Tag Archives: law

Another Look at the Twin Metals Timeline

Rees20170502AntofagastaIn response to a FOIA request I made back in April, the Department of the Interior has released Gareth Rees’ 2017 work calendar. Rees has served as Executive Assistant to the Deputy Secretary of the Department of the Interior since George W. Bush’s first term. He did not arrive with the so-called “beachhead” teams brought in by the current administration with the express mission of sabotaging and dismantling the government agencies entrusted to their care. Still, his calendar (which I’ve put up here, on DocumentCloud) adds more pieces to the puzzle.

Rees’ calendar drew my attention to a couple of meetings I hadn’t noticed before and which are now represented on the timeline. There is a June 15, 2017 meeting at Interior with a group called Jobs for Minnesotans — a front for the building trades that is currently lobbying for both the Twin Metals project near the Boundary waters and the Polymet project to the south, near Hoyt Lakes. Jobs for Minnesotans is a 501c4 “social welfare” or dark money organization of the kind I’ve written about in connection with mining projects in Michigan and Wisconsin. As a 2016 Pro Publica report suggests, these organizations are designed for those who prefer backroom deals to sunlight. 501c4s like Jobs for Minnesotans are used to channel money from private interests into public process, and coordinate localized efforts to remove environmental protections and undo regulation through regional and national networks.

A May 2, 2017 meeting with Antofagasta plc has also been added to the timeline. This meeting brought together representatives of the Chilean conglomerate with a large group of officials at the Department of the Interior just one month after Interior appears to have taken up the matter. Apparently meeting with Antofagasta was a priority. The company’s subsidiaries Twin Metals Minnesota and Franconia Minerals had sued the Department of Interior in February of 2017. The complaint makes the mining companies’ position abundantly clear. And yet administration officials seem to have been anxious to sit down with the Chilean parent company and discuss its leases. Why? (It’s not likely that the same courtesy will be extended to the ten Minnesota plaintiffs now complaining that in reinstating Antofagasta’s leases the Department of Interior exceeded its lawful authority and acted in an arbitrary and capricious way.)

The first meeting with Antofagasta, in early May, appears to have set the agenda; the second meeting with Antofagasta, on July 25th, looks as if it were called to reach an agreement. The July meeting with Antofagasta includes all Interior officials present at the May 2nd meeting as well as some important decision makers: Deputy Solicitor Daniel Jorjani, Acting Director of the Bureau of Land Management Michael Nedd, and Edward Passarelli, Deputy Chief at the Natural Resources Section of the Department of Justice.

It is difficult to avoid the conclusion that the Department of Interior worked steadily and closely behind closed doors with lobbyists and mining executives to renew Antofagasta’s mineral leases in Superior National Forest. This would conform to the general pattern at Interior under Zinke’s leadership. “A deeply problematic culture of secrecy…has taken root in the Department of the Interior,” the organization Earthjustice charges, “keeping the American public in the dark about major decisions, important records, and meetings with industry that affect the lands and resources the agency holds in trust for the American people.”

In this case, the mining company ran a full court press; the public was kept almost entirely out of the process. The deed appears to have been done well before the end of summer 2017. The legal review that would result in the Jorjani Memo of December 22nd appears to have been nothing more than an exercise in a foregone conclusion — a sham.

The Political Project of MCRC v. EPA, Revisited

Judge Robert Holmes Bell dismissed the Marquette County Road Commission’s case against the EPA back in May, and last week the Road Commission’s attorneys at Clark Hill PLC filed a motion to alter and amend that judgment. They complain that the Court’s dismissal for failure to state a claim is not only mistaken on points of law but, more dramatically, it allows the “EPA and the Corps to wage a war of attrition on local governments seeking to protect the health and welfare of their people.”

I was struck by this inflammatory piece of political rhetoric about federal overreach for a couple of reasons. First, because it’s just the sort of hyperbolical language Michigan State Senator Tom Casperson and StandUP, the 501c4 dark-money organization funding the Road Commission lawsuit, have used to frame the case for County Road 595 and advance what, in a series of posts (1, 2, 3, 4) last summer, I called the political project of MCRC v. EPA. Second, because the motion here tacitly admits that mining activity on the Yellow Dog Plains has put “the health and welfare” of people in Marquette County at risk. Rio Tinto and then Lundin Mining proceeded with their plans to mine copper and nickel at Eagle Mine and truck it to Humboldt Mill without a clear haul route. They not only went ahead; they were permitted by the state to do so. The risk was transferred to the public.

This is a familiar pattern, but the story it tells is not about federal overreach or intrusive oversight. Quite the opposite: it’s a story about mining companies rushing projects into production without due consideration for the communities in which they are operating, regulatory capture or lax oversight and enforcement, and elected officials who all-too-easily and all-too-conveniently forget where their real duties lie.

The June 13th motion doesn’t often have recourse to this kind of language. For the most part, the motion deals with fine points of administrative law, citing a few cases that it claims the court misread or misapplied. Probably the most important of these is the Supreme Court’s discussion of the Administrative Procedure Act in a May 2016 opinion, United States Army Corps of Engineers v. Hawkes Co.. (Miriam Seifter explains Hawkes over at ScotusBlog. Even with her very clear analysis in hand I can only hope to make a layman’s hash of things.)

In Hawkes, a company that mines peat for golf-putting greens — a process that pollutes and destroys wetlands — sought an appeal of “jurisdictional determinations” by the Army Corps of Engineers that wetlands on their property were subject to the Clean Water Act.

The “‘troubling questions’ the Clean Water Act raises about the government’s authority to limit private property rights” came up for some brief discussion in Hawkes, notes Seifter, but that was not the main focus of the Supreme Court opinion. The case instead revolved around the question whether jurisdictional determinations are “final,” which in this context means they constitute an action “by which rights or obligations have been determined, or from which legal consequences will flow.”

The Army Corps in Hawkes maintained that appeals of the Corps’ jurisdictional determinations should not be allowed, because the determinations of the Corps are still subject to review and are not “final” or binding. The court found unanimously in favor of the peat-miners, saying that determinations by the Corps were final — they would put legal constraints on the peat-miners, who would have to stop polluting or face penalties — and therefore could be reviewed in court.

In MCRC v. EPA, the Road Commission now seeks a decision along similar lines. “The Court erred,” the motion complains, “by holding that EPA’s veto was not ‘final’ because Plaintiff could submit a new application to the Corps.”

In other words, the court held that the EPA’s objections to County Road 595 weren’t the last word: they didn’t constitute “final agency action” and did not entail legal consequences or impose obligations the Road Commission didn’t already have. The Road Commission can even now take EPA’s opposition to the road under advisement, go back to the Corps and seek a new permit. They can continue to work with the EPA, whose objections to the road are “tentative and interlocutory”: there is still room for conversation.

The attorneys for the Road Commission don’t deny that the Road Commission could have gone back to the Army Corps of Engineers; but they say that it would have been time consuming, burdensome and ultimately futile, as the Corps had joined the EPA in its objections to the road, and the EPA’s objections had the effect of a veto.

This brings us back to the arguments advanced in the original complaint. The EPA didn’t just object to the Road Commission’s proposal; they unfairly vetoed the new road, in a “biased and predetermined ‘Final Decision’.” The Final Decision, according to the motion, took the form of a December 4, 2012 objection letter from the EPA to the Marquette County Road Commission, to which the Road Commission replied on December 27th. They did not receive a reply, and the EPA’s failure to reply was tantamount to a “refusal.”

The EPA’s refusal (or failure) to reply to the Road Commission’s December 27th letter indicated that their objections had “crystalize[d] into a veto,” according to the motion. “Unequivocal and definitive,” a veto is a final agency action, “akin” to jurisdictional determinations made by the Corps. What legal consequences flowed from the veto? For starters, the EPA’s Final Decision divested the state, specifically the Michigan Department of Environmental Quality, of any further authority in the matter.

While this is not a new position for the Road Commission, the way the motion lays it out is nonetheless clarifying. The discussion of Hawkes, especially, brings into focus the question before the court — a question of administrative law concerning the “finality” of the EPA’s objections to CR 595. Of course that question entails others: whether the EPA’s failure to reply to the Road Commission’s letter of December 27th amounts to a refusal of the Road Commission, whether that refusal, in turn, crystalized their objections into a veto, and whether EPA vetoes are really “akin” to jurisdictional determinations by the Corps.

Stronger accusations are only being held at bay here. For example, it would be difficult to read the EPA’s failure to reply to the Road Commission’s December 27th letter as a deliberate refusal to reply without accepting the original complaint’s charges of bias and allegations of conspiracy at the EPA, or indulging its witch hunt for “anti-mining” attitudes and its demonizing of “activists.” But even if we are not willing to follow the plaintiff down that dark road, it would also be difficult, now, to overlook the serious dysfunction and administrative incompetence exposed by the Flint Water Crisis, which cost the head of EPA Region 5 her job, and which showed the world just how broken the system of environmental governance is in Michigan.

Is Every Conversation Illegal? A Follow-Up on Shareholder Engagement

In a comment on Jackson and Gilshan’s “Call on U.S. Independent Directors to Develop Shareholder Engagement Strategies” — which I discussed in a previous post — Robert A.G. Monks sounds pessimistic.

If I read him correctly, he doesn’t think we’ll ever manage to create “an open and trusting format” of the kind Jackson and Gilshan recommend, where shareholders may “discuss the full range of company business with a director.” Monks says that what’s “missing” from the American scene is precisely a “framework for effective shareholder dialogue,” but he thinks that will remain “only aspirational on our side of the Atlantic.” Why? because there are legal obstacles that make companies skittish: “Indeed, counsel for the board of a NYSE listed company has explained to me – patiently – why it would be illegal for an individual board member to meet with me to discuss company business.”

A longtime shareholder activist who has written about a range of corporate governance issues, Monks wields a great deal of authority on these topics, so I defer to his experience and hope to benefit from his insights. I can appreciate, too, how frustrating it must be to be told that the law — and what he calls “orthodoxy” — prevent discussion. But I hope he’s not recommending we resign ourselves to the status quo.

Understanding, respecting and obeying the law is one thing, hiding behind it another. It doesn’t sound as if the counsel at the NYSE-listed company was hiding or trying to put Monks off, but you can also easily imagine that companies might take refuge in the assertion that the law and orthodoxy just won’t allow them to meet with or engage shareholders.

As I said in my reply to Monks’s comment, it might be illegal for an individual shareholder to sit down and whisper about company business with an individual director, but that isn’t the only possible scenario. There are still good faith efforts to be made, on both sides. A circuit of small gatherings, thoughtfully planned and dedicated to a particular theme, could offer one model. Shareholder proxy resolutions offer another opportunity for conversation — among directors, shareholders and stakeholders — before the resolutions are submitted or come to a vote.

In many cases, the shared experience of the conversation will be just as important as, if not more important than the content.

So the point here is not to multiply examples, but to suggest (as Monks himself suggests at the end of his comment) that there is good work to do on this front. The challenge, as I see it, is to create meaningful opportunities for face to face conversation and communication — for ongoing, purposeful “engagement”; the basic aim is to defuse antagonism, allow people to make connections, or simply ensure that everybody is in possession of relevant facts.

That there are legal obstacles here is no reason to give up. To my way of thinking, it’s all the more reason to develop a framework that U.S. owners and directors can use.

Can the UN Make Business Respect Human Rights?

Last Wednesday, the UN Human Rights Council announced its endorsement of the Guiding Principles on Business and Human Rights, developed by John Ruggie. The UN press release called it “an unprecedented step,” the establishment of “the authoritative global reference point” in questions of business and human rights.

Unprecedented? Only if you ignore history. In fact, the UNHRC endorsement caps a long period of unhappiness over business and human rights at the UN.

Consider the origins of Ruggie’s mandate. After several false starts, beginning in the 1970s, the UN in 2003 issued the Norms on Transnational Corporations and Other Business Enterprises. The original goal, as Ruggie describes it [pdf], was “to impose on companies, directly under international law, the same range of human rights duties that States have accepted for themselves under treaties they have ratified.”

Sensible enough, you’d think. The Norms gave the UN a chance to “revive its relevance,” as Surya Deva puts it [pdf], “in a new world order in which states no longer enjoy the monopoly as violators of human rights”. Despite a promising start, the Norms ended up falling far short, in Deva’s judgment, of laying the groundwork for “an effective international regulatory regime of corporate human rights responsibility.”

Businesses fought back fiercely; and governments, far from offering support, “went into hiding,” as Ruggie put it in a 2008 interview. By the time the Norms emerged from a UN Sub-Committee in August of 2003, they were hardly fighting words. Like the UN Global Compact, launched amid much hullabaloo only three years earlier, the Norms were not legally binding and left it up to businesses to decide the depth of their commitment and to meet human rights responsibilities on their own terms. (And as I pointed out in a previous post, most companies are only too happy to say that they are equipped to decide, all by themselves, whether they are respecting human rights.)

Recognizing that his mandate began in “controversy,” Ruggie took a “consultative” approach to developing his framework. This was shrewd, as it included business from the start, and gained endorsements — I almost want to call them corporate sponsors, given the display of logos on the Global Business Initiative site — along the way: South American mining company Cerrejon, GE, Flextronics, Coca Cola, JSL Stainless, Sime Darby, Novo Nordisk, and French oil giant Total, among others. 47 states, including the United States, also signed on.

The diplomatic achievement is admirable, but result of all this consensus-building is predictably anodyne. According to the “Protect, Respect and Remedy” framework Ruggie developed, the State has a duty to Protect human rights; corporations have a responsibility to Respect human rights; and victims of abuse need access to judicial and non-judicial Remedy. The Guiding Principles set out “comprehensive recommendations” for how states and businesses are to “implement” the framework, “in order to better manage business and human rights challenges.” “Manage” seems to be the operative word here, and the whole exercise is, unfortunately, replete with management-speak.

In other words, the Guiding Principles and the Framework they accompany feel a little like Norms 2.0, offering guidance and encouragement instead of rules and regulations, and on terms business finds acceptable. Like the Global Compact, the Guidelines create a forum for discussion and dissemination of ideas — “another talk shop,” as Arvind Ganesan of Human Rights Watch said dismissively. US envoy Daniel Baer was a little more generous – and decidedly cautious — when he said the Guiding Principles would make it “less likely” that businesses take “actions that might undermine the enjoyment of human rights.”

So it’s unclear to me exactly how much has been accomplished. Julian B. Gonzalez, Vice President for Sustainability and Public Affairs at Cerrejon, says Ruggie’s work has “not been in vain” and credits Ruggie with having shown his company the way: now the mining company has established “a rights-based Grievance Office” and has gained “better knowledge of neighbor communities and our impacts.” Flextronics reports it is now “proactively” addressing human rights; Coca-Cola CEO Muhtar Kent appeared in a “global video” emphasizing the importance of respecting human rights across the global supply chain. And so on.

Maybe this counts as a step in the right direction, or maybe it’s just a public relations exercise. It might be both. Whether the UN could have done more this time around remains a question. In any case it seems clear that Wednesday’s announcement represents another attempt to establish UN authority in the area of human rights without offending some of the world’s most powerful actors, without regulating business activity or curtailing bad corporate behavior.

Ron Paul Didn’t Just…No, He Didn’t

For a brief moment yesterday, I thought that Ron Paul had introduced one of the most brilliant and important pieces of legislation in the past decade, maybe in the past two or three decades.

That turned out to be my misreading. Paul’s American Traveler Dignity Act is a single paragraph, carefully crafted response to the stupid, abusive and bullying practices of the TSA. And I like that it puts the emphasis where it belongs, on human dignity – which is exactly what airport security takes away from the people it is supposed to protect, even if there is no touching of junk or x-rated x-ray imagery. Take off your shoes, take off your belt, stay in line, take orders, don’t joke, show your papers, give us your keys, give up your toiletries, answer the question, empty your pockets: submit.

The text of Paul’s Dignity Act (H.R. 6416) reads as follows:

No law of the United States shall be construed to confer any immunity for a Federal employee or agency or any individual or entity that receives Federal funds, who subjects an individual to any physical contact (including contact with any clothing the individual is wearing), x-rays, or millimetre waves, or aids in the creation of or views a representation of any part of a individual’s body covered by clothing as a condition for such individual to be in an airport or to fly in an aircraft. The preceding sentence shall apply even if the individual or the individual’s parent, guardian, or any other individual gives consent.

But that wasn’t exactly the way the bill was advertised, and this isn’t the language that got me excited. “Ron Paul,” wrote one blogger, “has introduced a bill saying the government can not do to us what would be illegal for us to do.” This turned out to be a paraphrase of something Paul himself said when summarizing the bill on Wednesday evening. “The bill I’ve introduced… It’s very simple. It’s one paragraph long. It removes the immunity of anybody in the Federal government that does anything that you or I can’t do.”

Now that would be a great act. Imagine a bill that stated, simply, that the Federal government and its agents cannot do anything citizens cannot do. Or, more precisely, that the Federal government and its agents are subject to the very same laws to which you and I are subject. That would be the equivalent of saying that the law applies equally to citizens and those elected to govern their affairs. The bill would have a great leveling effect, introducing what is, without exaggeration, a revolutionary idea – that all are equal before the law, that citizens can stand toe-to-toe with the people who govern them, and that government is no longer the refuge of tyrants and scoundrels.

But would anyone in Congress ever support such a revolutionary bill? As of this morning, just two Republicans, Walter Jones (North Carolina) and and John Duncan (Tennessee), had joined Paul as co-sponsors of his act. It seems unlikely anyone in the current Congress would want to support anything so radical as the measure I thought Paul was introducing.