Industry standard

Intervention targets companies not implementing global industry standard on residue

On the third anniversary of the Brumadinho disaster, which killed 270 people when a mine waste management facility (tailings dam) collapsed at a Vale mine site in Brazil, investors released the names of companies that have committed to implementing a new global industry standard designed to significantly improve mining safety.

79 companies, representing one-third of companies with tailings dams (by market capitalization), have committed to implementing the new global industry standard on tailings management or are evaluating their alignment with it. This includes the largest member companies of the International Council on Mining and Metals (ICMM), such as: BHP, Anglo, Glencore, Rio Tinto and Vale. Importantly, companies committing to the Standard go beyond their 27 members, signaling wider adoption of the Standard. 183 companies have yet to confirm whether they will implement it, including: Southern Copper, Zijn Mining, ArcelorMittal, Grupo Mexico, Saudi Arabian Mining Company, Ganfang Lithium Co, Boashan Iron & Steel Co, China Northern Rare Earth High-Tech Co, POSCO , and Zhejiang Huayou Cobalt.

The £3.5bn/US$4.7bn Church of England Pensions Board, which set up and leads the coalition of 100 investors representing £20 trillion U.S. Dollars Under Management, which form the Investor Mining and Tailings Safety Initiative, announced it would vote against chairmen of the boards of companies they invest in who have not confirmed their intention to implement the industry standard. Given the continued risk posed to communities and the environment by tailings dams, the Pension Board has encouraged other investors to consider following suit to comply with the standard.

Since the Brumadinho disaster in 2019, 12 other incidents have occurred at mine sites involving the collapse of tailings or waste management facilities, including in Angola, Brazil, India, Mexico, Peru and Turkey. Three were killed (two in Myanmar, one of which killed 126, and one in Peru). All have had environmental impacts. Although a number of incidents have occurred at unlisted companies, the issue remains a significant risk for public and private company boards.

Commenting on companies failing to commit to implementing the standard, Adam Matthews, director of responsible investing at the Church of England Pensions Council and chair of the global Mining and Tailings Safety initiative, said :

“With the low carbon transition driving increased demand for mining, the legacy of the Brumadinho disaster must lead to a completely reformed mining sector. We now have a global industry standard where none existed before and investors are working intensively with the UN, industry and other stakeholders to establish the world’s first independent institute to verify that the standard is applied at individual mine sites.

“If anyone doubts the continued risk posed by tailings dams, there have been 12 incidents at mine sites since Brumadinho, resulting in further loss of life and environmental destruction. Tailings safety remains a clear and present risk to communities and the environment as well as to those who invest in companies or provide them with insurance or banking facilities We are not yet confident that this issue is being adequately addressed.

“We are encouraged by the number of companies that have confirmed that they will adopt the global industry standard or assess the alignment. However, any company that opposes the standard will face intense scrutiny from investors. First, we will vote against the president of these companies and consider shareholder resolutions. If the chairman of a board of directors does not see this as a major risk requiring the highest standards of operation, then he himself represents a risk for us as a shareholder of this company.

To further support the work of the Mine and Tailings Safety Initiative, it was announced that John Howchin, former Secretary General of the Swedish AP Funds Ethics Board, would become the initiative’s global ambassador to work with investors, mining companies, and wider stakeholders in creating an independent global tailings management institute.

John Howchin, Global Ambassador for the Mining & Tailings Safety Initiative, said:

“Brumadinho should never have arrived. Mining companies, regulators, investors and governments have a responsibility to secure existing dams and ensure that any future mining expansion is only done with the highest best practice standards. The creation of the independent Global Tailings Management Institute gives us that opportunity and I am proud to be able to serve as an ambassador to work with investors to drive continued action on tailings dams.

The global industry standard on waste management was developed with investors led by the Church of England Pensions Board and the Swedish AP Fund Ethics Council representing the Principles for Responsible Investment ( PRI), the International Council on Mining and Metals (ICMM), and the United Nations Environment Program (UNEP). At an investor roundtable on the eve of the anniversary, UNEP and the Church of England Pensions Board announced that an independent global tailings management institute will become operational this year to help companies to implement the standard. The Institute will play a key role in overseeing independent audits of corporate compliance, including at mine sites.

Elisa Tonda, Head of Consumption and Production Unit, Division of Economics, UNEP, said:

“We are extremely pleased with the progress made by the international multi-stakeholder advisory group supporting the formation of the independent Global Tailings Management Institute. We are determined that the Global Institute will enter its initial phase of operation this year and prepare to support the implementation of the tailings standard and verify compliance at individual mine sites.

In addition, a separate multi-stakeholder Independent Advisory Group on Tailings Dam Disclosure, chaired by Professor Elaine Baker of the University of Sydney and Dr Stephen Barrie of the Church of England Pensions Board, has announced a consultation six weeks on a new disclosure standard for the industry. which aligns with the global industry standard on tailings management. This is intended to form the basis of a global tailings portal tracking the locations of tailings dams around the world. The portal will be integrated into the Global Institute when it is operational.

In addition, work guided by a group of experts is examining the feasibility of an independent global live monitoring hub that can track the most at-risk tailings facilities, including through the use of satellite monitoring. This group should report its findings by 2Q22.

Read the article online at: https://www.globalminingreview.com/mining/25012022/intervention-targets-companies-not-implementing-global-industry-standard-on-tailings/