Multinational miners: magnanimous or malevolent?

Eritrea is one of the world’s poorest countries. The International Monetary Fund considers it a potential ‘Heavily Indebted Poor Country’, notwithstanding its natural resources endowment, which includes gold, silver, copper, zinc and potash.

Human Rights Watch recently released a report ‘Hear No Evil – Forced Labour and Corporate Responsibility in Eritrea’s Mining Sector’ which outlines Eritrea’s government’s abusive program of indefinite forced labour. It calls on governments, including Australia’s, to develop mechanisms that pay close attention to the human rights records of their companies when they operate in Eritrea.

Should the recommendations made by Human Rights Watch be limited to Eritrea?

It refers to Australia’s South Boulder Mines as “actively moving ahead with plans to develop new mines in Eritrea” and says that the head of South Boulder, David Hughes, expressed no awareness of the human rights risks involved in his company’s Eritrea operations and indicated that the company had not yet taken any measures to avoid the risks highlighted by Human Rights Watch.

Human Rights Watch recommends implementing legal frameworks, such as a local independent ombudsman, that allow government institutions to monitor the human rights performance of domestic companies when they operate abroad in areas that carry serious human rights risks; to take steps to regulate the human rights conduct of domestic companies operating abroad in complex environments, such as requiring companies to carry out human rights due diligence activity; and to communicate an expectation to the government of Eritrea that companies investing in the mining sector there should be able to implement the outlined recommendations.

How is Australia’s track record in other African countries?

‘Africa Down Under’, last year’s speech by Foreign Minister Bob Carr, confirms that Australia has about 200 Australian companies involved in 650 projects in 37 countries, including Malawi, Mozambique, Mali, Guinea, Democratic Republic of Congo, Botswana, Niger, Burkina Faso, Liberia and Namibia.

Many of these countries ranked poorly in Transparency International’s Corruption Perceptions Index last year and most, despite their vast mineral wealth, find themselves a part of the International Monetary Fund’s Heavily Indebted Poor Countries program which, according to U.S. embassy cables published by news organisation WikiLeaks, requires them to devalue their currencies and free their economic markets and foreign exchange rates.

It’s hardly coincidental that policies like these give multi-national corporations more bang for their buck if they are in the market for precious minerals and resources.

Rather than being a source of self-congratulatory braggadocio, the nature and locations of Australian companies’ operations should invite scrutiny to ensure that they are not complicit in corrupt conduct, environmental despoliation or human rights abuses.

That is why the recommendations made by Human Rights Watch come at a critical time. With rising mineral and commodity prices, high levels of corruption and low levels of accountability and transparency, internal displacement of people, climate change, water scarcity and deficient local mining and environmental legislation, efforts must be made by the Australian Government to protect the human rights, the environment and social conditions.

Malawi