Earthworks

Dow Jones Sustainability Index is Unsustainable for Communities

Ellen Moore's avatar
By Ellen Moore

September 25, 2017

Dow Jones Sustainability World Index (DJSI World) recently announced its list evaluating the sustainability performance of the largest 2,500 companies listed on the Dow Jones Stock Market Index. US-based Newmont Mining scored high marks, earning it a spot as one of the world's most sustainable metal mining companies. Given Newmont’s abysmal environmental and human rights track record, this distinction raises the question, “How does DJSI define sustainability?”

If you took this question to communities living near Newmont’s Yanacocha mine in Cajamarca, Peru, or those opposing its recently stalled Conga mine in the same region, you would likely get a very different answer. The Yanacocha mine, the largest open-pit gold mine in Latin America, polluted critical and culturally significant water sources that threatens the health of communities and the environment now, and for generations to come.  In June 2000, one of Minera Yanacocha's contractors spilled 150 kilograms (335 pounds) of mercury from the mine along a 43-kilometer stretch of road through the towns of Choropampa, Magdalena and San Juan. More than 1,000 people maintain they were affected by the spill and many continue to report adverse health effects.

And Newmont’s more recent attempts to develop the proposed Conga gold mine in an important hydrographic basin has resulted in years of tension, violent repression and thousands of spurious legal attacks against local people. This uptick in the criminalization around Newmont’s mines in Peru follows a concerning trend found throughout Latin America in which social movement demanding rights are targeted with legal action. According to a report from the Inter-American Commission on Human Rights, the tactic aims to “paralyze or delegitimize their causes” negatively affecting democratic values and the rule of law.  

Newmont first sued local subsistence farmer, Máxima Acuña de Chaupe, in 2011, claiming ownership of her land near the proposed Conga project. In 2017, the Supreme Court of Peru upheld a lower court decision acquitting Máxima of criminal charges for aggravated assault which the company accused her of. As conflict over the development of the mine dragged on, Newmont’s construction permits expired, and the company quietly announced suspension of the project in 2016. But Newmont continues to harass Máxima and communities that stand in the project’s way. In yet another attempt to gain possession of her land, Newmont is pursuing a civil claim against Máxima. Civil litigation in Peru can drag on for up to 10 years, causing economic hardship and stress for her family and GRUFIDES, the Cajamarca-based human rights organization providing critical legal support. Máxima’s brave struggle was recognized on the world stage in 2016, when she was awarded the prestigious Goldman Environmental Prize.

With no end in sight, Máxima and her family, with legal support from Earth Rights International, filed a lawsuit against Newmont and three of its corporate affiliates that “seeks to stop a pattern of harassment and physical and psychological abuse that the Chaupe family has suffered at the hands of security personnel working on behalf of Newmont and its corporate affiliates.” The lawsuit, filed in Delaware federal court on September 15th, argues that Newmont’s Board of Directors and Executive Team sets and controls human rights standards, and is responsible for a violent campaign aimed at forcing the family off their land in order to advance the Conga mine. It calls for compensatory and punitive damages for the family well as relief from future human rights abuses by the company and its affiliates.  

Máxima is not the only local landowner Newmont has sued. For more than three years, the company has been embroiled in another land dispute, this time related to its acquisition of acreage near the Yanacocha mine. The Pajares family, who holds titles in the area in question dating back to 1954, claim Newmont illegally took possession of the land. In response to the conflict, the company has filed 28 lawsuits against each of the 22 children in the Pajares family for adverse possession, and has acted on numerous occasions to evict titles holders residing on the land. The most recent attempted eviction took place on September 5th when Newmont deployed private security officers who used pepper spray and pellet guns against local residents, including members of the Pajares family.

According to GRUFIDES, 303 community leaders who participated in protests against the Conga mine had criminal complaints filed against them by the state and Newmont’s subsidiary, Minera Yanacocha. Many of those targeted had up to a dozen charges each. Some who were arrested last year still have not had their first hearing before a judge, more than eight months later. And while families and communities struggle to find resources to pay court fees and lawyers, Newmont CEO, Gary Goldberg, received a bonus of over 1.8 million dollars, $73,000 of which was awarded by the Board specifically in recognition of the company’s ranking on the DJSI.

Contaminating and drying up local water sources, altering traditional livelihoods and landscapes, and resolving conflict through bankrupting local opposition with lawsuits - these practices fly in the face of Newmont’s high score on the DJSI. This is not the first time the credibility of the Dow Jones Index, which aims represent “the gold standard for corporate sustainability”, has been called into question. BankTrack blasted the ranking system in 2013 for its inclusion of Bank of America given its financing of coal mining and home and abroad, which in India had resulted in “the destruction of tiger habitats, the use of child labour and the forcible displacement of forest communities.” This same year, Australia & New Zealand Banking Group Ltd (ANZ) topped the DJSI’s list in the banking sector despite its designation as “Australia's biggest lender to a series of coal and gas export terminal projects that threaten to destroy the Great Barrier Reef.”

Currently DJSI defines sustainability such that there must be “sustainable” actors in each sector, even if their behavior is appalling - as in the case of Newmont. If the DJSI wants to provide investors with information about which companies are acting sustainably, it needs to prioritize not just the financial sustainability of corporations, but the social, cultural and environmental consequences of their operations for frontline communities. Unchanged, the DJSI World Index provides an incomplete analysis of what real “sustainable” practices must include, and instead serves as a PR cover to allow corporations to continue to commit environmental and human rights abuses.

Tagged with: peru, no dirty gold, newmont, mining, maxima, djsi, conga

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