Letter to Robert Wilson 7 October 1999

The RIO TINTO Campaign site

Letter from David Russell, solicitor, to Robert Wilson, Executive Chairman of Rio Tinto

Towells Solicitors
WESTMORLAND CHAMBERS
8-10 WESTMORLAND STREET • WAKEFIELD • WF1 1PJ
TELEPHONE 01924 370881 FAX 01924 290562

7 October 1999

Robert P. Wilson BA. CIMgt, Hon DSc,
Executive Chairman,
Rio Tinto PLC,
6 St. James's Square,
LONDON SW1Y 4LD

BY FAX (0171 930 3249) & FIRST CLASS POST

Dear Mr. Wilson,

RIO TINTO 'S OPERATION:

CAPPER PASS & SON LIMITED

I refer to my letter of 2 August, acknowledged on your behalf by John Bradley, Company Secretary. In my letter of 2 August, I cited my earlier communication of 2 6 May in which it was stated: -

In all of the circumstances, we trust that Rio Tinto's Chairman will not have the temerity to stand up at next year's AGM and to lecture shareholders about the Group's “transparency” or its “environmental, health and safety accountability”. Our experience in respect of Rio Tinto's operation at Capper Pass is that it abandoned all of its responsibilities at the first opportunity. We have not seen the slightest evidence of transparency nor, indeed, of any accountability in respect of health and safety issues.

As you know, I subsequently undertook further correspondence which was copied to all Executive and Non-Executive Directors. On behalf of the Directors, that communication was acknowledged by Mr. Bradley on 27 August.

As a result of further investigation into Rio Tinto's operation at Capper Pass, it is now clear that your company has made a series of statements which are wholly without foundation; quite simply, those statements are untrue. I am now giving you the opportunity of repudiating those statements. In so doing, I would refer you to Rio Tinto's Business Practice Statement: The Way We Work. That publication includes the following statement which, of course, you continue to promulgate:-

Rio Tinto recognises that excellence in managing health, safety and environmental responsibilities is essential to long term success.

In the circumstances, I now refer you to the statements which have been issued by Rio Tinto at Directorship level. In this connection, on 18 June, 1999 Rio Tinto wrote to Kevin McNamara MP stating:-

The Capper Pass Smelter operated at all times under the normal Regulations then in force and, as far as we are aware, complied with all requirements put forth by Regulators.

That statement was made in circumstances where Rio Tinto was aware that Mr. McNamara and Mr. Alan Johnson MP had tabled an Early Day Motion on 14 June, 1999.

Subsequently, on 18 August, 1999 Rio Tinto wrote to Channel 4 News (and its Production Team) stating:

During smelting operations and during closure, Capper Pass operated under all health, safety and environmental Regulations applicable to this Plant.

Rio Tinto has repeated those claims for some years. Indeed, in response to the report Tainted Titan, your company published a document entitled Rio Tinto - The Facts: Capper Pass, in which it was stated:

During operation and closure, Capper Pass always complied fully with relevant environmental Regulations.

Rio Tinto was, however, aware, at all material times, that those declarations of compliance were false. My investigation into Rio Tinto's operation at Capper Pass establishes, in wholly unequivocal terms, that Rio Tinto was in breach of environmental, and Health and Safety Regulations, governing its operation. In order to demonstrate that Rio Tinto was in breach of Health and Safety Regulations, I would refer you, for example, to the Statutory Improvement Notice served on 14 July, 1988 by the Health and Safety Executive, under the provisions of the Health and Safety at Work Act, 1974. The HSE gave Capper Pass & Son Limited notice that as an employer, they:

. . . are contravening/have contravened in circumstances that make it likely that the contravention will continue or be repeated the following statutory provisions:- Section 2 (1) Health and Safety at Work etc. Act 1974, Section 3 (1) Health and Safety at Work etc. Act 1974 and Section 63 Factories Act, 1961.

The HSE stated in the said Notice that the reasons for such opinion were:

Adequate precautions are not being taken so far as is reasonably practicable to ensure employees and possibly others are not exposed to unacceptable levels of arsenic dust and fume emitted during work activities being carried on.

The HSE then gave your subsidiary company notice that it was required to remedy the said Contraventions by 1 September, 1988. The HSE further directed that measures specified in a Schedule to the Statutory Improvement Notice must be taken, so as to remedy the said Contravention. The Schedule identified that there was excessive exposure of employees to arsenic. The Improvement Notice had been preceded by a statutory inspection, undertaken at Capper Pass, on 3 July, 1988 by H.M. Factory Inspector, Mr. M.R. Moore and Dr. Judith Grant, Senior Employment Medical Advisor. Senior Officials seen by the Officers included the Environmental Manager, Works Director, Plant Manager and Factory Doctor. The inspection was undertaken in consequence of biological monitoring which established that there was a high uptake of both arsenic in urine and cadmium in blood, suffered by employees.

Capper Pass was notified, during that meeting, that the HSE would serve an Improvement Notice.

The HSE's concern was such that it also gave the company notice that it would be proceeding with full inspection during September, 1988. That inspection was for the purpose of monitoring the company's management of health and safety and further, to follow up in depth those matters stipulated in the Improvement Notice. It is material that no Application was made by Capper Pass, or its parent company, Rio Tinto, to set aside the Improvement Notice.

The HSE then proceeded to set up a Multi-Disciplinary Team to undertake full health and safety inspection and investigation at Capper Pass. The Inspection was undertaken by eight specialist Officers of the HSE, to include H.M. Principal Inspector of Factories, H.M. Inspector of Factories, Senior Employment Medical Advisor, H.M. Principal Specialist Inspector (Occupational Hygiene), H.M. Specialist Inspector (Occupational Hygiene), Senior Scientific Officer, Higher Scientific Officer and H.M. Principal Specialist Inspector (Ionising Radiations). The inspection led to preparation of a comprehensive Report, running to 43 pages (excluding appendices), entitled Report on a Sample Survey to Assess the Standard of Compliance with Current Health and Safety Legislation at Capper Pass Limited, Brickyard Lane, North Ferriby, East Yorkshire 1988-1990.

There can be no issue that your company was unaware of the HSE's Report. In this connection, HSE served it upon Capper Pass and it also formed the subject of subsequent meetings. The principal meeting between the HSE and Capper Pass Management took place in September, 1990. I am aware that you currently have in your possession a copy of the full Report. You will be aware, therefore, that such report constitutes a damning indictment of health and safety at Capper Pass and, indeed, that it left the company at risk of prosecution. In particular, there was serious non-compliance with the Control of Lead at Work Regulations 1980, the Ionising Radiations Regulations, 1985 and the Control of Substances Hazardous to Health Regulations, 1988. The HSE were highly critical of Capper Pass, noting:

The Managing Director is responsible to RTZ Metals Group for monitoring the effectiveness of the health and safety policy. Senior Managers are given the "ultimate" responsibility for health and safety and are accountable for achieving the objectives of the policy within the areas under their control.

The HSE expressed doubt as to whether the company overall had provided the in-depth expertise to successfully deal with the wide range of health and safety matters associated with the operations carried on. In respect of Management, the HSE stated:

The extent and serious nature of the criticisms with regard to, for example. the "assessment" strategy re COSHH, sampling strategy, identification and rectification of sources of exposure and the generally poor compliance with the Ionising Radiations Regulations 1985 are perhaps best evidence of the need for greater in-depth health and safety "know-how" within the company, underlining the need for greater professional training off site for the Health and Safety Personnel.

In respect of the Ionising Radiations Regulations, 1985 the HSE formed the opinion that:

the attitude of Safety Management Personnel was unsatisfactory and their competence in this respect limited. The view was reinforced during the tour of the Plant Site when practical issues of radiation protection such as housekeeping, cleanliness and engineering controls were discussed.

The HSE held:

It appeared that most of the existing radiation safety arrangements had been implemented on reactive and ad hoc basis. An overall hazard assessment required under Regulation 25 IRR85 had not been carried out.

In respect of radiation safety, to include the risk of exposure to polonium-210, uranium and thorium, the Report concluded:

HSE Inspectors gained the impression that the attitude of safety management in respect of radiation protection was ill considered and their competence extremely limited.

Capper Pass was notified that it would have to undertake a comprehensive COSHH Assessment, covering the whole range of activities across the Site. No such Assessment had been undertaken, notwithstanding the clear statutory duty. The company's "arsenic Assessment" was neither suitable nor sufficient in several major respects. Control of exposure was ineffective. Having set out a series of critical findings, the HSE stated:

The above examples are direct evidence of widespread failure of performance of the control systems in operation.

The company's arrangements for maintenance and examination and test of control systems did not meet the statutory requirements of COSHH. The HSE further required Capper Pass to undertake a documented Hazard Assessment under the Ionising Radiation Regulations. Such Assessment was to be over the whole process, from handling of raw materials having elevated concentrations of radionuclides in the uranium and thorium decay series. That assessment was through smelting to waste disposal. The HSE stipulated that training and supervision were required, to improve the attitude of Management towards full compliance with the Ionising Radiations Regulations.

The HSE, as at September, 1999 stated:

The Inspectors had clearly decided a strategy to bring about long term improvements at the Plant. This strategy included the options of prosecution and/or enforcement notices had it become necessary. Capper Pass Managers were aware of the Inspectors' determination to bring about the necessary changes. Moreover, the closure of the Plant cut short the HSE action.

Similarly, Capper Pass was a serial offender of those Regulations governing and controlling the environmental consequences of its actions, to include discharges into the River Humber and emissions into the atmosphere. Capper Pass' discharges into the River Humber were frequently in breach of consent and at times, escalated into "dumping". Those breaches also occurred after closure of the Plant, and during decommissioning. We have inspected available records and we have to say that your company's environmental record is disgraceful. Your company, as stated, were regularly in breach of its licence, constituting gross exceedance of consent. As further stated, Capper Pass escalated into a dumping operation. Materials discharged into the River Humber at levels exceeding consent included arsenic, cadmium, lead and mercury. It is hardly surprising, therefore, that the Ministry of Agriculture, Fisheries and Foods found in 1987 that concentration levels for arsenic in fish from the River Humber, were higher than those from anywhere else in UK estuary waters, by a factor of two, and in some instances, by a factor of six. MAFF were of the opinion that the Capper Pass discharge was the source of the elevated arsenic concentrations which were being encountered in the Humber.

Rio Tinto, through Capper Pass, was intent on maintaining maximum discharges of toxic and carcinogenic materials into the River Humber. Capper Pass, even during restricted operation, was discharging 900,000 gallons of liquid waste per day, into the River Humber. It is to be observed that in a meeting held with the Regulating Authority on 20 December, 1985, attended by representatives of Rio Tinto, Capper Pass vigorously fought proposals for reduced arsenic discharge into the River Humber Capper Pass demanded the right to continue maximum discharging and further, to discharge its accumulated stockpile of arsenic. Rio Tinto's Representative, (RTZ Environmental Officer) considered that the Capper Pass approach was "reasonable" and acquiesced when its Senior Representative told the Regulatory Authority:

He said he would fight any other proposal with every trick in the book, because he had nothing else to give except cutting back production and pushing men out through the gate.

Rio Tinto and Capper Pass, however, equated arsenic waste by reference to only one yardstick, namely, profit. Indeed, in its October, 1986 Confidential Report: Statement of Best Practicable Environmental Option for Disposal of Arsenic by Capper Pass Limited, it was concluded that material containing one tonne of arsenic, contributed £55,000 in added value in 1986.

Atmospheric emissions also involved major discharges of toxic, carcinogenic and radioactive materials, to include arsenic, lead, cadmium and radioactive materials. The radioactive materials included polonium-210. Those emissions affected a massive area of East Yorkshire, putting residents, and their children at serious risk. Extensive laboratory analytical records are available. Capper Pass was responsible for major contamination and, for example, in the early 1970s resulted in livestock and crops being condemned at not less than three farms. It is to be observed that the matter was subject to extensive investigation by the Chief Public Health Inspector and, in turn, the Medical Officer of Health. The latter wrote to the Department of Health and Social Security in London on 9 December, 1971 expressing concern for the safety of residents. The Medical Officer of Health stated:

Fortunately, as far as we can ascertain. there are no milk herds being kept within the immediate vicinity of the Smelting Works. From findings to date, however, it would seem to me that fields adjacent to the works are at present unsuitable for the grazing of animals and the growing of crops for human consumption.

The Medical Officer concluded:

In my opinion the situation at the present time is not satisfactory and I feel may cause public alarm should the facts become generally known. Any advice and guidance you can give me on this matter would be greatly appreciated.

The available evidence, implicating Capper Pass and Rio Tinto extends to several thousand pages. It will, however, be clear to you that each of the statements issued by Rio Tinto, defending the Capper Pass Operation, is patently untrue. Thus, it is clear, beyond any measure of doubt, that the Capper Pass Plant did not "operate at all times under the normal Regulations then in force", nor, indeed, did it "comply with all requirements put forth by Regulators." It is equally clear that there was no foundation for Rio Tinto's statement that Capper Pass had "operated under all health, safety and environmental Regulations applicable to this Plant". It is also apparent that Rio Tinto sought to mislead its shareholders in issuing a statement, in preparation for the 1998 AGM, stating that "During operation and closure, Capper Pass always complied fully with relevant environmental Regulations".

For the avoidance of doubt, we are specifically alleging that Rio Tinto has issued a series of statements in respect of the Capper Pass Smelting Plant which were false. Since Rio Tinto was in possession of the Statutory Improvement Notice and the 1990 HSE Inspection Report, it knew that its statements had no foundation of fact. Rio Tinto made those statements to its shareholders and further, to Members of Parliament. It is not without materiality that Rio Tinto's response had been copied to another of the Constituency MPs, The Rt. Hon. John Prescott MP, Deputy Prime Minister. We represent a great many of the former employees and residents, affected by the Capper Pass Operation. In the circumstances, we invite you to repudiate the false and, indeed, misleading statements previously issued by Rio Tinto. In so doing, we would expect you to make a public statement, coupling such statement with an apology to all of those who have been misled by Rio Tinto's earlier statements. Those who have been misled by Rio Tinto's assurances include the former employees of Capper Pass and their families, local residents and the Constituency MPs. In the circumstances, and having regard to the gravity of the issues arising, we have copied this communication to all Executive and Non-Executive Directors of Rio Tinto.

Yours sincerely,

DAVID A. RUSSELL

NB Before you respond, I would ask you consider two further matters:

1. At Rio Tinto's UK AGM held in London on 12 May, 1999 you personally represented to Shareholders that the company had, at all material times, complied with environmental and Health and Safety Regulations in its Capper Pass Operation.

2. At Rio Tinto's Australian AGM held in Perth on 27 May, 1999 you personally responded to a question from a Shareholder representing an organisation holding $8 million of Rio Tinto shares, stating that the Capper Pass Smelter always operated under approval by the appropriate Authorities.

Those representations, made by you personally, were to Rio Tinto's UK and Australian Shareholders. Having regard to your unreserved statements that Capper Pass fully complied with all Regulations, you went on to assure the Australian Shareholders that it was "extremely unlikely, near zero, that we have any residual liability". However, since Capper Pass was in contravention of the relevant Statutory Regulations governing its operation, your statements and, indeed, assurances, were wholly without foundation.