April 17, 2012 - 8:51amUpdated: April 18, 2012 - 7:22am
BBC documentary program Panorama takes a look at Glencore. Photo courtesy bbc.co.uk
The Saskatchewan government is aware of a BBC documentary about Glencore that brings to light some questionable practices.
Child labour in the Democratic Republic of Congo, dumping chemicals and possibility paying paramilitaries are some of the issues on the list put together by BBC Panorama reporter John Sweeney.
Glencore is to set up its North American headquarters in Regina, which is why Premier Brad Wall was asked about the documentary.
The Swiss company is the big player in a $6.1 billion deal to buy up Regina grain-handling company Viterra. The deal still needs approval from two thirds of share-holders who vote on it next month.
While these stories may not have a Canadian connection, it's important for those who make regulatory decisions to know all the details about who they're letting into the business community, said Sweeney.
Wall is aware of the issues raised in the film, but he says there's no reason to expect the company would pose a threat to Saskatchewan.
“We have laws and we enforce those laws in terms of occupational health and safety, in terms of labour standards, in terms of our environment, and obviously, we would enforce those laws regardless of whoever was active in the province,” Wall told reporters.
In addition to the shareholder vote, Wall says numerous reviews of the transaction will be done before a decision is made on the take-over.
The research by the BBC started after Sweeney noticed the size of the Swiss-based commodities giant Glencore PLC.
"The Glencore float in the London stock exchange last year, with the biggest float we think in history, it came in something like £37 billion," said Sweeney, by phone from London.
In the program, Sweeney reveals issues in Congo and Colombia, where Glencore is accused of reckless greed.
"A few weeks ago they were dumping acids right into the river," he said about a copper and cobalt mine they visited in Congo. (View the video here.)
The water tested had a pH of 1.9, with 1.0 being pure acid and 7.0 is neutral. Glencore admits they knew about it, but didn't fix it right away.
"They say it's because the government didn't want them to close down the refinery while they did so," Sweeney said.
Glencore released a statement it released in response to the documentary. It says addressing this issue has been a priority since it took over that mine in 2009. It is working on a complex system to direct the effluent to a tallings pond.
Sweeney’s crew found another issue -- child labourers. (Read the BBC's report here.)
"It's got mine shafts 150 feet deep and the artisanal freelance miners walk down them. Some of them are children, it's illegal, it's against international law for any person under the age of 18 to work in a mine and we saw quite a few under 18 year olds and out researchers came across one child who was 10," Sweeney said.
According to the company, they stopped working in that mine four years ago and that any mining done there wasn't authorized by them, but Sweeney's team tracked the copper that comes from that mine and found that it ends up in Glencore's smelter.
Glencore responds by saying it makes every effort to ensure that material from those unauthorized miners don’t make it into its shipments. In its statement, it details those efforts working with third-party operators who ship the material.
The problems found by Sweeney weren't limited to Africa. In Colombia, they investigated a 2002 massacre over a piece of land, called El Prado, next door to a Glencore mining concession. In 2008 the people who occupied the land were believed by local police to associates of the killers. (Read the BBC's report here.)
"When the court looked into this they concluded that the reason for the massacre was so that these paramilitary murderers could take over the land, so they could sell on it to Glencore's subsidiary there … In 2008 Glencore admits paying $1.8 million dollars to the people on this land, who the locals believed to be associates of the paramilitaries," Sweeney said.
"Glencore insists they haven't done anything wrong and they go on to say they were asked to do this by the government. They don't want land, they say, they have no interest in it. Nevertheless they paid over $1.8 million for it."
Glencore explains in its statement that $1.8 million was not to acquire land, but to compensate those residents – as decided by the Colombian government -- for improvements they made to their homes and nearby plantations.
The BBC investigation talked with Ivan Glasenberg, the CEO of Glencore, about their discoveries of bad practices. The company’s full statement in response to the documentary can be read in full here.
"To be fair, Mr. Glasenberg, is robust in his defense. He believes, for example in the acid waterfall that they finally cleared up a mess that was made a long time ago.
“They believe they haven't done anything wrong in relation to these allegations of being involved with child labour or done anything wrong in Colombia.
“Nevertheless these stories are out there and there are evidence in each one," Sweeney said.