmental and social impact assessment for both exploration and mining activities. The company using independent consultants agreed to by both the company and the community, or the representative organisation of the community's choice should pay for studies. All EIAs should include the option for mining not to proceed at all if environmental and social impacts are found to be sufficiently severe.

5. HUMAN RIGHTS ISSUES INCLUDING CIVIL, POLITICAL AND SOCIAL RIGHTS

5.1 General Principles

PRINCIPLE:

Mining companies have a responsibility to contribute to the promotion and protection of human rights.

In an increasingly globalised world economy, the decisions and actions of mining companies impact directly on governmental policies and on the enjoyment of human rights. The Universal Declaration of Human Rights (UDHR) calls on “every individual and every organ of society” to play its part in securing universal observance of human rights. Mining companies, like all business enterprises, are organs of society. As their operations come under scrutiny around the world, human rights promotion and protection is increasingly demanded by consumers, shareholders and the communities with whom they interact.

PRINCIPLE:

All mining companies have a direct responsibility to respect human rights in their own operations.

Their employees and other people with whom they work are entitled to rights such as freedom from discrimination, the right to life and security, freedom from slavery, freedom of association, including the right to form trade unions, and fair working conditions (see Appendix A for sources in international human rights standards). Particular care needs to be taken by mining companies to ensure that their contracts and arrangements with corporate security guards, and relationships with state security and police forces do not lead to human rights abuses.

PRINCIPLE:

The mining industry, as a business community, also has a wider responsibility in both moral and legal terms to use its influence to promote respect for human rights.

A mining company's reputation will be increasingly affected by its response - in word and deed - to the violation of human rights and the defence of such rights. Violations of human rights may contribute to civil instability and to uncertainty in the investment climate, but even where this is not the case, mining companies should not be silent witnesses. Mining companies have a responsibility to use their influence to attempt to stop violations of human rights by governments or armed political groups in the countries in which they operate. Large companies regularly try to influence governments' tax and trade policies, their labour laws and environmental rules. The silence of powerful business interests in the face of human rights violations is not neutral, and is often interpreted by governments and other non-state organisations as implicit support.

Companies may argue that they should not take action in this way because to do so would be to interfere in domestic politics or offend the values of other cultures. However, the international community has decided, through a variety of covenants and agreements, that the promotion and protection of inherent human rights transcends national and cultural boundaries.

“Companies can't be a substitute for governments. We have no mandate and no authority. But to say there are things which we can't and shouldn't do is not to say that we should do nothing. We are part of those societies and can't be indifferent to their needs and aspirations. We can give a lead.” John Browne, Group Chief Executive, The British Petroleum Company p.l.c. 1997.

PRINCIPLE:

Protecting and promoting human rights is good for effective and profitable mining business.

Protecting and promoting human rights helps business in the following ways:

Action by mining companies to protect and promote human rights supports successful mining business operations in significant ways. This action (in stark contrast to inaction) helps build social collateral and political stability in the location of operations. Also, such action is crucial to the integrity and global reputation of the company. Corporate leadership and long term business success depends, among other things, on these dimensions.

“The business sector thrives where society thrives. We don't have to look far for an example of this. Look at the investment confidence in Northern Ireland during the first IRA cease-fire and after that cease-fire broke down” Peter Sutherland, Chairman of British Petroleum, former director of GATT/WTO, 1997.

PRINCIPLE:

Mining companies should acknowledge the potential for human rights abuse through the environmental impacts of development, and should further seek to minimise environmental impact for human rights promotion.

Natural resources provide the basis for the economic, cultural and social fabric of a community. Mining companies have a responsibility from a human rights standpoint to minimise harm to natural resources such as rivers and estuaries, fisheries, animal breeding grounds, agricultural land, forests, landscape features, and air. Impact through mining operations to these (and other natural resources) may result in serious violations of human rights of the communities affected. Members of communities who seek to defend these resources against the impact of mining operations are further at risk of having their human rights violated by private security guards, the state, and other agents with vested commercial interests.

Regardless of the nature of local environmental regulations which are relevant to the mining operation, mining companies have a responsibility, on human rights grounds, to minimise environmental harm.

5.2 Best Practice for Human Rights for Mining Companies

Background information on the international human rights standards on which these best practices are based is included in Appendix A: `Human Rights Principles for Companies: Sources in International Human Rights Standards'.

PRINCIPLE:

Mining companies should develop a Company Policy for human rights.

All mining companies should adopt an explicit company policy on human rights which includes public support for the Universal Declaration of Human Rights. Companies should establish procedures to ensure that all operations are examined for their potential impact on human rights, and safeguards to ensure that company staff are never complicit in human rights abuses. The company policy should enable discussion with the authorities at local, provincial and national levels of specific cases of human rights violations and the need for safeguards to protect human rights. It should enable the establishment of programs for the effective human rights education and training of all employees within the company and encourage collective action in business associations to promote respect for international human rights standards. The policy should include provision for independent monitoring and an open and candid reporting system, undertaken in consultation with NGO's with expertise;

The code of conduct can then be detailed and operationalised in a set of operational principles.

PRINCIPLE:

Mining companies should prescribe and enforce a set of operational principles relating to all aspects of mining operations for the protection and promotion of human rights.

Issues for consideration include all conditions of employment of the company's own workers, relations with owners and investors, matters concerning the safety of the products and services delivered to customers, and environmental harm. In addition, operations include relationships with suppliers, subcontractors, subsidiaries, partners in joint ventures, consultants, and others with whom the initiation or continuation of a commercial relationship lies within the control of the management of the company.

In practice, achieving the above would mean that the company is committed to the a number of practical steps laid out in the following operational principles checklist.

Operational Principle No.1. - Ensure Appropriate Security Arrangements.

All mining companies should ensure that any security arrangements protect human rights and are consistent with international standards for law enforcement. Any security personnel employed or contracted should be adequately trained. Procedures should be reviewed for their consistency with the United Nations (UN) Basic Principles on the Use of Force and Firearms by Law Enforcement Officials and the UN Code of Conduct for Law Enforcement Officials. They should include measures to prevent excessive force, as well as torture or cruel, inhuman or degrading treatment. Companies should develop clear rules for calling in or contracting with state security forces and for not hiring security personnel who have been responsible for serious human rights violations. Any complaint about security procedures or personnel should be promptly and independently investigated. Review all policies and practices in areas of conflict to ensure that the company's relations and contacts both formal and informal with the military do not play a part (however unwittingly) in contributing to human rights violations.

Mining Companies should have appropriate realtionships with the military and law enformcement agencies. They should publicly urge a full and impartial investigation into all reported human rights violations in and around the area of operations and urge that perpeterators be brought to justice. They should condemn human rights violations by the military in and around areas of operations.

Operational Principle No. 2. - Ensure Effective Community Engagement.

All mining companies should take reasonable steps to ensure that their operations do not have a negative impact on the enjoyment of human rights by the communities in which they operate. This should include a willingness to meet with community leaders and voluntary organisations to discuss the role of the company within the broader community. Mining companies should seek to support activities and organisations which promote human rights, for example by supporting education, training or citizenship programs which incorporate human rights issues and organisations which defend human rights.

Operational Principle No. 3. - Ensure Freedom From Discrimination.

All mining companies should ensure that their policies and practices prevent discrimination based on ethnic origin, sex, colour, language, national or social origin, economic status, religion, political or other conscientiously held beliefs, birth or other status. This should include recruitment, promotion, remuneration, working conditions, customer relations and the practices of contractors, suppliers and partners. It should include measures to deal with sexual or racial harassment, and to prohibit national, racial or religious hatred.

Operational Principle No. 4. - Ensure Freedom From Slavery.

All mining companies should ensure that their policies and practices prohibit the use of chattel slaves, forced labour, bonded child labourers or coerced prison labour. This should include ensuring that suppliers, partners or contractors do not use such labour.

Operational Principle No. 5. - Ensure Effective Health and Safety.

All mining companies should ensure that their policies and practices provide for safe and healthy working conditions and products. The company should not engage in or support the use of corporal punishment, mental or physical coercion, or verbal abuse.

Operational Principle No. 6. - Ensure Freedom Of Association And The Right To Collective Bargaining.

All mining companies should ensure that all employees are able to exercise their rights to freedom of expression, peaceful assembly and association, as well as a fair means of collective bargaining without discrimination, including the right to form trade unions and to strike. Companies have a responsibility to ensure such rights for their employees even if such rights are not protected in a particular country's national law. Companies should take steps to ensure that suppliers, partners or contractors do not infringe such rights.

Operational Principle No. 7. - Ensure Fair Working Conditions.

All mining companies should ensure just and favourable conditions of work, reasonable job security and fair and adequate remuneration and benefits. This should include provision for an adequate standard of living for employees and their families. Companies should take steps to ensure that suppliers, partners or contractors do not infringe such rights.

Operational Principle No. 8. - Monitoring Human Rights.

All mining companies should establish mechanisms to effectively monitor all their operations' compliance with codes of conduct and international human rights standards. Such mechanisms must be credible and all reports must periodically be independently verifiable in a similar way to the auditing of accounts or the quality of products and services. Other stakeholders such as members of local communities in which the company operates and voluntary organisations should have an opportunity to contribute in order to ensure transparency and credibility. If serious human rights violations continue to occur, cthe ompany should re-examine its presence in that country and whether its investment is appropriate and justifiable.

5.3 Economic Considerations For Human Rights Promotion and Protection

While it is not our place to prescribe effective mining practice on economic grounds, we believe the following to be worthy considerations for the joint goal of effective business and human rights promotion and protection.

COMMENT:

Mining companies which uphold their obligations on human rights as previously described will be likekly to build a stronger reputation which is important for business is several ways.

Companies which demonstrate moral leadership will gain the confidence of other businesses, governments and corporate partners, build shareholder confidence, contribute to community well-being and political stability in the locations of mining operations, and gain respect, pride and commitment of employees.

COMMENT:

Mining companies enhance their reputation amongst shareholders, corporate colleagues, and potential government partners by pursuing a human rights agenda as part of core business.

In business, reputation is everything. A loss of faith by shareholders may be caused on moral or economic risk grounds (or both) when companies contravene human rights law. Companies who seek leadership in the commercial arena can ill afford negative reports on their behaviour. With efficient media technologies, and committed and intrepid journalists keen to expose transgressions, companies conduct immoral or illegal activities at their peril.

COMMENT:

Protecting human rights helps to build a stronger and more stable community and society within which company operations must take place.

For companies interested in long term operations, which most mining companies are, they have a vested economic interest in building the human rights framework which which underpins an open and vital society which supports their enterprise. Instability, both politically and socially increases the risk that business will suffer or fail due to uprising or conflict. Week social capital means a debilitated work force. In a repressed society, business loses out over the long term. As John Browne, Group Chief executive of BP stated

“open markets, efficient and sustainable use of resources…, steady economic development and an open society are the conditions in which we can best pursue our business. They run directly contrary, of course, to the common belief that companies find it easier to deal with the apparent stability of repressive regimes than to manage the uncertainties of democracy. In fact, stability built on repression is always false.”

COMMENT:

Mining Companies that demonstrate moral leadership by supporting such issues as human rights are more likely to have an enthusiastic and committed work force.

Contrary to some schools of thought in management, workers are not inert to the moral behaviour and leadership of the companies for which they work. People live and work by their values and principles. Working for a company that disregards human rights does little to instil pride and build morale in the workers, at all levels of mining operations.

5.4 International Humanitarian Law - with respect to Armed Conflict

International Humanitarian Law (IHL) is that body of law which regulates the conduct of armed conflict toward the minimisation of harm to civilians and those placed outside the combat for whatever reason.

PRINCIPLE:

Mining companies must do all that is reasonable within their power to avoid exacerbating the social, political and cultural climate, which might lead to armed conflict.

By doing so they will be as much the beneficiaries of peace as the communities in which they operate. Armed conflict is devastating for a country, its people, culture and economy. It is also devastating for a mining company attempting to run a financial operation

PRINCIPLE:
It is recognised that mining companies have legitimate concerns to protect themselves and their employees.

The means with which mining companies protect themselves and their employees must be consistent with human rights principles.

PRINCIPLE:

Mining companies should not operate in areas where such operations require the use of military forces or excessive security in order to maintain the operation.

Companies should suspend operations where existing operations require such military force to operate until agreement on the operations could be reached with local communities and/or their representatives

Companies should publicly speak out against militarisation of areas in which they operate.

Such conduct is likely to inflame the tensions locally and is an endorsement of conduct condemned by the international community.

PRINCIPLE:

Companies must not hire mercenaries to protect their business interests.

In Australia the Crimes (Foreign Incursions and Recruitment) Act 1978 regulates issues dealing with mercenary activities with an Australian connection. Furthermore, Australia has recently indicated that it will ratify the International Convention against the Recruitment, Use, Financing and Training of Mercenaries and lobby regional governments to do so as well. The attitude of the Australian Government and other regional governments make the employment of mercenaries by mining companies legally dangerous, quite apart from being morally unacceptable.

PRINCIPLE:

Companies must be mindful of important IHL treaties, such as the Geneva Conventions of 1949 and the Additional Protocols to those Conventions of 1977.

Furthermore, all the human rights treaties listed previously are applicable in an armed conflict situation.

6. LABOUR STANDARDS AND WORKERS RIGHTS

6.1 Introduction

Government are driven by a range of factors such as IMF structural adjustment policies, the Uruguay round of GATT, the desire to attract direct foreign investment or the need for export income, in order to encourage mining companies to invest. Many governments use the low cost of labour and unfettered labour laws as the basis of their industrial expansion. Such a political environment can enable companies to operate without serious consideration of best international practice with respect to the environment, human rights and labour conditions. The only way to overcome such concerns is to make a clear commitment to international standards.

In order to attract foreign investment the position of labour in many countries is very precarious because of:

All labour laws need to take into account the basic instruments of the United Nations conventions, which include:

CROC The Convention on the Rights of the Child

ICCPR International Covenant on Civil and Political rights

ICESCR International Covenant on Social, Economic and Cultural Rights

UDHR Universal Declaration on Human Rights; as well as

CEAFDAW The Convention on the Elimination of all Forms of Discrimination Against Women

and the core International Labour Organisation (ILO) conventions, which are more strongly worded and pro-active of worker rights include:

6.2 The Must - Obligations of Companies

PRINCIPLE:

Companies must observe not only the labour laws applicable in the countries in which they operate but also International Human Rights law and the International Labour Organisation conventions, regardless of whether such laws have been ratified by the states within which companies operate.

PRINCIPLE:

Companies must recognise that basic workers' rights is of fundamental importance and in the legitimate interests of employees and contractors adhere to the following conventions:

6.3 The Right and Freedom to Work Principle

PRINCIPLE:

Companies must recognise that everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. (UDHR 23.1)

6.4 Equal pay for equal work

PRINCIPLE:

Companies must recognise that “everyone without discrimination has the right to equal pay for equal work” (UDHR 23.2)

6.5 Just reward

PRINCIPLE:

Companies must recognise that “everyone who works has a right to just and favourable remuneration ensuring for him/herself and his/her family an existence worthy of human dignity supplemented, if necessary, by other means of social protection” (UDHR 23.3)

6.6 Right to holidays and leisure

PRINCIPLE:

Companies must recognise that “everyone has the right to rest and leisure, including reasonable limitations of working hours and periodic holidays” (UDHR 24).

6.7 Standard of living/income

PRINCIPLE:

Companies must recognise that “everyone has the right to a standard of living adequate for health and well-being of him/herself and his/her family, including food, clothing, housing and medical care and necessary social services, and the right to security .in the event of unemployment, sickness, disability, widowhood, old age or lack of livelihood in circumstances beyond his/her control” (UDHR 25.1)

6.8 No slave or forced labour

PRINCIPLE:

Companies must recognise that forced labour is unacceptable, and therefore, “no one shall be required to perform forced or compulsory labour” and “no one shall be held in slavery; slavery and the slave trade in all their forms shall be prohibited”. ICCPR 8.1, 8.3)(ILO No.105)

6.9 Non Discrimination

PRINCIPLE:

Companies must recognise that all people have the right to work “without discrimination of any kind as to race, colour, sex, language, religion, political or other opinion, nationality or social origin, property, birth or other status” (ICESCR 2.2)

6.10 Vocational training

PRINCIPLE:

Companies must recognise that all people have the right to “technical and vocational guidance and training programs, policies and techniques to achieve steady economic, social and cultural development and full and productive employment under conditions safeguarding fundamental political and economic freedoms” (ICESCR 7.2)

6.11 Conditions of employment

PRINCIPLE:

Companies must recognise the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular:

¨ fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work nor inferior to those by men, with equal pay for equal work;

¨ a decent living for themselves and their families in accordance with the provisions of the present Covenant;

¨ equal opportunity for everyone to be promoted in his/her employment to an appropriate higher level. Subject to no considerations other those of seniority and competence;

¨ rest, leisure and reasonable limitations of working hours and periodic holidays with pay, as well as remuneration for public holidays (ICESCR 7)

6.12 Trade Union Rights

PRINCIPLE:

Companies must recognise the right of everyone to form trade unions and join the trade union of his/her choice, subject only to the rules of the organisation concerned, for the promotion and protection of his/her economic and social interests. No restrictions may be placed on the exercise of this right other than those prescribed by law, which are necessary in a democratic society in the interests of national security or public order or for the protection of the rights and freedoms of others;

PRINCIPLE:

Companies must recognise the right of trade unions to establish national federations or confederations and the right of the latter to form or join international trade-union organisations.

PRINCIPLE:

Companies must recognise the right of trade unions to freely operate subject to no limitations other than those prescribed by law and which are necessary in a democratic society in the interests of national security or public order or for the protection of the rights and freedoms of others;

PRINCIPLE:

Companies must recognise the right to strike provided that it is exercised in conformity with the laws of the particular country. (ICESCR 8.1)

PRINCIPLE:

Companies should promote collective bargaining as the most fair way for the employer-employee relationship (ILO Convention 87 and 98 and the OECD guidelines).

6.13 The Elimination of discrimination against women

The following principles are designed to ensure the elimination of discrimination against women in the field of employment in order to ensure on the basis of equality of men and women, the same rights, in particular:

PRINCIPLE:

Companies must not discriminate against women and therefore must recognise:

¨ the right to work as an inalienable right of all human beings;

¨ all people have the right to the same employment opportunities, including the application of the same criteria for selection in matters of employment;

¨ the right to free choice of profession and employment, the right to promotion, job security and all benefits and conditions of service and the right to receive vocational training and retraining, including apprenticeships, advance vocational training and recurrent training;

¨ the right to equal remuneration including benefits, and to equal treatment in respect of work of equal value, as well as equality of treatment in the evaluation of the quality of work;

¨ the right to social security, particularly in cases of retirement, unemployment, sickness, invalidity and old age and other incapacity to work, as well as the right to paid leave;

¨ the right to protection of health and safety in working conditions, including the safeguarding of the function of reproduction.

Principles taken from (CEAFDAW 12.1)

6.14 Discrimination on the basis of marriage or maternity

PRINCIPLE:

Companies must recognise the special needs of women and thus:

¨ insure against “dismissal on the grounds of pregnancy or of maternity leave and discrimination in dismissal on the basis of marital status”;

¨ introduce “maternity leave with pay or with comparable social benefits without loss of former employment, seniority or social allowances”;

¨ support clauses which “encourage provision of the necessary supporting social services to enable parents to combine family obligations with work responsibilities ...on particular through promoting the establishment and development of a network of child-care facilities”;

¨ recognise the need “to provide special protection to women during pregnancy in types of work proved to be harmful to them.” (CEAFDAW 12.2)

6.15 Children and Work

PRINCIPLE:

Companies must recognise “the right of the child to be protected from economic exploitation from performing any work that is likely to be hazardous or to interfere with the child's education, or be harmful to the child's health or physical, mental, spiritual, moral or social development.”

(CORC 32.1)

PRINCIPLE:

Companies must “respect the minimum age for admission to employment”. (CORC 32.2a)

Definition: A child means every human being below the age of eighteen years unless under the law applicable to the child, majority is attained earlier. (CORC 1)

7. INDEPENDENT MONITORING, AUDITING and REPORTING

7.1 Codes of conduct including enforcement

PRINCIPLE:

Companies should adhere to codes of conduct that are acceptable to NGOs and landowners groups/communities in the host countries (where projects are occurring). Codes should include:

7.2 Independent Monitoring

PRINCIPLE:

Companies should allow an on going process of independent transparent monitoring of their operations, including the impact of company operations on environmental, labour, human, civil, political and social rights.

PRINCIPLE:

The company shall appoint a director for human rights. This director will have a direct line of mutual communication with local management and the Board of Directors. The director shall have staff support in the form of human rights experts.

This director will implement all internal human rights reviews and training programs. This will include a review for all managers and staff to focus on any shortcomings and how improvements could be made. The outcomes will be made public through the annual report.

7.3 Promoting compliance

PRINCIPLE

The company must recognise that if the code of human rights conduct is to be complied with then a regular and independent external review of the policy as practised must be implemented.

This process shall also include periodic meetings with interested parties both inside and outside the company. The final conclusions must be made public.

The process of implementation monitoring must be an open and candid process which is done in consultation with NGOs and which has measurable outcomes and redress procedures for non-compliance with the Code adopted by the company.

Independent monitors should involve a variety of different stakeholders who should be nominated and selected by the stakeholders themselves.

7.4 Independent auditing

PRINCIPLE:

Companies should have regular and independent audits of their operations carried out by independent auditors, which include representatives nominated by relevant stakeholders.

7.5 Design and implementation of monitoring and auditing

PRINCIPLE:

Companies must recognise that design and implementation of the independent monitoring and auditing should be jointly designed by the company in consultation with representatives of communities and NGOs.

Programs for auditing and monitoring should include verifiable and monitorable targets agreed by company and independent representatives.

7.6 Independent verification and reporting

PRINCIPLE:

Companies must report the results of auditing and monitoring programs in an annual report prepared and verified by an independent auditor agreed to by stakeholder representatives.

The report should detail areas in which a company has failed to meet agreed targets, has been involved in accidents or incidents of any the areas audited or monitored or has infringed regulations or laws governing its operations. Where there are disagreements between independent parties and the company these should be reported.

Such community participation should start at the earliest stages of a project (ie during the planning of any operation affecting the community) and should continue until either a decision is made not to develop a project or until a project shuts down. It should involve communities or community nominated representatives in design, management, operation, monitoring, auditing and reporting on company operations and should be facilitated via a trust fund.

7.7 Complaints mechanism

PRINCIPLE:

Companies should support the establishment of an independent and accessible complaint mechanism, to which communities who feel that the industry's standards have been breached by a particular mine can bring complaints.

The Minerals Council of Australia together with the Australian Government could initiate this.

This complaints body would be similar in operation to the World Bank's Independent Inspection Panel, which was established by the Bank in 1993 in response to increasing opposition and complaints from local communities to a number of its large development infrastructure projects.

The basis of complaints must be that, in the implementation of a World Bank funded project, the Bank did not adhere to its own standards or policies as set down in its policy or procedures documents. A similar principle could be applied to standards set by the mining industry in Australia.

While funded by the industry and the Australian Government, it would retain as much independence as possible and be staffed by people from outside the industry with perhaps a legal or community development background.

To be effective it would need some power to obtain information from companies about their operations, which could be legislated power. And it would probably need to conduct its own on the spot investigations at overseas mine sites.

8. BIBLIOGRAPHY

Agenda 21, UN Conference on Environment and Development, 1992

Berlin Guidelines: Mining and Environment Guidelines, The, 1991

Business Charter Sustainable Development, The, (International Chamber of Commerce), 1991

Carley, M. 1980. Rational Techniques in Policy Analysis, Heinemann Educational Books, London.

Caux Round Table Principles for Business

Concepts and Principles of International Environmental Law: Hunter, Sommer and Vaughan, UNEP,1994

Convention for the Protection of the South Pacific Region, 1990 (the South Pacific Convention)

Convention on EIA in a trans-boundary Context

Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter, 1972 (the London Convention).

Convention on Wetlands of International Importance (the Ramsar Convention)

Draft comments on World Bank Guidelines, part 1 and 2: (unpublished), Project Underground, 1997

Environmental Impact Assessment and Ecological Sustainable Development in Australia: A discussion Paper, ACF and WWFN, Australia, ESD Policy Unit 1993.

Environmental Summary of Lihir Gold Project: OPIC, 1995

Guidelines for Development-Based Displacement, Expert Seminar on Forced Evictions and Human Rights, Geneva, United Nations, June 1997.

Helsinki Rules on the Uses of Waters of International Rivers

Human Rights New Consensus : UN human Rights Conference 1993; Regency press; London; 1995

International Council on Metals and the Environment Charter, 1993

International Labor Conventions and Recommendations 1919-1991 Vol 1; 1992

Organisation for Economic Cooperation and Development; Declaration on International Investment and Multinational Enterprises; OECD Doc.C(76) 99

Paris Convention for the Prevention of Marine Pollution from Land Based Sources, 1974

Montreal Rules for Transfrontier Pollution (the Paris Convention on LBS)

Principles for the Conduct of Australian Mining Companies operating in Papua New Guinea: Helen Rosenbaum, ACF, 1995

Protocol for the Prevention of Pollution of the South Pacific by Dumping, 1990 (the South Pacific Protocol)

Rio Declaration on Environment and Development, 1992

Stockholm Declaration, 1972

World Bank, Operational Directive 4.30, Involuntary Resettlement, Washington DC, June 1990.

World Bank Resettlement and Development. A Bank-wide Review of Projects Involving Involuntary Resettlement. Environment Department, Washington DC, April 1994.

World Bank Environment, Health and Safety Guidelines, Milling and Open Pit, 1995

Tabor, Anthony and Helen Rosenbaum Guidelines For Global Business: A Discussion Paper, Australian Conservation Foundation, 1994.

UN Convention of the Law of the Sea,

UN Revolving Fund for Natural Resources Exploration, 1973

Universal Declaration of Human Rights; General Assembly Resolution 217 A(III) 10 December 1948; as published in Amnesty International Handbook; Amnesty International Publications; London; 1992..

World Heritage Convention

World Bank Guidelines for Mining

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