A fatal worker protest staged at a Lonmin platinum mine in South Africa escalated, with consequences for the company’s shares and broader consequences for the country’s mining sector and credit ratings. A week-long dispute took the death toll at Lonmin’s Marikana mine near Johannesburg to 44 as police opened fire on strikers armed with machetes and sticks. Details of the workers’ living conditions have since been reported. Lonmin, which accounts for 12% of global platinum output, was forced last week to freeze mining as a result of the violence. Most recently, state prosecutors have charged 270 strikers with the murder of 34 colleagues. The arrests went ahead even though the victims were shot dead by police.
South Africa is one of the world’s most important commodity producers. Terence Goodlace, chief executive at Impala, the world’s second biggest platinum miner, warned of a “significant risk to the industry” as the labour unrest spread to other mines. The Lonmin strike was also used as an extreme example of the type of risk faced by investors who did not take environmental, social and governance (ESG) issues seriously at the second annual Africa ESG Investment Forum. The original strike triggered a sell-off of domestic bonds by foreign investors, and weakened the rand. Top analysts, including Standard & Poor’s, have said that the industrial unrest could prompt a sovereign credit rating downgrade for South Africa. (Reuters; Financial Times*; Business Day Live; Business Day Live; Indepdendent)
Avon's 'lipstick evangelism' shows promise in poverty fight
A recent study by University of Oxford researchers suggests that selling Avon cosmetics have helped women in South Africa become financially independent. Oxford Business School professors spent three years surveying poor black women who worked as Avon representatives in South Africa and found that nearly three-quarters made their primary income through the company. Of the 300 women surveyed from 2007 to 2010, those who sold Avon goods for at least 16 months made enough money to purchase necessary “survival” goods on a monthly basis for their families. The earnings placed the South African “Avon ladies” in the top 10% of self-employed black women. It is argued that direct sales gives women broader benefits than microfinance does, including helping them establish credit, build networks and develop other job skills. (Bloomberg Business Week)
Asia
Japanese firms develop rare earth recycling
The Nikkei, a stock market index for the Tokyo Stock Exchange, has reported that Japan’s Ministry of Economy, Trade and Industry is teaming up with Toyota and other major Japanese manufacturers to develop technology for recovering and recycling rare-earth metals. It could eventually allow Japan to reduce its rare earth imports by at least 10% by 2025. Currently, Japan relies on China for approximately 80% of its rare earth elements. Those elements are commonly used in motors found in electric vehicles and the nickel-metal hydride batteries used in many hybrids. (Eco Business)
India cancels GMO cotton license
An existing license for Monsanto genetically engineered cotton seeds (also known as genetically modified organisms, or GMOs) has been revoked in the Indian state of Maharashtra amid an investigation into farmer suicides. Some have suggested the high cost of the seeds, which have failed to repel cotton pests as promised, as well as the debt incurred by farmers as a result has been a contributor to more than 8,200 suicides in the past decade. India has taken a more sceptical view of GMO crops this year. In late June, the country joined Russia, China, Brazil, and 49 major industrialised nations in requiring GMO labelling. So far, 50 countries either restrict or ban the use or cultivation of GMOs outright. (Sustainable Business)
Apple manufacturer Foxconn improves on Chinese workers' hours and safety
Foxconn, Apple's top manufacturer, has improved safety conditions and cut working hours in an effort to resolve violations at its plants that triggered a global scandal for the iPad and iPhone maker. The Taiwanese company submitted to an audit by an independent group, the Fair Labor Association (FLA), after reports of suicides and abusive conditions at several of its factories in China. The FLA said Foxconn had made significant improvements such as introducing more breaks and better maintenance of safety equipment. The company more than doubled wages after protests from worker groups and is backing a local law adjustment that will extend unemployment insurance. As well as being Apple's largest supplier Foxconn, which employs about a million people, makes products for Sony, Hewlett-Packard and Cisco Systems. (The Guardian)
Europe & North America
Britain has only weeks to use Olympics for social good
There has been a lot of media coverage of the London 2012 Olympic and Paralympic games throughout August and many of the articles have referenced the need to use the games to positively develop society. Sports organisations, businesses and charities called for action after Sir Matthew Pinsent, the four-times Olympic rowing champion, said that Britain must avoid the fate of Australia, which failed to capitalise on the enthusiasm of the 2000 Sydney Games to tackle a host of social problems. It has been emphasised that the euphoria surrounding the Olympics can be utilised to affect young people’s sport participation in disadvantaged communities and obesity rates in England. Sara Parker, of the British CBI employers’ lobbying organisation, said that companies had only weeks to capitalise on the success of the Games. (The Times*)
US health purchasing groups join forces for sustainability
Five of the largest health care group purchasing organisations (GPOs) in the United States (Amerinet, HealthTrust, MedAssets, Novation and Premier) have been praised for working together on a standardised list of questions for suppliers about their products' impact on humans and the environment. The questions focus on non-electronic products only and inquire about products' use of natural resources and end-of-life, as well as whether they contain carcinogens or substances such as polystyrene. This can have a big impact on greening the industry’s supply chain: purchases of the five GPOs represent 90% of all GPO purchases and total $135 billion a year, according to Curtis Rooney, president of the Health Care Supply Chain Association. (GreenBiz)
Latin America
Hundreds of locals sickened in Peru toxic mining spill
Antamina, one of the world's biggest copper and zinc mines, is facing community opposition and government inquiries after its pipeline burst exposing more than 200 people to a mineral slurry, according to Reuters. Over 100 rural Peruvians have been sickened by the spill of the toxic copper concentrate. Antamina is a consortium that includes some of the world's biggest mining multinationals: BHP Billiton, Xstrata, TECK Cominco and Mitsubishi. (Reuters)
Chile blocks coal refinery
Chile’s Supreme Court blocked the construction of a proposed coal-fired power plant by Brazil’s MPX Energia and E.ON on the northern coast of the Chile. The court said that the Brazilian and German investors for the Hacienda Castilla project failed to prove they can protect the surrounding environment. The court ordered MPX to resubmit an environmental impact study that considers the construction of a port and the power plant as a single project. (Bloomberg Business Week)
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