Grupo Mexico’s shareholders must demand accountability to the companies responsible for human rights abuses and lack of remediation

Publishing date: May 26, 2021

The Sonora River Watershed Committees, the local movement organized to demand comprehensive remediation and respect for our human rights following the environmental disaster caused by Grupo Mexico in Sonora almost 7 years ago, call on its institutional investors to act against abuses by the companies they are financing and to consider this at Friday’s shareholder meeting before casting their vote and/or ratifying the leadership of Grupo Mexico and Southern Copper Corporation.

It is essential that, as investors you use your influence, not only because not doing so may represent a material risk to your funds, but also because it is about changing the ways of doing business as usual in the framework of a new scheme of responsible investments with a focus on respect for social, environmental and transparent governance principles. This is an opportunity to be consistent with international standards such as the United Nations Guiding Principles on Business and Human Rights, and act on that basis.

On August 6, 2014, Buenavista del Cobre, a mining company subsidiary of Grupo Mexico and the third largest copper producer in the world, spilled 40 million liters of acidified copper sulfate into the Sonora and Bacanuchi rivers. The toxic spill extended over 250 km and affected more than 22,000 people in eight municipalities in our state, causing substantial damage to health, the environment, the biodiversity, and our local economy. Despite ongoing litigation and legal victories, the promised comprehensive remediation has not arrived. The Supreme Court of Justice’s ruling is still pending for its implementation. It orders to review the closing of the trust fund created for this purpose, which was unilaterally terminated, and where around 800 million pesos remained unspent for the reparation of damages.

Before casting your vote and ratifying your leadership this Friday, we call on you to consider the following outstanding remediation issues that may also represent a material risk:

1. Why hasn’t the company fully repaired the damages in the almost seven years since the largest socio-environmental disaster in the history of mining in Mexico?

2. Why was the Río Sonora Trust Fund closed? Created for reparation purposes, but full of shortcomings, such as lack of transparency, arbitrary closure, and lack of participation of the women, girls, boys, men and all the people of the affected communities, in the decision-making process regarding the use, distribution and monitoring of resources and actions for comprehensive reparation.

3. Why were the 36 water treatment plants initially promised by the company not built and only one works intermittently and does not separate heavy metals? Similarly, why was the promised health care clinic not built and instead it ended up as an incomplete construction site where we can get very basic and limited service?

4. Why has the construction of a new, larger tailings dam been financed, and our demand to stop it under existing conditions ignored? We demand the cancellation of the mega-dam, whose construction violated our right to participate, did not obtain our consent, and whose presence in the region fills us with distress and fear.

We therefore urge you to take these considerations into account before voting and possibly ratifying the company’s leadership, and to reaffirm your commitment to corporate governance that ensures human rights and a healthy environment.

Beyond the work that governmental and law enforcement authorities are doing, such as the promises of the Federal Environmental Protection Agency to ensure access to justice, you as investors also have the opportunity to act. It is urgent for us, and a matter of investor responsibility and ethics to identify, prevent and mitigate harms, and to be accountable when they occur.

Companies must respect all stakeholders, including the communities where they operate and that are affected by their operations. Investors’ discourse of being responsible and establishing trust between the parties is worth very little if it is not backed up by concrete actions that address the issues we are stating, that repair the damages caused, and that can prevent future damage.

For justice, reparation and non-repetition.


The Sonora River Watershed Committees

May 26, 2021, Sonora, Mexico