This week the Guardian published my story on the role of Australian and foreign mining companies in Africa. One of the companies I identity is Australian firm Danakali, currently operating in Eritrea. 10 days before publication I emailed questions to the corporation seeking answers. No response. A few days later I emailed again and called its Perth office. Again, nothing. Now, a few days after my story was released, the company’s CEO and Managing Director Paul Donaldson has emailed me some answers. He’s unhappy with my article and its lack of “objectivity”. I’ll let readers decide whether a company operating in one of the world’s most repressive regimes has questions to answer about its behaviour. The following are my original questions and Donaldson’s answers:
Operating in Africa can be a challenging regulatory environment. How does your company operate in a country such as Eritrea?
We are a small company in the feasibility study stage. We have a group of local geologists, safety, environmental and administrative personnel based in our Asmara office. They are all our employees and are on annual salaries. We have safety and travel protocols for commuting between office and site, have introduced risk assessment processes before conducting any site work and do monthly safety inspections at site.
Requirements for mining are outlined in the Eritrean Mining proclamation which identify the need for a bankable feasibility study with an accompanying social, environmental impact assessment and environmental management plan before a mining license can be granted. We work closely with the ministry of land and environment and the ministry of energy and mines to ensure that we meet/exceed these requirements.
A look at our asx announcements will demonstrate to you that our SEIA is being done to the equator principles, and that we have been conducting environmental baseline assessments to support the environmental impact assessment. The work is also being conducted by a Perth based environmental group who have been engaged to ensure this work is done to meet the equator principles, which is of the highest standard and underpins the social and environmental management plan.
In conducting this work, and again with reference to our published information, this includes stakeholder engagement and is particularly relevant to communities in close proximity to the resource.
Eritrea has been accused by the UN, Human Rights Watch and Amnesty International for its human rights abuses. How does your company ensure that human rights abuses aren’t being breached during its operations?
Firstly you should already be aware that we are not actually in operation. We are in feasibility study stage. All of our study work is conducted by paid personnel – both nationals and where appropriate expats. Secondly, the joint venture company is currently working through its operating policy’s which will be adopted when the project is further advanced. This includes corporate, social responsibility that ensures that human rights abuses do not occur. The existing Bisha operation which is a joint venture between the Eritrean National Mining company and Nevsun have led the way in this respect (I note there is no mention of them in your article).
What kind of relationship does your company have with the Eritrean government?
As per our company presentations – we have a good working relationship with the government. We meet regularly with the Ministry of Energy and Mines and the Ministry of Land and Environment. The Eritrean National Mining company is our joint venture partner.
Do you think that Australian companies, operating outside Australian borders, should have to abide by any basic operating standards, regulations etc and should this be enforced by the Australian government?
Publicaly listed Australian companies do have to abide by standards of good corporate governance. It is a condition. Safety, environmental, training performance all form part of public company reporting protocols when in operation.
Having said that, my views are as follows:
1. The first priority is to comply to the local regulations, which most African countries have, albeit at different levels of maturity
2. After that foreign companies should be working with the regulators within the relevant jurisdiction to continually lift the bar on standards
3. Companies should always be self and third party auditing to ensure compliance to their own policy and standards
4. It is not appropriate for the Australian government to enforce regulations in another country. However, it is important to foster information sharing between emerging and developed mining jurisdictions.