In 2021 I watched aghast as Nacho Gimenez, then Managing Partner of BP Ventures, spoke to a packed room about BP’s commitment to decarbonisation. This was during Carbon13’s venture builder programme of which BP was a major sponsor. A key part of his rationale behind BP’s commitment, was the notion that his colleagues at BP are today experiencing the same plight the British coal miners did under Thatcher’s government. He poetically drew a parallel across time and space between the prospect of BP being asked to reduce drilling with the miner’s strikes that took place in the eighties.
I remember my jaw literally dropping.
Did he really believe what he was saying? Was he really comparing his suited, pampered, highly paid colleagues with the unionised coal miners on minimum wage who literally hacked at the coal face? Was he somehow comparing the unprofitable and small coal mining operations with a multinational juggernaut who that year would go on to make an annual profit of USD 12.8 billion? A company that ended the previos year, 2020, with USD 34 billion in cash reserves.
I cornered Nacho after the talk and attempted to debate him on some of the issues he had raised. I was inexperienced and he wasn’t. With a few smooth smiles he batted me off and was out of the building quickly. (He needed to catch a plane for a family vacation. Or he was tired coming back from one, I forget which.)
This was my first glimpse into how the mind of a multinational works.
And so, while many are celebrating the ratification of the CS3D directive by the European Parliament, I am less impressed.
What is CS3D?
CS3D stands for Corporate Sustainability Due Diligence Directive, a piece of legislation that was first approved by the European Parliament in March 2024.
Lawmakers and sustainability champions have been celebrating this as a significant win for supply chain accountability.
The CS3D directive is indeed a far-reaching piece of due diligence legislation. It calls for full disclosure and prevention of supply chain human rights violations and is, I believe, a well-intentioned attempt at curbing human rights abuses in the pursuit of (primarily) mining activities. To quote EY:
The CS3D requires companies to engage in a thorough due-diligence process encompassing identification, assessment, prevention and mitigation of negative impacts on human beings and the environment. To mitigate adverse impacts on human rights and the environment, a broad range of elements must be addressed, including child labor, forced labor, greenhouse gas emissions and deforestation. Importantly, companies are required to examine and document findings beyond their immediate operations, encompassing both upstream and downstream supply chains.
While I am certain that most of the promoters of this work, having heard some of them speak, are genuine, I am equally certain that the legislation was finally ‘allowed’ to pass because the companies impacted see a route around it. Or out of it.
Apologising for pessimism
I was in Vienna last week for the Beyond Growth conference during which this topic was discussed in a workshop and fishbowl discussion about trade, specifically focused on mining and supply chains. The group was addressed first by Guilherme Cavalli by a pre-recorded video message from Brazil on the topic of disinvesting in mining. In the same session we had an in-person presentation by Laura Carvajal from Colombia on similar issues being faced in that country.
Both of these speakers (and one other participant who I’m sorry to say I did not take the name of; please reach out and I will include you if you wish) took a dim view of the effectiveness of CS3D and apologised a few times for having such a pessimistic outlook.
That apology is what spurred me to get out of my seat and join the fishbowl discussion.
There is nothing to apologise for.
If the proverbial glass were empty and someone filled it up to the half way mark then you could argue that calling it “half full” is a pessimistic outlook. But if on the other hand the glass was full and someone drank half your water without asking, its not pessimistic to think that that person may very well take the rest. That’s looking at the facts square in the face and speaking truth.
If anyone needs to apologise I would suggest that it is the EP for taking so long to begin addressing these issues. And for forcing these people to put aside what they’re doing to become activists. For forcing them to come all the way to Brussels and Vienna to make their case, in a foreign language, and for making them feel like they’re somehow inconveniencing us with their ‘annoying’ truths.
I don’t actually know how many prime ministers and MEPs actually visited mining communities in Colombia, Brazil, Kenya, Nigeria, and the DRC but I’m willing to bet that it is way less than the number who visited Kiev since Russia’s invasion of Ukraine. Legislation aside, that is a more telling indicator to me of what types of “human rights violations” are valued.
Disconnected language
The two presentations in Vienna shared a lot of similarities with Laura Pipolo‘s talk at a similar event in Rome earlier this year.
The similarity I’m talking about is one of language.
When you listen to people who’ve seen with their own eyes what happens where mining takes place they talk about specifics. Children injured and starving to death. Women and girls being raped and forced into prostitution. Forced evictions and villages being burnt and flattened. Murder. Millions of dead animals and permanent toxification of land and water. Despair and suicide.
When you listen to corporates you hear very different things. They talk about negative impacts and human rights violations. Supply and value chains. Due diligence and mitigation. Upstream and downstream. Forced labour.
Of course ‘forced labour’ is really slavery. Just as the other terms are euphemisms for what’s really happening. A sugarcoating to make talking about the issues more ‘accessible.’
The result is disconnection.
The very notion of a supply chain is an agent for disconnection through which decision-making is divorced and several layers removed from impact. In fact its mostly not even a supply chain now, it’s a value chain, making everything more ambiguous. Knowledge and responsibility are effectively outsourced and parcelled out ‘along the chain’ so that the sound of a company’s impact is muffled, muted, and suppressed.
The language used is key in that suppression. As the reverberations of impact make their way back up the value chains, responsibility and meaning are scattered along the chain’s links, until finally they land neatly into a bright green spreadsheet cell in an office somewhere in Europe.
Having effectively reduced the “human rights violations” to a number, the marketing departments can now celebrate an “improvement” on a billboard. And so everyone sleeps at night, safe in the knowledge of a job well done.
But the miners are still hungry. They don’t sleep.
The very hungry miner
Hunger drives you to do the otherwise unthinkable. And the miner, being hungry, will dodge, bend, and break the rules to carry on extracting stuff from the ground.
The miner I’m talking about is the multinational corporation.
When you see an organisation generating a profit of over 20 Billion US Dollars and still seeking to expand and grow you have to conclude that it will never be satisfied. It must be very hungry. And therefore it is likely to not be happy with that half a glass of water. It will come after the rest by hook or by crook.
And so unless the very notion of a multinational is outlawed, or at least fundamentally changed, the rest of the water will never be safe. Because ultimately a key defining characteristic of such companies is that they will simply not take no for an answer.
While there may be a measure of outward compliance and acquiescence internally there will be no meaningful change to underlying principles. We are talking after all about organisations who have literally massacred people to keep mining operations running and there are several institutions like Barclays who are more than willing to fund such things. Armed with billions and guns, anyone who thinks they will simply comply with CS3D is mistaken.
We’ve seen what happened with GDPR. Five years later, despite well-known abuses in Big Tech, the biggest ‘success’ story is the slapping of Amazon with a 746 million Euro fine. It may sound like a large sum but it pales in comparison to Amazon’s profits.
Amazon’s (reported) profit last year was 270.046 billion USD.
So this means that while the fine looks impressively huge, it is in fact a mere 0.27629629629% of Amazon’s yearly profits. That’s the equivalent of a £140 fine if you had an annual salary of £45,000. Hardly life changing. With data and privacy being of direct personal impact to EU voters GDPR is in fact low-hanging fruit and this is still the best we’ve done.
But when it comes to mining and drilling there is an even bigger problem.
The growth imperative built into the EU’s economy requires the stuff these companies are extracting, be it oil, iron, copper, cobalt, or lithium. And so ultimately when push comes to shove the EP will find itself on the side of the multinational — on the side that simply can’t take no for an answer.
You can call me a pessimist if you want to.
I think that recognising the truth and the problems is not pessimism and allows us to come up with genuine solutions rather than bandaids.
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