Future Fund puts MinRes and Chris Ellison on notice
Future Fund has raised issues with MinRes boss Chris Ellison along with BHP over the handling of its Samarco disaster.
The head of Australia’s sovereign wealth fund has put Mineral Resources on notice over the tax evasion and other scandals surrounding the miner and its managing director Chris Ellison.
Future Fund chief executive Raphael Arndt also revealed he met senior BHP executives out of concern over the 2015 Samarco dam disaster and intends to follow up with the mining giant on its recent $45bn settlement with authorities in Brazil.
Mr Arndt told a senate estimates hearing on Tuesday night that the Future Fund would seek more information from the MinRes board over Mr Ellison’s involvement in tax evasion and other dubious conduct exposed by whistleblowers and a subsequent company-ordered investigation by law firm Herbert Smith Freehills.
The Future Fund holds about $88m in MinRes stock.
“We’ve raised the issue with our investment managers. We’ve asked them to engage with the company board on it and to let us know,” Mr Arndt said.
“The issues raised are serious. We’ve asked our fund manager to look into it and make sure they’re aware of it.”
Mr Arndt said he didn’t usually get personally involved in major scandals involving mining companies but had felt compelled to speak directly with BHP over the Samarco disaster that claimed 19 lives and had a devastating impact on communities and the environment around Mariana in the Brazilian province of Minas Gerais.
“However, in this particular case, because it was such a significant issue at the time, I did, in fact, meet personally with senior executives of BHP as a major shareholder to impress upon then the importance, from our point of view as a shareholder, for them to make decisions and operate in a way, to rectify the situation and do the right thing by the local community,” he said.
“So, they certainly are aware of our views as a shareholder.”
Asked what follow up action the Future Fund had taken, Mr Arndt said BHP’s efforts to make amends and the settlement with Brazilian authorities would be raised with BHP and with fund managers.
“It’s quite recent news (the October 25 settlement), so I’m not sure what we actually have done, if anything, yet. But I’ll make sure that it’s raised in those meetings,” he said.
BHP signed off on the settlement with Brazilian authorities that was thrashed out over years of negotiations on adequate compensation.
The settlement involving Samarco and its co-owners BHP and Vale is expected to see direct and indirect benefits flow to about 500,000 Brazilians and potentially limits BHP’s exposure to lawsuits in other jurisdictions.
BHP is defending a lawsuit in England lodged by 620,000 Brazilian claimants. Pogust Goodhead, the law firm acting on behalf of those claimants, has said BHP may have to pay out up to £36bn ($70bn) if it loses the class action.
In the case of MinRes, Australian Council of Superannuation Investors is urging the board to engage with the Australian Securities & Investment Commission on the findings of the Freehills investigation. ASIC launched a preliminary inquiry last month.