ESG rating agencies

Response to MSCI allegation “Kamoto Copper Company, Democratic Republic of Congo: Artisanal miners killed in collapse at Kolwezi Open-Pit Mine.”

In June 2022, MSCI downgraded from ‘severe’ to ‘very severe’ its assessment of a 2019 fatal incident involving artisanal miners at Glencore’s Kamoto Copper Company (KCC) industrial asset in the Democratic Republic of Congo (DRC). The downgrade is based on revisions to MSCI’s methodology and does not reflect any changes to the incidents recorded by MSCI.

MSCI’s overview of the incident does not provide any updates or amendments that justify the downgrade – the last update is from Glencore’s 2020 Annual Report. Rather, MSCI notes that the controversy would be considered for an upgrade if all or most of the following conditions have been met:

• Implements measures to mitigate dangers associated with illegal trespassing on mining sites [see points below]
• No criticisms from local governments, and NGOs related to its Kamoto Copper operations [none noted by MSCI]
• No new similar controversies within a 12-month period [none recorded]

As Glencore has met these criteria, it is unclear as to why MSCI has downgraded this 2019 controversy, rather than giving it an upgrade.

Glencore’s approach to artisanal and small-scale mining (ASM) in the DRC

Our operations in the DRC are in areas where ASM is present. ASM is a source of employment for circa two million people in the DRC. 

KCC’s approach to ASM focuses on security management and alternative livelihood programmes, it also operates summer camps for children to encourage them against participating in ASM activities during the school holiday. The camps offer a wide range of activities, as well as discussions on the risks of ASM and the importance of education.

KCC has a layered security approach to mitigate and discourage unauthorised access onto its operating concession. Its activities include:

• Daily monitoring of ASM;
• Constructing a 44km boundary wall around its active operations;  
• Monitoring and managing intrusion incidents in line with its security procedures, which align with the Voluntary Principles on Security and Human Rights;
• Engaging with the public security providers present in the area; and
• Visible private security patrols.

We also provide equipment and finance to encourage alternative livelihoods through various organisations, including:

• creating cooperatives to provide goods and services to mining companies in Kolwezi, including Glencore and its contractors;
• training and developing skills such as carpentry, mechanics, building and welding; and
• providing equipment, seeds, fertilisers, and training to farming cooperatives.  

During 2022-23, an international expert conducted a Human Rights Impact Assessment for our DRC assets. We are reviewing the report’s recommendations and developing action plans to address the identified salient human rights areas, which include ASM.

Glencore has appointed a new ASM Manager to progress our ASM strategy. This role is responsible for conducting a collaborative knowledge baseline study, as well as strengthening our approach and partnerships.

Glencore’s cobalt supply chain

Around 80% of cobalt produced in the DRC does not involve any form of ASM or child labour. This includes Glencore's industrial assets; we do not tolerate any form of child, forced, or compulsory labour anywhere in our business or our supply chain. Our DRC operations do not purchase, process or sell ore from ASM activities.

While most of the cobalt we supply to the market is from our own operations, we also source some from a select group of third-party suppliers. Our enhanced supply chain due diligence process has identified no significant adverse human rights impacts in our cobalt purchasing activities.

In 2020, we worked with the Responsible Minerals Initiative (RMI) to pilot its Responsible Minerals Assurance Process (RMAP). The RMAP uses independent third-party assessments of smelter and refinery management systems and sourcing practices to validate conformance with RMAP standards. RMAP standards meet the requirements of the OECD Due Diligence Guidance and the US Dodd-Frank Wall Street Reform and Consumer Protection Act. KCC is listed in the conformant cobalt refiners list of the RMI and regularly undergoes the RMAP, with the findings published on Glencore and the RMI’s websites.

The Global Battery Alliance (GBA) is a partnership of 130+ businesses, governments, academics, industry actors, international and non-governmental organisations, which the GBA mobilises to provide a framework for collecting and reporting on certain ESG data for batteries. During 2022, we continued to contribute to the GBA’s Battery Passport. 

We apply the Cobalt Industry’s Responsible Assessment Framework (CIRAF) reporting framework and management tool for our cobalt producing industrial assets. The CIRAF strengthens the ability of cobalt producers and buyers to assess, mitigate and report on responsible production and sourcing risks in their operations and supply chain. It also enables a more coherent and consistent approach to cobalt due diligence and reporting by the cobalt industry. 

We participate in a blockchain initiative, Re|Source¹, to support the use of technology as a means to greater transparency, by introducing traceability in the cobalt supply chain. We worked with other major metals and mining companies, a battery material supplier and a global electric vehicle pioneer to pilot Re|Source. Re|Source is working with the Battery Passport of the GBA.

¹ As of August 2023, if the Re|Source project is formally constituted, it will be a joint venture between multiple parties; its constitution is subject to global anti-trust approvals being granted. Until it is constituted, Re|Source’s consortium partners act individually only in relation to Re|Source.

Supporting responsible ASM

We believe ASM can co-exist alongside large-scale mining (LSM) when carried out responsibly and transparently. We recognise the legitimacy of responsible ASM operations in the global supply chain and welcome the efforts by responsible sourcing initiatives and international organisations to improve practices and address the risks of human rights violations.

Glencore’s approach is to support the co-existence of LSM and ASM where we operate through visible and impactful programmes implemented in-house and with strategic partners. We are committed to working with our local communities and other stakeholders to address the causes of ASM around our operations. We engage on ASM with communities living around our industrial assets, local and national authorities, civil society, and other key stakeholders to promote community development and support alternative livelihoods to ASM.

We also continue to support international initiatives and forums aimed at developing a responsible ASM cobalt sector in the DRC. We are a founding member and an active participant in the Fair Cobalt Alliance (FCA), which brings together supply chain actors and stakeholders to drive the development of fair cobalt by supporting the professionalisation of ASM site management: making mines safer, minimising environmental impact, and creating dignified working conditions for men and women working at the mines. For more information, see the FCA website.

McArthur River Mine, Australia: Indigenous community concerns over environmental and health risks

In July 2022, MSCI downgraded from ‘moderate’ to ‘severe’ its assessment of allegations relating to Glencore’s relationship with Indigenous communities living near to its McArthur River Mine (MRM) zinc industrial asset in the Northern Territory of Australia. The downgrade is based on revisions to MSCI’s methodology and does not reflect any changes to the incidents recorded by MSCI.

In particular, MSCI noted claims relating to contamination of two creeks and that local residents were warned not to eat the fish. Concerns were also expressed on the security of Sacred Sites on MRM concession. 

However, MSCI did record that MRM’s 2020-21 Annual Environmental Performance Audit Report (AEPAR) found the mine to be in accordance with environmental obligations. The AEPAR assesses the mine's performance based on multiple regulatory approval conditions, including the NT Environment Protection Authority (EPA) recommendations.

Addressing MSCI’s allegations

MRM’s operations are regulated via licences and approvals issued by the Northern Territory (NT) and Commonwealth governments, as well as the conditions of the Aboriginal Areas Protection Authority (AAPA) certificates, designed to protect Sacred Sites. MRM complies with the NT Aboriginal Sacred Sites Act and has internal processes laid out in its Aboriginal Cultural Heritage Management Plan, to protect and respect Sacred Sites and cultural heritage. It understands its obligation to protect such sites on its mining lease and takes this obligation very seriously.

MRM’s approach to Indigenous peoples

MRM’s operations are on or near the traditional lands of Indigenous peoples. Studies including archaeological and ethnographic surveys dating back to the mid-1960s have identified several culturally significant sites in the mine lease area. 

MRM’s approach seeks to make a positive difference in its surrounding communities, respect the unique cultural heritage and partner with local groups to make a positive and enduring contribution to the region’s future. Its community team has a permanent office in Borroloola for regular engagement with the community. MRM holds meetings in Borroloola, which are open for every member of the community to attend. 

MRM enjoys one of the highest rates of Aboriginal employment of any mining company in the Northern Territory, with close to 25% of MRM’s employees being members of Indigenous Peoples' communities. 

Aboriginal Cultural Heritage Review

MRM has undertaken an Aboriginal Cultural Heritage Review to identify potential gaps between its history and compliance in respect with Sacred Sites and cultural heritage sites. The review confirmed details of known Sacred Sites and cultural heritage sites but also found some discrepancies between MRM’s records and those held by the AAPA. MRM had documented the details of sites in the immediate vicinity of its operational areas but did not accurately document sites further away on its mineral lease.

One reason for this is that some of the original studies of cultural heritage sites occurred before modern GPS and mapping technologies were available. As such, while the general location of some sites was known, its exact location was not accurately mapped. In some cases, mapping was deliberately vague as Traditional Owners did not want the locations of sites recorded to protect them from potential harm.

MRM has engaged an expert archaeologist to work with Traditional Owners to “ground-truth” every cultural heritage site on its mineral lease. This work is well underway with Traditional Owners nominated by elders in community. The archaeologist documents each site that receives a ground truth and works with the AAPA and the Heritage Branch to update their records.

MRM recognises that there are always opportunities to strengthen its relationships with local communities and is currently negotiating an Indigenous Land Use Agreement (ILUA). The ILUA negotiations involve broad consultation with Traditional Owners on a variety of matters, including Sacred Sites and cultural heritage protection. This process is expected to be finalised in 2023.

Lead levels in fish

MRM’s wastewater discharge licence is issued by the NT government’s Department of Environment and Natural Resources under the Water Act 1992. The licence provides conditional approval, including strict environmental controls, for the discharge of excess water to the receiving environment. It provides protection to the receiving environment, community values and beneficial uses of the McArthur River by defining site-specific trigger values for water quality, which must not be exceeded at a defined location.

Queensland, Australia: Adverse health impact on children from lead emissions in Mount Isa city

In June 2022, MSCI downgraded from ‘moderate’ to ‘severe’ its assessment of allegations relating to lead-in-air emissions from Glencore’s Mount Isa Mines industrial asset (MIM) in Queensland, Australia. The downgrade is based on revisions to MSCI’s methodology and does not reflect an update or change to the incidents recorded by MSCI.

MSCI alleges that emissions from the company's facility allegedly resulted in elevated blood lead levels in Mount Isa residents, particularly in children under the age of five. 

Addressing MSCI’s allegations

Managing emissions

Emissions generated by MIM are constantly monitored and managed. Its Air Quality Control (AQC) Centre was established in 1975 and is continually reviewing engineering approaches, operating procedures and monitoring programmes for ways to reduce emissions.

MIM has systems to manage emissions and dust generated by its operations to minimise impacts to the local Mount Isa community. The AQC Centre uses real-time air quality data to monitor emissions and observe emerging weather patterns. 

The ACQ Centre works both predictively and reactively to minimise impacts to the community and ensure compliance with regulatory limits. The AQC Centre provides daily forecasts and planning advice to MIM’s smelter operations and monitors real-time air quality data and conditions at ground level to ensure smelter operations can respond appropriately to any unexpected weather events. 

As part of its air quality monitoring system, MIM has two continuous metal monitors in the community which measure metals in air 24/7 to ensure it minimise any impact to the people of Mount Isa. MIM monitor the concentration of metallic particulates in the air, including arsenic, cadmium, copper, lead and zinc, as well as an additional 19 metals, within the Mount Isa community using its comprehensive air quality monitoring system.

MIM publishes real-time and historical air quality data. This is also made available via its Air Quality in Mount Isa (AQMI) app, which enables the current air quality to be checked at any time via a smartphone.

Lead pathways

MIM’s Lead Pathways Study of Mount Isa focused on land, water and air. 

MIM commissioned the Lead Pathways Study in 2006. It was conducted by the University of Queensland’s Centre for Mined Land Rehabilitation (CMLR) in collaboration with the National Research Centre for Environmental Toxicology (Entox).

The study investigated the natural and industrial pathways of lead and other heavy metals into the Mount Isa community and assessed the potential risks to human and environmental health. The study was completed in 2017 and concluded there was a relatively low health risk from lead in soil, water and air for most of the Mount Isa community.

Detailed findings from the study are available on MIM’s website.
 

Espinar, Peru Operations: Studies indicate heavy metal contamination among local residents

In July 2022, MSCI downgraded from ‘moderate’ to ‘severe’ its assessment of allegations relating to heavy metal contamination among residents living near Glencore’s Antapaccay industrial asset in the Espinar province of Peru. As part of this allegation, MSCI references studies demonstrating water contamination and community exposure to toxic substances, a protest in 2012 that led to the deaths of two civilians, a 2021 Amnesty International report on public health and negotiations with local communities on the development of the Coroccohuayco project. The downgrade is based on revisions to MSCI’s methodology and does not reflect any changes to the incidents recorded by MSCI.

Addressing MSCI’s allegations

Antapaccay’s water use

The drinking water for Espinar’s urban area, where most of the province’s population live, comes from the Huayllumayu dam, which receives water from the Apurimac catchment area. The 13 rural communities living around Antapaccay draw water from springs, separate from the Salado and Cañipía Rivers. Due to natural causes, these springs contain naturally occurring heavy metals. Antapaccay is located between the Salado and Cañipía Rivers. The mine only uses water from underground wells that are part of the mine dewatering process in its operational activities. 

While the mine has a licence to use water from the Salado River, it only takes water from underground wells that are part of the mine’s drainage system. Antapaccay’s water is mostly recycled, with only a small amount being treated and discharged into the Cañipía and Salado Rivers, in line with permits provided by the national water authority (ANA). Water discharge, both quality and quantity, is monitored in real time and reported to the authorities.

Access to water is a problem across Peru. In Espinar´s urban area, many residents have access to water for only a limited period each day due to the lack of public infrastructure or a water treatment facility. In rural areas, where smaller communities live, the quality of surface and groundwater is influenced by the geochemistry of the soils of the Salado and Cañipia River basins, as shown by government-conducted studies. Rural areas also have a lack of infrastructure to draw, treat and store water. As a result, water has been an ongoing source of tension in the area, with allegations being made against Antapaccay, who does not draw or discharge water from the same catchment area used for the Espinar urban area and treats the small amount of water that is discharged into Salado and Cañipía Rivers. 

2012 social unrest

In 2012, the mayor of Espinar fuelled the common misperception of negative environmental impacts caused by mining operations, giving rise to a demonstration in which the National Police killed two people and seriously injured others. Criminal proceedings were initiated against three people, including the mayor.

Following the demonstration, allegations of human rights abuse were made against the police and Antapaccay. Some of the alleged victims tried to pursue their claims in the Peruvian court. In addition, 22 people launched a civil case in the English courts against Xstrata (the owner in 2012). The claimants argued that as Xstrata had identified Peru as a moderate or high-risk country for human rights abuses, it knew or should have known of the risks of human rights abuses by public and/or private security forces in Peru and should have taken steps to prevent such abuses. Xstrata rejected liability for the actions of the Peruvian police and/or private security forces and denied providing any assistance or encouragement to the police. In January 2018, the English High Court dismissed the claimants claim.

Natural presence of heavy metals

Following the social unrest in 2012, a dialogue table between the mine, local communities and government representatives, originally started in 2001, was restarted. The dialogue table included an Environment working group, with a purpose to “develop an integral health and environmental intervention plan for the Espinar province”. Its approach included the implementation of several water studies, the results of which were summarised in the Participatory Health and Environment Monitoring Report published in 2013. 

The Participatory Health and Environment Monitoring Report concluded that the quality of surface and groundwater in Espinar is influenced by the geochemistry of the soils of the Cañipia and Salado river basins. However, no causal link was made to Antapaccay’s operations. This means that the mineral content in water is related to the natural presence of minerals in the soil.

Independently of the studies carried out as part of the Participatory Health and Environment Monitoring Report, Antapaccay carries out monitoring of the water upstream and downstream in accordance with its approved water monitoring plan, i.e., it is carried out by a state-accredited laboratory that follows a chain of custody for the water samples. The water monitoring results are submitted to the government’s Environmental Assessment and Enforcement Agency (OEFA) on a monthly and quarterly basis and are reviewed by their specialists to ensure that the established standards are indeed being met. Accordingly, Antapaccay ensures that its activities conform with the environmental permitting conditions.

Antapaccay’s investment in water and health

Antapaccay has a ‘Framework Agreement’ with Espinar Provincial authorities. Under the Framework Agreement Antapaccay is required to make an annual contribution of 3% of profit before tax to finance social improvement projects for the benefit of communities in Espinar Province.

Antapaccay encourages efforts to improve access to water for Espinar’s urban area and rural communities through supporting initiatives that address water quantity and quality issues. Antapaccay uses the government work-for-taxes programme to fund the construction of a water and sanitation systems that will provide potable water to Espinar (urban area) 24 hours a day. The studies required for the project are currently underway and construction is due to start in April 2024 and complete by 2026. The project will benefit the residents of the provincial capital of Espinar.

The Work for Taxes mechanism was created by the Peruvian government in 2008 to enable companies to ‘pay’ a part of their income taxes in advance through the execution of public works projects. By accepting infrastructure projects in lieu of future taxes, national, regional and local governments can forgo the mobilisation of public funds and reduce the burden on government budgets, as the private sector assumes the upfront costs and management of new infrastructure projects.

In the 13 rural communities in Antapaccay’s area of influence, studies are underway to evaluate the community water and sanitation systems, aiming to identify existing infrastructure and beneficiaries. In a number of communities, this type of study has been the foundation for building potable water and sanitation systems. For instance, a water and sanitation system has been built in Tintaya-Marquiri, and similar projects are underway in Huancané Bajo and San José. 

Agriculture is an important livelihood for many communities surrounding the Antapaccay operation. However, many of these communities lack the relevant water infrastructure required to support agriculture and livestock activities. Under the Framework Agreement, Antapaccay supported the construction of an irrigation system in the Apurimac River basin. In addition, prefeasibility studies for the Jatarana-San Martin Dam construction project, located in the upper part of the Cañipia River basin. The project includes the installation of an irrigation system for agricultural production and hydraulic infrastructure to collect dam rainwater in the upper part of the basin for transferring to the middle and lower basins, the implementation of which will be funded through the work for taxes programme. It is anticipated that ten different communities’ agriculture and livestock activities will benefit from the dam.

In addition to investments in water infrastructure, Antapaccay continues to support health initiatives in Espinar. The Espinar hospital, which is fully integrated into the public health network, was built with funds from the Framework Agreement inn 2007 and continues to receive support from Antapaccay. During the COVID-19 pandemic, Antapaccay supported the hospital through the donation of equipment.

2021 Amnesty International Report

In 2021, Amnesty International published its Failed State of Health report. The primary objective of the report was to make recommendations for the government of Peru to address health-related challenges associated with community exposure to toxic substances in the Espinar province. Amnesty International’s report also referenced Glencore’s presence in this region, through Antapaccay mine and the Coroccohuayco project (an exploration project that is currently on hold, Antapaccay has postponed its construction). 

Coroccohuayco Project

Antapaccay is planning to develop a new mining zone, the Coroccohuayco Project, to replace its current mining area. 

Antapaccay needs to acquire land from third parties, including rural communities, for the development of Coroccohuayco. The land acquisition will be performed in accordance with Peruvian law and IFC Performance Standard 5. 

After an internal assessment, Antapaccay has postponed the construction on the Coroccohuayco project; a new start date is currently being evaluated.