The human and environmental impacts of historic mining operations still linger today with many mining-affected communities impacted by the negligence and misconduct of historic mining activities.
Without any laws and principles in place, there were no hard and fast rules on how to implement environment, social and governance policies, nor any penalties for failing to do so, with many mining companies overlooking the importance of having ethical and sustainable operations, instead favouring the capitalistic notion of profitability and production.
In a webinar hosted by UK-based law firm Leigh Day and human rights movement Amnesty International, which unpacked the human and environmental impact of historical mining operations, the panel examined why the misconduct was allowed, whether it is still ongoing and whether increased scrutiny into the environment, social and governance (ESG) policies of mining companies by investors, mineral off-takers and consumers will assist in preventing and remediating harm to local communities and the environment.
The Kabwe case
A class action case was filed in South Africa’s High Court in 2020 by law firm Mbuyisa Moleele and Leigh Day against Anglo American’s South African division on behalf of an estimated 100 000 individuals thought to have been poisoned by lead from a mine that the mining company part owned in Zambia’s Kabwe district nearly 50 years ago.
The lawsuit alleged that Anglo American South Africa was liable for emissions of lead into the local environment due to deficiencies in design, and for failing to ensure the clean-up of contaminated land or that ZCCM, a state-owned company which took over the mine in 1974 after it was nationalised, was warned of the lead hazard.
When the class action case was filed, Anglo American, which was one of a number of gold mining companies involved in R5 billion silicosis and tuberculosis class action settlement in South Africa, said that it was not responsible for lead poisoning at a Zambian lead mine and that it intended to defend its position in this regard as the mine continued to operate for an additional 20 years after being nationalised until its eventual closure in 1994.
According to Zanele Mbuyisa,director and co-founder of Johannesburg-based law firm Mbuyisa Moleele Attorneys, which is representing the victims in the Kabwe class action case, said that the community is left to suffer the dire consequences of the human and environmental impact of the lead poisoning.
An August 2019 report by international NGO Human Rights Watch found that more than one third of the population of Kabwe lived in lead-contaminated townships because of the mine’s activities. The report also noted that exposure to high levels of lead could impair growth, damage organs such as the liver and brain and increase the risk of miscarriage.
Settlements remained flawed
According to Mbuyisa, companies that deny their liability, while having the right to do so, often delay cases on procedural grounds before they make their plea. During this time, claimants often pass away, as was seen in the South African silicosis and tuberculosis case. Moreover, in South Africa, the introduction of strategic lawsuit against public participation or SLAPP suits by mining companies, intended to censor activists or law firms acting in the public interest, continues to take place.
Fortunately, a judgment in February this year, which dismissed a mining company’s case of defamation against environmental attorneys and activists, was an important step in developing common law procedures to stop the powerful abusing legal processes to silence those who expose the ecological and social harm they cause, she says.
How to ensuring ESG policies are adhered to
Nicole Martens,head of Africa & Middle East at the UN-supported Principles for Responsible Investment, based in Johannesburg, said that the protection of human rights is not something that its often codified into investment processes. While it may form part of a due diligence, there was no explicit guidance for institutional investors until as late as 2013 when the UN Guiding Principles were clarified to apply specifically to institutional investors, she noted.
“The system was just not structured in a way that gave investors any responsibility in protecting stakeholder value as opposed to just maximising shareholder value,” she said.
More recently, the influence and leverage that investors have has equipped them with the power and responsibility to protect shareholder value, which they have started to do, says Martens.
Both investors and mining companies have been flawed in how they handle ESG issues until now and how they integration of ESG into their businesses, but have increasingly started considering the impact of certain projects and certain investments on human and environmental rights, she adds.
Thankfully, ESG thinking has evolved to include questions by investors on how their investment decisions impact the broader socio-economic and environmental stability and how does this in turn effect the ability of my portfolio to generate returns. This understanding by investors in increasing, supported by policy and regulation, says Martens.
“Mining will remain an important part of the transition to low carbon economies in future and mining companies will no doubt be under increased scrutiny on how they are contributing as opposed just extracting, she concludes.