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ResearchOnline@JCU This file is part of the following reference: Smith, Rebecca Ann (2013) Human rights and Australian extractive industries in Australia and the Asia-Pacific region: a case study of Rio Tinto's adherence to the construct of corporate social responsibility. Masters (Research) thesis, James Cook University. Access to this file is available from: http://researchonline.jcu.edu.au/33092/ The author has certified to JCU that they have made a reasonable effort to gain permission and acknowledge the owner of any third party copyright material included in this document. If you believe that this is not the case, please contact [email protected] and quote http://researchonline.jcu.edu.au/33092/ Human Rights and Australian Extractive Industries in Australia and the Asia-Pacific Region A case study of Rio Tinto’s adherence to the construct of corporate social responsibility Thesis submitted by Rebecca Ann SMITH BSc-LLB Qld in February 2013 for the degree of Master of Laws in the School of Law James Cook University Acknowledgements I wish to acknowledge all who helped and, in the case of my children, hindered me along the way. I thank the wonderful Paul Havemann for holding the faith, encouraging me and for his general brilliance. I thank Chris Cunneen for his patience and dedication, and for cracking the whip when it was sorely needed. I thank Stefan Aeberhard for his unwavering upbeat support and encouragement, and Daniel Lavery and Ping for hilarity in the research room. I thank my lovely encouraging daughter Indigo Murphy for believing I might finally finish. I thank my son Mab Smith for being happy I finished, and Xanana, Liberty and Bodhi Smith for keeping me grounded. Table of Contents Page Abstract i Chapter I 4 A. Brief Introduction 4 B. Overview of International Law and the Rising 6 1. Origins Of International Human Rights And Environment Law 6 2. Changing Paradigm Of International Relations Under Globalisation 7 C. Thesis Statement and Objectives 12 D. Methodology 13 1. Rio Tinto as case study - Rationale 14 2. Asia-Pacific as a sphere of Influence 17 3. Specific Methodology 18 E. Objectives 19 F. Chapter Outlines 19 G. Conclusion 21 Chapter II - The Doctrine Of Corporate Social Responsibility 22 And Its Uptake In Australia And International Fora Introduction 22 A. Corporate Social Responsibility – defining the chimera 23 1. Corporate Social Responsibility As Global Phenomenon 23 2. Background of CSR and its inception in the UN Framework 28 3. Definition of CSR used in this paper 29 B. Environmental Rights as Human Rights 30 1. Ecosystem Services and the Millennium Ecosystem Assessment 31 2. CSR Industry Failure at Triple Bottom Line 32 C. CSR and Control of Common Pool Resources 35 1. Market Fundamentalism and CSR 35 Chapter III – Rio Tinto, a case study of an Australian Listed Global 39 Giant A. History of Rio Tinto 39 1. From Antiquity until the 19th Century 39 2. Establishing the Mining Company 40 B. Relations with Aboriginal People and the effect of Mabo and the 44 Native Title Act 1. Industry reaction to the Wik People’s Native Title Claim 45 2. A Change of Policy in Australia 46 3. Rio Tinto’s Aboriginal and Torres Strait Islander Policy 47 4. The Way We Work – Rio’s Global Code of Business Conduct 49 5. Critique of Rio Tinto’s Aboriginal and Torres Strait Islander 50 Policy 6. Rio Tinto’s Relations with Aboriginal People 52 7. Discussion Of Rio Tinto’s Relations With Aboriginal People 70 Chapter IV – Rio Tinto in the Asia-Pacific Region 74 A. Panguna Copper Mine At Bougainville 74 1. Brief History Of The Island Of Bougainville – Pre-Civil War 75 2!"The Bougainville Civil War – More Than A Resource Curse 79 B. Grasberg Mine in West Papua 87 1. Introduction – Ecocide in the Equatorial Mountains 88 2.!Freeport's Operations And Precursor To Rio Tinto 90 3."Background To The Grasberg Mine – A Brief History Of West 95 Papua and the Papuans 4. Environmental Destruction – Ecocide At The Lease Site 98 5. Breaches of Indonesian Environment Law 100 6. Human Rights Abuses Since Rio Tinto Became Involved in Grasberg 102 7. Discrimination Against Papuans 108 8. International Action Against Rio due to its Involvement in 109 Grasberg C. PT Kelian Mine in Kalimantan 110 1. Brief Background to Kelian Mine 110 2. Rio Tinto’s Activities with Indonesian Government re: Kelian 113 D. Conclusion 114 Chapter V – Rio Tinto’s Human Rights’ Adherence 117 Part One 117 A. Rio Tinto's Consistency With Its Own Stated CSR Principles 118 1.!State Transparency Determines Strength and Compliance of State Laws 118 2. Reputation Matters for Shareholders 123 3. Respect for Rights of Employees? 125 4. Respects Human Rights Consistent with UDHR? 130 Part Two 132 B. Rio Tinto’s consistency with the Global Compact Principles 132 1. The Global Compact 132 2. Rio Tinto shaping Australian Law and Policy 137 C. Rio Tinto’s Consistency with International Human Rights and 141 Environment Laws 1. Doctrine of State Responsibility 142 2. International Law – Customary and Treaty Law 142 D. Conclusion 161 Chapter VI – CSR in the Globalized World 163 A. Globalization and the Fractured Nation-State 165 1. Diminution of Sovereignty 166 2. Globalization and the Ascendency of TNCs as Powerful 168 Non-State Actors 3. Bretton Woods and beyond – a brief account to the 174 Ascendency of Neoliberalism B. International Governance of Corporations 175 1. The GATT Environmental and Human Rights Clause 177 2. International Self-Governance of Corporations 178 3. Corporate Regulation – From Hopes of Binding Initiatives 184 to Soft Laws C. Conclusion 186 Chapter VII – Conclusion 185 A. Introduction 185 B. Responsibility for Private Actor’s Wrongful Acts 187 1. Recent Authority for Changing Notions of Responsibility 187 2. State Responsibility – Diminution and Devolution 191 3. Home State Hypocrisy – Scope of Extraterritoriality 197 4. State Responsibility, Transnational Corporations and the 200 Right to Health C. Reforming the Corporations Act to Mandate Human Rights Protections? 202 1. Introduction 202 2. Senate Joint Committee Inquiry revisited 204 3. Reform Of The Corporations Act For Consistency With 205 International Obligations 4. Possible Regulatory Reforms 206 5. Conclusion 211 " List of Tables Page Table 1 – Sample of Corruption Indices 119 Table 2 - Rio Tinto's compliance with Global Compact 134 Principles referenced from Chapters III and IV !"#$%&'&(&)*+&!*,-+./&012%3%,4%&-+&56/-+7"38&9,-%3,"-*+,"$&&& & :;<& &&&&&&&&&&&&&&&&&&=">/&*,&9,1+,%/*"?&@AB&",1&06/-3"$*"& ACRONYMS ACCSR !"#$%&'(&)*+,)$%,*-.%*+.%/.%&$,*0.1(&'*Responsibility ACFOA Australian Council For Overseas Aid ACTU Australian Council of Trade Unions AIRC Australian Industrial Relations Commission ALP Australian Labor Party ALRI Australian Legal Resources International AMPA Argyle Management Plan Agreement AMPLA Australian Mining and Petroleum Law Association APEC Asia-Pacific Economic Cooperation ATSIC Aboriginal and Torres Strait Islander Commission AWA Australian Workplace Agreements AWU Australian Workers Union BIG Bougainville Interim Government BOC Bougainville Copper Limited BRA Bougainville Revolutionary Army BTG Bougainville Transitional Government CEDAW Convention on the Elimination of All Forms of Discrimination Against Women CERD Convention on the Elimination of All Forms of Racial Discrimination CLC Carpentaria Land Council COW Contract of Work CRC Convention on the Rights of the Child CRA Conzinc Rio Tinto Australia CRAE Conzinc Rio Tinto Exploration CSD United Nations Commission on Sustainable Development CSR Corporate Social Responsibility CZ Consolidated Zinc Corporation DSTP Deep Sea Tailings Placement ECOSOC Economic and Social Council (United Nations) GATT General Agreement on Tariffs and Trade G9 Group of Nine (European States) HREOC Human Rights and Equal Opportunity Commission (Aus) HRC Human Rights Committee (Aus) HRC Human Rights Council (UN) ICCPR International Covenant on Civil and Political Rights ICESCR International Covenant on Economic, Social and Cultural Rights ILUA Indigenous Land Use Agreement ICJ International Court of Justice IMF International Monetary Fund ISO International Organization for Standardization LETAG Lower Emissions Technology Advisory Group LKMTL Lembaga Kesejateraan Masharikat Tambang dan Lingkungan (Council for People's Prosperity, Mining and Environment) MA Millennium Ecosystem Assessment MRET Mandatory Renewable Energy Target NGO Non Governmental Organization OPIC Overseas Private Investment Corporation PJC Australian Parliamentary Joint Committee on Corporate and Financial Services PNG Papua New Guinea PNGDF Papua New Guinea Defence Force PR Public Relations PT KEM Kelian Equatorial Mining REDD Reducing Emissions from Deforestation and Forest Degradation in Developing Countries RTC Rio Tinto Company RTZ Rio Tinto Zinc SAM Sustainable Asset Management SRSG Special Representative to the Secretary-General TNC Transnational Corporation UDHR Universal Declaration of Human Rights UN United Nations UNCED United Nations Conference on Environment and Development UNCTC United Nations Permanent Committee on Transnational Corporations UNCTAD United Nations Committee on Trade and Development UNESCO United Nations Educational, Scientific and Cultural Organization UNOMB United Nations Observer Mission to Bougainville WAHLI Wahana Lingkungan Hidup Indonesia (Indonesian Forum for the Environment) WTO World Trade Organization * HUMAN RIGHTS AND AUSTRALIAN EXTRACTIVE INDUSTRIES IN AUSTRALIA AND THE ASIA-PACIFIC REGION: A CASE STUDY OF RIO TINTO'S ADHERENCE
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