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Wednesday, 01 June 2011

MEPs demand a moratorium on the financing of mining projects

On the day that the Swiss commodity trader Glencore joined the stock market, 50 Members of the European Parliament (MEPs) wrote an open letter to the Presidency of the European Council and the European Commission. They demand a moratorium on EU financing of mining projects, until sufficient standards and regulations for mining finance have been introduced. The concerned Parliamentarians belong to the S&D Group, the Greens/EFA, GUE/NGL and ALDE. “The developmental aspect of mining projects is highly debated,” said Dutch Social Democrat Thijs Berman, who presented the letter in the European Parliament. “Due to tax advantages for the company, low labor standards and grave environmental impacts, the host country and its population rarely benefit from mining projects. Instead, international mining enterprises make a profit, and I do not understand why they should receive public funds in return. At least not until standards and regulations have been introduced which guarantee a positive effect for those who need it: poor countries and their populations.” The letter was presented on the day of Glencore’s accession to the stock market, because it was written as a reaction to a scandal about the Mopani copper mine in Zambia. The mine is administered by a consortium (Mopani Copper Mine – MCM) the main owner of which is Glencore. In February 2011, an internal tax revision report was published which detailed how MCM avoided profits in Zambia in order to not pay any taxes, the environmental orgaisation urgewald reported. At the same time, the company used accounting measures to transfer profits to Glencore. Glencore itself is located in Zug, Switzerland, where it again profits from low tax rates.

Source: Entwicklungspolitik online