ANZ: BAD CREDIT! GET OUT OF LAFAYETTE MINE

In April 2005, the Philippine government granted an Environmental Compliance Certificate (ECC) to the Australian owned Lafayette Mine. This signalled the start of the extraction of gold, silver, copper and zinc within Rapu Rapu Island.

During its few months of operation, as a result of negligence, cyanide and other contaminants from the mine spilled into the sea and around the island, resulting in massive fish kills. In January 2006, Lafayette was fined for violating the Clean Water Act, and violating the conditions of their Environmental Compliance Certificate (ECC).

After an inquiry the mine was allowed to recommence mining under a 30 day “test run”. A leak occurred two days into the test run. Less than two weeks later on July 18, 2006, residents reported a fish kill in the island’s Mirikpitik creek. Moreover, the heavy presence of military, police, and private security around the island belie Lafayette’s claims of full transparency during the 30-day test run.

David Andrade, a Greenpeace employee sent to investigate reports of a fish kill was detained at gunpoint while on public land - and his water samples were confiscated. Greenpeace is working with the Mineral Policy Institute on this issue.

The Lafayette Project is financed through a syndicate of banks including ANZ Investment Bank and ABN AMRO Bank NV (Australian Branch).

The project clearly violates the social and environmental standards these banks say they stand for. ANZ are a major funder of coal mining expansion in Australia and the region and also prop up destructive logging in Tasmania, Australia and Papua New Guinea, where loggers break the law and abuse human rights. Write to ANZ and tell them this is BAD CREDIT! Urge the bank to stop financing the Lafayette mine.

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Dear Mr McFarlane and Mr Hodgson,

cc: Mr Gavin Murray, Sustainability Director

I am writing to you out of concern at ANZ’s involvement in the Lafayette Mining project at Rapu Rapu in the Philippines.

Your corporate website clearly states that your bank is committed to “enhancing the well-being and prosperity of the communities where our people live and work, and where our business operates,” and “responsibility … to the environment we live in and to reducing the cumulative impact of our operations and business activities.”

Your “Environmental and Social Risk in Lending” project concluded that you recognize that you “need to …. identify, manage and mitigate against the significant risks associated with specific transactions or customer industry sectors with environmental and social issues or implications.”

Clearly, the Lafayette mine is breaching the standards ANZ apparently aspires to:

•	Environmental Management: The mine violates environmental laws. The environmental impact assessment (EIA) conducted by Woodward-Clyde Philippines recognize the same potential negative effects on the Rapu Rapu physical environment and surrounding marine waters as a concurrent series of scientific studies.

•	Social impacts: The local economy is weak and mining revenues are not expected to provide spillover benefits to agriculture and fisheries.  The physical environment has already been damaged by mining and unsustainable economic practices.

•	Community well-being: Major national, regional and local organizations have formed alliances against not only Lafayette but also after the spills are challenging the Mining Act of 1995

•	Social responsibility:  There have been indications that human rights violations have been committed. Specifically there needs to be a review of the means by which Lafayette acquired land rights in the direct impact barangays (villages)

•	Transparency: The heavy presence of military, police, and private security around the island, including in small, remote barangays located well beyond the mine's boundaries, belie Lafayette's claims of full transparency during the 30-day test run.

During its few months of operation, the mining company showed negligence with regard to its operations.  As a result, after heavy rains on October 11 and 31, 2005, cyanide and other contaminants from the mine spilled into the sea and around the island, resulting in massive fish kills which Lafayette continues to downplay.

In January 2006, Lafayette was fined PhP10.7 million (about $206,850 USD), PhP10.4 million (about $201,060 USD) for violating the Clean Water Act, and PhP300,000 (about 5,800 USD) for violating the conditions of their Environmental Compliance Certificate (ECC).

They only paid 6 months later when payment was stipulated as a precondition to the mine's 30-day test run. A leak occurred during operations two days into the test run, but the government was quick to dismiss this as a minor incident. Less than two weeks later on July 18, 2006, residents reported a fish kill in the island's Mirikpitik creek. Aside from dismissing the incidents as results of "sabotage," there has been no response on the part of the company.

Moreover, the heavy presence of military, police, and private security around the island, including in small villages located well beyond the mine's boundaries, belie the government and Lafayette's claims of full transparency during the 30-day test run. Monitoring and inspection by independent parties concerned about the negative effects of the mining operation are actively discouraged and even prevented.

David Andrade, a Greenpeace employee sent to investigate reports of a fish kill, was detained at gunpoint while on public land - and his water samples were confiscated.

In light of all of the above, I am writing to ask ANZ to withdraw from the project which is obviously inconsistent with your standards and aspirations to become Australasia’s most “respected” bank.

Yours sincerely,