The AGM "season" in London is short & BP and Rio Tinto booked into town on the same day with the BP drawing the crowds and the headlines.
Many pension funds hold Rio Tinto share-holdings because of its consistent FTSE100 showing and because UKG foreign policy is intertwined with the interests of such companies. My local London borough's essentially secretive pension fund has 2% of its investments in RT- even though its specific dividend earnings on such holdings are low.
Before leaving home I caught the BBC Radio 4 interview with Terry Smith on "Today". Smith reckons that public company share "buy-backs" do not fundamentally represent a real benefit to investors, but do so to companies who can write off such spending in their accounts. http://www.terrysmithblog.com/
Rio Tinto promise to do such a buy-back this year- with the implied promise of increased dividends.
They claim to have reduced their massive USD 19 billion debts mainly through the increase in metals prices- and through some claimed productivity increases. It's completely non-transparent where these productivity increases came from? And Joan Sekler’s film “Locked Out 2010” about their US subsidiary Borax’s chaotic mis-management of miners’ employment contracts rip-up and consequent replacement with unskilled scab workers should raise specific questions about how such labour relations could possibly increase productivity.
The company's mission statement imperatives of "access to land, people and capital" were severely questioned by community representatives from Utah, Michigan, Alaska, Mongolia and Indonesia who criticised the company's past performance and unrolling future impacts. The company is non-compliant with US air and water pollution regulation and with best practice on financial bonding on mined-out land reclamation. In Indonesia it has passed off its post closure liability for waste dams on a polluting gold mine onto a notional state forestry department- in contravention of explicit international best practice of continued company responsibility.
Mostly people who attend these AGMs in UK are retired private investors. Something occurred which was the nearest thing to "frisson" when two successive actually-present investment managers [from Standard Life and the Railway Pension Fund] declared reasons why they would vote against the company's increased remuneration and "share plan" packages. The company assured nobody when they said that they hadn't made more than a cursory justification of the pay package nor were they likely to do so until at least 2013.
Rio Tinto did state that all the directors would seek re-election regularly- but only musical chairs for so-called "independent" non-executive directors is a real possibility. The senior NOED is legally responsible for leading their justification and approval of the directors and senior executives’ pay – both the strategy and the quantum, and the present incumbent has no intention of rocking the boat before he steps down in 2012. Next up as senior NOED? Perhaps Sir Rod Eddington? The semi-public function of these or at least the "senior" of these is usually to say something like "I understand the call for transparency and that's something that the board will consider." http://www.abc.net.au/am/content/2010/s3040157.htm Will this continue to be enough?
At least two of the "smal"l shareholders questioned why the company were so unwilling to help explain the board director candidacy of Stephen Mayne. Mayne argues that his candidacy is more valid than that of the Canadian government placeman [part of the company's acquisition price of Alcan]. Australian law allows such dissident candidacy- in contrast to UK law which for example allows no more than that the board considers a petition or provides a brief explanation of one of its assertions- necessitating written support of at least 5% of voting shareholders on a non-public list.
Stephen Mayne's platform may carry more punch in Australia in May. He explains how the board censored even his basic statement- so as to remove any mention of Australia's proposed Resources Super Profits tax or its impacts http://www.maynereport.com/articles/2011/04/08-1639-5156.html
He at least fairly repeats Fox News reportage that UK proxy investor advisers PIRC appear to share Rio Tinto's board’s view that he doesn’t have the necessary skills and experience to help operate a transnational resources company.
That raises the question: what work-based skills experience relating to social and environmental impacts and human rights aspects of displacement of land-based communities that mining inevitably causes do the essentially white English-speaking male middle-aged board members have?
Will apple-pie statements about corporate social responsibility from the present board chairman Jan du Plessis to US community representatives at this AGM, threatening litigation and reputation loss, continue to suffice?
*******
London Mining Network have commissioned a short film on the Rio Tinto plc London AGM. In it, Andy Hickman of UK NGO Down to Earth explains how Rio Tinto block out questions about the impacts of the Grasberg mine in West Papua.
Norwegian Council on Ethics in its Recommendation of 15 February 2008 to the Government Pension Fund whereby it disinvested in Rio Tinto, concluded that:
RT is “directly involved in the continuing “severe environmental damage caused by the mining operations” ie dumping approximately 250.000 tons of mining waste [tailings] into the river system each day, and that Rio Tinto’s environmental claims are implausible and seemingly designed to deceive. http://www.regjeringen.no/upload/FIN/etikk/Recommendation%20RT.pdf
Client Earth in their January 2010 report on UK Company Law : Digging Deeper found that UK public company mandatory reporting regulation on ESR is inadequate and ineffectual.
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