Robeco is stepping up its efforts to improve safety in the mining industry after 248 people were killed in a Brazilian tailings dam collapse this year. Engagement specialist Sylvia van Waveren explains how an investor initiative is taking action to prevent further disasters.
Robeco has engaged in active dialogues with many mining companies on environmental and social topics for many years. A recent example is the engagement with Samarco Mineração, a joint venture between Brazil’s Vale and the Anglo-Australian mining giant BHP.
This engagement focused on the breach of a tailings dam – an embankment used to store byproducts of mining operations after extracting the metal ore – in the Brazilian state of Minas Gerais in 2015. Tailings dams are very large and often highly toxic, causing widespread pollution if they collapse.
Worse was yet to come after 248 people were killed in January 2019 due to the collapse of another dam owned by Vale holding mining waste in Brumadinho, Brazil. This again provided us with a fundamental need to take action now. These disasters seem to become statistically more significant and industry-wide. Climate change and extreme weather shifts will intensify the risks.
Therefore, it is essential that investors can establish a clear line of sight about the tailings facilities that mining companies possess, and how these facilities are being managed. The current disclosures being made by companies are largely inadequate.
In order for us as investors to assess the risks, we require a system to monitor the safety risk of tailings dams. We require public reporting through an accessible database that communities, governments and investors can access to ensure that the safety of mining dams is assured. This is a test case for the responsibility of corporations and investors to prevent unnecessary death and destruction, and to make the sector as safe and socially beneficial as possible.
In April 2019, the Investor Mining and Tailings Safety Initiative was set up by the Church of England Pensions Board and the Swedish Ethics Council. Robeco is a member of the steering committee. The total group consists of 96 investors with USD 10.3 trillion in assets under management.
The initiative brings together institutional investors that are active in extractive industries, including major asset owners and asset managers, using roundtables to pursue its agenda. Inputs have been sought from communities impacted by recent disasters, along with advice from leading international experts, government representatives, leading international technical advisors, and company representatives.
The roundtable events aim to:
Investors meet on a monthly basis. Their work has already led to three interventions.
The group made a public call to establish a new independent and publicly accessible international standard for tailings dams based upon the consequences of failure. There is currently no consolidated global public register of the estimated 18,000 tailings dams worldwide, of which approximately 3,500 are currently active. Without a global register, the precise scale of the risks involved are not clear, nor is it understood which company has responsibility for which facilities.
In response to that request, a global review was announced and co-convened by the International Council on Mining and Metals – an international organization dedicated to a safe, fair and sustainable mining and metals industry – along with the Principles for Responsible Investment (PRI) and the United Nations Environment Programme.
The second intervention was a letter sent to all 651 miners – including those oil and gas companies that have exposure to tailings through their oil sands operations – asking for greater disclosure about a number of issues. To create a sense of urgency, the letter was described as “an urgent global engagement” in response to the Brumadinho disaster.
The companies involved are being asked 20 questions about their tailings storage, including longitude and latitude coordinates, their present status, information about independent reviews, and engineering records. The initiative asked companies to publish the required disclosure on their company website within 45 days, and ensure that it is signed off by the company’s chief executive officer or chairman.
The companies were also asked to consider how they can best communicate any disclosure with communities that might be affected by their tailings footprints. If they are unable to answer a question, or provide the requested information, the company should clarify what action it is taking to address the issues.
So far, 34 of the top 50 largest mining companies in the world, have responded, including 21 out of the 22 publicly listed members of the International Council of Mining & Metals. Some 66% of the industry by market capitalization have given discloses, and 52% fully and publicly disclosed. Some 25 companies are still classified as requiring extra time to complete the disclosures.
A detailed proposal to establish a global tailings database has been developed and submitted for seed funding. This is currently with a government for consideration. The group has asked a Norwegian data provider and consultant to assist in developing the infrastructure for a permanent public database.
One use of the information collected would be in the development of an international standard for tailings facilities that is expected to create a “step change” in safety and security.
The individual company disclosures, strengthened by a global tailings data base, could be used by investors as they develop an assessment framework to profile each company on their tailings management.
As we expect the new disclosures to drive a new level of accountability and transparency within the mining sector, Robeco will further analyze the outcomes, and relate this to its portfolio holdings. This could be basis of further engagements on safety risks with mining companies in our portfolios
Confermo di essere un cliente professionale
Le informazioni e le opinioni contenute in questa sezione del Sito cui sta accedendo sono destinate esclusivamente a Clienti Professionali come definiti dal Regolamento Consob n. 16190 del 29 ottobre 2007 (articolo 26 e Allegato 3) e dalla Direttiva CE n. 2004/39 (Allegato II), e sono concepite ad uso esclusivo di tali categorie di soggetti. Ne è vietata la divulgazione, anche solo parziale.
Al fine di accedere a tale sezione riservata, si prega di confermare di essere un Cliente Professionale, declinando Robeco qualsivoglia responsabilità in caso di accesso effettuato da una persona che non sia un cliente professionale.
In ogni caso, le informazioni e le opinioni ivi contenute non costituiscono un'offerta o una sollecitazione all'investimento e non costituiscono una raccomandazione o consiglio, anche di carattere fiscale, o un'offerta, finalizzate all'investimento, e non devono in alcun caso essere interpretate come tali.
Prima di ogni investimento, per una descrizione dettagliata delle caratteristiche, dei rischi e degli oneri connessi, si raccomanda di esaminare il Prospetto, i KIIDs delle classi autorizzate per la commercializzazione in Italia, la relazione annuale o semestrale e lo Statuto, disponibili sul presente Sito o presso i collocatori.
L’investimento in prodotti finanziari è soggetto a fluttuazioni, con conseguente variazione al rialzo o al ribasso dei prezzi, ed è possibile che non si riesca a recuperare l'importo originariamente investito.