Guinea: Demanding a fair deal for communities from Alcoa-Rio Tinto bauxite mine

Compagnie des Bauxites de Guinée

Overview

The West African nation of Guinea is home to the world’s largest reserves of bauxite – the raw material used to produce aluminum. The multinational corporations extracting it are making a fortune, but instead of sharing the benefits with local communities, they are driving farmers off their ancestral lands without compensation and causing severe environmental damage. Now, with Inclusive Development International’s assistance, local communities are taking the fight for their rights to corporate boardrooms around the world.

 

CASE FILE

Location: Guinea – Boké region
Project Bauxite mine
Companies: Compagnie des Bauxites de Guinée (CBG), which is majority owned by Halco Mining, a joint venture of Alcoa, Rio Tinto, Dadco
Key concerns:

 

·      Physical and economic displacement without adequate compensation

·      Violation of customary land rights

·      Destruction of agricultural lands and threats to local food security

·      Pollution of local water resources

·      Health and safety concerns from dynamite blasting and dust pollution

·      Impacts to biodiversity and wildlife, including endangered chimpanzees

·      Lack of local benefits

Community goals: Full and fair redress of harms and losses suffered, protection from future adverse impacts, and benefit sharing from the mining operation to support local community development aspirations
Key financiers and buyers: Project financiers include the International Finance Corporation (IFC), the United States Development Finance Corporation (USDFC), the German government’s Untied Loan Guarantees program (UFK), Société Générale, BNP Paribas, Credit Agricole, Natixis; ING-DiBa AG; and two Guinean banks, Société Générale de Banques en Guinée (SGBG) and Banque Internationale pour le Commerce et l’Industrie de la Guinee (BICIGUI).

Bauxite from CBG can be traced to a number of large consumer-facing brands, including Coca-Cola, Anheuser-Busch, Red Bull, Coors, Crisco, Campbells Soup, Audi, BMW, Fiat-Chrysler, Ferrari, Ford, General Motors, Hyundai, Jaguar, Land Rover, Mercedes-Benz, Porsche, Volvo, Honda.

Our partners: Association pour le Développement Rural et L’entraide Mutuelle en Guinée (ADREMGUI), Centre du Commerce International pour le Development (CECIDE), FIAN Germany, Natural Justice, Powershift, Witness

With the world’s largest reserves of bauxite, the people of Guinea should be benefiting from the surging global demand for aluminum. Unfortunately, with the collusion of the Guinean government, multinational corporations are extracting the country’s natural wealth with a blatant disregard for the local communities impacted by their operations.

The Compagnie des Bauxites de Guinée (CBG) mine has a long history of denying the customary land rights of local communities and expropriating their farmland without any compensation. Irreversible destruction of large swaths of soil, disruption of the traditional crop rotation system and pollution of water supplies have caused extreme hardship for local communities.

Now CBG wants to massively expand the mine, but local communities are demanding reparations for past harm and a fairer deal that will deliver meaningful local benefits going forward.

Inclusive International Development has helped the communities to follow the money to justice by unravelling the web of financial institutions, multinational corporations and big consumer brands that are enabling and profiting from CBG’s harmful activities. This has enabled community members to lodge a complaint with a key international accountability mechanism, engage in targeted advocacy with investors, and bring CBG to the negotiating table.

Mediations are currently underway.

Our Actions

Inclusive Development International, along with Guinean organizations CECIDE and ADREMGUI, assisted 540 residents of 13 affected villages to file a formal complaint against the International Finance Corporation (IFC), the World Bank’s private-sector arm, for financing the expansion of CBG’s harmful bauxite mine. 

The complaint, filed with the IFC’s independent watchdog, the Compliance Advisor Ombudsman (CAO), details violations of the IFC’s environmental and social Performance Standards and international law.  The complainants allege that CBG grabbed their ancestral land, destroyed their livelihoods and damaged the local environment.

The complaint describes harms that were inflicted after IFC’s investment in 2015, as well as historical grievances relating to the company’s actions over the course of several decades.  It argues that the severity of the harms the communities have suffered historically, including the loss and destruction of much of their agricultural land and water resources to CBG, means that the spirit and objectives of the Performance Standards, such as the objective of improving, or restoring, the livelihoods and standards of living of displaced persons, cannot practically be achieved by isolating impacts going forward. Years of damage from CBG’s activities has gradually eroded living standards and economic resiliency, so only a comprehensive plan that reflects the past and future impact of CBG’s operations can truly restore communities’ livelihoods and standards of living.

The complainants are seeking full and fair redress for all of the harms and losses they have suffered and protection from future violations. They also want to see development benefits from the project as envisioned by the Performance Standards.

Inclusive Development International also traced the bauxite from CBG’s mine to refineries and smelters in North America and Europe, where it is processed into primary aluminum and sold to big brands that produce automobiles and aluminum packaging for food, beverage and other consumer goods.  We have engaged with many of these companies, along with CBG’s majority owners Rio Tinto and Alcoa and its expansion project financiers, to urge them to use their leverage to bring CBG to the negotiation table with the communities and engage in an effective process of remediation.

In October 2019, CBG formally agreed to the communities’ request to enter into mediations with them to address their grievances under the auspices of the CAO.  If the dialogue process is unsuccessful, the complaint will be transferred to the CAO’s compliance unit to conduct an audit of the project’s compliance with IFC’s environmental and social policies.

In partnership with CECIDE and ADREMGUI, we have worked intensively to help the communities prepare for the mediations by collecting evidence, electing representatives and training them in negotiation skills.

We have worked with cartographers to analyze satellite imagery over a 40-year period and train community members to map their customary lands and productive resources that have been impacted by the mine. Armed with this evidence of the mine’s impact, the affected communities are prepared to enter the negotiations on a more equal footing.

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Background

Since the inception of the mine in the early 1970s, local communities have experienced widespread loss of land and livelihoods, due to the expropriation of ancestral farmlands without consultation or the provision of compensation or replacement land.

Over the last several years, the Guinean government has carved up its Boké region and sold it off to multinational mining companies from the United States, the United Kingdom, China, Russia and the United Arab Emirates. These companies have extracted billions of dollars of Guinea’s bauxite and processed it abroad into aluminum, which is used by major consumer brands to make cars, beverage cans and technology products. Yet few Guineans have benefited from this extractive economy.

Despite the ‘bauxite boom,’ more than 63 percent of the population still languishes under the poverty line, making Guinea one of the poorest countries in sub-Saharan Africa.

CBG was the country’s first bauxite mine, beginning operations in 1973. A joint venture of the Guinean government and three multinational aluminum producers – Rio Tinto, Alcoa and Dadco – CBG is today one of the largest bauxite mines in the world.  More than 230 villages have been or are expected to be impacted by CBG’s operations, according to external monitoring reports.

Since it began operations, CBG has mined large areas of land surrounding the town of Sangaredi in the heart of the lush Boké region. Like other mining companies in Guinea, CBG has treated rural land as state property. For years, the joint venture has grabbed farmland without the free, prior and informed consent of customary landowners, without following a public expropriation process, as required under national legislation, and without the payment of compensation.

CBG has also failed to rehabilitate the agricultural land it has strip mined, seriously disrupting the traditional crop rotation system and irreversibly destroying large swaths of soil.

CBG’s operations have had other widespread environmental and social repercussions. Pollution of water and prevention of access to clean water has been a major impact of CBG’s operations, causing extreme hardship for local communities. The mine has had severe impacts on biodiversity, including critical habitats for endangered chimpanzees.

These harmful practices, along with the failure to provide tangible benefits to host communities, have caused enormous frustration amongst the local population.

In April and September 2017, the Boké region saw large-scale riots by thousands of young people protesting bauxite mining in the region, resulting in several deaths of protestors at the hands of security forces.

 

CBG and Its Financial Backers

In 2016, the IFC provided a $200 million loan to expand the venture’s mining operations, with the U.S. government’s Overseas Private Investment Corporation (now known as the Development Finance Corporation) providing an additional $150 million.

A further $473 million came from a syndicate of commercial banks: France’s Société Générale, BNP Paribas, Crédit Agricole and Natixis; the German affiliate of ING bank, ING-DiBa; and two Guinean banks, Société Générale de Banques en Guinée and Banque Internationale pour le Commerce et l’Industrie de la Guinée, a member of the BNP Paribas group. The German government guaranteed a portion of the financing through its Untied Loan Guarantees program.

The syndicated loan was provided under the Equator Principles, the banking industry’s voluntary environmental and social risk management framework that is based on the IFC’s Performance Standards.

The bauxite from CBG’s mines is exported internationally to a number of refineries and smelters in North America and Europe, where it is processed into primary aluminum and sold on to big brands that produce automobiles and aluminum packaging for food, beverage and other consumer goods. These include Coca-Cola, Anheuser-Busch, Red Bull, Coors, Crisco, Campbell’s Soup, Audi, BMW, Fiat-Chrysler, Ferrari, Ford, General Motors, Hyundai, Jaguar, Land Rover, Mercedes-Benz, Porsche, Volvo, Honda, and others.

Inclusive Development International is proud to accompany the Boké communities in the CAO dispute resolution process that is currently underway with CBG.  We will continue to engage with CBG’s stakeholders throughout this process to ensure that they all live up to their human rights responsibilities to prevent and redress harms within their investment and supply chains.

Further Reading

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