Colombian communities vs. Xstrata

Date filed

4 October 2007

Keywords

Countries of harm

Colombia

Current status

No resolution

Sector

Mining

NCP

NCP Australia

Allegations

Cerrejón Coal, one of the largest open-pit coal mines in the world, is co-owned by BHP-Billiton (Australia), Anglo-American (UK) and Xstrata (Switzerland). According to the complaint, Cerrejón has attempted to depopulate an area of the La Guajira peninsula by destroying the township of Tabaco and forcibly expelling the remaining population through a purported expropriation.

Another five communities are suffering from the effects of what is called locally ‘estrangulación’ (strangulation), actions taken by the company that are designed to make living unviable in the area and therefore drive the population out. The complainants allege that this has caused suffering and hardship for the former population of Tabaco and of the other five pueblos.

Relevant OECD Guidelines

Outcome

On 9 October 2007, the UK NCP organised a meeting in London with local Cerrejón Coal management, the Australian and Swiss NCPs, the companies and the complainants. Since then, emails have been exchanged, but no further mediation has occurred. At that meeting a proposed Third Party Review initiated by Cerrejón Coal was accepted by the NCP as a solution/answer for the complaint. The OECD Guidelines case was suspended until the Third Party Review published its report in March 2008.

In July 2008 the Australian NCP sent a draft final statement to the parties for comments. BHP Billiton and Xstrata claim that local Cerrejón management now has the capacity and the knowledge to conduct proper resettlement process and that there is no need for a third party mediation. However, although the resettlement processes is taking place on paper, no mutually agreed negotiation scheme has been agreed with the complainants, nor has the communities’ ability to negotiate improved.

A positive outcome of the case was the December 2008 agreement reached between Cerrejón Coal and the township of Tobaco, which included contributions to indemnities of US$1.8 million and a further US$ 1.3 million for sustainable projects. A similar agreement has not been reached for the other five affected communities.

The complainants requested that the NCPs conduct fact-finding on the ground in Colombia either in person or through the respective embassies, but the Swiss NCP responded that the NCP does not have the human or financial resources to carry out local fact-finding or mediation, and that doing so would be a violation of national sovereignty. This seems to be at odds with the approaches of the UK and Dutch NCPs. The Swiss NCP further argued that local embassies cannot carry out the duties of the NCPs. The Swiss NCP mentioned that this may change after the upcoming review of the Guidelines and Procedural Guidance.

The Swiss NCP supports the final statement of the Australian NCP and takes it as a basis to formally close the specific instance. Complainants object to this closure, as concerns of the five communities have not been resolved and nearly no progress has made made on the resettlement. The final statement of the Australian NCP acknowledges this.