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PT Newmont Nusa Tenggara (PTNNT) is an Indonesian joint venture company owned by Nusa Tenggara
Partnership and by PT Pukuafu Indah. In 1986 PTNNT signed a Contract of Work Agreement for our Batu Hijau
copper and gold mine with the Republic of Indonesia in an area located on West Nusa Tenggara Province.
Batu Hijau is an open pit mine with associated processing and support
facilities. Our product is copper concentrate containing small quantities
of gold which is transported to local and foreign smelters for further
processing. The project is located in West Sumbawa regency, West
Nusa Tenggara.
The Batu Hijau porphyry copper deposit was discovered in 1990 after ten years of exploration. Following the approval of
the feasibility study and environmental impact analysis (ANDAL), a US$1.8 billion construction project commenced in
early 1997 and finished in late 1999, followed by commissioning/ start up. Commercial production started on 1 March
2000.
Based on the feasibility study, Batu Hijau's ore reserves were 1.1 billion
tons containing 0.525 percent copper and 0.37 grams per ton of gold. At
the current production rate, Batu Hijau's mine life is expected to continue
until 2023. PTNNT is currently exploring other parts of its Contract of
Work area such as the Elang exploration prospect.
As a contractor to the Government of Indonesia, PTNNT contributes substantially to the nation's economy through
employment, domestic purchases, royalties and taxes. Currently, PTNNT is responsible for the direct employment of over
7,000 people. Of these, more than 60 percent are from the province of West Nusa Tenggara.
In 2007, PTNNT contributed more than $248 million in taxes, non-taxes and royalties to the Indonesian government. In
addition, PTNNT annually purchases goods and services from within Indonesia amounting more than US$154 million,
pays US$58 million to national employees and spends US$4 million in community development.
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Yes and No: Newmont Recommends Voting For One Resolution, Petitions SEC to
Omit Another
by Bill Baue
The actions span the gamut of corporate responses to shareowner resolutions on environmental, social,
and governance issues, from wholehearted support to forceful opposition.
SocialFunds.com -- When Michael Pryce-Jones, social research analyst at proxy advisory firm PROXY
Governance, read the proxy ballot from Newmont Mining, he was surprised to see the board recommend
voting for a human rights shareowner resolution filed by Christian Brother Investment Services (CBIS).
Standard operating procedure for companies is to recommend voting against shareowner resolutions on
environmental, social, and governance (ESG) issues.
It is exceedingly rare for companies to recommend in favor--in part because shareowners typically
withdraw resolutions when behind-the-scenes dialogue leads companies to implement the policies or
practices advocated by shareowners. This is the first social resolution supported by a US mining
company.
PROXY Governance recommended voting for the CBIS resolution asking the company to review its
implementation of free, prior, informed consent (FPIC)--as well as assessing the risks of community
opposition resulting from less-than-robust FPIC. Specifically, it requests a report by a committee of
independent board members reviewing the company's global policies and practices addressing "existing
and potential opposition from local communities," particularly in Peru, Indonesia, Ghana, and on the
Western Shoshone reservation in Nevada--and "steps taken to reduce such opposition."
Institutional Shareholder Services (ISS), the oldest and most influential proxy advisory firm, also
recommended voting for this resolution, which ended up receiving 91.6 percent support from voting
shareowners at the Newmont annual meeting last week. However, both firms recommended against the
NYCERS resolution, noting that the controversial issue has the potential to impact shareowner value but
that the company is managing the problem and providing sufficient disclosure on its website and filings.
The resolution received 5.63 percent support.
"A benefit when management supports a resolution in the proxy is that all shareholders are made aware
of the issue and the concerns of the proponent," said Julie Tanner, corporate advocacy coordinator at
CBIS. Co-filers include fellow members of the Interfaith Center on Corporate Responsibility (ICCR), a
coaltion of 275 faith-based institutional investors with over $110 billion in assets. "Additionally, it is helpful
that the company outlines, albeit briefly, how and when it will implement the resolution, and the proponent
can then hold the company to that very public commitment."
The board's Environmental, Health, and Safety Committee, which includes at least three independent
directors, will oversee the review and report, according to the board recommendation in the proxy ballot.
Stakeholders expressed cautious optimism about the prospects for the report, while also continuing to
press the company.
"Newmont should call on experts who are completely independent of the company and won't just say
what it wants to hear," said Keith Slack, senior policy advisor for Oxfam America. "It should also seek
input from affected communities themselves."
According to Steve Gottesfeld, Newmont's vice president of communications and public affairs, the
committee determines the use of independent experts or community consultation, not the company.
"The value and strength of the committee comes from the fact that it is comprised of directors who are
independent," Mr. Gottesfeld told SocialFunds.com. "It is the committee that will determine what
resources are needed up to and including the retention of outside experts as well as consultations with
our host communities."
"Newmont already enlists third-parties to evaluate our sustainability practices and provide assurance on
our reporting," he added. "Provided that we all continue to engage in good faith and with good will, we see
little risk in the inclusion of these perspectives [in the report.]"
While this yes recommendation is significant, it does not necessarily foretell a trend.
"The place to look for trends isn't in the technical form companies' responses take--but I do see a trend in
companies facing more pressure to have substantive policies or practices on human rights," Mr. Pryce-
Jones of PROXY Governance told SocialFunds.com. " Last year, we saw a increase in support for human
rights resolutions, for example at Boeing, Halliburton, and Chevron--they all got about a quarter of the
vote for."
Proxy advisory firms are increasingly supporting such resolutions. For example, both ISS and PROXY
Governance recommended for the resolution asking Chevron to adopt a global human rights policy--and
they both do so again this year.
On the other end of the spectrum, companies continue attempts to block human rights resolutions. For
example, Yahoo lobbied to block a resolution filed by Harrington Investments calling for the creation of a
Board Committee on Human Rights. The company currently faces an Alien Tort Claims Act suit filed by
the wife of a Chinese citizen who published writings on the Internet critical of the communist government
and was jailed for 10 years after Yahoo revealed his identity to Chinese authorities. The SEC denied the
company's request for permission to omit the resolution from its proxy ballot.
"This is the first time a binding by-law amendment to create a corporate Board Committee on Human
Rights has made it on a shareholder ballot," said John Harrington, President and CEO of Harrington
Investments. While most resolutions are precatory (or advisory), this resolution represents a relatively
new development in seeking to require companies to implement measures sought by shareowners. "The
internationally recognized moral issue of human rights will now become an important fiduciary issue for
corporate directors."
Unsurprisingly, Yahoo's board did not recommend voting for this resolution, nor did it recommend voting
for a similar human rights resolution on Internet censorship filed by NYCERS.
Disclosure: Bill Baue co-hosts Corporate Watchdog Radio with Sanford Lewis, who serves as the attorney
for Harrington Investments on the Yahoo resolution.
SocialFunds.com -- Mining nowadays entails much more than just digging for gold. It also requires
diplomacy and respect to obtain community consent and a "social license" to operate, especially from
indigenous people with ancient claims to the land. Last year the Western Shoshone Nation petitioned the
United Nations Committee for the Elimination of Racial Discrimination (UN CERD) to weigh in on this very
issue. The committee issued a decision this March calling on the United States to "freeze any plan to
privatize Western Shoshone ancestral lands for transfer to multinational extractive industries and energy
developers."
The decision could potentially have a chilling effect on Newmont Mining (ticker: NEM), the world largest
gold miner, which operates on lands traditionally inhabited by the Western Shoshone in Nevada. A group
of socially responsible investing (SRI) shareholders wrote Newmont Chair and CEO Wayne Murdy a letter
on April 20 citing this UN decision as a primary
reason for the company to take a proactive and
responsible stance toward community engagement.
The letter, which Newmont has not formally responded to though it told the shareholders it intends to,
calls on Newmont to adopt a public policy to refrain from lobbying the US government for privatization and
sale to Newmont of the Western Shoshone ancestral lands.
"We have never lobbied on privatization of Shoshone land," said Deb Witmer, vice president of
communications for Newmont. She further explained how Newmont is essentially caught in the middle of
a dispute between the US government, which owns title to the lands Newmont mines, and the Western
Shoshone, which points to the 1863 Treaty of Ruby Valley as securing their claims to the land. "Many
Shoshone argue that the Federal government has acquired the land illegally."
"We are bound by the law but we will always look for ways to respect the cultural interests and activities
of indigenous people," Ms. Witmer told SocialFunds.com. "Where an indigenous Nation or a Tribe has a
cultural or historical interest in land upon which the company is building a project, Newmont will work with
them as an interested stakeholder, focusing on issues such as cultural resource preservation, economic
development and employment, education and job training, and bilateral consultation on environmental
impact studies, permitting and development of mitigation plans."
In addition to calling for fair compensation of the Western Shoshone for resources extracted from its
lands, as provided by the Treaty of Ruby Valley, the SRI letter also calls on Newmont to adopt a policy for
obtaining free, prior and informed consent (FPIC) to new or expanded activity.
"There's not one company that we can uphold as being a leader on FPIC--Newmont certainly hasn't
shown leadership in that area in the developing world, and they've shown it even less in their relationship
with tribes in the US," said Ms. Compere. "I actually think Newmont has spent more time thinking about
the structure of community relations and stakeholder engagement in developing countries than they have
in their own back yard."
Newmont has been in the spotlight for controversies over community relations around the globe. In
southern Ghana last November, police shot and killed a farmer when locals started protesting at a town
meeting over how Newmont would compensation them fairly for its Ahafo project there.
In February of this year, Newmont and the Indonesian government settled a $133 million lawsuit over
pollution near the company's Minahasa Raya mine, agreeing to scientific monitoring of the affected Buyat
Bay region and enhanced community development programs in North Sulawesi.
The company will provide $12 million in initial funding for the monitoring and community development
programs, adding $18 million more over the next ten years. However, separate criminal proceedings
alleging that heavy metals dumped from Minahasa Raya have caused illness in villagers remains active,
with the company facing potential fines of $80,000 and ten years imprisonment for senior company
officials.
While the notion of FPIC is embraced by nongovernmental organizations (NGOs) and SRI practitioners
alike, Ms. Witmer calls it into question.
"'Free, prior and informed consent' is a wonderful phrase, but not easily defined," she told
SocialFunds.com. "Local elected officials are there to represent the interests of local people--FPIC, in
effect, argues for usurping power from local government authorities and giving it to activist groups."
"For our part, we must do a better job of communicating with communities and in addition, help build
capacity within local governments," Ms. Witmer admitted.
Newmont Mining Corporation has agreed to pay $30m to the Indonesian government to settle a
lawsuit over alleged pollution of a bay with arsenic and mercury. A further criminal trial against the
company is ongoing.
The suit came about after villagers near the company's Buyat Bay mine complained of a variety of
ailments that they believed to be linked to discharges from the mine. The company has denied the
charges, and the settlement includes no admission of guilt.
The mine at Buyat Bay closed two years ago, although the company operates another larger mine at
Sumbawa. It had earlier admitted that a separate incident of the release of mercury vapours took
place, although it said these had not been harmful to the environment.
Newmont Mining Corp will have to defend itself in court over the major Buyat Bay pollution
allegations, Indonesia's environment minister has announced. Six of the company's executives have
indictments against them in a case that now should be filed early in the new year.
Newmonth chief executive Wayne Murdy had, days before, visited Indonesia and had discussions with
the government, but the government has said that there will be "no bargaining". The company is
accused of having polluted Buyat Bay and making people ill through contamination to the food chain.
The company denies the allegations, and has argued that a long drawn-out process is not in the
interests of any of the stakeholders of the action.
News item from Business Respect, Issue Number 77, dated 25 Jul 2004
PT Newmont Minahasa Raya, the Indonesian unit of gold mining company Newmont Mining Corp, has
attacked NGO accusations that the company had polluted a bay creating local health problems for
villagers.
The company has complained to the police that the unsubstantiated allegations had damaged the
company's reputation. The groups include the Indonesian Forum for the Environment (Walhi).
Newmont insists that it regularly monitors its emissions, and complies with all laws regarding its
business. NMR president director Richard Ness said that the management were 'disgusted' at the false
allegations and said they were simply not true.
Walhi had said that 30 people in Ratatotok village had died from a disease associated with mercury
poisoning after drinking water from the bay.
A News item from Business Respect, Issue Number 49, dated 31 Jan 2003
In spite of recent gains, gold will only have a future as a major generator of wealth if the mining
companies get serious about practicing social responsibility, according to Wayne Murdy, Chairman and
CEO of Newmont Mining Corp.
Murdy is due to tell hundreds of mining professionals at the Colorado Mining Association conference
that it is now a necessity for companies to obtain a "social licence" to conduct operations within local
communities. Principles of sustainable development must govern future operations.
The conference is also due to see a Public Perceptions Forum will include presentations by industry
leaders, environmental groups, and the news media on how current opinion shapes policies that
impact mining.
Environmental issues will also be discussed, just weeks after a proposal to ban new gold mines from
using cyanide was defeated in the Colorado courts. The industry had argued that the biggest problem
of toxic mine pollution stems from old, abandoned mines and that resolving this legacy calls for
federal, not corporate, action.
The test found that the level of mercury in the hair of Totok Bay
residents was 3.72 micrograms per gram (æg/g), higher than that of
residents of Buyat Bay, which reached only 2.65. æg/g.
The level of mercury in the residents' hair was similar to that of
Japanese people's hair, and far lower than the threshold level of 50-
125 æg/g set by the WHO, the report said.
The institute also found that mercury levels in fish in both Buyat
and Totok bays were within the normal range.
The average level of mercury in fish was 0.24 æg/g in Buyat Bay and
0.15 æg/g in Totok Bay, while Minamata disease would be diagnosed if
the average level of mercury in the fish was higher than 10 æg/g, it
said.
The institute concluded that the mercury levels in fish found in the
two bays didn't indicate a "hazardous" level of pollution.
It also said the mercury level of sediment around Buyat Bay was 0.04
æg/g, which was much lower than 4.06 æg/g detected in the sediment
around Totok Bay.
This suggested that PT Newmont was not responsible for the mercury
contamination of Buyat Bay than small-scale miners, who disposed of
tailings in Totok Bay, the report added.
The police said the test showed that the mercury levels of samples
taken from three locations in Buyat Bay waters were 5.5 æg/L, 4
æg/L, and 3.9 æg/L.
The mercury levels, they added, exceeded the standard of 1 æg/L set
by the government, through Ministerial Decree No. 51/2004 on
seawater pollution standards.
http://www.thejakartapost.com/yesterdaydetail.asp?
fileid=20041006.A05