Small donation for big payoff?

Small donation for big payoff?

By Bob Burton

SYDNEY (JP): Should an Australian legal rights group in
"partnership" with one of the world's largest mining companies be
involved in helping draft Indonesian legislation on the
environment, human rights and corporate governance?

The mining company, Rio Tinto, the human rights group,
Australian Legal Resources International (ALRI) and the
Australian government think so.

The project developed by ALRI, with financial support from Rio
Tinto and advice from the Australian Embassy in Jakarta, aims to
provide assistance for "legislative drafting and comprehensive
legal and judicial reform".

Part of the project will involve legislative drafting of
"environmental law, human rights law, constitutional law,
bankruptcy and corporate law".

With A$50,000 from Rio Tinto, ALRI was able to gain matching
funding from the Australian government aid agency, AUSAID, to
develop the first stage of the project: to provide assistance in
judicial training in Indonesia.

Rio Tinto has major mining interests, including in the
Freeport mine in West Papua, officially Irian Jaya, coal mines in
Kalimantan and the Kelian gold mine, which have all been subject
to criticism over labor, environmental or human rights issues.

For a small donation, the project has a potentially big
payoff. However, Rio Tinto is unashamed in acknowledging that its
motivation is not altruistic. Rio Tinto's head of external
affairs, Tim Duncan, considers that it would be inappropriate for
companies to be involved in writing legislation only if they were
doing so uninvited.

"If we think there is an opportunity and if we think there is
a significant section of Indonesian opinion that thinks it is in
their national interest to do that, we can act as brokers", he
told this writer.

The partnership enables Rio Tinto to gain access to legal
networks and a legislative development process by trading on the
credibility of ALRI, which boasts an impressive list of well-
respected human rights lawyers on the board and as patrons.

For ALRI, the funding enables them to undertake a project they
otherwise wouldn't be able to support. While Rio's funding would
be troubling enough, its role is potentially much deeper than
providing funding at arms length.

In its public documents setting out what it expects from
"partnerships" Rio insists on a "a high degree of involvement" in
any project it funds. Rio Tinto insists that partnership projects
must have "strategic relevance" to the company and "the
opportunity for direct involvement of Rio Tinto people
and operations".

ALRI has acknowledged that legal staff from Rio may be
seconded to work with ALRI on the Indonesian law reform project,
though, it insists, not in a major role. However, one Rio Tinto
person working in a small organization like ALRI, which comprises
only a handful of people, increases the possibility of one person
having a significant impact on the organizations work and
thinking irrespective of their formal role.

Late last year, Rio Tinto seconded the then head of ALRI to
work in its public relations section for six months, which has
recently been converted to a permanent position. The secondment,
apart from illustrating the closeness of the relationship, raises
other troubling questions.

The person seconded to Rio was simultaneously serving as an
executive member of Australia's peak community aid and human
rights umbrella group, the Australian Council For Overseas Aid
(ACFOA). ACFOA has long taken a close interest in human rights
issues in Indonesia.

In 1995 it was ACFOA that published a damning report on human
rights abuses at the Freeport mine in West Papua, a project in
which Rio Tinto subsequently became a major shareholder.

While ALRI considered there was no potential conflict of
interest with a seconded staff member working with Rio Tinto,
ACFOA decided that it would be better if he stood aside for the
duration of the secondment (He has subsequently joined the
company full time).

However, the whole project raises disturbing questions about
the blurring roles of government, corporations and well-
intentioned nongovernmental organizations.

Should corporations be involved in any way in a project likely
to involve the drafting of legislation which will directly affect
their own commercial interests?

If it would be inappropriate for a company to be involved in
directly drafting legislation, why does partnership with an NGO,
especially if company staff are in any way involved, make it acceptable?

The community values NGOs for their independence in the belief
that they will honestly and fearlessly advocate policies they
believe to be in the public interest.

However, the emergence of some nongovernmental organizations
increasingly reliant on corporate donations raises concerns
about whether the projects they undertake and policies they advocate are
truly independent or have been shaped by the interests of their sponsors.

The writer is the editor of Mining Monitor, a quarterly
magazine published by the Sydney based nongovernmental
organization, the Mineral Policy Institute (www.mpi.org.au).