The main activity of Glencore in Zambia is the mining of copper and cobalt, which is carried out through the subsidiary Mopani Copper Mines mainly on the Copperbelt province in the areas of Mufulira and Kitwe. The environmental effects of mining activities specific to the Mufulira Kanyono site are mainly air, water and land/soil pollution, mainly due to sulphur dioxide emission above WHO minimums in the construction of the extraction plants, and causing permanent damage to livelihoods and cultivations. The pollution forms acid rain and endangers plant life. Furthermore, Mopani Copper Mines smuggles its profits out of Zambia without paying taxes and bringing profits to a tax haven, Switzerland, according to a leaked Financial Audit Report carried out by tax specialists Grant Thornton and Econ Poyry, analysing the balances of the company and mine activities from 2003 to 2008.
History of the conflict The mining sector in Zambia is consolidated and has been mining copper working for over a hundred years. Prior to the privatization of the mines in the 1990’s and early 2000s’, the Zambian mining sector was seen as a reflection of the state’s developmental philosophy and fruitful public investment of produced revenues. The mines managed the environment in the mine townships, maintained the roads, collected refuse and also supported and maintained recreation centres doted around the townships. Key industries related to the mining sector also flourished, and brought consistent wealth to the country.
However, the now privately owned mining companies have a focus on profit making and further been involved in serious incidents of environmental mismanagement that have compromised the health of the local people. The activities of Glencore in Zambia are now conducted by a subsidiary company named Mopani Copper Mines, and notwithstanding the incentives and the profitability of its mining operations, Mopani Copper Mines has reported zero profits for over ten years of operations in Zambia, until 2012.
Zambia needs tax revenue, in order to fund education, health and other infrastructures of public utility. In addition to this, the emissions of sulphur dioxide from mining are associated with diseases, acid rains, crops diseases, and other environmental damage that the company agreed to reduce but failed to do so effectively until this moment.
The environmental effects of mining activities are mainly air, water and land/soil pollution. The pollution of air is due to sulphur dioxide emission from the smelter. It was established that Mopani Copper Mines’ purification method allowed sulphur dioxide 70 times above the WHO minimums. The sulphur dioxide emitted in the air sometimes forms acid rain in the rainy season and this endangers plant life, and inhibits the growth of vegetation by poisoning the soil. The emissions of sulphur dioxide also pose serious risks of respiratory diseases for workers and populations exposed to it. A section of the mining site in Mufulira was even closed in 2012 because of its pollution levels, and since the acid mists produced was harming local communities and damaging the environment.
Furthermore, Mopani Copper Mines smuggles its profits out of Zambia without paying taxes and bringing profits to a tax haven, Switzerland, according to a leaked Financial Audit Report carried out by tax specialists Grant Thornton and Econ Poyry, analysing the balances of the company and activities mine from 2003 to 2008.
The role of the Architecture of Impunity During the nineties, via pressure of the International Monetary Fund (IMF) and the World Bank, foreign investors entered the liberalised market and overtook most national companies that were privatised and are now owned by foreign capital. Zambian authorities adopted fiscal and political measures required by international creditors and created an environment attracting foreign investment, especially through low taxes and an assortment of exemptions. Many of these measures were even softened through development agreements signed by the government of Zambia directly with several different transnational corporations individually, granting specific favourable conditions to each.
In particular, the Government tried to review the mining tax regime and introduce the windfall tax in 2008. This tax was introduced to establish an equitable distribution of the mineral wealth between the government and the mining companies. The measure obviously faced a lot of resistance from the mining companies and was revoked in 2009. In addition, that same year other reforms were introduced including the abolishment of several development agreements. Besides the tax benefits, Mopani Copper Mine received a massive 48 million Euros loan from the European Investment Bank for the purposes of smelter up-grade project.
Attempts of access to justice MCM had violated the OECD’s guidelines on Multinational Corporations and Human Rights, as it resorted to accounting manipulations to conceal its profits and to reduce its imposable tax base. Implying transfer pricing between Mopani and its distribution partner (Glencore), failed to comply with the OECD’s arm’s length principle. Further violations of the OECD guidelines violations include the breaching of local communities human rights, the failure to communicate and consult with communities on environmental, health and safety policies, and breach of the WHO limits on sulphur dioxide emissions.
Following the appearance of the devastating effects of mining, in 2011 the Centre for Trade Policy and Development initiated a campaign called “Pay up, Clean up or Get Out!”. This is a Public Interest Initiative to Restore and Compensate Environmentally Damaged Communities resulting from operational activities by Multinational Companies operating in selected communities in Zambia. The Campaign focuses on empowering local communities that directly affected by the negative effects on the environment by the mining operations, while seeking to highlight, expose, and follow up on incidences and cases of environmental pollutions (air and water), soil degradation, and related damages. The campaign involved a number of regional and international organisations to highlight consequences of the mining, like the Zambia Alternative Mining Indaba and the Capetown Alternative Mining Indaba.
One of the major activities under this campaign has been a civil litigation case against Mopani Copper Mines in European courts, as well as Zambian courts, for the acid spoilage in the domestic water supply which contaminated the entire district of Mufulira in 2008 due to the ion consequence of the mining method “Acid leaching” process to extract copper from the ore body underground. The Centre for Trade Policy and Development and other organization including SHERPA (France), the Berne Declaration (Switzerland), l’Entraide Missionnaire (Canada), and MiningWatch (Canada), filed a complaint in 2011 against Glencore International AG and First Quantum Minerals Ltd before Swiss and Canadian OECD National Contact Points for violating the Guidelines for Multinational Enterprises. The argument for the complaint is in the financial and accounting manipulations of the subsidiary Mopani Copper Mines aimed at evading taxation in Zambia. An agreement with the company was reached through mediation, but this was a disappointment, as it did not go further than an agreement to disagree. The result shows that there is no point in dialoguing with the company on this, as it hads not even complied with its commitment to respond to a detailed set of questions regarding its tax payments. Moreover, some of these organisations together with Christian Aid, Oxfam International, Friends of the Earth France and Tax Justice Network Africa, wrote to the European Investment Bank urging it to give suit to the investigations on tax evasions by Mopani Copper Mines in Zambia. Despite this, the results of the investigation were not made public; the President of the European Investment Bank gave order not to accept new loan applications from Glencore and its subsidiaries due to the group’s concerning corporate governance.
What Justice could do: a say from the TPP In a hearing that was held in Geneva in June 2014, the Permanent People’s Tribunal (PPT) listened to the testimonies of Nkula Edward Goma, of Centre for Trade Policy and Development. In line with the evidence brought before the judges by this witness, the Tribunal recognized the actions of the transnational corporation as another example of violations of human and people rights. In line with its full judgement of Madrid, in May 2010, and just a few months before the session that was subsequently held in Mexico in December 2014, the PPT underlined once again how transnational corporations, including Glencore and its subsidiary in Zambia, systematically violate human and peoples’ rights to their own profit. In the same line, the PPT recognized in this widespread practice the current shortcoming of international law, namely the impossibility of accessing justice and obtaining a remedy that is increasingly becoming an unbearable burden for affected communities, as well as for the laws that are supposed to give them shelter. In the same spirit, the PPT acknowledged the necessity to improve international legislation, including through a binding treaty on transnational corporations, and/or a peoples’ treaty, in order to hold transnational corporations accountable for their actions.