On May 6 Les Soeurs des Sainte-Anne will stand up in a Toronto hotel ballroom and call the world’s largest gold producer to account. It won’t be the first time, or the last.
The Quebec-based teaching order Les Soeurs des Sainte-Anne, with the backing of Les Soeurs des Saints Noms de Jesus et de Marie and the union-backed pension and mutual fund company Batirente, want Barrick Gold Corp. to answer questions about the company’s $2.4-billion Pascua Lama project, an open pit gold mine the company is developing high in the Andes on the border between Argentina and Chile.
The sisters were part of an effort in 2006 to persuade Barrick Gold’s management to report back to shareholders on environmental and financial risks associated with Pascua Lama, a deposit with about one million ounces of gold which the Toronto-based company will start mining in 2009. Two years ago the sisters met with management and convinced them to hire environmental consultants to prepare an overview of the project. It’s a report neither the sisters nor a host of activists who have followed the issue were happy with.
At the 2007 annual general meeting (AGM) the sisters intended to grill management about the report and concerns over the mine’s proximity to glaciers, frequent earthquakes in the region, risk to rivers that supply water to downstream farmers and encroachment on the traditional lands of native people in the area. But before they could get to the microphone, Barrick president and chief executive officer Greg Wilkins terminated the meeting, noting the presence of non-shareholder activists Corp Watch distributing leaflets and protesting.
Barrick welcomes the presence of the crusading sisters and takes their concerns seriously, said company spokesman Vince Borg.
“Generally, with any thoughtful, reasonable investor dialogue is in and of itself a good thing,” Borg told The Catholic Register.
But both Borg and Diane Boudreault, who oversees the sisters’ investments, recognize there comes a point when quiet board-room agreements between concerned investors and management will no longer suffice. In 2006 the sisters withdrew their shareholder motion while they waited for the independent consultant’s report on environmental risk factors. In social investment circles this generally counts as a victory. But the campaign’s not over and this time around the sisters want the issue in front of shareholders for a vote.
“We are not sure of the independence of the people who are doing the work for them,” Boudreault said.
The sisters, like other socially responsible investors, are under no illusion that any shareholder motion will actually win a vote on the AGM floor. Outside of rare cases when management backs the shareholder motion, it never happens.
“It’s not a first-past-the-post system,” said KAIROS’ corporate social responsibility expert Ian Thomson. “It’s part of a more sophisticated process of engagement and dialogue.”
Bringing a proxy vote to the floor of the AGM isn’t so much about grabbing 51 per cent of the votes as it is about sowing doubt about management’s handling of an issue — enough doubt to cause the company to change course.
The sisters hold up the example of Alcan Inc. and the Missionary Oblates of Mary Immaculate. In 2006 the Oblates wanted Alcan management to face up to the real risks associated with UTKAL, an Indian bauxite mine in which Alcan held a 45-per-cent stake. Though the mine had fulfilled all the legal requirements and the mine developer had filed various environmental impact statements, the NGO community had uncovered all kinds of problems — including government officials threatening locals who opposed the mine and fudged results in the environmental assessment reports. The Oblates convinced the Ontario Teachers’ Pension Plan that these problems represented real, financial risk to investors. Teachers’ backed the Oblate’s motion and 36.8 per cent of voting shares went against management on the issue.
While technically the Oblates lost the vote, Alcan management was forced to go back and look again at the project. Alcan bailed on the mine in July 2007.
Boudreault is convinced the sisters can win the vote at the Barrick AGM in the same sense that the Oblates won in 2006. They’ve begun distributing their own research into Pascua Lama to investors, and have been fielding responses from Europe.
“What has been our strength is the depth of our research,” said Boudreault. “It (Pascua Lama) is very complex and the consequences can be disastrous — for both the people there and for the company. The financial risks are there.”
The complexities of Pascua Lama are daunting. Barrick points to a 94-per-cent vote in favour by the Water Users Co-operative representing farmers downstream from the mine and $15 million already spent on environmental engineering. Opponents, however, have claimed the company bought Water Users Co-operative votes with promises of $60 million in infrastructure improvements and the nearby Diaguita indigenous community claims part of the mine’s concession as its ancestral territory.
Ultimately investors have to look for companies that are well managed and open about their environmental practices, said Barrick’s Borg. Barrick is not the kind of junior mining company that is trying to get away with something, he said.
“We take each issue, each project, each mining operation on a day-to-day basis on how we can advance a responsible, thoughtful dialogue first and foremost with those people who live in the community, that could be impacted by it, that are elected officials to regulate the jurisdiction in the host country,” he said.
Win or lose, the sisters see themselves speaking truth to power and carrying on the tradition of their religious order.
“They were teachers because formation for the people at that time when they were founded was a social justice issue. There were no schools for everybody, especially for the girls,” said Boudrealt. “Now they are not in the same social context... So, what are the new ways for them to deal with social justice?”