A high-level delegation of institutional investors is to visit the sites of the Mariana and Brumandinho tailings dam collapses in Brazil later this year in order to assess for itself the responses to the tragedies amid “radically divergent” accounts of what has happened.
The delegation will be made up of representatives from the Church of England Pensions Board (CEPB), the Council of Ethics for the Swedish Public Pension Funds, UN Principles for Responsible Investment (PRI), and the Local Authority Pension Fund Forum (LAPFF).
Last January, the collapse of a tailings dam near a mine in south-east Brazil killed 270 people, while a river of iron ore waste contaminated the countryside. This led to calls from institutional investors for a global independent public classification system to monitor the safety risk of such dams.
Immediately afterwards and in response to the disaster, the CEPB and the Council of Ethics set up the Global Mining and Tailings Safety Initiative, a vehicle for engagement which convenes institutional investors active in the extractive industries and which now has over US$14trn (€12.7trn) in assets under management.
The CEPB and the Swedish funds also sold their shares in Vale, the company which owns the mine, immediately after the disaster.
The delegation to Brazil was announced today at the Initiative’s summit held in London, in which representatives of the communities affected participated.
‘Radically divergent accounts’
Doug McMurdo, LAPFF chair, said the organisations behind the initiative sought equally to understand both the company and the community perspectives.
“As both human beings and investors, we need clarity not just on what happened, but about how to respond”
Doug McMurdo, LAPFF chair
“Our difficulty is that we are hearing radically divergent accounts of events and responses, and as both human beings and investors, we need clarity not just on what happened, but about how to respond to where we are now and how to prevent future tragedy.”
McMurdo continued: “To this end, the delegation will undertake its own assessment of the responses from companies to the Mariana and Brumadinho disasters. It will report against defined terms of reference, which will be published in due course following engagement with the communities and other stakeholders.”
The summit also saw the launch of the first-ever global public database of over 1,900 tailings dams, which captures disclosures made by mining companies in response to the request made by the group.
At the summit, investors adopted a set of principles for mining companies as well as principles to guide how investors engage with and finance the sector. These principles will be presented to PRI and all members asked to support them.
Meanwhile, the group called on companies and governments to jointly set up a global tailings alert/monitoring system similar to those in aviation and shipping, to establish an urgent process of identifying and then removing the most dangerous tailings dams.
John Howchin, secretary general of the Council of Ethics for the Swedish Public Pension Funds and co-chair of the Global Mining and Tailings Safety Initiative said: “One year on from this disaster, that should never have happened, we release the first global tailings database tracking 1,900 of the world’s tailings dams.
“This is a fraction of the dams that exist but it is a start, and establishes what we expect from any company seeking finance from investors.”
Howchin said: “We are continuing to engage with companies that have not disclosed, and will use votes and company AGMs to ensure this request is responded to. Not reporting is unacceptable and poses a risk to our pension funds.”