Regulators and investors have increasingly focused on mining safety following the collapse of a mine-waste dam owned by Vale in Brazil that killed 270 people in 2019.
Photo: mauro pimentel/Agence France-Presse/Getty ImagesMark Roberts died last March after becoming trapped under the wheels of his truck while delivering coal for global miner South32 Ltd. S32 3.76%
But South32 said in its annual report that it had zero casualties for the financial year and awarded Chief Executive Graham Kerr a bigger bonus for the achievement.
The Australian miner had a further two deaths linked to transport last financial year, the company told The Wall Street Journal. But it said it doesn’t account for fatalities when it has no control of the activity, a determination that—in the case of at least Mr. Roberts—goes against guidelines from the industry’s main trade body. The company now says it is modifying that policy.
Many other miners, including giants Anglo-American NGLOY 4.51% PLC and Glencore GLNCY 7.22% PLC, don’t always count transportation deaths in their end-of-year tallies, keeping death tolls lower and sometimes allowing executives to get bigger bonuses for so-called zero-fatality years.
In recent decades, companies have made mining much safer—and reported fatalities have fallen. But governments and companies sometimes report statistics in a way that underestimates the true death toll in what remains one of the world’s most dangerous professions.
Regulators and investors have increasingly focused on mining safety following the collapse of a mine-waste dam owned by Vale SA VALE 2.35% in Brazil that killed 270 people last year. Last month, at least 162 people were killed after heavy rains triggered a landslide at a mine in Myanmar’s largely unregulated jade mining industry.
This year, 16 out of 27 members of the International Council on Mining and Metals reported zero casualties to the trade body—a record in the eight years it has collected this information. But several companies, including Australia’s South32, didn’t include fatalities in transportation, which the ICMM classifies as occupational deaths.
Miners need to take responsibility for deaths in transport, said Peter van der Werf, an environment, social and governance specialist at Dutch fund manager Robeco, adding that not doing so made it hard to properly judge the safety of the industry.
“It is an essential and high-risk element of their operation, especially because they are transporting with heavy-duty trucks in emerging markets where one of the highest causes of deaths is road accidents,” he said, referring to recent studies on the topic.
Reporting of mining deaths is inconsistent, with different miners and countries following different rules on what fatalities the industry should be held responsible for.
South32 said the fatalities happened in Mozambique, Colombia and Australia. The deaths weren’t mentioned in the company’s sustainability report, where miners chart the previous year’s safety record.
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Mr. Roberts died while unloading cargo from a South32 mine at the Port Kembla Coal Terminal in Australia, according to his brother and a local union. Australia’s Construction, Forestry, Maritime, Mining and Energy Union said South32 shouldn’t have used the terminal, which it manages and part owns, at the time because workers had been locked out over a contract dispute, leaving it staffed by inexperienced personnel.
South32 and Port Kembla Coal Terminal declined to comment about the incident.
“Sadly, there were three fatalities that occurred which were linked to our business activities, but where we did not have direct control,” a South32 spokeswoman said. The company said it reports deaths in accordance with ICMM’s guidelines on incidents that occur while the activities are under its direct control.
The ICMM states, though, that deaths resulting from work activities at the “direction of the employer, regardless of location” are occupational injuries and deaths. The trade body categorizes driving for a company as a “controlled activity” and cites examples such as someone driving ore from a mine to a seaport.
A spokeswoman for the ICMM, which represents 27 of the world’s largest mining and metals companies, said the rules are guidance for member companies and aren’t enforced. She declined to comment on the South32 deaths.
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A company executive said South32 intends to disclose future deaths that occur in environments where the company doesn’t have direct control in its annual sustainability report, though it still won’t classify them as an occupational fatality, which would affect bonuses.
In its annual report, for the financial year ending June 2019, South32 said an absence of reported fatalities was a factor in awarding executive bonuses. Mr. Kerr, the CEO, was awarded pay, including bonuses, of around $4.9 million for 2019. Three years earlier, the company shaved up to 24% off his bonus as a result of deaths at the miner.
“If they are claiming their bonuses for saying they are casualty free, I believe they are not acknowledging Mark’s death,” Mr. Roberts’ brother, Dean, told the Journal.
Other miners reported zero fatalities, despite employees dying in work-related accidents.
A bus carrying mine employees collided with a tractor-trailer rig in Nevada on Aug. 24, 2019, causing fatalities and several injuries. Many companies don’t include fatalities in transportation when reporting death tolls.
Photo: Jim Stewart/Associated PressBarrick Gold Corp. GOLD 0.30% reported no deaths in its annual report for last year but did say in its sustainability report that two people working at its Nevada operations died outside a mine when an ore truck collided with a bus carrying commuting workers.
A company executive said one of the deaths was a commuting worker, which the ICMM doesn’t require companies to disclose. The other fatality was a contractor, who had dropped off a truckload of ore and was neither on mine property nor on the clock when he died in the crash.
The Nevada Highway Patrol’s crash report said the truck’s driver was “actively driving for his work” and on his shift when the accident happened. Barrick declined to say whether the contractor still had work to complete for the company when he died—for instance, whether he was returning his vehicle or picking up more ore.
Like other mining companies, including Glencore and Anglo American, Barrick says it includes only those deaths that happen in a controlled location or activity where it can supervise and enforce health and safety standards. Deaths on public highways often aren’t included because miners say they can’t control what happens on such roads.
Barrick lists, in corporate disclosures, the company’s safety record as a factor in determining part of Chief Executive Mark Bristow’s bonus for the period. Anglo American takes into account its safety record, including fatalities, when awarding bonuses, as does Glencore, though its CEO doesn’t take a bonus.
Some fund managers say many aspects of transportation can be controlled, such as the safety of the vehicle, training of the driver and the routes a company chooses. To get a full picture of how deadly the mining profession or individual operations are, they say, all deaths need to be included, rather than just those the company feels it has control over.
Some ICMM members—including AngloGold Ashanti Ltd., AU 0.06% and Teck Resources Ltd. TECK 6.17% —do include transport deaths, including outside their mines.
Last November, a subcontractor working on a new copper project run by Teck in Chile died when a truck overturned on a public road. The death was Teck’s only fatality that year. Reporting it meant the miner reduced its CEO’s bonus by 5%.
—David Winning and Chieko Tsuneoka contributed to this article.
Write to Alistair MacDonald at alistair.macdonald@wsj.com
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