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The dark side of Australia’s mining sector

By Andrew Hewett - posted Thursday, 8 November 2007

Australia’s mining sector is booming with some companies raking in multi-billion dollar profits. Everyone from shareholders to the national treasury stand to reap a reward in the mining bonanza. But have some Australian miners been driven by an unquenchable thirst to mine precious minerals at any price?

Take the example of Melbourne-based mine operator OceanaGold. On its website the Australian Stock Exchange-listed company proudly champions its “commitment to building relationships within the communities that are impacted by its operations”.

However, an Oxfam Report recently published found villagers in Didipio, a remote community in the Philippines some 200 kilometres northeast of the capital Manila, had accused the mine operator of harassment and intimidation in its attempt to pressure the community to accept its plans to develop a large gold and copper mine in the area. While the local Council and many community members are opposed to mining, an influx of pro-mining outsiders is further inflaming community tensions.


Over the past five years, Oxfam Australia conducted interviews and participated in community meetings involving hundreds of villagers. Many alleged that agents of OceanaGold threatened farmers with legal action, attempting to bully people to sell their land at a price determined by the mine company.

Shockingly, a village woman named Juanita Cut-ing reported that armed soldiers accompanied mine representatives on visits to her home when attempting to convince her to sell. Oxfam Australia raised these concerns repeatedly with the company, most recently in July 2007 sharing with them previous versions of the report, and recommended they investigate and respond. But to date the company has failed to address community grievances. In the absence of an adequate company response, Oxfam made public the findings of its investigation this week.

OceanaGold’s response, sadly, was to try and shoot the messenger, deny the report’s findings, and ignore the need to respond adequately to community concerns. In all the years Oxfam has been in contact with the mine operator we have only received two letters from them, both flatly denying community concerns and giving no indication that they plan to address villagers’ grievances. In these days of emphasis on Corporate Social Responsibility, is denial a good enough business practice from an Australian mining company? Oxfam Australia believes it is not.

Perhaps most egregious of all, Oxfam heard allegations that company representatives offered financial inducements to members of the democratically elected local council in the form of money, employment and enormously inflated offers for their land. One current councillor stated he refused these and alleged that a company manager offered him so much money that, “… as long as I was alive I would not be able to consume this money”. Under Australian law bribing foreign officials is illegal.

Let’s be clear. Oxfam is not anti-mining. We believe that Australian mining companies can contribute to local development and poverty eradication. But at the heart of this case is the right of indigenous peoples and local community members to be heard and to be able to influence decisions that affect their lives and livelihoods. And in Didipio it is worth noting that local and provincial Councils have both passed resolutions opposing the mine project.

Mining companies should recognise that choosing to push for a mine despite community opposition could result in conflict as well as breaches of human rights - a situation unlikely to result in a sustainable mine operation in which both the local community and company benefit. For OceanaGold, the bottom line is they must not enter into activities that undermine local decision-making processes.


Oxfam believes that the establishment of a formal, broad-based complaints mechanism to oversee Australian mining industry activities overseas would help prevent Australian complicity in riding rough shod over local communities and ensure that local people, such as the citizens of Didipio, are listened to.

Overseas the idea of a Mining Ombudsman is catching on. A recent Corporate Social Responsibility review undertaken by the Canadian government, civil society and industry concluded that an ombudsman model, “was the best way to advance CSR compliance in the extractive [mining] sector”.

An increasing number of mining companies recognise that they need to obtain a “social licence to operate” in addition to the usual regulatory licences. By obtaining the community’s consent and approval to go ahead with operations, mining companies can improve their relationship with local communities and lessen the risk of incurring costs due to conflict and delay.

Most Australians believe that everyone has a right to a fair go and the people of Didipio deserve no less. OceanaGold should respect the decision-making processes of community members and the current elected Councils and should address the many grievances raised by the community before proceeding any further.

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About the Author

Andrew Hewett is Executive Director of Oxfam Australia.

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