The Council on Ethics’ recommendation, 30 April 2013

Since its inception in 2007, the Council on Ethics has been in discussion with American mining company Freeport-McMoRan Copper & Gold Inc., since the company’s mining operations in Indonesia are linked to severe adverse environmental impact in violation of the UN Convention on Biological Diversity.

The aim of the discussion is to convince Freeport-McMoRan to report on what it is doing to minimise its environmental impact, and to draft a plan on how the area will be restored once mining operations cease. Another aim with Freeport-McMoRan, as with all companies the Council is in dialogue with, is that the company should take measures to prevent future violations.

The dialogue with Freeport-McMoRan has focused on: greater transparency, better reporting, greater environmental expertise on the board of directors, and the adoption of a policy distancing itself from future emissions into rivers. The Council has seen some progress with regard to transparency and reporting. The company now has, for example, a public report describing the controversial waste disposal method and it reports its sustainability work in accordance with GRI. Freeport-McMoRan has, however, not presented any scientific articles substantiating the company’s claim that the mining operations will not have any irreversible impact on the environment. Freeport has a comprehensive environmental programme for monitoring its environmental impact. Unfortunately, the Council has seen no progress with regard to adopting a policy, and the Council deems this necessary to prevent the company from using the controversial method in the future. The company’s CEO and Board Chairman have declared in writing that the company will not adopt any policy that limits the company’s future choice of waste disposal method.

The Council believes that continued dialogue with Freeport-McMoRan is not meaningful, and that the risk of future violations exists since the company will not preclude the possibility of using the controversial waste disposal method in future projects. The Council has therefore recommended that the AP Funds exclude Freeport-McMoRan.