metal mining and ENVIRONMENTAL CRIME
GLAN and London Mining Network take action over 'dirty copper' traded on the London Metal Exchange
GLAN and London Mining Network have taken bold action over 'dirty copper' traded on the London Metal Exchange (LME). Filing a complaint with its regulator, the Financial Conduct Authority (FCA), we warn that copper from the Grasberg Mine, West Papua, currently being traded on the Exchange could constitute 'criminal property' due to the serious environmental harms being caused through its production.
The Grasberg Mine, situated in the rainforests of New Guinea, currently uses ‘riverine tailings disposal’ – discarding its mining waste (known as ‘tailings’) directly into nearby rivers, polluting the local area and water systems. This practice would qualify as a serious environmental crime if it were to occur in the UK, meaning that copper produced at the mine could amount to “criminal property” under the Proceeds of Crime Act, irrespective of whether the production process is lawful in Indonesia.
The letter sent by GLAN and the LMN reminds the London Metal Exchange of its duty under UK criminal law that as a business operating in the regulated sector, it has an obligation to report to the National Crime Agency any knowledge or suspicion of laundering of proceeds of environmental crime happening on its Exchange. Failure by the London Metal Exchange to exclude these illicit commodities could trigger liability under the Financial Services and Market Act 2000 and the Proceeds of Crime Act 2002 (POCA) and could require the Exchange to immediately identify and halt the trade of these metals.
GLAN lawyer Stéphanie Caligara said, "The London Metal Exchange is the world centre for metals and critical minerals trading. As humanity's reliance on metals like copper intensifies in the pursuit of the ‘Green Transition’, the Exchange has a legal duty to ensure that the metals traded on its Exchange are not produced on the backs of environmental crimes. It also has a critical role in safeguarding the integrity of global supply chains. As the Exchange’s regulator, the FCA must investigate any suspicion of laundering of proceeds of crime trading on the Exchange."
“Copper produced through severe environmental harm at the Grasberg Mine, West Papua is emblematic of this issue and the harm highlighted in this case are symptomatic of deeper systemic problems across the world. GLAN has identified similar patterns with mining corporations operating in Brazil, Peru, Guinea and the Russian Federation to name only a few, who trade their products on the London Metal Exchange. If successful, GLAN and LMN’s action might force these companies to revisit too the way they produce metals in these countries. This in turn could lead to reduced environmental harm linked to mining and drastic improvement of the livelihood of communities affected by these operations.”
In January 2024, GLAN and the LMN alerted the London Metal Exchange of the likelihood that the Exchange was being used to trade the proceeds of environmental crime. Despite having been aware of the risks around ‘dirty copper’ for over a year, the Exchange has resisted delisting Grasberg copper products, which are still being offered on the Exchange.
The action could have significant implications for other companies whose mining operations are linked to environmental crimes overseas, preventing them from trading on the Exchange.
Dolly, a West Papuan indigenous community leader said, "This case is about our fight against those who profit from the destruction of our people's rivers, our forests and way of life. Our communities are experiencing the life-threatening effects of mining, we have no choice but to take up this fight because if we remain silent who will speak for us?"
This case is part of our commitment to work with indigenous communities and use the law strategically to hold perpetrators of environmental crimes accountable. Legal actions like this one which seek to change the systems that enable environmental crimes and human rights abuses, can have ripple effects for communities around the world.
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In West Papua indigenous communities are suffering the effects of mining waste pollution from the Grasberg mine being dumped into the water sources that they rely on for basic needs like drinking, cooking and bathing. Over 200,000 tonnes of toxic mining waste, known as ‘tailings’ are thrown into local rivers every day. This practice is considered so harmful to the environment that it is subject to an almost universal ban across the globe. West Papua remains an exception, as one of the few places where it is still practiced, at the cost of both the environment and the indigenous people inhabiting the region of the mine.
West Papuans have seen the rivers that are central to their way of life, for fishing and navigating, disappear; sedimentation resulting from toxic mining waste is causing widespread health problems for the community. Skin diseases and other health conditions from the heavy metal pollution in the water is causing suffering to the whole community but children and the elderly are more at risk. Indigenous communities have witnessed West Papua’s forests, which provides their food, gradually disappear under mounds of mining waste.
The environmental harms in West Papua highlighted in this case are symptomatic of a deeper systemic problem across the world. GLAN has identified similar problematic patterns with mining corporations operating in Brazil, Peru, Guinea and the Russian Federation to name only a few. If successful, GLAN and LMN’s legal action might force these companies to revisit too the way they produce metals in these countries.
GRASBERG MINE, WEST PAPUA
Pictured top: The Grasberg Open Pit Mine, Pictured bottom: Toxic tailings from the mine damage waterways and kill trees
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