Iluka Resources has criticised the evaluation which led to divestment of shares in the mineral sands miner by the Australian National University (ANU).
Iluka Resources general manager (for investor and external relations) Dr Rob Porter said representatives of the company met with research group CAER (Corporate Analysis, Enhanced Responsibility) on Friday last week to discuss their process of evaluation.
“They have a lot of different criteria,” Porter said.
“If you’re involved in mining activities you don’t rate very well to start off with because it’s an extractive activity."
Porter said CAER had a number of criteria that would be difficult for most small mining companies to meet.
“They have criteria like ‘Do you have a dedicated manager who is responsible for water management?’ or ‘Do you have a dedicated senior manager for CO2 or emissions’,” Porter said.
“We are not a large company by any matter of means, so no, we don’t have dedicated people associated with that.
“We are, in a very preliminary way, involved in overseas jurisdictions, but we’re not seen to have an adequate enunciation of policies around human rights abuses and child labour.”
Porter said Iluka Resources did not intend to pursue the matter through legal channels, as was threatened by Sandfire Resources.
“Like other companies we’re not particularly impressed with the quality of the rigour of the research, nor the fact that there was no real dialogue with the company in terms of being cross-checked, or having it reviewed independently,” Porter explained.
“But rather than get into a brawl about this matter we’ll engage with them and do what we can to change the assessment.”
Iluka announced earlier in October that it was confident in its sustainability credentials, that it operated within the framework of ASX corporate governance principles, and that it had a commitment to the highest standards of health, safety and environmental performance.
Iluka Resources also has a documented track record of responsible rehabilitation of areas disturbed by exploration and mining operations.
In May this year Iluka Resources won the South Australian Premier’s Award for Environmental Excellence, for research partnerships to promote industry best practice at the Jacinth-Ambrosia mineral sands operation.
Iluka was also recognised in September for outstanding contributions on the part of Narngulu operations manager Stuart Forrester for promoting the role of women in mining, and in 2013 won the Excellence in Social Inclusion award for indigenous employment , education and business development in South Australia.
ANU announced early in October that it would divest shares in seven mining companies on the basis that they were 'not socially responsible and doing harm'.
The move that was pushed by student activist group ‘Fossil Free ANU’ and the international fossil fuel divestment campaigners 350.org, however these organisations have apparently failed to persuade ANU to distance itself from BHP Billiton, which is a corporate donor to the university.
Of the seven companies named in the divestment of around $16 million worth of shares, only two are companies involved in the production of fossil fuels.
The other companies selected for divestment were Santos (oil and gas), Oil Search (oil and gas), Newcrest Mining (gold), Sandfire Resources (copper, gold), Independence Group (nickel, gold), and Sirius Resources (Nickel, not yet producing).
The $16 million worth of shares represents only 1.6 per cent of ANU’s estimated $1 billion worth of investments.
Similarly divested company Sirius Resources was recently commended as an industry leader by indigenous consulting company Indigenous Services Australia, for their sensitivity and respect in negotiating for land use with the Ngadju people, as well as achieving positive social outcomes for them as traditional owners of the land covered by the exploration lease for the Nova Nickel Project.
Sydney-based Oil Search administers United Nations health care funds, and is listed on the Dow Jones Sustainability index (Australia) and the UK-based Alliance Trust Sustainable Future Global Growth Fund.
Sandfire CEO Karl Simich said that the company was not contacted by CAER prior to ANU’s decision, and were only able to obtain a copy of their company profile from CAER on Wednesday.
“Sandfire Resources is, at this present time, considering all of its legal options to the extent that we can,” Simich told the ABC.
“Yes, we will take further action in a formal capacity, and we will be seeking a full retraction of the statements made by the ANU.
“When you make comments that you're not interested in investing in companies that cause social harm, that is something we take umbrage at.
“It really is a distressing statement to hear, from an institution that actually provides (university) courses for people who will enter the mining industry.”
Association of Mining and Exploration Companies (AMEC) CEO Simon Bennison said the decision by ANU to publically blacklist the companies was an inappropriate reaction to a flawed report.
“ANU commissioned CAER to prepare a report into environmental, social and governance ratings of various companies within their share portfolio.
“AMEC understands that ratings were assigned to a number of criterion based only on publicly available information.
“The fact that the nominated companies were not formally approached, afforded natural justice or the right of any reply, the decision making process by ANU is clearly flawed.
Bennison said AMEC was extremely concerned and disappointed that ANU chose to make a public statement on what should have been an internal decision making process.
“In the meantime, there is no question that the investment reputation of the companies involved has been tarnished,” he said.
“They have been vilified without credible evidence being provided to substantiate the conclusions in the Report.”