Suspension of blood coal can increase leverage

Image: Today PAX began a public awareness campaign to urge energy company Nuon/Vattenfall to suspend trading of blood coal until decisive steps have been taken by the mining companies towards effect

May 17, 2016

In order to comply with international standards for responsible business conduct, European energy companies should seriously consider a temporary suspension of buying blood coal to increase their leverage towards mining companies Drummond and Prodeco/Glencore. That is one of the conclusions that can be drawn based on a SOMO discussion paper titled ‘Should I stay or should I go’.

The discussions paper explores the role of disengagement in order to address grave human rights violations. It shows that if companies are not able to show concrete results, they should consider disengagement or temporary suspension in order to force their supplier to take the right actions. Campaign leader of PAX Wouter Kolk: “Translated to the case of Colombian blood coal it clearly shows that energy companies have to increase their leverage in order to show concrete steps towards remedy for victims.”

According to several sworn testimonies, suppliers of European energy companies – mining giants Drummond and Prodeco/Glencore – have supported illegal paramilitary groups in the Cesar mining region by structurally financing them and exchanging strategic information. Between 1996 and 2006, at least 3,100 people were killed and at least 55,000 people were driven from their land. To this day, the victims have never received recognition or reparations from the companies for their suffering. Instead, many victims who stand up for their rights are intimidated.

Victims have been waiting for more than ten years for the remedy they are entitled to. European energy companies are the most important customers of Drummond and Prodeco/Glencore and have been well aware of the human rights violations in their supply chain for many years. The actions they have taken so far have not yet had any significant impact. Therefore PAX is urging energy companies to suspend trading of blood coal until decisive steps have been taken by the mining companies towards effective remedy for the victims.

DONG does it
Recently, the largest energy company of Denmark, Dong Energy, has chosen not to renew its coal imports from the Colombian mining company Prodeco/Glencore as part of a robust due diligence process. DONG has made clear it will not enter any new purchase contracts with Prodeco/Glencore until DONG’s standards for responsible sourcing are met. This includes mitigation and remedy for human rights violations. This makes DONG the frontrunner in corporate social responsibility. It shows that energy companies can draw a line when it comes to importing coal. If the other European energy companies are also serious about their corporate responsibilities in the coal chain, they should follow Dong’s example.

Unfortunately, Vattenfall and others refuse to temporary suspend their trading of blood coal in order to push Drummond and Prodeco/Glencore to take concrete steps towards remedy for victims. SOMO’s paper states: “Any serious attempt to engage a business partner to address adverse impacts would include the prospect of disengagement if the partner refuse or fails to adequately address the impacts.”  Wouter Kolk: “The energy companies themselves have stated that insufficient improvement should lead to disengagement. They should back-up their own words by deeds and suspend their trading relation with the mining companies.”

Read the discussion paper Should I stay or should I go?

In depth: Stop Bload Coal


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