The Truth Revealed

Friday, September 7, 2007

Rio Tinto: the world's worst company?

Rio Tinto: the world's worst company?
By James Vassilopoulos

With a turnover of $10.8 billion in 1996, Rio Tinto is the biggest mining company in the world. Through its mines and subsidiaries, Rio Tinto wears many masks. Among them are: Hunter Valley Mine No 1; Comalco; Bougainville Copper Ltd; Argyle Diamonds; Hamersley Holdings; US Borax; BP Canada; La Escondida in Chile; PT Kaltim Prima in Kalimantan, Indonesia; Rossing Uranium in Namibia; and Palabora in South Africa. [Rio Tinto: Sarawak Aluminium Company]

The dispute with coal miners at the Hunter Valley No 1 is the latest in its ongoing battle with unions and workers. In that dispute it presents itself as offering workers an extra for ``productivity'' improvements.

But its history of ties to the apartheid regime, its abuse of indigenous peoples, its attacks on workers and unions, its global environmental pillaging and its use of child labour tell a different story.

Roger Moody, in his book Plunder, describes Rio Tinto's activities as ranging from ``brow-beating opponents, leaning on governments and price-fixing, to violating international law, union-busting and management of one of the world's biggest commodity cartels''.

It is the quintessential capitalist corporation, skilled at maximising profits irrespective of environmental and human rights concerns.

In 1991, Rio Tinto owned 200 subsidiaries in 40 countries. In 1996, it made $1.4 billion after-tax profit. It mines a diverse range of minerals and metals including coal, copper, gold, uranium and iron ore. It controls 55% of the market for borates, 15% of industrial diamonds, around 8% of uranium and significant percentages of world copper, bauxite and iron ore production.

Born of dead miners

Rio Tinto was founded in 1873 to mine the Rio Tinto copper deposit in the Spanish province of Andalusia. It was floated on the London stock exchange, funded by English capitalists and Deutsche National Bank, a German bank.

From the start, Rio Tinto's success was at the expense of working people. Several hundred Rio Tinto miners died from lung diseases like silicosis between 1877 and 1887.

The company was rocked by labour struggles in the 1920s, as Richard West's book River of Tears documents. In 1920, many left-wing miners were sacked after a strike which lasted four months, in protest at mass sackings and being paid in food.

In the Spanish Civil War of 1936-39, Andalusia was a stronghold of the Republicans against the fascist Nationalist forces of the dictator, General Franco. Sir Auckland Geddes, the chair of Rio Tinto, reported approvingly to the company's 1937 annual general meeting in London: ``Since the mining region was occupied by General Franco's' forces, there have been no further labour problems ... Miners found guilty of troublemaking are court-martialled and shot.''

The 1950s and 1960s were tumultuous times for Rio Tinto. Two-thirds of its Spanish mine was sold. It expanded its exploration and mining to ``safe'' countries like Canada, Australia, the US, New Guinea and South Africa.

In South Africa, Rio Tinto developed the Palabora copper and uranium lode in the Transvaal. At the time, the vicious apartheid regime was savagely repressing the black majority. Rio Tinto supplied uranium from its Rossing mine in Namibia to England, under both Conservative and Labour governments, in defiance of United Nations sanctions against apartheid.

In 1962, Rio Tinto merged with Consolidated Zinc, greatly increasing concentration in the mining industry. The new corporation, called Rio Tinto-Zinc (RTZ), now mined uranium, gold, iron ore, bauxite and zinc and owned various smelting companies.

Its rise and rise continued into the 1980s, when it bought out BP US. In 1995, it merged with its Australian subsidiary Conzinc Riotinto of Australia, 40% owned by Australian capitalists, to form RTZ-CRA. In 1997, it changed its name to Rio Tinto.

Indigenous peoples

Rio Tinto claims it has an excellent record in dealing with indigenous people, but the reality is much different.

The demand by the Aboriginal Mining Information Centre -- ``Don't CRAp on our land!'' -- exemplifies relations between indigenous people and this multinational. Indigenous land claims have been one of the biggest obstacles to Rio Tinto's pillaging of the earth's resources.

Plunder outlines some examples.

To build the Weipa bauxite mine, Comalco -- 67% owned by CRA -- forcibly removed two Aboriginal communities from their land at Weipa and Mapoon. On November 15, 1963, the Mapoon community was arrested in the dead of night and everything -- their homes, the school, the shops -- was burnt to the ground.
According to a 1975 report by International Development Action, Comalco refused to provide reasonable compensation for their loss or to pay royalties to the people of Weipa and Mapoon.

The Argyle Diamond Mines joint venture controlled by CRA in 1992 was the world's most lucrative mine. During mine construction, Roger Moody recounts, Aboriginal sacred sites were pulverised. The Barramundi Dreaming area, a site sacred to Aboriginal women, has been almost completely destroyed.

A damning report by a number of academics in 1984 concluded that the company's ``good neighbour program'' at Argyle had failed. The company controlled Aboriginal people socially and politically and left them isolated, disadvantaged and powerless.

The November issue of Common Cause, the miners' union journal, states that Rio Tinto's Argyle Diamonds has been linked to child labour in the diamond polishing industry in India.

Rio Tinto has often bragged about the jobs it creates for Aboriginal people. At Weipa, according to Moody, only 10% of the work force were Aboriginal in 1977. At Argyle Diamonds' mine, only three of the mine's 1000-strong work force are members of the local Aboriginal people.

In 1963, Comalco asked the arbitration commission to allow it to pay indigenous workers less than half the average of white workers' wages, according to International Development Action.

More extreme human rights abuses have occurred at the Grasberg mine in West Papua, primarily owned by US-based Freeport-McMoRan, and in which Rio Tinto has a 12% share. It has a 40% interest in the output from an expansion now under way.

The Australian Council for Overseas Aid in April 1995 found Freeport-McMoRan turned a blind eye to Indonesian armed forces' killing and torturing of people protesting in the vicinity of the mine. Soon after these revelations, RTZ-CRA bought its 12% share.

The ACFOA report found that 52 people had been killed from May 1994 to April 1995. Freeport-McMoRan has denied any part in the killings by Indonesian troops protecting the mine. The company provides transport, food and accommodation for the soldiers.

Individual contracts

In the 1980s, Rio Tinto smashed the unions at the Robe River iron ore mine in the Pilbara, pioneering the introduction of individual contracts in Australia. It did a similar thing at the aluminium smelter at Tiwai Point, New Zealand.

At Weipa, in 1995, it offered bonuses for workers who left the union and signed individual contracts. Out of a work force of 700, only 71 stayed with the union. But by 1997, the number of unionists had doubled, Nigel Gould, Weipa president of the Construction, Forestry, Mining and Energy Union, told Green Left Weekly.

More recently, an Rio Tinto subsidiary, Coal & Allied, has been involved in a bitter dispute with the CFMEU in the Hunter Valley over gutting of working conditions.

At Mt Thornley in the Hunter Valley, another Rio Tinto coal mine, it is trying to sack 120 of the work force of 400. At Vickery, also in the Hunter, 12-hour shifts have been partially implemented, even though a consultant's report showed that these result in lower productivity.

An important part of the propaganda of the federal government, in cahoots with Rio Tinto, is that its workers are an ``elite''. Yet a rigger or greaser, according to the coal award, earns just $526.50 per week.

What isn't trumpeted is that Rio Tinto executive chairman Bob Wilson is paid $2.44 million, according to the company's 1996 annual report. It would take a rigger or greaser 80 years -- two working lives -- to make that amount.

In Third World countries, the company's treatment of workers is almost feudal. In West Papua, Freeport-McMoran pays local workers about $3.50 a day. There have been 143 serious industrial accidents.

In 1972, in white minority-ruled Rhodesia, black miners were paid just 10% of the wages of white workers. Even after the end of white rule in 1989, the Mineworkers Union of Namibia charged that 92% of black miners at Rio Tinto's Rossing uranium mine did not earn a living wage.

Environmental hooliganism

Environmental damage caused by mining can be minimised by not mining in national parks or World Heritage areas, processing waste and rehabilitating areas after mining -- measures that cost money. Rio Tinto has not been prepared to do this.

The key demand of the Carpentaria Land Council in its fight with RTZ-CRA over the Century Zinc mine in Queensland, was to stop the proposed 300-kilometre slurry pipeline from the mine to the sea. The council instead pushed for a rail line. Rio Tinto refused.

Plunder outlines numerous examples of environmental irresponsibility. These include a tailings dam completely collapsing in the Philippines, spewing acidic waste and heavy metals, and 617 chemical drums, suspected of containing sodium cyanide and hydrochloric acid, falling into the river at its Kelian gold mine in Indonesia.

Ranger uranium mine in NT has had 28 leaks from its radioactive tailings dam.

The Panguna mine in Bougainville, when it was in operation, dumped 1 billion tonnes of waste into the river system, killing all aquatic life and creating a 480 square kilometre blot.

In 1989, Rio Tinto sold off one of its chemical companies, IC Chemicals, Britain's second biggest producer of chlorofluorocarbons (CFCs). According to Roger Moody, Alistair Frame, a top management figure at RTZ, claimed that scientists were divided on whether CFCs destroyed the ozone layer.

Val Duncan, chair of RTZ in the 1960s, claims he was called to the British Atomic Energy Commission and ordered ``to go forth, find uranium and save civilisation''. The uranium mined at CRA's Mary Kathleen mine in Queensland ``ended up in both British and US nuclear warheads'', claims Moody.

The Coalition government has recently given the go-ahead for the Jabiluka uranium mine in the Kakadu National Park. The next uranium mine may be Rio Tinto's Rudall River mine in WA. This proposed mine is in a national park and on Aboriginal land.

Presenting evidence to the World Uranium Hearing in Salzburg in 1992, Matome Malatzi, regional coordinator for community health near the Palabora uranium mine in South Africa, gave evidence that children were allowed to play with yellowcake. Uranium was washed into the river from which people drink and wash.

Buddies and price fixing

In 1970, Comalco was launched. It offered selected people pre-issue shares, according to Moody. They included the Queensland treasurer and acting premier, Gordon Chalk, and his family, the minister of Aboriginal affairs and the soon to be premier, Joh Bjelke-Petersen.

Rio Tinto has a long history in leading cartels which fix prices and eliminate competition. In the 1970s, it was a part of the Uranium Producers' Club, which boosted the price of uranium five-fold.

Although making billions of dollars in profits, it has also benefited from assistance from governments. In Bougainville it had a five-year tax holiday. At Weipa, it got the land almost for free, paying $4 per square mile in rent -- ``About one hundred and sixtieth the normal mining rent at the time'', estimates Moody.

For its Tiwai Point smelter in New Zealand, it was sold electricity at rates 13 times cheaper than consumers pay.

British PM Margaret Thatcher in 1986 approved interest-free loans to RTZ worth US$30 million.

One of RTZ's newest partners is the ``ugly Canadian'' Robert Friedland. Friedland is Rio Tinto's junior partner in the Lihir gold mine in PNG. Executive Outcomes, the apartheid-linked mercenary force that was contracted by the PNG government to invade Bougainville and reopen the Panguna mine, is largely controlled by a Friedland company, according to Roger Moody, writing in Multinational Monitor. Friedland's companies trade with the dictatorship of Burma and have interests in Indonesia.

It was RTZ chair Sir Roderick Carnegie who said at its 1984 shareholders' meeting: ``The right to land depends on the ability to defend it''. Ordinary people throughout the world are finding that the right to a job, good wages, human dignity and land rights depends on the ability to fight and beat Rio Tinto.


Another infamous Rio Tinto operation is in Borneo. Rio Tinto owns 90% of the Kelian gold mine in Kalimantan. Prior to Rio Tinto's arrival to Kalimantan, small-scale gold mining was performed by the local population. Around 1989, under General Suharto, paramilitary police were brought in to force the local miners out of the mines. These people were never compensated for the loss of their livelihood. In 1990, Rio Tinto acquired more land, which meant that a number of settlements had to be razed. Many of the people who were evicted had to live in shanties. A total of 440 families were displaced from their homes. Some compensation was paid, but it was not adequate to cover losses.

Problems with the Kelian gold mine go beyond the eviction of the local population. More recently there have been allegations of sexual harassment and rape. These allegations have been reported for about ten years, but an independent investigation was conducted only recently. The investigation revealed that many of the claims of sexual abuse could be supported. The head of the inquiry, Mr Benjamin Mangkoedilaga, reported that the victims of sexual abuse had been threatened with dismissal if they did not cooperate or were promised a job or money in return for sex. Although according to its statement of business practice Rio Tinto claims to be committed to corporate transparency, the company apparently never revealed the investigation or its findings in its reports to shareholders or in its voluntary Social and Environmental Reports. Additionally, just last month, Oxfam's newly established Mining Ombudsman published its first Annual Mining Report. The report provides well documented details of grievances from local communities which have been devastated by the Kelian mine.

Rio Tinto under pressure

Pius Nyompe came to England from East Kalimantan to express to shareholders and Rio Tinto's board the views of the community affected by PT Kelian Equatorial Mining. He outlined the problems PT KEM's gold mine (90% owned by Rio Tinto) had caused his community in East Kalimantan: pollution of the River Kelian with sediment and chemicals; air pollution from dust from mining traffic; the seizure of people's land and homes; the obliteration of the small-scale local mining industry; and human violations.

Nyompe said that - for all Rio Tinto's talk of 'working with the community' - the company had only started discussions with the Kelian people in May 1998 after years of ignoring their letters and protests. They wanted a proper independent audit of PT KEM's impact on the community in full consultation with the community and NGOs; full compensation for the loss of their land rights and human rights violations; and proper rehabilitation of their land. The only way of getting Rio Tinto to accept responsibility for its operations in PT KEM was to hand over 20% of the value of its shares to rectify the above. If they were not prepared to do this, then Rio Tinto should get out of Indonesia, Nyompe stated through an interpreter. Before returning to Indonesia, Nyompe met Rio Tinto Executive Director, Leon Davis, at the company's London head office to explain the Kelian people's grievances and demands. A deputation of 14 people from East Kalimantan plus Indonesian NGO staff met with Rio Tinto and PT KEM management twice in May in Jakarta, but were not satisfied with the outcome as company representatives attempted to deny their responsibilities. Their only concession was to invite the Indonesian environmental organisation WALHI to carry out its own investigation of water pollution down stream of the mine. Another round of talks about fair compensation for land, forests and crops started in the provincial capital Samarinda in late June.

Rio Tinto closes Kelian mine - history of human rights abuses
The mine was developed on land owned by indigenous Dayak communities who were given no choice but to move. Its history has been punctuated by protests over evictions, violence and intimidation by security personnel against people who protested, and violence against women as well as environmental pollution.

"Locals suffer from skin rashes when they bathe in the river. They can no longer catch the fish they rely upon as a protein source, and the water is so contaminated with insufficiently treated mine wastes that it's too dangerous to drink", continues Mr Ramli. ... More story here and here

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