Most people will have noticed in the news recently that conflicts between miners and management at the Lonmin-owned Marikana mine in South Africa led to the police shooting dead 34 people. If you really want to you can watch some footage of it. Some observers say that the miners were herded into a barbed wire pen, had tear gas shot at them, then the police killed them as they tried to escape.
Now here is something I came across in the course of other research: a quote from the Co-operative Bank’s 2012 ‘Responsible Investment’ Review.
Lonmin is one of only two mining companies presently allowed in our Sustainable range of funds. Lonmin’s sole product is Platinum Group Metals, which are mostly used in catalytic converters to scrub emissions and increasingly in renewable technologies. Lonmin had historically demonstrated the best safety record in a dangerous industry, South African platinum mining. So we shared the alarm expressed by CEO Ian Farmer at the 2011 half-year results that the fatality rate for the half-year was already double the number for all of 2009. The loss of life and serious disability are cause enough for reflection but it was sobering as investors to realise that 10% of operating days were lost at the Marikana mine in 2010 because of safety – and this itself was a 42% improvement on the previous year.We engaged immediately with Lonmin, contacting the senior independent director to understand what analysis the company had carried out and planned remedies.
[…]Lonmin’s investor relations team also sent a detailed letter, which we followed up with several meetings, that examined the causes of the accidents (which appear to be behavioural rather than inadequate procedures) and spelled out their remedies. It also confirmed no one in the company would receive any bonus element relating to safety for the year. The last quarterly results showed a major decrease in fatalities but we continue to monitor the situation.
So the most ethical funds of the UK’s most ‘ethical’ high street banks have money in Lonmin. Isn’t that an interesting lesson in ethical investment? And isn’t that last line more than a little uncomfortable to read now? The Co-op Bank considered themselves to be engaged in a process with Lonmin that would render it a more ‘ethical’ company. Now we know that while the Co-op believed themselves to be having a positive effect, Lonmin was enacting all sorts of other policies that would ultimately lead to the killings of their workers.
For me it calls into question the whole model of ‘ethical investment’ the Co-op believes in. The problem is, even if you accept that an obsessive focus on the profit motive is a good way to do economic organising, there is something about corporations that resists ethical pressure. As currently structured they are fundamentally secretive, non-transparent, unaccountable organisations. If you pressure them into improving something in one place they can do something horrific where you’re not looking. I was just yesterday trying to look up information on certain mining projects in Colombia. The details are not available even to investors. You simply can’t know what they’re up to. Corporations were designed that way. The details of their operations are not considered your business. Just invest, buy the products and shut up.
Incidentally while current accounts with the Co-op Bank don’t go into mining companies for ethical reasons, the Co-op investment funds also have money in Glencore, Xstrata, Rio Tinto, BHP Billiton and other companies complicit in throwing indigenous peoples of their land, environmental destruction and corrupting governments. I think the Co-operative Bank should at least be more honest about what they can and cannot do in terms of their ‘ethical’ influence. Or if they really want to have an ethical influence perhaps they should call for corporations to be transparent (it would be a start if we could put in FOI requests to corporations for example) and accountable for their actions. Any effect the Co-op could have on individual corporations would be dwarfed by, for instance, pressuring the government to ensure UK corporations and their senior management can be sued more easily for crimes overseas – and for crimes in the UK for that matter.