The Observer view on global mining regulation

Date of publication: 
2 August 2015

The suffering of communities in Zambia’s copper mining region highlights the need to create a global regulatory regime

The appalling suffering of villagers living close to the mining town of Chingola, in Zambia’s copperbelt region, whose water supplies have been dangerously polluted by leaks of sulphuric acid and other toxic chemicals, is both avoidable and unacceptable. As we report today, the Chingola pollution and associated environmental damage has led to serious health problems for those affected, such as potential organ failure, cancers and permanent disabilities, as well as failed crops, loss of earnings and livelihoods.

This continuing toll on life and well-being is wholly avoidable, in part because the problems associated with Vedanta Resources’ giant mine at Chingola have been common knowledge for some years.

A scientist whistleblower familiar with company activities claimed operating and maintenance standards were consistently poor from 2005, when the Vedanta-owned subsidiary, KCM, bought the plant. “There have been heavy spillages and massive leakages. Acid has been leaking all over the place… No effort has been made to correct this scenario,” the whistleblower said.

Avoidable, too, because public attention has been drawn to the Chingola situation in the past. In April, Zambia’s supreme court upheld a 2011 high court judgment that found Vedanta (KCM) guilty of water pollution in 2006. But compensation payments to 2,000 claimants who said they suffered liver and kidney damage and other illnesses remain uncertain. Separate proceedings against London stock exchange-listed Vedanta began in the high court in London last week. A demonstration is planned outside the company’s AGM in London tomorrow, part of a “global day of action” by activists protesting at the activities of Vedanta and its subsidiaries in Africa and Goa, India.

The Chingola case is unacceptable, in part because it seems so familiar. To a limited degree, some mining companies and the extractive industries’ national bodies have moved to clean up their act in recent years. Public awareness of issues arising directly and indirectly from mining in its various forms is greater than it once was, as the passionate debate in Britain about fracking has shown. But that said, the continuing problems linked to mining – human health and rights, climate change, deforestation, environmental pollution, water resources, and adverse impacts on biodiversity – are among the most fundamental challenges of our age. Not nearly enough is being done by mining companies or government regulators to mitigate them.

The days when British coal miners died in large numbers in underground pit disasters and from mining-related disease have thankfully passed. Only about 34,000 people are now directly employed in mining, broadly defined, in the UK. But like other countries, Britain is not immune, for example, to the un-lovely effects of open-cast mining and quarrying.

In Appalachia, in the eastern US, for example, strip mining involving the removal of whole mountain-tops continues to exact a huge environmental and human toll, particularly in respect of clouds of dust particles linked to cancer. In Soma, in western Turkey, the trial of allegedly negligent mining company officials continues after an underground fire that killed more than 300 miners last year.

In the high sierras of Latin America and the deep waters of the Gulf of Mexico, miners and seabed oil-drillers continue to pay the ultimate price for the global scramble for cheap energy resources. In remote stretches of Inner Mongolia, residues from China’s booming rare earth industry have created a vast inland lake full of toxic sludge.

And in terms of regulation, Chingola is again a case in point. Aware it had a pollution problem, Vedanta employed a leading Canadian engineering firm in 2010 to advise on remedies. But the Canadians’ subsequent, critical findings do not appear to have been acted on.

Governmental inaction also greeted the findings of the House of Commons’ business, innovation and skills select committee, whose report last October on the activities of the extractive industries in the UK and around the world supported calls by NGOs for closer scrutiny of London-listed companies, but tiptoed around some of the nitty-gritty issues. The UK, it said, was “at risk of being associated with some of the negative practices often reported alongside the [mining] sector. To counter this, more needs to be done to improve social and environmental performance, transparency and reputations of the companies it hosts.”

Pressure groups testifying before the committee were more incisive. The Publish What You Pay NGO highlighted “profit shifting, transfer mispricing, secret deals and the use of secretive shell companies and tax havens” by international mining companies operating out of London. It advocated an open, public ownership registry, in part to curb tax avoidance. Christian Aid said the current lack of transparency contributed to corruption. World Wide Fund for Nature UK suggested these factors encouraged a belief that the reputation of the extractive industries “is at an all-time low”.

Unperturbed, the committee accepted government assurances that London-listed mining companies were not dodging tax. The UK exchequer was grateful for what it received: £6.1bn in 2012-13. Britain had joined the Extractive Industries Transparency Initiative, the committee noted approvingly. This and various new EU directives would help the UK “become a beacon of best practice”.

This conclusion, and the government’s response, smack of complacency. Like the financial and banking sector before the 2008 crash, too many mining companies around the world, such as Vedanta, still put profit and greed before people and the planet. This cannot go on. As a study by the Massachusetts Institute of Technology found, “international regulation is necessary to prevent mining facilities from damaging the environment, to ensure the safety of miners, and to effectively deal with conflicts that arise over the international trade of strategic minerals”. Since offenders continue to offend, a comprehensive, muscular and mandatory global regulatory regime is required.