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May 11, 2006
Digging for More than Gold: SRI Letter Asks Newmont to Address Western Shoshone Concerns
    by Bill Baue

The letter cites a recent decision by the United Nations Committee for the Elimination of Racial Discrimination to support Western Shoshone claims.


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.

"This decision by UN CERD underscores the need for Newmont Mining to develop a policy towards Native American peoples in the United States and address the specific concerns of the Western Shoshone," wrote Lauren Compere, director of shareholder advocacy at Boston Common Asset Management, along with six other social investors. "By developing such a policy and by addressing Western Shoshone concerns, Newmont Mining will be able to show that it has the capacity to achieve community consent and social license to operate on ancestral Western Shoshone lands."

"The fact that an entity like the UN coming out so strongly on the side of the Western Shoshone and other indigenous people will have a reputational impact on Newmont," Ms. Compere told SocialFunds.com. "The UN decision is a wake-up call, adding fuel to the fire--it is extremely significant that the UN is coming out in saying that what the US did is not right and not legal."

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.

 

 
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