Centre for Environmental Rights – Advancing Environmental Rights in South Africa

The annual general meetings (AGMs) of two companies which featured in the Centre for Environmental Rights’ September 2015 Full Disclosure report, Anglo American Platinum Limited (Amplats) and Anglo American plc (Anglo American), will be held on 8 and 21 April 2016 respectively.

Our Full Disclosure report revealed that over the period assessed (2008-2014), many of South Africa’s biggest listed companies committed serious breaches of environmental laws, and that the level of disclosure of these breaches to shareholders was, in most cases, extremely poor. In relation to Amplats and Anglo American specifically, we noted grave concerns regarding the environmental compliance records of both of these companies.

Shareholders should therefore use the opportunity provided by the AGMs to ask relevant questions, set out below, of the management teams of Amplats and Anglo American.

Of current concern is Anglo American’s recently announced restructuring plans, in particular the company’s plans to sell off its South African coal and iron ore assets. On 29 February 2016 the CER sent an open letter to Anglo American CEO Mark Cutifani calling for transparency, as publicly committed to by Anglo American, and public participation in the transfer of any of its mining rights.

With 6000 derelict and ownerless mines in South Africa – a legacy problem which is costing taxpayers millions annually – shareholders should call for careful assessment and public scrutiny of the sale of these assets. This scrutiny is essential to ensure that sufficient funds are provided by Anglo American, as well as by any new owners of these assets, to cover the costs of all rehabilitation and other environmental liabilities. Secrecy, facilitated by the Department of Mineral Resources, around the amount of funds set aside for rehabilitation when mining rights are granted and transferred, is one of the primary reasons why South Africa has such an abysmal record of successfully cleaning up the environmental devastation wrought by mining.

Anglo American responded to the CER’s open letter on 16 March 2016. The CER is disappointed by the company’s response, which fails substantively to address any of the concerns raised in our letter. Anglo American has avoided making any specific commitments to transparency and consultation around the environmental implications of its restructuring plans, while simultaneously claiming that it has “consistently demonstrated good corporate citizenship”. In these circumstances, a good corporate citizen should welcome the opportunity to disclose all information necessary to enable shareholders, communities and other interested and affected parties to assess the environmental risks inherent in the proposed disposal of these assets.

Photo: Stephane de Sakutin/AFP/GettyImages

Questions for the management of Anglo American Platinum Limited

Compliance with Environmental Management Programmes

The CER’s Full Disclosure report drew attention to Amplats’ failure to comply with its Environmental Management Programmes (EMPRs) at its mines, according to the company’s own audits of compliance. Identified non-compliances involved serious issues such as ground and surface water contamination, the failure to implement biodiversity and rehabilitation plans, and the failure to carry out concurrent rehabilitation.^[1] In Amplats’ 2015 Sustainable Development Report, the company stated that its mining operations were only 92% compliant with EMPR commitments, and that its process operations were only 93% compliant with EMPR commitments.

Given that compliance with environmental legislation, and with the conditions attached to mining licences, EMPRs, environmental authorisations and water use licences is not optional, it is concerning that the company considers it acceptable to be in non-compliance with such an array of conditions. Shareholders should accordingly ask:

• Is Amplats committed to ensuring 100% compliance with South Africa’s environmental laws, and what steps is Amplats taking to address the deficit in compliance with its environmental authorisations?
• How many times have Amplats’ facilities been inspected by regulatory authorities for compliance with environmental laws and permits in the past financial year?
• What were the results of these inspections?

Notices issued by the Department of Water and Sanitation

Information provided by the Department of Water and Sanitation (DWS) to the CER pursuant to formal requests for access to information indicates that the Modikwa Platinum mine (a joint Amplats and African Rainbow Minerals operation) and the Bokani Platinum Mine (an operation in which Amplats has a significant shareholding) were issued with notices in terms of the National Water Act (NWA) in 2014 and 2015 respectively.^[2] It is not clear from the information provided by the DWS why the notices were issued, but such notices most commonly relate to the contravention of conditions contained in water use licences. It is a criminal offence to fail to comply with any directions given in these notices. Shareholders should accordingly ask:

• Why were these notices issued by the DWS?
• What action, if any, were these facilities directed to take in these notices?
• Have these facilities complied with the directions (if any) given in these notices?

Community complaints

As noted in Amplats’ annual reports, and in other publicly available sources of information,^[3] complaints are frequently made by community members regarding the environmental impacts of Amplats’ operations. Most recently, in Amplats’ 2015 Sustainable Development Report, it is reported that three complaints were received in respect of emission related incidents and one in respect of a dust related incident.^[4] Although it is stated that “remedial action was taken where required”^[5], similar complaints have been reported by Amplats almost every year. As these are clearly ongoing problems which the “remedial actions” are failing to address, shareholders should ask the management of Amplats for details of the complaints, details of the remedial action taken, and details about what the company intends to do to resolve such issues.

Questions for the management of Anglo American plc

Compliance inspections by authorities

Anglo American’s annual reports contain no information on inspections carried out by regulatory authorities. Shareholders should ask for details to be provided on any inspections carried out by the DWS and Department of Mineral Resources (DMR).

Notices issued by the DWS

Information provided by the DWS to the CER pursuant to formal requests for access to information indicates that Anglo American’s Greenside and Kreil Collieries in Mpumalanga were issued with notices in terms of the National Water Act in 2015.^[6] Shareholders should ask:

• Why were these notices issued by the DWS?
• What action, if any, were these facilities directed to take in these notices?
• Have these facilities complied with the directions (if any) given in these notices?

ENDS

About the Centre for Environmental Rights (CER)

The CER is a non-profit organisation and an environmental rights law firm that helps communities defend their right to a healthy environment. It does this by advocating and litigating for transparency, accountability and compliance with environmental laws. For more information, visit http://cer.org.za/.

For media queries, contact attorney Christine Reddell on [email protected] or 021 447 1647.

FOOTNOTES

[1] http://cer.org.za/full-disclosure/company/anglo-american-platinum-limited

[2] http://cer.org.za/full-disclosure/company/anglo-american-platinum-limited?impacts

[3] Anglo American Platinum Limited: Mogalakwena Platinum Mine – Issues & Response Report for Proposed Projects, by SRK Consulting, at p4, available at http://www.srk.co.za/files/File/South-Africa/publicDocuments/Groot_Sandsloot/issues_responses_report_oct_2013_owea.pdf

[4] Anglo American Platinum Sustainable Development Report 2015, at p48, available at http://www.angloamericanplatinum.com/~/media/Files/A/Anglo-American-Platinum/documents/1-0-amplats-sd-2015-final.pdf

[5] Anglo American Platinum Sustainable Development Report 2015, at p48, available at http://www.angloamericanplatinum.com/~/media/Files/A/Anglo-American-Platinum/documents/1-0-amplats-sd-2015-final.pdf

[6] http://cer.org.za/full-disclosure/company/anglo-american-plc?impacts