Glencore requested ICIJ publish its full response to our questions relating to our story about Glencore in Burkina Faso. The following is what they supplied.
Respecting human rights
We are committed to respecting human rights across our operations. We uphold the human rights of our people and our local communities, including vulnerable groups such as women, children, indigenous people and victims of conflict.
We are committed to working in line with:
- United Nation’s (UN) Universal Declaration on Human Rights
- UN Guiding Principles on Business and Human Rights (UNGPs), including its Protect, Respect and Remedy framework
- UN Global Compact
- International Labour Organization (ILO) Core Conventions
- Voluntary Principles on Security and Human Rights
We have a global Human Rights policy, which applies across the Glencore Group. Pursuant to our policy, we require our assets to identify and assess risks to human rights as part of their general risk assessment. Where such risks are found, assets develop mitigation plans that follow international leading practice, for instance the International Finance Corporation’s resettlement guidelines and the Voluntary Principles.
Our presence in Burkina Faso
Glencore is one of the world’s largest natural resource companies and first invested in Burkina Faso in 2010. Glencore’s investment provided for i) funding for both the construction and production phases as well as ii) technical, operational and managerial support to Nantou Mining (operating entity) in order to ensure the viability of the mine.
In line with the Burkina Faso Mining Code, the government received a 10% free carry interest in Nantou Mining and a permanent board seat. The free carry interest does not require the government to provide funding towards either the development or sustainability of the operation whilst the Mining Minister annually appoints a government representative to act as director of Nantou Mining.
The mine was officially inaugurated 3 years later (January 2013) and commenced commercial production in April 2013.
Since Glencore’s investment, Nantou Mining has received the following awards:
Chevalier de l’Ordre National – highest corporate honour in recognition of community development through the establishment of a tri-partite social development committee. The committee includes representatives from the mine, surrounding communities and local authority, which acts as an independent forum to facilitate inclusive and transparent social decision making. ; and
National recognition for leadership – contribution to awareness and prevention of HIV/AIDS
Additionally, Glencore through Nantou Mining has contributed significantly to the development of the local communities and the surrounding area. These contributions include (amongst other):
- Equipping training centres, literacy centres and schools
- The construction of a youth and community centre
- The construction of boreholes including ongoing maintenance
- The construction of sanitation and sewerage facilities
- The construction of roads and bridges
Glencore divested in full, its shareholding in Nantou Mining in August 2017. The shares held by Glencore and its subsidiaries were sold to Trevali, a Canadian TSX listed mining company.
The workforce and contractors
Nantou Mining is one of the biggest employers in the Sangui region. The salary structures and benefits (includes long-term skills development and ongoing education) are amongst the best across the Burkina Faso mining industry.
In 2012, the mining contractor was replaced. The change was necessitated due to contractor performance and cost. As part of the changeover, local employees, specifically those from the Perkoa village were provided the opportunity to transfer to the in-corning contractor.
In accordance with Glencore’ s approach to protecting human rights, we totally reject the allegation that Nantou Mining’s workforce was subjected to “slavery like conditions”.
Funding of the rehabilitation account is required from the date commercial production is declared by way of pro-rata instalments over the LOM (Life of Mine). Due to financial constraints as a result of the operation being loss-making during the mine ramp-up to design capacity followed by the Zinc price downturn (10 year lows), Nantou Mining proactively agreed a payment plan with the Mining Ministry in order to ensure the sustainability of the operation. It should be noted that Nantou mining has made full provision for its rehabilitation liability in its statutory accounts.
The USD$30m you refer to was a loan provided by Glencore to fund a cash shortfall to ensure continuous operation of the mine as per above. The interest on the loan is linked to short-term interest rates regularly obtainable in the market.
Nantou Mining contracts the services of a reputable, internationally affiliated (member of the World Tax Service Alliance, which is a global network of tax firms spanning more than 100 countries) local tax firm. Following an official re-assessment received, the amount due was reduced from USD$29m to USD$1.5m. Nantou Mining continues to challenge this re-assessment as provided for in the Burkina Faso Tax Code.
The allegation that N antou Mining included fictitious charges to Pasley Universal in exchange for services are false.
In 2010, a Nantou Mining management agreement was concluded whereby Glencore provides technical, operational and management support through its subsidiary Pasley Universal acting as operator/manager of the Nantou Mining up to Glencore’s divestment in 2017. This agreement was structured in accordance with the local and national tax regulations of Burkina Faso.