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5 August, 2005ICEM News release No. 45/2000
Directors of mining giant Rio Tinto came under heavy attack from shareholders at the company's Annual General Meeting in London today.
Speakers criticised the company's record and expressed dismay that its board had chosen to oppose two resolutions brought before the AGM by the Coalition of Rio Tinto Shareholders.
The resolutions call upon Rio Tinto to appoint one single, non-executive Deputy Chairman and to implement in full the core standards of the UN's International Labour Organisation (ILO), which protect basic human rights at work.
Supporting speeches this morning included criticism of Rio Tinto's disclosure standards, as well as a strong warning that discontent within the Rio Tinto workforce could spread globally.
But trade unions represented at the AGM also declared their willingness to promote social dialogue and a sustainable mining industry worldwide.
BROAD SUPPORT
Not for the first time, shareholders at this morning's AGM were irritated by the high-handedness of Rio Tinto chairman Robert Wilson. He dismissed the resolutions as irrelevant to corporate governance. Wilson also candidly admitted that he was "trying to run a controlled meeting."
Under its dual-listing structure, Rio Tinto holds two Annual General Meetings (AGMs) - today's one in London and another in Brisbane, Australia, on 24 May. The resolutions will also be put to shareholders at the Brisbane AGM.
The outcome of the vote on the two resolutions will not be announced until after the Brisbane event.
However, some big institutional shareholders with over 65 billion pounds sterling in assets [over 99.7 billion US dollars] had already said publicly that they would back the motions.
These supporters include the Co-operative Insurance Society Ltd. (CIS), one of the largest shareholders in Rio Tinto with more than 23 billion pounds under management. Friends, Ivory and Syme plc, a global investment management firm with more than 37 billion pounds under management, said it would vote for the resolution on ILO standards. Other big shareholders publicly supporting the resolutions include the West Yorkshire Pension Fund and the South Yorkshire Pension Authority.
The campaign is backed by the Australian Construction, Forestry, Mining and Energy Union (CFMEU), the Australian Council of Trade Unions (ACTU), the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the British Trades Union Congress (TUC) and the International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM). The ICEM is a global industrial union federation representing more than 20 million workers of all continents.
This is the first time that trade unions have organised a shareholder campaign of this kind at the global level.
SOCIAL DIALOGUE NEEDED
"We in the trade unions want social dialogue with the multinational companies in general - not least with the big mining corporations," ICEM President John Maitland told the AGM.
"We see challenges for the mining industry at the environmental, social and economic levels," Maitland said. "We are prepared to address these challenges and we support the principles both of the Global Compact launched by UN Secretary-General Kofi Annan and of the Global Mining Initiative - provided that a genuine effort is made to involve all the stakeholders."
Amongst other things, the Global Compact would encourage corporate social responsibility and social dialogue between unions and companies. The Global Mining Initiative, launched by the major mining companies, aims to promote a sustainable, environmentally and socially acceptable global mining industry.
WORKER RIGHTS ...
"My union endured the apartheid era and won basic freedoms for our members," Senzeni Zokwana told the shareholders this morning. Zokwana, who is President of South Africa's ICEM-affiliated National Union of Mineworkers (NUM), was speaking in favour of the resolution on compliance with ILO standards.
The NUM is South Africa's biggest union, with more than 300,000 members. It now has a "cooperative relationship" with Rio Tinto, Zokwana said. But "it was not always so. The South African mining industry was one of the pillars of the apartheid system, and Rio Tinto was very much a part of that."
It was, Zokwana said, "extremely disappointing" that "the company my union works with in South Africa" is "delaying verifiable compliance with the core ILO Conventions." He was also "distressed when I learn that there are places outside South Africa where Rio Tinto does not respect the rights of its workers." In particular, he cited Rio Tinto's current anti-union campaigns in Australia.
And Zokwana issued a clear warning to the company: "If Rio Tinto will not respect the rights of workers to form independent trade unions and to bargain collectively in every country, then workers in South Africa too will have a problem with Rio Tinto."
Supporting Zokwana's call to adopt the resolution was Tony Maher.
He is the President of the Mining and Energy Division within ICEM Australian affiliate the CFMEU.
Since 1995, the CFMEU has been in conflict with Rio Tinto company management "on numerous occasions and at numerous sites," Maher recalled.
But "we haven't come all the way to the UK to argue over wages and conditions," he insisted. Most of the Australian disputes "go far deeper than that."
"The company says it respects the right of its employees to bargain collectively," Maher pointed out. "But on numerous occasions the company has been found, in Australia, to discriminate against its employees on the basis of union membership and union activity."
Unions "from around the world" had sent representatives to the AGM because the real issue was "the basic rights of Rio Tinto employees worldwide to join a union and to bargain for a fair deal with the company."
The benefit to shareholders in adopting the resolution would be "risk management," Maher said. "Everything the company does is increasingly subject to public scrutiny - not just in the local community but across the world. Rio Tinto's performance in Indonesia may well affect its right to operate in Canada or the USA."
The resolution was about "lifting the game of the industry," he argued. "It's about Rio Tinto moving away from warm, fuzzy statements about principles to firm commitment to well-known human rights treaties." To reject the resolution would be to imply that Rio Tinto "cannot, or will not, comply with global minimum standards. "
That would be "extremely disappointing," Maher stated. But more than that, it would be "a bad sign for the future of this company. Maintaining and increasing shareholder value over the long term is about acknowledging trends and risks and adapting to meet them."
On labour relations issues, the ICEM has already offered to negotiate and sign a global agreement with Rio Tinto. Under such an agreement, the ICEM and its affiliated unions worldwide would verify, among other things, the company's compliance with ILO core standards. Through the ICEM, unions would have the right to raise with Rio Tinto corporate management any alleged breaches of these standards.
However, the ICEM has also made it clear that Rio Tinto must resolve current industrial disputes in Australia before a global agreement can be signed.
... AND SHAREHOLDER RIGHTS
On corporate governance, too, speakers were sharply critical of Rio Tinto's current practice.
The resolution on this would "strengthen the board's accountability to shareholders," Bill Patterson argued, because it would "guarantee a balance between the executive and fully independent non-executive directors of Rio Tinto." Patterson is the Director of the Office of Investment at the US labour federation AFL-CIO.
Rio Tinto's corporate governance standards "fall short" when compared with those of its peers in the UK mining industry, Patterson said. Also, "many of Rio Tinto's cross-listed peers such as Reed International, Shell Transport and Trading, or Unilever, have adopted higher standards of disclosure and corporate governance." Moreover, Rio Tinto's standards of executive independence are below "what is considered best practice in Australia and the US."
The proposals in the resolution were not "unusual, revolutionary, or even particularly new," said Simon Steyne, TUC International Officer and a Director of the Ethical Trading Initiative. They reflected a growing consensus within the business community, among non-governmental organisations and, indeed, among many governments.
"What we propose is in the interest of the company and all its stakeholders," Steyne insisted, "and it is a strategy reflected in the practice of large numbers of forward-thinking international companies."
Core labour standards "make good business sense," he pointed out. "They are the foundation of modern industrial relations and a modern human resources strategy."
Speakers criticised the company's record and expressed dismay that its board had chosen to oppose two resolutions brought before the AGM by the Coalition of Rio Tinto Shareholders.
The resolutions call upon Rio Tinto to appoint one single, non-executive Deputy Chairman and to implement in full the core standards of the UN's International Labour Organisation (ILO), which protect basic human rights at work.
Supporting speeches this morning included criticism of Rio Tinto's disclosure standards, as well as a strong warning that discontent within the Rio Tinto workforce could spread globally.
But trade unions represented at the AGM also declared their willingness to promote social dialogue and a sustainable mining industry worldwide.
BROAD SUPPORT
Not for the first time, shareholders at this morning's AGM were irritated by the high-handedness of Rio Tinto chairman Robert Wilson. He dismissed the resolutions as irrelevant to corporate governance. Wilson also candidly admitted that he was "trying to run a controlled meeting."
Under its dual-listing structure, Rio Tinto holds two Annual General Meetings (AGMs) - today's one in London and another in Brisbane, Australia, on 24 May. The resolutions will also be put to shareholders at the Brisbane AGM.
The outcome of the vote on the two resolutions will not be announced until after the Brisbane event.
However, some big institutional shareholders with over 65 billion pounds sterling in assets [over 99.7 billion US dollars] had already said publicly that they would back the motions.
These supporters include the Co-operative Insurance Society Ltd. (CIS), one of the largest shareholders in Rio Tinto with more than 23 billion pounds under management. Friends, Ivory and Syme plc, a global investment management firm with more than 37 billion pounds under management, said it would vote for the resolution on ILO standards. Other big shareholders publicly supporting the resolutions include the West Yorkshire Pension Fund and the South Yorkshire Pension Authority.
The campaign is backed by the Australian Construction, Forestry, Mining and Energy Union (CFMEU), the Australian Council of Trade Unions (ACTU), the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the British Trades Union Congress (TUC) and the International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM). The ICEM is a global industrial union federation representing more than 20 million workers of all continents.
This is the first time that trade unions have organised a shareholder campaign of this kind at the global level.
SOCIAL DIALOGUE NEEDED
"We in the trade unions want social dialogue with the multinational companies in general - not least with the big mining corporations," ICEM President John Maitland told the AGM.
"We see challenges for the mining industry at the environmental, social and economic levels," Maitland said. "We are prepared to address these challenges and we support the principles both of the Global Compact launched by UN Secretary-General Kofi Annan and of the Global Mining Initiative - provided that a genuine effort is made to involve all the stakeholders."
Amongst other things, the Global Compact would encourage corporate social responsibility and social dialogue between unions and companies. The Global Mining Initiative, launched by the major mining companies, aims to promote a sustainable, environmentally and socially acceptable global mining industry.
WORKER RIGHTS ...
"My union endured the apartheid era and won basic freedoms for our members," Senzeni Zokwana told the shareholders this morning. Zokwana, who is President of South Africa's ICEM-affiliated National Union of Mineworkers (NUM), was speaking in favour of the resolution on compliance with ILO standards.
The NUM is South Africa's biggest union, with more than 300,000 members. It now has a "cooperative relationship" with Rio Tinto, Zokwana said. But "it was not always so. The South African mining industry was one of the pillars of the apartheid system, and Rio Tinto was very much a part of that."
It was, Zokwana said, "extremely disappointing" that "the company my union works with in South Africa" is "delaying verifiable compliance with the core ILO Conventions." He was also "distressed when I learn that there are places outside South Africa where Rio Tinto does not respect the rights of its workers." In particular, he cited Rio Tinto's current anti-union campaigns in Australia.
And Zokwana issued a clear warning to the company: "If Rio Tinto will not respect the rights of workers to form independent trade unions and to bargain collectively in every country, then workers in South Africa too will have a problem with Rio Tinto."
Supporting Zokwana's call to adopt the resolution was Tony Maher.
He is the President of the Mining and Energy Division within ICEM Australian affiliate the CFMEU.
Since 1995, the CFMEU has been in conflict with Rio Tinto company management "on numerous occasions and at numerous sites," Maher recalled.
But "we haven't come all the way to the UK to argue over wages and conditions," he insisted. Most of the Australian disputes "go far deeper than that."
"The company says it respects the right of its employees to bargain collectively," Maher pointed out. "But on numerous occasions the company has been found, in Australia, to discriminate against its employees on the basis of union membership and union activity."
Unions "from around the world" had sent representatives to the AGM because the real issue was "the basic rights of Rio Tinto employees worldwide to join a union and to bargain for a fair deal with the company."
The benefit to shareholders in adopting the resolution would be "risk management," Maher said. "Everything the company does is increasingly subject to public scrutiny - not just in the local community but across the world. Rio Tinto's performance in Indonesia may well affect its right to operate in Canada or the USA."
The resolution was about "lifting the game of the industry," he argued. "It's about Rio Tinto moving away from warm, fuzzy statements about principles to firm commitment to well-known human rights treaties." To reject the resolution would be to imply that Rio Tinto "cannot, or will not, comply with global minimum standards. "
That would be "extremely disappointing," Maher stated. But more than that, it would be "a bad sign for the future of this company. Maintaining and increasing shareholder value over the long term is about acknowledging trends and risks and adapting to meet them."
On labour relations issues, the ICEM has already offered to negotiate and sign a global agreement with Rio Tinto. Under such an agreement, the ICEM and its affiliated unions worldwide would verify, among other things, the company's compliance with ILO core standards. Through the ICEM, unions would have the right to raise with Rio Tinto corporate management any alleged breaches of these standards.
However, the ICEM has also made it clear that Rio Tinto must resolve current industrial disputes in Australia before a global agreement can be signed.
... AND SHAREHOLDER RIGHTS
On corporate governance, too, speakers were sharply critical of Rio Tinto's current practice.
The resolution on this would "strengthen the board's accountability to shareholders," Bill Patterson argued, because it would "guarantee a balance between the executive and fully independent non-executive directors of Rio Tinto." Patterson is the Director of the Office of Investment at the US labour federation AFL-CIO.
Rio Tinto's corporate governance standards "fall short" when compared with those of its peers in the UK mining industry, Patterson said. Also, "many of Rio Tinto's cross-listed peers such as Reed International, Shell Transport and Trading, or Unilever, have adopted higher standards of disclosure and corporate governance." Moreover, Rio Tinto's standards of executive independence are below "what is considered best practice in Australia and the US."
The proposals in the resolution were not "unusual, revolutionary, or even particularly new," said Simon Steyne, TUC International Officer and a Director of the Ethical Trading Initiative. They reflected a growing consensus within the business community, among non-governmental organisations and, indeed, among many governments.
"What we propose is in the interest of the company and all its stakeholders," Steyne insisted, "and it is a strategy reflected in the practice of large numbers of forward-thinking international companies."
Core labour standards "make good business sense," he pointed out. "They are the foundation of modern industrial relations and a modern human resources strategy."