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Tom Butler, CEO of the ICMM |
➤ Tailings standards need to be more prescriptive to prevent disasters.
➤ The industry hopes the standards will gain credibility if an independent panel develops them.
➤ In a review of tailings standards, the mining sector wants to make a "step change" to bolster public confidence in the facilities and ensure their safety.
The deadly tailings disaster at Vale SA's Feijao mine in Brumadinho, Brazil, has put pressure on the mining sector to improve the safety and oversight of tailings facilities. In the wake of the tragedy, which killed more than 300 people, the International Council on Mining and Metals, or ICMM, and its 27 member companies decided to convene an independent review panel and develop tailings dam standards as well as a mechanism for oversight. The work is gathering steam and will pick up pace once a chair of the review panel is chosen. The make-up of the panel is being jointly decided by the ICMM, which represents a number of major miners such as Vale and BHP Group, and the United Nations Environment Programme and the Principles for Responsible Investment. S&P Global Market Intelligence spoke with Tom Butler, CEO of the ICMM, about the initiative. The following is an edited transcript of the interview.
S&P Global Market Intelligence: It seems to me that Brumadinho galvanized action — political, social, corporate — to address deficiencies in the design and oversight of tailings facilities. What's your view?
Tom Butler:
Would you say the urgency of the conversation was greater than the last time around with the 2015 Samarco disaster or Mount Polley the year before?
We all felt that we had reacted strongly to the Samarco incident, and yet within three years we were facing another even more catastrophic incident. We felt that we had taken the Samarco incident very seriously and we had convened a panel of experts and we had produced an additional commitment based on their inputs. But clearly that position statement didn't have the intended effect because, if it had been fully effective, we wouldn't be facing the same thing three years later. In a way, the fact that we had a previous incident three years ago was another reason for the discussion about the need for a real step change in how we look at this.
It seems like the ICMM is trying to get something with more teeth. Tell me a little bit about what you want to accomplish with the creation of tailings dam standards and also the independent review system.
There are a few things to say. First of all, the previous position statement was about high-level governance requirements. So it outlined the key elements of how to manage the tailings facilities. But it was not prescriptive. It was not a standard. So I think there was recognition [that] the standards that we're working on now will need to be more prescriptive. I think we need to borrow the best bits of best practice around the world and come up with something that would be globally applicable.
Beyond that, we're also going to look at broader issues and not just the technical issues. That's why we're commissioning this much broader review with multistakeholder input and an independent chair because I think there are issues beyond technical issues to consider, for instance: how these facilities are managed, organizational behavior, governance aspects, cultural aspects, accountability, transparency and independence. All of those things have to be surfaced and I think they would be much more effectively surfaced if it's not the industry surfacing them but an independent review. The big advantage of an independent review is that it has a lot more credibility in it.
By involving outside parties like the United Nations Environment Programme and the Principles for Responsible Investment, are you addressing skepticism about the industry self regulating?
It's not so much skepticism. It's recognition [as regards the Principles for Responsible Investment] that on the investor side they're very preoccupied about exposure to these kinds of liabilities. I think a number of them have lost a lot of confidence about whether the industry is managing them well. So whatever solution we come up with, it's much better to have them at the table because they need to be comfortable with the solution.
And then on the U.N. side, we are hoping that whatever we come up with will be adopted by countries and by companies well beyond our own membership. We're only 27 companies. Whatever we come up with, our membership will implement. But beyond that, it's going to depend on interest. And obviously, if the U.N. is at the table there's much more likelihood of much greater take up by the rest of the industry and other countries.
It's probably too early to say, but is it possible that certain types of tailings dams might be avoided? We saw Brazil phasing out the upstream style of tailings dams. Do you expect that as an outcome here? Or does the ICMM lean more toward best practices and addressing what types of situations are appropriate for certain types of dams?
I don't think it really makes sense to initiate a blanket ban of certain types of dams. There are some parts of the world where upstream dams have been used for decades without incident and work successfully. The review will look more at what factors should be considered when you decide what type of dam to build.
The ICMM has said it wants to finish the review by the end of the year. In terms of getting some of the subsequent systems in place, how long do you expect that to take?
It's a difficult question to answer because it depends on what the review comes up with. I couldn't say. The members, once they see the review, will have to take a view themselves as to how long it's going to take them to get into compliance.