Extractive companies regularly find themselves embroiled in human rights conflicts. Colombian mining giant Cerrejón is taking steps to minimise its impact

Colombia is fast becoming an important player in the global coal market. In a good year, the South American nation exports about 80m tonnes. Roughly two-fifths of that comes from just one mine. Located in the north-eastern state of La Guajira, close to the border with Venezuela, Cerrejón’s 69,000-hectare concession is home to one of the largest open pit coal mines in the world.

With size comes public spotlight. Mining remains hugely contentious in Colombia. The reason is simple: most of it is small-scale, poorly regulated (if at all) and often very polluting. Artisanal and small-scale miners blocked roads across the country in early 2013, demanding new provisions in the country’s mining code. Workers in larger firms are also lobbying for better pay deals. This year has seen both Drummond and Cerrejón, two of the sector’s largest foreign investors, face bitter union disputes.

The big issue of the day, both at home and abroad, is the industry’s poor reputation for human rights. Historically, mining firms have been accused of collusion in abuses with state and paramilitary forces. Allegations of forced displacement, destruction of local livelihoods and endangering public health also fall at their door.

As the country’s largest mining company, Cerrejón receives a fair portion of the flak directed at the industry. The company’s union, a coalition of indigenous peoples’ groups and women’s rights organisations recently joined other community-based campaign groups in calling for a state-wide strike against the company. Why? Lack of basic public infrastructure and widespread poverty in the area, despite 35 years of mineral development.

Internationally, meanwhile, Cerrejón has been the subject of highly critical reports by London-based campaigners ABC Colombia, the London Mining Network and the World Development Movement, among others.

In short, Cerrejón is under pressure to act. So what can and should a large-scale miner be doing to best manage its human rights impacts? And, given the depth of public distrust, how can it convince observers that its actions are credible?

Transparent governance

Management without governance is like a ship without a rudder. On a complex, disputed issue such as human rights, vague statements of intent don’t cut it. First, clear policies are required. Second, clear reporting lines are necessary – the higher up the institution they run, the better. Third, clear accountability mechanisms are needed.

Cerrejón set about formalising and systematising its human rights management in 2005, establishing a distinct human rights office. This sits within the company’s social standards division, where responsibility for security, dispute resolution, social impact monitoring, and public consultation also resides. The director for social standards, Carlos Franco, reports directly to the company’s vice-president for public affairs and communications, Juan Carlos Restrepo, who is the government’s former anti-narcotics “tsar”. In sum: the issue now carries internal clout.

From a policy perspective, Cerrejón has looked to cover all the main bases. At the same time as setting up its human rights division, it signed up to the Voluntary Principles on Security and Human Rights, the UN-backed benchmark standard for training and monitoring security personnel.

Two years later, it adopted the clauses within the International Finance Corporation’s (IFC) Social and Environmental Performance Standards that relate to human rights: on social and environmental risk management, on involuntary resettlement and regarding indigenous peoples. More recently, it has put its name to the United Nation’s Guiding Principles on Business and Human Rights, which were released in 2011 and advocate the Protect, Respect and Remedy framework.

Values statement

Encompassing these and similar policy commitments is the Cerrejón Way, a general values statement that all 10,000 or so employees and contractors are expected to abide by. These include relevant ILO conventions, the UN Global Compact and the UN Declaration on Human Rights, among others (see box).

In addition, Cerrejón has a two-page human rights statement, which spells out a dozen specific commitments. These range from a general pledge to respect Colombian legislation and to promote human rights in its “area of influence”, through to special consideration for the customs of indigenous people and the “transparent, efficient and timely” resolution of complaints.

“Before 2005, there was a willingness [to address human rights], but no formal standards on human rights,” says Franco.

Policies are all well and good, but their value rests entirely on their implementation. In this respect, Cerrejón has a head start. It boasts three multinational owners – Anglo American, GlencoreXstrata and BHP Billiton – all of which have best practice management processes from which Cerrejón can draw. Cerrejón has done just that in that case of Seat, for example, Anglo’s award-winning social impact methodology.

With respect to accountability and transparency, Cerrejón operates internal mechanisms to inform management on compliance performance. As yet, it does not regularly report externally, however. This is commensurate with its status as a wholly owned private enterprise, the company says. Needless to say, critical external stakeholders would welcome more information in the public arena.

That said, Cerrejón’s human rights record isn’t without scrutiny. Back in 2007, it invited a panel of NGO and academic experts to examine its human rights performance. The resultant report identified 24 issues on which the company needed to improve. Every six months, the company reports its progress against these. To date, Cerrejón has met its targets on 19 of these issues (the remainder, it says, require the participation of other parties, such as the local government).

Cerrejón has followed up on this base report in 2011 with a human rights audit by independent consultancy firm ERM. The study assesses risks in a range of areas, from land use and migration through to royalty payments and employee health and safety. The final report breaks down the impacts, affected groups, risk level and recommended actions for each subject area (see box). 

Security concerns

As with other parts of the country, La Guajira bears the scars of Colombia’s protracted civil conflict. Although the worst years of violence are now behind the war-torn country, guerrilla forces still operate in the area around Cerrejón’s operations, crossing in and out of neighbouring Venezuela. Cerrejón finds itself directly affected. In 2012, for instance, it counted half-a-dozen violent attacks against its facilities, with rebel forces particularly targeting its 150km railway to the coast. 

With Cerrejón’s mine a strategic national asset, the government has billeted about 800 soldiers to protect the site, rail infrastructure and its loading port along the coast. Their activities are supplemented by an additional 1,200 or so private security personnel, who are contracted by the company.

As a signatory to the Voluntary Principles on Security and Human Rights (VPs), Cerrejón has undertaken a range of measures designed to minimise the risk of abuses by public or private security forces. These include:

• raising awareness of Cerrejón’s human rights policy among security personnel, and providing relevant training where necessary;
• incorporation of VPs in contracts with security providers and agreements with the Colombian Public Forces;  
• development of indicators to measure VP compliance; and
• arrangement of meetings between local communities and security forces to address security impacts.  

Among the other major human rights flashpoints for Cerrejón is resettlement. The current owners face a serious legacy issue: a number of communities within the company’s extensive concession area were resettled by Cerrejón’s previous owners. While these residents received financial compensation, little thought was given to their housing, economic and social needs. In the case of the village of Tabaco, which underwent a mandatory expropriation in 2001, residents were subjected to violence by police.

Over the past decade, the expansion of Cerrejón’s operations has required the resettlement of five communities in total, affecting about 1,000 people. A number of key principles have governed this process, says Cerrejón’s Carlos Franco. Cultural sensitivity is one. In the case of Tamaquito, a community with indigenous roots, Cerrejón has styled the houses in traditional fashion and provided communal grazing areas.

Local economics

Long-term economic sustainability is another guiding theme. Each resettled family is issued with a parcel of land for farming and seed capital for a productive enterprise. A third principle centres on equitable compensation. In addition to a financial payment (which is not publicly disclosed), residents receive a moderately sized house and free education for their children, as well as access to a community centre, recreation facilities and local healthcare. 

At a process level, Franco insists that Cerrejón is anxious for resettlement to be as transparent, participative and dialogue-based as possible. At the nub of the issue is the principle of free, prior and informed consent (FPIC). Under Colombia law, companies are obliged to consult with communities affected by resettlement. Strict consent, however, is only required in the case of communities that are officially categorised as indigenous. This is consistent with international law and global standards, such as those of the IFC, Franco notes. He concedes that obtaining consent is “desirable” wherever possible, but says the politicised nature of mining in Colombia often makes it very difficult “in practice”.

The latest addition to Cerrejón’s human rights work is the establishment of a complaints office. It opened in pilot form in 2009, with the idea of field-testing the operational-level grievance mechanism guidelines that were being set forward by the UN in its draft norms on business and human rights.

Formally launched the following year, the office employs a complaints management system, which ensures that complaints are registered, tracked and resolved within a reasonable time and according to transparent decision-making processes. The team has seven full-time personnel, including two indigenous representatives who work as translators and intermediaries.

The office receives about 200 complaints a year, although numbers are gradually falling. The majority of these relate to the loss of livestock, with goats, sheep and other animals being hit by the company’s train along its rail track. There is no legal obligation on the company to meet the costs for these losses, Franco says, “but in reality, we realise that we are affecting the community. If there were no trains, there wouldn’t be any impacts on animals.”

Cerrejón has a policy of non-monetary compensation in most cases, especially for lost livestock. It also seeks to avoid like-for-like replacements as this often leads to cultural misunderstanding (the indigenous Wayúu have compensation structures that far exceed standard market rates). Instead, Cerrejón tends to favour the exchange of raw materials that can be used for productive activities, such as wools and fabrics for making handicrafts.

Consultation challenges

Despite its management efforts, Cerrejón is still far from out of the woods. Human rights issues continue to occur in and around its operations. Public consultation is particularly contentious, with consensus among community members often difficult to achieve. Cerrejón recently suspended the proposed re-routing of a local river because, in part, it was unable to gain consent from a handful of indigenous communities that would have been affected. A plan to expand the width of its railway is similarly locked in dispute with one of three affected communities.

Likewise, attempts to negotiate the resettlement of eight families in the community of Roche have so far failed. The community members accuse the company of intimidation and bad faith, while Cerrejón maintains that the families are asking for unreasonable levels of financial compensation. The conflict has now reached the courts and the likelihood is that, after more than eight years of dialogue, the remaining families will be forcibly evicted. A renegotiated compensation deal for the community of Tabaco also remains incomplete, although Cerrejón says this is due to failures by the municipal government rather than its own inaction.

One critical future step for Cerrejón will be to improve its external communications. Restrepo admits that the company’s communications department is “totally focused inward” at present. Human rights are an evocative and emotive issue. Incidences are rarely clear-cut, with claims and counter-claims. Being upfront and honest about the company’s position and its version of events (even when that involves admitting fault) is not only the right thing to do, but also the sensible thing to do if trust is to be regained. Individual incidents will inevitably occur.

Such is the nature of a modern, multinational extractive business operating in a low-income, marginalised environment. When that happens, the public – both in the immediate vicinity and farther afield – needs to know that the company has credible systems in place that it implements judiciously and with responsible intent. That won’t stop accusations coming (although they should reduce in quantity and severity), but it should provide a platform for a rational debate to occur, rather than the high-profile blame-game that characterises so much of the business/human rights interface at present. 

Standards followed by Cerrejón

UN Global Compact

Voluntary Principles on Security and Human Rights

IFC’s social performance standards (Nos 1, 5 and 7)

ICMM’s sustainability framework

UN Declaration on Human Rights

ILO basic conventions

Cerrejón: in numbers

Annual coal production: 34.6m tonnes

Share of Colombian coal exports: 40.5%

Global market share: 3.9%

Exports growth from 2002 to 2012: 44%

Full-year sales: $2.9bn

Taxes paid: $724.4m

Direct jobs: 5,708

Social investment: $13.3m

Environmental controls and management expenditure: $54.6m

Production growth from 2002 to 2012: 96.6%

Exports growth from 2002 to 2012: 77.3%

Source: Cerrejón: data from 2012. 

Top human rights risks

In 2011, consultancy firm ERM analysed Cerrejón’s operations and identified the following areas as “high risk”. In each case, it made a series of recommendations to mitigate these risks.

Security

Issue: links with public security personnel.  

Impact: increase of army, police and other security personnel in the region.

Risk: potential abuses by security personnel in the local community; perception that Cerrejón is viewed as an alternative to state forces; guilt by association in abuses caused by state security.

Measures: raise awareness among security personnel of human rights; help government in monitoring human rights among security forces.

Environmental contamination

Issue: local air and water contamination.

Impact: increase in respiratory diseases; possible use of unsuitable alternative water sources.

Risk: community conflict; loss of public credibility; reputational damage.

Measures: support research into causes of pollution; create a regional round table to discuss environmental issues; widen communication of Cerrejón’s existing measures to reduce contamination, among others.

Train transport

Issue: accidents involving people or animals.

Impact: damage to local livelihoods; failure to provide culturally appropriate compensation; reprisals against the company.

Risk: compensation payments; protests against the company; deterioration in community relations, reputational damage; legal sanctions.

Measures: acknowledge public accidents; support pastoral production programmes; design common prevention measures with the community; build bridges for pedestrians; establish responsible compensation policy, among others.

Land use

Issue: resolving issues surrounding the 2001 forced displacement of Tobaco.

Impact: community divisions.

Risk: negative reputational impacts and financial costs arising from delay or dispute in compensation packages; attribution of blame on the company for failures on the part of the local government; community resentment.

Measures: collective participation of all affected parties; pursuit of existing agreements with local government; clear communication with former residents of Tobaco.

Indigenous people

Issues: division of Wayúu lands by train line; loss of traditional livelihoods; resettlement of communities.

Impact: disruption of historical customs and ways of life.

Risk: social friction; political denouncements against the company; increase in civic protests and direct action; reputational damage.

Measures: commonly agreed impact management measures with the community; working collaboratively with government and NGOs in resettlement process; design of an exit strategy in the case of resettlements; among others.

Cerrejon  extractives  Human rights  mining