Stockholm (NordSIP) – On Friday, April 5, the Church of England Pensions Board and the Swedish Council on Ethics for the AP Funds, supported by 96 investors with US$10.3 trillion AUM and by the PRI, announced they had sent an urgent letter to 683 listed extractives companies asking for specific disclosures on every individual tailings facility under their control. The companies have 45 days to answer this request.
The letter is part of a broader engagement effort by investors to improve the quality of tailing dams in mining facilities following a tragic accident at a Vale facility in January. “As responsible investors, we are committed to working with the mining sector to ensure that verifiable best practice standards are developed, implemented and maintained,” the letter explains. “To enable proper engagement on tailings dam management we need to assess the risks and the current state of tailings dam facilities that individual mining companies are associated with and/or have responsibility for, whether under construction, operation or retired/decommissioned.”
The letter makes four broad requests, detailed in 20 different questions that it wants companies to answer. First, it asks that the companies publish the disclosure on their website within 45 days. It also asks that the companies ensure that the disclosure is signed by the company CEO or Board Chair. Companies should also consider how to communicate any disclosure with communities that might be affected by the company tailings footprint. Finally, if unable to answer a question, or provide the requested information, the company should clarify what action it is taking to address the issues.
“These disclosures will drive a new level of accountability and transparency within the mining sector and will form the basis of further interventions as investors continue our engagement following the tragedy of Brumadinho,” said Adam Matthews, Director of Ethics and Engagement for the Church of England Pensions Board and the Co-lead on the Investor Mining & Tailings Safety Initiative. “It is essential that investors can establish a clear line of sight on which company has which tailings facility and how that facility is being managed. The current disclosures from companies are largely inadequate. We know good practice exists, but we need to be able to understand how every mining company manages each facility. We are working across the investment community and with expert input to create a global database to assess this information,” concluded Matthews.
According to the press release, the individual company disclosures will be scrutinised by investors as they develop an assessment framework to profile each company on their tailings management. This request follows two high-level investor roundtables convened by the Church of England Pensions Board and Swedish Council of Ethics at Church House in London on the 4th March and 1st April. Investors are due to meet again in May.
“Having had an initial in-depth review on this topic the need for serious action is very clear. These tailings dams are here for eternity, we need to set a global system in place that handles it, out of respect for the victims of the Brumadinho disaster but also for future generations,” clarified John Howchin, Secretary General of the Swedish Council on Ethics for the Swedish AP Funds.
The investors’ position also enjoyed support from academia. “Tailing dams are massive structures that store toxic waste. Even if they are well designed and operated, they have the potential to fail with catastrophic human and environmental impact,” according to Professor Upmanu Lall, Chair of the Department of Earth and Environmental Engineering and Director of the Columbia Water Centre at Columbia University. “Given the thousands of such sites, some failures are inevitable. Alternative mining strategies that are benign are needed. Monitoring, mitigation and accurate disclosure of these risks to investors and society is a primary fiduciary responsibility for mine operators.”