Today, a parliamentary committee has released its verdict on the future of the mining and extractive industry. Echoing our calls to toughen regulation, it recommends that the Financial Conduct Authority’s (FCA) remit be expanded to screen companies wanting to list on the London Stock Exchange (LSX) on their social and environmental standards.
For some years campaign groups including ourselves and the London Mining Network have been pressuring the UK government to introduce social and environmental criteria for companies wanting to list on the London Stock Exchange. Currently, the finance sector regulator, the FCA only has oversight over technical issues such as accounting standards and corporate governance. Companies with appalling environmental and human rights records outside of the UK are able to be listed on the LSX as long as they meet the technical criteria.
Alex Scrivener, WDM’s policy officer, submitted both written and oral testimony to the committee and was quoted in the committee’s findings. He said:
London-listed mining companies are responsible for all manner of human suffering and environmental devastation across the world. It’s an enormous oversight that there’s no screening process to prevent companies from benefitting from being listed on the London Stock Exchange while abusing human rights or destroying the environment. The inquiry’s verdict is a real step in the right direction, but what we need now is for the government to act quickly to implement the committee’s recommendations.
In 2013 trading of shares in the Indonesian mining company Bumi had to be suspended after allegations of accounting and corporate governance irregularities emerged, but the company had already raised £707 million from its float on the London Stock Exchange despite having a highly questionable human rights record. Bumi has been accused of evicting indigenous people from their land and polluting rivers in Borneo. Campaigners are suggesting that if the inquiry’s recommendations were to be implemented by the government, it would make it more difficult for companies like Bumi to be listed.
Pius Ginting is an ally from Friends of the Earth Indonesia who is travelling the UK at the moment as part of the Dirty Coal Tour. He said:
In Indonesia, since 2011, there have been more than 100 conflicts each year due to mining operations taking place at the expense of communities and often without their consent. Indonesian communities affected by UK listed mining companies would welcome any measures to improve scrutiny over the environmental, social and human rights impacts that they are facing in their daily lives.
It’s important to note that this is one aspect of the committee findings that we’re welcoming. It still argues that the benefits of hosting mining companies on the LSX outweigh the risks. The extractives sector as a whole is unethical and often hugely destructive. If we are to stop climate change, there is no long-term future for coal, oil and gas. But we also need to ensure that mining for other minerals doesn’t come at the expense of the poor. Instead of being a base for dirty energy firms and dodgy mining companies, London should be a centre for renewable energy and solutions that do not violate the rights of people in poor countries. We could start by standing up to big firms here in the UK who are lobbying for continued investment in fossil fuels.
- UK-Listed Mining Companies and the Case for Stricter Oversight – Case Studies and Recommendations – London Mining Network – February 2012
- Mining sector needs greater transparency and accountability – Business, Innovation and Skills (BIS) Select Committee – 28 October 2014
- Banking while Borneo burns – How the UK financial sector is bankrolling Indonesia’s fossil fuel boom – WDM – September 2013
Source: World Development Movement