The LEAD Group vs Xstrata PLC

Allegations

The LEAD Groups complaint alleges that Innospec Inc, Xstrata and TetraBOOST Ltd. have violated the Environment Chapter of the OECD Guidelines related to the production and distribution of an additive for leaded gasoline.

According to the companys website, Innospec is the worlds only manufacturer and distributor of the environmentally-harmful additive Tetra Ethyl Lead (TEL) for leaded gasoline, which is possibly sold in Afghanistan, Algeria, Burma, Iraq, North Korea and Yemen. Xstrata owns the Australian mine and the UK refinery that produces and processes the lead for Innospecs TEL production.

In the complaint, The LEAD Group requests that Innospec cease its production and distribution of TEL for MOGAS motor vehicle fuel (but not for aviation fuel) by the end of 2011. They also request that Xstrata stop supplying lead to Innospec for TEL for MOGAS if the company does not cease its TEL production.

An additional complaint against the UK-based company TetraBOOST alleges that TetraBOOST distributes a fuel additive made from Innospecs TEL in several European countries. The LEAD Group claims that the distribution of TetraBOOSTs product is equally harmful to people and the environment and requests TetraBOOST terminate the distribution of products containing TEL.

Relevant OECD Guidelines

• Version 2000 Chapter V
• Version 2000 Chapter V Paragraph V.1 Subparagraph V.1.A
• Version 2000 Chapter V Paragraph V.1 Subparagraph V.1.B
• Version 2000 Chapter V Paragraph V.1 Subparagraph V.1.C
• Version 2000 Chapter V Paragraph V.2 Subparagraph V.2.A
• Version 2000 Chapter V Paragraph V.2 Subparagraph V.2.B
• Version 2000 Chapter V Paragraph V.3
• Version 2000 Chapter V Paragraph V.6 Subparagraph V.6.A
• Version 2000 Chapter V Paragraph V.6 Subparagraph V.6.B
• Version 2000 Chapter V Paragraph V.6 Subparagraph V.6.C
• Version 2000 Chapter V Paragraph V.6 Subparagraph V.6.D
• Version 2000 Chapter V Paragraph V.7
• Version 2000 Chapter V Paragraph V.8

Outcome

The complaints against Xstrata PLC and Innospec were filed on 27 August 2011 at the Australian, Swiss, UK and US NCPs with a supplemental submission filed on 25 October 2011 at the request of the US NCP. The additional complaint against TetraBOOST was filed with the UK NCP on 23 December 2011.

The NCPs agreed to collaborate in handling the various cases. The US NCP took the lead in handling the case against Innospec. After conducting an initial assessment, the US NCP accepted the case for further consideration. The NCP offered to host a mediated dialogue aimed at reaching a settlement. The LEAD Group was prepared to engage in the mediation, but Innospec refused, claiming that the complaint was inaccurate and that it did not believe The LEAD Group would engage in good faith dialogue. Seeing no possibility to move forward with mediation, the US NCP decided to conclude the case in February 2012 with a final statement without making an analysis or determination as to whether Innospec had breached the Guidelines.

The UK NCP took the lead in handling the complaint against Xstrata because Xstrata is UK-incorporated and the alleged breaches took place in the UK. After an initial assessment, the NCP accepted the case for further consideration. Since the complaint was filed before the 2011 Guidelines entered into force, the UK NCP declared it would assess the case based on the 2000 Guidelines.

Both Xstrata and The LEAD Group accepted the UK NCPs offer to host conciliation/ mediation with the aim of reaching a settlement. A meeting between the parties was held on 17 February 2012 in London. The LEAD Group attended the session via phone conference and invited UK-based NGO RAID to physically attend the meeting on behalf of The LEAD Group. The mediation session resulted in an agreement between the parties and the withdrawal of the complaint against Xstrata. The UK NCP issued a final statement describing the process and noting that an agreement had been reached.

The UK NCP also conducted an initial assessment of the complaint against TetraBOOST. After facilitating email exchanges between the parties, the NCP rejected the case in May 2012 arguing that accepting the case would not contribute to the purposes of the Guidelines because TetraBOOST is a small company without much influence in the global market. The NCP further argues that because TetraBOOSTs core (and only) business involves the distribution of TEL, asking the company to change its behaviour would mean that the company would cease to exist, and thus the complaint is not eligible. The complainants strongly disagree with the NCPs logic in rejecting the case. The fact that a multinational enterprise is small should not exempt it from adhering to the Guidelines, nor should a company whose core business violates the Guidelines be exempted simply because observing the Guidelines would result in the company going out of business. The complainants are worried that the UK NCPs decision could set a dangerous precedent for other OECD Guidelines cases.

More details

Related complaints

• The LEAD Group vs Innospec
• The LEAD Group vs TetraBOOST

Documents

• statement

  31 May 2012

  UK NCP issues final statement on the case

  NCP UK
• case dropped

  18 February 2012

  After an agreement has been reached The LEAD Group withdraws case against Xtrata

  LEAD
• meeting

  17 February 2012

  UK NCP facilitated a meeting between the parties

  LEAD
• initial assessment

  16 December 2011

  Intial assessment issued by the UK NCP

  NCP UK
• file

  27 August 2011

  Complaint against Xstrata filed

  LEAD