Japanese Investments linked to rights violations in copper mining
Fair Finance Guide Japan in their latest case study highlight the need for stronger monitoring by financial institutions of mining projects they invest in, and overall better due diligence in the mining sector. The case study spotlights the situation in two mines - a nickel mine in the Philippines and a copper mine in Chile, both financed by Japanese banks and producing minerals needed for a low-carbon energy transition, but found to have alleged violations regarding indigenous people's rights.
- Those involved in the project finance of Quebrada Blanca Phase 2 expansion project should conduct strict monitoring immediately to assess its social and environmental impacts. If the monitoring reveals that sufficient mitigation efforts have not been made, financial institutions should consider responding - including a withdrawal of investments.
- If and when Sumitomo Metal Mining and its collaborating companies seek additional project finance for the Rio Tuba mine expansion project, financial institutions shall strictly scrutinize the project to confirm that Sumitomo Metal Mining or its ore suppliers are considering sustainability in accordance with IFC performance standards. In case of doubt, financial institutions should refrain from financing
- Financial institutions shall consider all mining projects as high risk projects and strengthen due diligence through sector-based policies.
The full report in Japanese is available here.
Read the FFI news report here.