‘First steps’ taken to drive highest standards of tailings management – CoE Pensions Board

The “first steps” have been taken to drive the highest standards of safety within company tailings management, the Church of England Pensions Board has said, as 50 per cent of the mining sector has now disclosed new information following an investor call.

Investors representing the Mining and Tailing Safety Initiative, co-led by the Church of England Pensions Board and the Swedish AP Funds Council of Ethics, have released a list of companies that have, and have not, responded to their urgent request to provide details of their tailings (waste) facilities.

The request for dam-by-dam disclosure was made at the beginning of April and is now supported by 100 investors with over USD $12.5trn in assets under management. 655 publicly listed extractive companies were contacted (including oil and gas companies because tailings waste can be generated from tar sands operations and they may be involved in tailings through joint ventures).

Of those, 202 responded with 118 confirming they did not have tailings facilities, and 77 per cent confirmed they did have tailings facilities. Thirty companies have not yet published their disclosure on a website or have asked for extra time to complete their disclosure, and 453 did not respond at all.

To date 29 of the top 50 mining companies have made disclosures which has resulted in information about thousands of individual tailings dams/facilities being made public on company websites. Over 50 per cent of mining industry (specifically, 50 per cent of publicly listed mining companies by market capitalisation) have responded and 20 of 22 publicly owned companies that are members of the International Council on Mining & Metals (ICMM) responded.

The release of this information follows an investor call for a new global safety standard on tailings management to be developed. A global review is now being led by the Swiss former Environment Minister, Professor Bruno Oberle, that is co-convened by the International Council of Mining & Metals (ICMM), The Principles for Responsible Investment (PRI) and the United Nations Environment Programme (UNEP).

Both interventions followed the collapse of the dam at Vale’s Brumadinho site in Minas Gerais in Brazil. As of the beginning of June 246 people have been confirmed killed with 24 people still missing.

Last week (10 June) investors held an initial review of the above disclosures at the 4th Roundtable of their Mining & Tailings Safety Initiative and welcomed the number of disclosures given the urgent timeframe. The Roundtable agreed that companies that have not responded can now expect intense engagement with funds from the initiative.

Commenting on the disclosures, Church of England Pensions Board director of ethics and engagement, Adam Matthews said: “Good tailings management exists but, when tailings dams fail the consequences can be catastrophic for communities and the environment. These disclosures bring a new level of transparency to the mining sector that will enable us to begin to reappraise the risk in our portfolios.

“It is clear there has been insufficient attention paid by the investment community and tailings have in effect been treated as an externality. These disclosures begin to change that understanding. We now know who has a facility, where it is, and we are beginning to understand the risks associated with individual dams. Through the work of the Investor Mining & Tailings Safety initiative we expect to drive the highest standards of safety within company tailings management. These disclosures are the first steps towards that goal.”

In addition, Swedish National Pension Funds secretary-general, John Howchin, said: “Following Brumadinho, safety, transparency, and independent verification will be key drivers in rebuilding trust. Whilst we are pleased that so many companies have responded to our disclosure request, we will be engaging robustly with those that have not. Not disclosing is unacceptable and poses a very real risk to our investment. We are now working with partners to develop a global tailings database that can standardise independent reporting and monitoring of tailings.”

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