Is GCM teetering on a precipice? Earlier this summer it replaced its board of directors, which is never a sign that things are going well for a company. It seems that the Organisation for Economic Co-operation and Development (OECD) accepting our complaint about their proposed coal mine in Phulbari, Bangladesh was the final straw for the old guard.
It’s Interesting that, faced with a formal investigation by the OECD into human rights abuse, the company responds by bringing in new expertise. We’re celebrating a small victory in the wider campaign to uphold the rights of the 220,000 people in Phulbari at risk of displacement. But this also leaves us wondering who is in control of GCM and what their response will be to the widespread opposition to the mine.
But instead of bringing in new expertise on human rights or community relations, GCM has prioritised new expertise on finance and investment. A look at the new board is an illuminating way to understand the link between the energy and finance sectors. As WDM have been highlighting in our Carbon Capital campaign, the overlap in directors of finance and energy companies is a linchpin in keeping dirty energy industries alive.
In the case of GCM, the new executive chairman, Michael Tang has another hat as executive co-chairman and managing director of Polo Resources Limited - an investment company focusing on natural resources and registered in the tax haven of the British Virgin Islands. His own company, Mettiz Capital, set up an agreement earlier in the year to provide “consultancy” (read “lobbying”) services to GCM in an attempt to get the go-ahead for the stalled project.
Neil Herbert - another new GCM director - also comes from Polo Resources where until recently he was the co-chairman and managing director.
The third and final member of the GCM board, Guy Elliot, is also the senior non-executive director of, yes you guessed it, Polo Resources.
It may therefore come as no surprise to learn that Polo Resources is GCM’s largest shareholder – Polo owns 27.8 per cent of GCM.
It is no understatement to say that the financiers are now driving this project – the biggest shareholders are also making the strategic decisions with their director hats on. In addition, in its response to our complaint, GCM noted that “withdrawing from the project as the complainants propose could conflict with its duties to shareholders under UK law”.
And so we start to get to the heart of some of the problems with the finance system. Companies are obliged by law to maximise profit for their shareholders. But not to report to those same shareholders on the climate impacts of their investments. And they’re certainly not obliged to pursue investments that uphold people’s fundamental human rights and protect our climate.
Phulbari is a human rights disaster waiting to happen. It is a climate disaster waiting to happen. Hundreds of thousands of people in Bangladesh have protested against this mine, sometimes meeting violence and giving their lives as part of this opposition.
Polo Resources and other investors need to be held to account for their role in Phulbari. Investors need to understand that they are as culpable as the energy companies themselves for climate change and other impacts of dirty energy projects. Until we can bring this accountability to bear, then the finance sector will continue to bankroll dirty energy - and lucrative projects like Phulbari will be pursued whatever the social and environmental cost.
As a first step we demand that UK finance companies tell us about the carbon dioxide emissions of their investments.