ANZ puts profits over people in the Philippines

Campaigns and Advocacy, Media Releases article written on the 25 Oct 2008

A report released today by international aid agency Oxfam shows that cyanide-laden spillages from a mine financed by ANZ in the Philippines has devastated communities dependent on fishing for their livelihoods.

Oxfam Australia’s Mining Ombudsman Shanta Martin said ANZ had some good social and environmental policies but had not demonstrated an ability to put these policies into practice.

“Unfortunately, this case demonstrates there is sometimes an enormous gap between what a company says and what it does, which underlines the need for regulation,” Ms Martin said.

The Philippines mine, which was owned by the now defunct Melbourne-based Lafayette Mining Limited, exhibited a clear lack of environmental safeguards. Shortly after commencing operations in 2005, spillages of cyanide-laden waste contaminated local seas, killing fish and leaving communities robbed of their means of income. More fish kills in 2006 and 2007 fuelled social unrest from a community reliant on the fish for income and food.

ANZ led a consortium of banks from 2004 to 2008 that financed the copper-zinc-gold-silver mine. ANZ signed up to the Equator Principles – international social and environmental benchmarks that guide financing decisions for banks – in December 2006. However, the bank continued to provide support to the mine on the tiny typhoon-prone island of Rapu Rapu while ignoring overwhelming community opposition to the project.

Among the Rapu Rapu Report’s recommendations to ANZ are:
• Guarantee that money is available for any environmental damage caused by a project, and rehabilitation after a mine’s closure, as is required in Australia;
• Implement better screening practices for projects, and
• Ensure that companies financed by the bank have complaints mechanisms for affected communities.

Ms Martin said that from the outset, ANZ could have done better. “When considering whether to lend to a mining project, ANZ had a responsibility to critically assess the potential social and environmental risks. They should then have insisted on measures to avoid those risks eventuating,” she said.

“When things went as badly wrong as they did, both the mine and ANZ should have taken steps to address those problems and publicly shared what those steps were.”

The report details community complaints which include:
• contamination of local water sources and lessening availability of clean drinking water;
• the presence of armed military on the island, and
• poor employment prospects for the local communities.

Given the lack of response from ANZ despite multiple requests for information and action, Oxfam had no choice but to discontinue accepting institutional donations from the bank until its practices had changed.

Ms Martin said the case demonstrated that social and environmental responsibility go hand-in-hand with fiscal prudence. Lafayette, went into voluntary administration in December 2007, and ANZ incurred a loss when the mine was sold in April 2008.

It also highlights the need for better regulation of the Australian mining industry overseas: “What the Rapu Rapu case demonstrates is that regulation is needed to ensure that those who can least afford the impacts of corporate greed are given the greatest protection – this means protecting the rights of the communities whose lives and livelihoods are affected by Australian corporate activity abroad,” she said.

Oxfam is calling on the Australian Government to establish an independent complaints mechanism that would allow the concerns of affected communities to be addressed while also helping to prevent Australian corporate complicity in breaches of human rights and environmental standards.

Download the report

For more information or to interview Shanta Martin please contact: Laurelle Keough, Media Coordinator – Advocacy & Campaigns, on 0409 960 100