A new post about the merger of two Upper Peninsula environmental organizations on Keweenaw Now includes this short video excerpt of the talk I gave in Marquette, Michigan a while back about the power and responsibility we have to protect water and wild places from unsustainable development.
You can read the full text of my remarks here.
This is the text I prepared for my remarks at the Save The Wild UP December Gala. My talk deals with the ethics of Lake Superior mining, connecting it with climate change, the loss of the wild and the dawn of the Anthropocene. It’s also a reflection on human ingenuity and human responsibility. The half-hour keynote makes for a long blog post, but I hope readers will find something here worth sharing and discussing.
1
When you invited me to speak tonight, I tried almost immediately to come up with names of people who might be better suited to the task. In this crowd, I ought to be listening and trying to catch up.
I’m an outsider, and a latecomer to boot. Some of you were here when Kennecott and Rio Tinto first staked their claim to the Yellow Dog Plains. I didn’t fully appreciate the extent of the new mining activity in this area and all around Lake Superior until about 2012. That was right after Ken Ross and I had finished making 1913 Massacre, our documentary about the Italian Hall disaster.
I was so caught up in the story our film tells that I was under the impression that copper mining — sulfide mining — was a thing of the past in the Upper Peninsula.
Very near the end of 1913 Massacre, there’s an interview with an Army veteran who’s sitting at the counter of the Evergreen Diner, drinking a coffee and smoking a cigarette. He says that after the copper mines closed in 1968, attempts to re-open them failed because people were “bitching about the environment and all that shit and the water and the runoff.” The camera, meanwhile, is exploring the industrial damage left behind by the mining operation.
This is the one moment in the film where we had to bleep out some bad language before Minnesota Public Television would air 1913 Massacre on Labor Day in 2013. The only time anyone in our film curses is when the subject turns to protecting the water and the environment.
That these two things — a destroyed, toxic landscape and a hostility toward people who care about the environment — exist side by side; that people can watch a mining company leave a place in ruins, poison its waters, damage it to the point that it’s now a Superfund site, with high levels of stomach cancer and fish that can’t be eaten, and direct their anger and curses at people trying to prevent it from happening again: our film presents all that as part of what we’ve come to call “mining’s toxic legacy.”
The Army veteran went on to say — this part didn’t make it into the film — that people who bitch about the environment are “people from out of town.” He wasn’t complaining about environmental regulation or about big government; he was complaining instead about out-of-towners, strangers who make it tough for regular guys to make a living.
Strangers can be people from faraway, or just people from whom you feel estranged: people who don’t share your ways or speak your language; and it would be possible to talk at some length about the way the mining operations in the Keweenaw estranged people from each other and from the place they live.
Everywhere it goes, it seems, mining divides and displaces people. It’s never just about extracting ore from the ground. Mining is development and the power to direct it.
When strangers come to town or when people feel estranged, we need translators, guides and mediators. This is one reason why it’s so important to have a local, grassroots organization dedicated to the shared interests people have in the nature and culture of the Upper Peninsula.
You might look like the underdog right now. But I think you’ll agree that there’s a pressing need for a more responsible, inclusive and respectful conversation about development in this place. Save the Wild UP is in a great position to lead it.
2
Back home in Brooklyn, I have a fig tree. I planted it last spring. I just finished wrapping it for the winter. I love the work the fig tree involves — the care it involves — because it connects me to the memory of my grandfather and the fig tree he kept. My tree connects me to my family tree (my roots), to history, and in my imagination the tree belongs as much to history as it does to nature. The life of my tree depends almost entirely on my care. I sometimes wonder if there is anything wild about it.
There is a wild fig. The ancient Greeks even had a special word for it: φήληξ. They seem to have derived its name from another word (φῆλος) meaning “deceitful,” because the wild fig seemed ripe when it was not really so. The ancient world knew that wildness is tricky. It can deceive and elude us, or challenge our powers of discernment.
Nature, we claim, is our dominion, as if it (naturally, somehow) belonged to history, the world of human activity. Our economy organizes nature to produce natural resources. But the wild represents a living world apart from history and another order of value altogether.
We can’t assimilate the wild into an engineered and technical environment: it will cease to be wild the instant we try. The wild begins where engineering and ingenuity stop, at the limits of human authority and command. So “wild” is sometimes used to mean beyond the reach of authority, out of control.
But what’s wild is not alien. Sometimes the wild calls out to us, usually to ward us off. The wild is almost always in flight from us, leaving tracks and traces for us to read. It always responds to us, as wild rice and stoneflies respond to the slightest change in water quality, offering guidance if we are attentive and humble enough to take it.
The wild marks the limits of our powers, our ingenuity and ambition, and before it we ought to go gently.
We have not.
The headlines tell us that our carbon-intensive civilization, which brought us so many material advantages, is now hastening its own demise. We are entering an entirely new era of human life on earth. Some scientists and philosophers talk about the end of the Holocene and the beginning of the Anthropocene — the dawn of a new geological epoch of our making.
The story beneath the headlines is a record of loss. A map of the terrestrial biosphere shows that today only a quarter remains “wild” — that is, “without human settlements or substantial land use” — and even less is in a semi-natural state. Data from the Mauna Loa Observatory tell us that this year was the last time “anyone now alive on planet Earth will ever see” CO2 concentrations lower than 400 parts per million. Those levels started rising in the 1700s with the industrial revolution, spiked dramatically in the postwar period and have climbed steadily higher. Since 1970, the populations of vertebrate animals have dropped by 52 percent. The same report by the World Wildlife Fund tells us that freshwater animal species have declined by 76 percent since 1970.
That precipitous drop in freshwater species should set off alarm bells, especially here, on the shores of one of the largest freshwater lakes in the world. Since the 1970s, Lake Superior surface-water temperatures have risen and ice cover has dramatically reduced. Walleye can now live in more areas of the lake than ever before. There’s an earlier onset of summer stratification. By mid-century, according to the National Wildlife Federation, Lake Superior may be mostly ice-free in a typical winter.
Now I know it’s the holiday season and these aren’t exactly tidings of comfort and joy, but they are tidings all the same. And what they announce is this: we are responsible. We’re responsible for all this destruction of the wild — of the whole web of life — and for the changes sweeping over us. Denial will not let us off the hook.
Responsibility is not just about being held accountable for the damage you’ve done; it’s also about taking steps to limit damage, repair the broken world, reclaim it and make things better. We have that responsibility to ourselves and to future generations.
“Loss belongs to history,” writes the political philosopher Sheldon Wolin, “while politics and life are about what is still to be done.” But, he’s careful to remind us, loss still has a strong claim on the way we live now and on our future plans. The loss of the wild gives us a new responsibility that should inform our politics and our lives at every turn, direct the investments we make and the activities we sanction, and give rise to new conversations about what to do.
Saving the wild is now bound up, inextricably, with saving the human world — for ourselves and for future generations. We can appreciate in a new way Thoreau’s famous statement: “in wildness is the preservation of the world.”
3
Knowing all this, why don’t we act? Why haven’t we acted?
One answer to this question has to do with the word “we,” and our underdeveloped capacity for coordinated, collective action.
Mark Carney, Governor of the Bank of England, suggested another good answer in a speech he gave back in September to a group of insurance industry executives. Not exactly a bunch of tree huggers, but actuaries, people interested in accounting for risks and costs.
Carney talked about the future in terms of horizons, near versus long term. When we focus only on the near term, we don’t account for the true cost of our activities. That’s why for Carney, climate change is a “tragedy of the horizon,” or the tragic consequence of our inability to see and plan and take steps beyond the near term. Since “the catastrophic effects of climate change will be felt beyond our immediate horizons” — beyond the business cycle and the quarterly earnings reports, beyond the political cycle and the current election — we have deferred the cost of fixing the problem to future generations.
We’ve organized things — markets, politics, institutions — so that near-term interests win out over longer-term well-being and more sustainable arrangements.
Nowadays, if you look out at the Lake Superior horizon, you might see all the way to China. An unsustainable scheme of Chinese urbanization and economic growth fueled much of the new mining activity around the lake, and especially the exploration and exploitation of copper-rich deposits. Over the last decade or so, copper was used not just to build and wire new Chinese cities, many of which today stand empty; it was used mainly for collateral on loans. As much as 80 percent of the copper China imported was used to back loans. Today, as China unravels and the price of copper plunges, commodities investors are expressing remorse. Nickel’s down, too. The rush for Lake Superior minerals now seems to have been reckless — part of a larger market failure, with unforeseen risks and costs current and future generations are likely to incur.
Or look at the Polymet project in Minnesota. It’s an exaggerated case of not accounting for the long-term costs of mining. Currently, the Polymet Environmental Impact Statement says that water treatment will go on “indefinitely” at a cost of 3-6 million dollars a year. There is no way, so far as I know, to multiply 3 or 6 million dollars by a factor of indefinitely; and even the company’s most concrete prediction is 500 years of water treatment. Just to put that in perspective, the state of Minnesota has only been around since 1858: 157 years.
How is it possible that a proposal like this can be taken seriously? They promise jobs, a fix to a near-term problem; but there’s something else at work here as well: technology or, rather, misplaced faith in technology and human ingenuity. We make technology a proxy for human responsibility.
But technological advances that create efficiencies or solve problems for mining companies can carry hidden social and environmental costs: for example, a study done after the Mount Polley spill last year concludes that “new technologies, deployed in the absence of robust regulation” have fostered a “disturbing trend of more severe tailings failures.” Recent events in Brazil underline the point.
Great machinery, even full automation, will never amount to responsible stewardship. New technologies can have unintended consequences, distancing us from each other and from our responsibilities. Things corrode, repairs are made or not, entities dissolve, contracts are broken, obligations are forgotten, empires decline and fall, even within definite time horizons.
The industrial development that mining brings distorts horizons in another way. One theme of Tom Power’s research on the economics of the Lake Superior region and on what he calls wilderness economics is that “protecting the quality of the living environment…lays the base for future, diversified economic development.” Over-reliance on mining — and mining that damages or threatens the living environment — hinders economic diversification and makes the economy less resilient. It also requires us to discount the value of water and land it puts at risk, a value that is only going to increase over the long term, as freshwater becomes ever more scarce and as carbon capture afforded by peatlands and forests becomes more critical.
To allow that calculation for the nonce is not to concede that the market value of these wild places is their true value. The living world, creation and generation, is more than a bundle of ecosystem services, a tap and a sink for human activity. That way of thinking won’t save the wild; it is bound to open the door to the very forces that have already destroyed so much of it.
4
Let’s not lose sight of the larger point: if you take the long view, looking forward into the future and out across the horizon, protecting the land and water in this region actually looks like a more attractive investment than extracting all the ore from the ground.
That makes the capture of government by mining and extractive industry — from Marquette County to the state and federal levels — all the more troubling and deplorable. It directs investment and development down these risky and unsustainable paths, where short-term interests of multinational corporate actors are paramount and enjoy the full protection of law. The coercive power of the state, which ought to place constraints on corporate actors, is used mainly to benefit them. When things go south, society ends up bearing the cost.
This grassroots effort challenges that whole topsy-turvy arrangement. We have to continue to challenge it, at every opportunity, in every forum, recognizing that the results we’re looking for probably aren’t going to come on a quarterly basis or anytime soon. We have to lengthen our horizons.
At the same time, we have to re-open the conversation about how we are going to organize ourselves in this place, so that what remains of the wild UP can flourish and the people living here can thrive.
It’s imperative, too, that Save the Wild UP stay connected with other groups around the lake facing similar challenges. To take just one example: Kathleen’s recent Op Ed in the Star Tribune about Governor Dayton’s visit to the Eagle Mine. That made a difference to people in Minnesota: it was widely shared and talked about. People connected with it.
I have to believe that there’s power even in these little connections — and in conversation, cooperation and community. There is power where we come together, when we are no longer strangers and no longer estranged from each other. There would be power in an international congress where people from all around Lake Superior gathered to talk about responsible development. This isn’t the power the mining companies and the state can wield; it’s another kind of power, coordinated, collective, non-coercive, one we as a society have not done enough to realize.
We’re going to need that power to meet this current set of challenges.
Now you may have noticed that I keep using the word “we,” and I’m conscious that by including myself here I might be overstepping and intruding. But maybe that’s why I keep coming back to the UP: deep down, I know this is not a faraway or a strange place but a familiar place, where I have a stake in things — where we all have a stake.
The “wild UP” that we are organized to save is not just wilderness, waterfalls, wolves and warblers. It is the stage of humanity’s tragic predicament. It marks a boundary that we cross at our great peril. It can be a vital source of economic and social renewal.
Ultimately, saving the wild UP is about realizing the power and political authority we all have, everyone in this room, people across the UP and around the lake, to govern ourselves and make decisions about the future we want. What do we see on the horizon? What do we want for our children, grandchildren, our great-grandchildren and so on down the line? What do future generations require of us? What do we owe them?
That’s a conversation we need to keep having. And that’s why this organization deserves all the support we can give it, because Save the Wild UP connects us and shows us that we can be both powerful and responsible at the same time.
Thanks for listening so patiently, and thanks again for inviting me to the Gala.
delivered 5 December 2015
“Let’s take this show on the road,” quipped Mark Tercek, President and CEO of The Nature Conservancy, at the close of Dow Chemical’s Google hangout on “Redefining the Role of Business in Society.” Moderator Alice Korngold guided the panelists, three Dow executives and a few big names in sustainability from the NGO world, through the hour-long hangout without a hitch; audience approval (registered via the thumbs up/thumbs down Applause function) seemed pretty consistently high. Everyone played their part well, and they had reason to congratulate each other.
Still, Tercek’s final remark was telling, a sort of gloss on the hour that preceded it. In fact, if I had to offer just one criticism of yesterday’s hangout — and I intend this to be constructive criticism — it would be that this was, essentially, a show. It lacked the spontaneity and the give and take of conversation, as well as the informality promised by the word “hangout” (and which characterizes hangouts I’ve attended and in which I have participated).
As a result, the hangout was less about “redefining” the role of business in society than promoting a settled definition of that role. Dow executives ran through talking points, and at several junctures even the people from the NGO world seemed to have adopted the jargon that Dow has developed around its 2025 sustainability goals. Where conversation would have uncovered discrepancies in order to work toward new understanding, here was little disagreement or dissent, and nothing like irreverence or skepticism — which are ways that interlocutors withhold assent and keep conversations honest.
For example, no one in the hangout challenged what in most other settings would be regarded as a relatively new and extraordinarily controversial idea: that business’s role is to “lead” society; no one suggested that it ought to be the other way around. The most vocal dissent focused on one small point: Peter Bakker, President of the World Business Council for Sustainable Development, said that he didn’t think it would be necessary for Dow to create another sustainability think tank. Maybe he’s right: the world has plenty of talk shops; but in this context, where it was quickly followed by Dow Chairman and CEO Andrew Liveris saying we need “do tanks, not think tanks,” it felt like another way to close the discussion, short circuit deliberation, and declare the matter settled.
I appreciate that this may not have been the appropriate occasion to invite others into the circle, to take live comments, or open bigger questions that couldn’t be resolved in the short space of an hour. I appreciate, too, the effort it takes to bring a twentieth-century industrial giant like Dow into a twenty-first-century online social forum, and the legitimate concerns about everything from reputation to litigation that effort raises. But the broadcast quality of this hangout lent it an air of artificiality and, more importantly, just didn’t seem to jive with the commitment Dow has publicly made to collaboration, dialogue, listening, and building social capacity.
Clearly, the sustainability goals Dow has set for itself warrant a more inclusive and dynamic conversation — where the outcome is not set in advance, and which allows heterodox views, strong dissent and unresolved, maybe irresolvable differences. That’s especially true because Dow claims to be serious about its sustainability goals — this isn’t just window dressing — and what Liveris called its sustainability “journey” has only just started. At the very least, subsequent conversations should tease out and develop some salient points about this ambitious program and the thinking behind it. Here, I’ll confine myself to identifying just three of these points, based on what was said during yesterday’s hangout.
The first issue concerns the historical roots of the corporate sustainability movement. Two participants in the hangout, Liveris and John Elkington (who coined the phrase “Triple Bottom Line” and has written extensively on the subject) both traced it back to the 1960s, and what Liveris called their “hippy” days.* But, as Elkington came close to suggesting, sustainability thinking also has roots in the reactions of the 1970s and 1980s, which saw the rise of neoliberalism and the idea that markets can offer solutions to social problems, sometimes better, or at least more efficiently, than governments.** This is obviously not just a debate with historical interest; it is a question of the commitments — and the ideas about business’ role in society — that sustainability thinking carries with it.
The second point worth discussing and developing has roots in the 1970s and 1980s as well. This is the idea of natural capital. It not only went unquestioned in the hangout; it seems to have achieved the status of an article of faith. The trouble isn’t just that the figures used to calculate natural capital are made of “marmalade,” as George Monbiot put it in a lecture on the topic, and reduce the inestimable — the natural, living world, all of creation, if you like — to the merely estimable; but there were several points during the hangout where that trouble lurked just beneath the surface. There are other objections that merit fuller discussion here; namely, that the concept of natural capital:
[harnesses] the natural world to the economic growth that has been destroying it. All the things which have been so damaging to the living planet are now being sold to us as its salvation; commodification, economic growth, financialisation, abstraction…. what we are doing here is reinforcing power, is strengthening the power of the people with the money, the power of the economic system as a whole against the power of nature.
That’s Monbiot again. The point is not that he’s right, though I think he’s got a strong argument here. Agree or disagree, meeting these arguments and others like them when it comes to natural capital would produce a much deeper, more nuanced and truer understanding of the interventions that sustainability thinking requires.
And finally there’s that question of power that Monbiot raises, which I would recast in this context as a set of important ethical considerations that cluster around the idea that you can do well by doing good. At one point, Liveris ran through some impressive numbers to suggest that Dow has figured out how to make sustainability profitable. But there was no mention during the hangout of what agency or power will hold Dow and other companies to account — or oblige them to meet their responsibilities — in case of non-performance.
The unspoken assumption just underneath the surface here seems to be that we are to trust the company, because its intentions are good; or at least the intentions of its executive team are. There’s no reason to doubt that, but if you are rolling out a “blueprint” for society’s future, as Dow says it is, you are also assuming responsibilities toward the people who now live and will live where you plan to build that future. So to get buy-in to the blueprint, earn the trust and engage the energies of all those people, it’s important to enumerate and discuss those responsibilities, to put in place appropriate checks that measure success in society’s terms, not just in business terms, and to prescribe remedies in case of failure.
All this brings me back to Bakker’s suggestion that the world does not need another think tank, and the idea that it’s time for Dow and other companies to partner with NGOs and other social institutions in order to start “doing.” The challenges Dow is trying to address — climate change, clean water, food security, income inequality and youth unemployment were among the issues Liveris enumerated — are no doubt urgent. But a focus on “solutions” to pressing problems can’t be an excuse to short-circuit discussion or sidestep political process; and we should be careful not to mistake the advance of a business agenda for social progress, or, in our rush to meet the very real challenges the world now faces, confuse the two things. The thing we need to sustain, right now and into the future, is the conversation.
*Postscript, 18 April 2015: The day after I wrote this post, a friend brought this provocative 2006 essay by Slavoj Žižek to my attention. Here, Žižek characterizes professions of “love” for May 68 as a staple of “Porto-Davos” sustainability discourse: “What an explosion of youthful energy and creativity! How it shattered the confines of stiff bureaucratic order! What an impetus it gave to economic and social life after the political illusions dropped away! And although they’ve changed since then, they didn’t resign to reality, but rather changed in order to really change the world, to really revolutionize our lives.”
**Postscript, 14 December 2015 Joe Bakan offers a smart discussion of this point in “The Invisible Hand of Law: Private Regulation and the Rule of Law”. see especially pp. 293-4 and 297-9.
On Thursday of last week, an avalanche derailed a Quebec North Shore and Labrador Railway freight train owned by Iron Ore of Canada as it made its way north along the banks of the Moisie River.
Divers recovered the body of Enrick Gagnon, the train’s engineer, just this morning. The train’s lead locomotive is still completely submerged in the Moisie and another is partly submerged. Each locomotive holds about 17,000 litres of diesel fuel, and a 20 kilometer slick — “a silvery layer” — has spread over surface of the Moisie. The train was not hauling ore; its freight compartments were empty for its northbound run.
The Moisie and its watershed are part of a designated aquatic reserve, so the river is technically protected from mining activity; but so far as I can tell, the 16 mile stretch that the Quebec North Shore and Labrador Railway line runs along the Moisie was built in 1954, when mining first began in the region, and more than fifty years before the Quebec government published its conservation plan.
One stated aim of that plan is to protect native species, including and perhaps especially the Atlantic salmon running in the Moisie. As nearly every report on the Moisie catastrophe notes, the pristine waters of the remote northern river are internationally renowned for salmon fishing.
For the Innu of Uashat mak Mani-utenam, whose traditional territory the Moisie crosses, the river is much more: it is, in the words of one newswire report, a thing of “inestimable cultural value.” So development in Innu territory continues to risk the inestimable for the merely estimable: in this case iron ore, jobs, growth. The Innu, who call themselves “the true owners of the land,” say they never consented to the tradeoff, and that the mining operation in their territory violates “international law, particularly the principle of ‘free, prior and informed consent.’”
Now, with this trainwreck, the Innu have an environmental crisis on their hands; but over the past couple of decades, the Innu say, they have also witnessed a gradual and “cumulative” effect on the environment and their community due to “the intensification of industrial activities” in the Sept-Îles region.
Iron Ore of Canada has a lock on the region’s economy, and development opportunities in the Labrador Trough are, in the words of IOC’s CEO Zoe Yujnovich, “potentially unconstrained.” Rio Tinto, which owns the majority stake in IOC, recently increased annual production capacity for the region from 18 to 23 million tons of ore concentrate, and plans to open a new mine called Wabush 3 to help meet that goal.
A 2013 publication touting Rio Tinto’s “Sustainable Development” plan for the region notes that the additional revenue generated by IOC’s “wholly owned rail company” will keep pace with growth: “use of the railway is set to increase significantly in the next few years as a result of our own expansion projects and junior mining startups in the area.” In other words, more trains than ever will be traveling along the Moisie, from Labrador to Sept-Îles Junction.
Glencore remains the only FTSE 100 company that does not have a woman on its board of directors. At the shareholder’s meeting at the start of this week, Chairman Tony Hayward promised that the company would remedy the situation by year’s end; but some big institutional investors have grown impatient, and UK business secretary Vince Cable said “it is simply not credible that one company cannot find any suitable women.”
The problem is industry-wide. A 2013 report by Amanda van Dyke (of Palisade Capital and Chair of the organization Women in Mining) and Stephney Dallmann (of PwC) found that mining companies “have the lowest number of women on boards of any listed industry group in the world.”
Maybe that doesn’t come as a great surprise to those familiar with mining, but within the industry there are companies who seem to be doing more than bluffing or hoping the issue will go away. Most of those are high profile global players. Women’s numbers decline steadily as we move down the ranks to the so-called juniors; and the likelihood that women will have a board seat or participate in a board committee also varies by territory. (South Africa leads the pack: over 21% of the committee seats of listed South African mining companies are occupied by women.)
Canada boasts the highest number of listed mining companies, and the “large mining companies in Canada are much further down the road [than smaller firms] in terms of their understanding of the importance of the role women play on boards.” The top-tier Canadian companies with high market capitalization (and the increased visibility that comes with size) have nearly 14% of board directorships held by women, but among the bottom 400 of the world’s top 500 miners, Canada has “the lowest participation on board committees by women, at 5.9%.”
The authors acknowledge that many of these companies are at early stages of development and they have only a few board seats to fill; but if they expect to grow and mature (as they do), there is no time like the present to lead or at least follow the lead of the big league players. When the same men keep winning the game of musical chairs — and when they sit next to each other (as they do) not just on one board, but on several, and their affiliations stretch back over decades — the result is likely to be not just over-familiarity but insularity, both of which are likely to impair and impede judgment. Meetings become a day at the club; the boardroom becomes an echo chamber.
As van Dyke and Dallmann note in a 2014 follow up report, it’s misleading to say, as many mining company executives do when pressed, that the small number of women directors correlates in a meaningful way with the lack of women with mining-related degrees. Only 32% of men on boards of mining companies have an engineering degree. So “there is no shortage of women in the talent pool;” according to van Dyke and Dallmann, “there is simply a perception of a lack of available female talent.”
This blinkered view of reality has real-world consequences, for shareholders and stakeholders in the communities where the miners operate. Mining companies with women on their boards see performance improvements on a number of fronts, from financial to social and environmental performance. “Sustainability” — as measured by water use, Bloomberg ESG score, UN Global Compact participation, Community Spend, and CSR or Sustainability Committee — improves across the board. For example, average total water use by mining companies “decreases steadily with an increase of women” in director roles — though it’s not entirely clear to me why that should be so — and “the amount [mining] companies spend on community projects and initiatives increases with the number of women on the board.” The authors are careful not to urge any hasty conclusions, but after surveying the data they are compelled to suggest that “the security of a company’s social licence to operate may be improved by having women on the board.”
I would go one step further: it’s difficult to countenance a mining company asking for social license to operate even as it deliberately insulates itself from social reality.
The phrase “human rights” is nowhere to be found in the Oyu Tolgoi Investment Agreement, a document [pdf] that will play a critical role in guiding Mongolia’s development over the next decade. The Agreement sets the terms for the $6.2 billion investment in the Oyu Tolgoi gold and copper mining project, which promises to account for no less than one-third of Mongolia’s GDP by the year 2020. Rio Tinto has a 66 percent stake in the project through its subsidiary, Turquoise Hill Resources Ltd; the Mongolian government owns the rest.
Along with the serious environmental concerns cited by the United States when it abstained, in February of this year, from a World Bank investment scheme in Oyu Tolgoi, there are a host of human rights issues to address — from migrancy to land seizures, rights to the scarce water resources of the Gobi desert region, conditions in Ulaanbaatar’s Ger camps, and the survival of Mongolia’s herder communities. (The Bank Information Center provides an overview of these concerns, here and here.) The Investment Agreement briefly addresses some of these points, but it resorts, in all instances, to what I would call the language of corporate benevolence.
So the Investor agrees to abide by the Extractive Industries Transparency Initiative (a voluntary agreement to publish payments made by the Oyu Tolgoi mine to the government); in another place (section 4.13; but cf. also section 4.6) the Investor consents to “build and maintain productive working relationships, based on principles of transparency, accountability, accuracy, trust, respect and mutual interests, with non-governmental organizations, civic groups, civil councils and other stakeholders.” Beyond this, there is not much else to guide or govern the company’s conduct vis a vis civil society and its responsibility to respect human rights.
Given the high stakes, the scale of Oyu Tolgoi and the involvement of the World Bank and IFC in the project, it is surprising the Agreement does not explicitly incorporate — or reference — the UN Guiding Principles on Business and Human Rights. Instead of creating binding agreements or even practical mechanisms to ensure that Oyu Tolgoi and the government of Mongolia meet their respective human rights obligations as the economy accelerates and the social terrain continues to shift, the Investment Agreement relies on the language of corporate social responsibility to smooth things over.
Part of the trouble with CSR isn’t just that it tends to replace binding agreements and articulated responsibilities with vague sentiments, the language of corporate benevolence, and promises of sustainability and shared prosperity. That’s bound to happen when social responsibility meets public relations. A bigger problem is that the commitments companies voluntarily make to contribute to economic development and social progress — and to respect human rights — will last only as long as the business requires them.
For an example of how abruptly a company can ditch stakeholder communities, what happened in Michigan yesterday with another Rio Tinto project may turn out to be more instructive than what’s happening right now in Mongolia. In the face of serious environmental and human rights challenges to its Eagle Mine project over the last several years, Rio Tinto all along touted its good corporate citizenship, promising to “leave more wood on the woodpile” and to take an active hand in the long term, “sustainable development” of the Upper Peninsula. That is just part of “The Way We Work,” as the title of a Rio Tinto CSR publication would have it — or at least it was the Way We Worked. Yesterday, the company announced that it had sold the Eagle Mine project to Toronto-based Lundin Mining for the tidy sum of $325 million cash — part of CEO Sam Walsh’s strategy to divest from “non-core” assets and protect the single-A credit rating the company currently enjoys. A community of stakeholders whose future Rio Tinto promised to make happy, bright and prosperous became, overnight, a disposable asset.
I’ve been looking for a transcript of the remarks Johan Lubbe made yesterday, on behalf of the National Retail Federation — a trade association representing about 9000 American retailers and the chief and most vocal proponent of an “alternative” to the legally-binding global pact to ensure the safety of clothing factories in Bangladesh. The global pact has won pretty widespread support in Europe, but so far there are only two American signatories. The Americans won’t sign up because, they say, the global pact would expose them to litigation, or what one spokesperson for The Gap called “unlimited litigation,” should something go wrong at one of the factories they use.
Yesterday they brought out Lubbe. Here is how today’s AP report summarizes his remarks:
On Friday, the retail trade group made available for the media an international labor lawyer who rebuked the global pact and said that it is too vague for retailers to sign. At the heart of the criticism: the contract would expose retailers to legal liability for the failure of factories to comply with the set standards even though merchants don’t own the facilities.
In rejecting the global pact, Lubbe and the NRF are trying to limit the scope of legal liability to ownership — in this case, brick and mortar property ownership. I can’t tell if the claim here is that with outsourcing comes immunity, or that liability does not extend in any way down through the global manufacturing supply chain. For the moment, however, I’m less interested in all that than in knowing whether Lubbe or the NRF have made any kind of statement acknowledging their responsibility for conditions in the Bangladesh garment factories.
Responsibility is a word that applies, or should apply here, no matter how the debate about liability gets resolved. It is not a “vague” word of the sort that the NRF would reject. It’s a word that entails specific human rights commitments, which have been carefully enumerated and articulated in connection with the UN’s Guiding Principles for Business and Human Rights. It comes with ownership, but it also extends beyond ownership to business partnerships and relationships — all the way to Bangladesh.
I imagine there is anxiety that acknowledging responsibility might be misconstrued as admitting liability. The word and the idea of responsibility are certainly nowhere to be found in the statement the National Retail Federation issued on Wednesday. Instead, the NRF focused on how applying “a legal standard” would limit the ability of retailers and brands “to respond” to an “ever-changing environment.”
Given the global nature of the apparel and retail industry, applying a legal standard is a very complex proposition. The Safer Factories Initiative understands that flexibility is required to address a broad array of worker safety issues and enables brands and retailers to respond swiftly and effectively to an ever-changing environment.
Let’s forgive the sloppy confusion (“flexibility is required to…enables”?) of the second sentence, and hope that in future the NRF hires a PR firm with grammarians in its employ. Just have a look at the language they’re floating here. These are such well-worn business tropes that we barely notice them: complexity, flexibility, responding swiftly to an ever-changing environment. Here, the big, giant brand, the multinational with suppliers and partners all around the world, is both powerful agent and vulnerable patient: capable of responding, at least if not bound or restricted by law, but subject to forces far beyond its control.
Sidestepping obligations and commitments, the NRF statement opts for “flexibility” and (as the statement continues) “sustainability,” an already-overused and much-abused word that appears in nearly every statement the Federation makes. Talk about vague. The NRF want “sustainable solutions” to make the Bangladesh garment industry “a sustainable manufacturer.” They offer a “sustainable action plan” now and “will continue to pursue a sustainable industry-wide solution,” and so on. The word and its variants appear 9 times in the course of a single statement.
You get the idea. As companies respond to rapidly changing conditions — or flee from one disaster to the next — they need flexibility to fashion a sustainable way forward. Otherwise they might be engulfed by their own blunders, or held responsible or liable for their part in the whole mess before they can run to the next country.
Just before the holidays I wrote a short post about the one-two punch that Michigan legislators delivered during the 2012 lame duck session. They rushed through legislation to make Michigan a “right to work” state despite widespread protests and they passed Emergency Manager Legislation in defiance of voters.
Most of the news coverage of these bills focused on the action in Lansing and effects this legislation might have in the Detroit auto industry. I wondered aloud (or at least on Twitter) what implications these bills might carry for towns and working people in the Upper Peninsula.
There’s a new mining boom underway in the region, with global giants like Rio Tinto and Orvana exploring, leasing, and re-opening old mines.
This map [pdf], put together by the Lake Superior ad hoc Mining Committee, shows all mines, mineral exploration and mineral leases in the Lake Superior Watershed as of 2010.
The map merits some careful study. As you can see, there is already significant activity in the Upper Peninsula. On the Canadian side, especially around Thunder Bay and further north, there’s been a leasing boom. Lots of gold on the eastern shore; copper and nickel as you move further west. They’re also exploring for uranium in at least two places.
The new mining is going to put enormous pressure on the Lake Superior basin. There are the usual environmental hazards associated with mining — subsidence, toxic runoff, acid mine drainage. Mining puts the waterways – the Lake and the streams and rivers that feed it – at risk. And then there is the infrastructure that’s going to be built to support all those mines. Access roads and haul roads, like the proposed CR 595 in Big Bay, roads to get to those roads, gas stations to fuel the vehicles that run along those roads, housing to shelter the people who drive on those roads to get to work and haul the ore from the mines, and so on.
Governor Snyder and his cronies in the Michigan legislature are doing everything they can to encourage this new activity. Just before the holidays, the Governor signed a third lame-duck bill, addressing the taxes that mining companies operating in Michigan will pay. The new bill, brought by outgoing Republican representative Matt Huuki, relieves mining companies of up front costs. Indeed, they will pay no taxes at all until they start pulling minerals from the ground. Even then, companies will pay only 2.75 percent on gross value of the minerals they extract. So a million dollar sale of Michigan’s mineral wealth on the copper exchange will yield the state a paltry $27,500 in taxes.
35 percent of these so-called severance taxes will go to a “rural development fund to support long-term economic development opportunities.”
A number of things aren’t clear to me. What, exactly, is meant by “economic development” here? What’s the best course of development for a rural region, and for the Lake Superior region? How will fueling the boom benefit the region over the long term? How much if any of this money will go to alleviating the environmental impact that all this new mining is bound to have? How is it possible to talk about rural development without taking responsible stewardship of the environment into account?
It’s also unclear what sort of working conditions in the new mines the “right to work” legislation might allow, and whether the Emergency Manager bill could be used to limit community oversight.
For now, at least, it looks like the big mining companies are running the show in the UP, and the vague promise of economic development — whatever that means — has trumped all else.
A letter from Starbucks CEO Howard Schultz has been making the rounds, asking other CEOs to join with him and “forgo all political contributions until Congress and the President return to Washington and deliver a fiscally-disciplined, long-term debt and deficit plan to the American people.”
The idea has gained plenty of admirers: “thousands of Americans – both CEOs and everyday citizens” (as CNN puts it) have contacted Schultz to express their support. Joe Nocera dedicated his entire column in the Times last week to Schultz’s proposal, praising the boycott as “hardheaded and practical, the kind of idea you would expect from a good businessman”.
That it is. But its virtues are also its limitations. Schultz wants to tackle a very big, very difficult problem: what he calls “the lack of cooperation and irresponsibility among elected officials as they have put partisan agendas before the people’s agenda. This is not the leadership we have come to expect, nor deserve.”
We can debate that last point: the current crop of ineffectual cowards in Washington might be exactly the leadership we have come to expect and deserve. Be that as it may, I am a little suspicious of grassroots movements in which angry “everyday citizens” find themselves in cahoots with angry CEOs; and it seems odd that we are being asked to entrust “the people’s agenda” to Schultz and his gang of CEOs – who may be well-meaning, but whose agenda (it seems fair to say) may not exactly match up with the aspirations and priorities of everyday citizens, or at least those of us who don’t happen to be leading multibillion-dollar multinationals.
I know that Starbucks bristles at the suggestion that multibillion-dollar companies might not always put the interests of its people, its “baristas” and “partners,” front and center. (But just a couple of weeks ago, baristas in Chile went on hunger strike because the company refused to negotiate with them over wages.) And I understand that Schultz prides himself on being a good CEO – one who has done well by doing good. He is, in fact, regularly singled out for praise by the business press as a CEO who defies the “the power-hungry stereotype,” and who will put the long-term good of his employees, his company or the environment over short-term advantage. (That’s the story Motley Fool’s Alyce Lomax told just last week in a Howard Schultz puff piece on AOL’s Daily Finance site.)
I’m not questioning Schultz’s good intentions. But the effort he’s mounted so far has a whiff of benevolent corporate paternalism about it; and the prospect of well-meaning CEOs around the country banding together on behalf of all the little people to fight political paralysis in Washington DC should — at least — give us pause. It sounds like a bloodless coup in the making, a plutocrats’ putsch.
There is something absurd here as well: aided and abetted by a pliant and misguided Supreme Court, corporate interests have already hijacked the political process; now they plan to withhold ransom payments until the ineffectual cowards we elected to represent and defend our interests – the public interest – deliver the economy back to them in sound condition, and deliver them from all “uncertainty.” Then they will create jobs. (Be sure to read Glenn Greenwald’s analysis of the uncertainty canard here.)
That said, the real trouble with Schultz’s proposal is not its presumption or its absurdity or its patronizing benevolence. The real trouble here is that Schultz fails to see the big picture, the broad agenda, the scope of the problem we face right now. Like most political and corporate leaders, he sees the people’s agenda – and the country’s uncertain prospects — through the narrow lens of jobs and economic growth. And while jobs and sustainable economic growth are undeniably important, and can be made to serve the public interest, the public interest can’t be reduced merely to those things; they may sometimes even be at odds with the public interest, as they sometimes are in human rights, labor or environmental disputes.
Real prosperity can’t be measured simply in terms of economic growth or high employment figures. I fear that what we have here is a failure to imagine the American future as anything more than a sunny financial forecast, the country as anything more than a happy work camp.
If you haven’t yet read it – and I admit I am late on this, as I am on nearly everything else – have a look at John Cassidy’s profile of Bridgewater hedge fund manager Ray Dalio in the July 25th issue of The New Yorker. Cassidy exerts most of his energy trying to figure out whether Bridgewater, which has bragging rights as the world’s richest and biggest hedge fund, is a Fountainhead cult, a Maoist re-education camp, or just a big bond-market player that happens to be run by a super-rich sociopath with intellectual “pretensions.” I was most struck by the passage where Dalio is “rambling” about how “everything,” or “almost everything,” is a “machine.”
“Almost everything is like a machine,” he told me one day when he was rambling on, as he often does. “Nature is a machine. The family is a machine. The life cycle is like a machine.” His constant goal, he said, was to understand how the economic machine works. “And then everything else I basically view as just a case at hand. So how does the machine work that you have a financial crisis? How does deleveraging work—what is the nature of that machine? And what is human nature, and how do you raise a community of people to run a business?”
I’ve talked about this view of nature, “the life cycle,” and the world as a machine in another context. Its philosophical heritage stretches back at least to the 17th century. But in Dalio’s case it’s hard to decide whether this is a considered view, informed by careful reading and thinking, or just some immature posturing, intended to create the impression that Dalio is an amoral übermensch. It’s not even clear how seriously Dalio takes himself: is everything a machine or is everything “like” a machine? The distinction is a crucial one, but Dalio wants to have it both ways.
It’s unfair, I suppose, to expect coherence and rigor from ramblings. And yet Dalio’s express goal – “to understand how the economic machine works” – deserves to be taken seriously. He’s betting the future of his firm on it; it’s key to his success. And it’s not just an offhand remark. As Cassidy explains, this mechanistic outlook is of a piece with Dalio’s crude social Darwinism.
He regards it as self-evident that all social systems obey nature’s laws, and that individual participants get rewarded or punished according to how far they operate in harmony with those laws. He views the financial markets as simply another social system, which determines payoffs and punishments in a like manner.
There’s nothing self-evident about any of this; and to track “all” social systems back to “nature’s laws,” whatever those are, is merely to admit one’s ignorance of social arrangements and social history and to confuse metaphors. The confusion, moreover, is not just Dalio’s; it’s general, and it fails us every day.
When, like Dalio, we regard the economy as a “machine,” and markets as a “social system,” we are inclined to put the system first and relegate people to the status of beneficiaries or collateral damage. The system does not serve human priorities. Instead, we put aside those priorities to keep a dysfunctional system running. The system “determines payoffs and punishments”; the system is the ultimate arbiter of our lot in life. We’ve already surrendered.
But we don’t have to. Umair Haque put up a postyesterday called “How Our Economy Was Overrun by Monsters and What to Do About It.” It offers a reminder that the market is a social construct – our construct, something not just hedge fund managers but human beings from all different places and all walks of life make and remake every day. And what we’ve created, says Haque, are monsters of opulence and greed, rather than markets that work for people and help us thrive. This is not just a moral reproach and it’s not (at all) an anti-capitalist rant. It’s simply about getting priorities right, and putting human prosperity before the efficiencies of a dysfunctional machine.
lvgaldieri 