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).