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BASF challenged on suppliers after miner killings

Highlighting the difficulties companies have with controlling how they source components for their products.

BASF SE faced questions about its sourcing of platinum from a South African mine where strikers were shot dead by police, highlighting the challenge of controlling suppliers while promoting humanitarian credentials.

Chief Executive Officer Kurt Bock rejected calls at the company’s annual shareholders’ meeting on Thursday to pay into a fund to support the families of Lonmin Plc miners who were killed during a strike at the Marikana mine, north-west of Johannesburg, in August 2012. He answered questions posed by Johannes Seoka, a South African Anglican bishop, read out in German by Markus Dufner of the Association of Ethical Shareholders Germany.

The world’s biggest chemical company should “take responsibility as Lonmin’s principle customer” and make reparation payments to the families of the miners, Seoka said through Dufner. Ludwigshafen, Germany-based BASF should also look into the housing and working conditions around Lonmin’s mines where many workers live without running water or electricity.

Lonmin, the world’s third-biggest platinum producer by volume, saw strikes over pay in 2012 that culminated in the killing of 34 protesters by police in a single day. Seoka said that Lonmin bears some of the responsibility for the deaths.

The issue stresses the difficulties companies have with controlling how they source components for their products. IPhone maker Apple hired a watchdog to inspect working conditions at factories after suicides at its Chinese partner Foxconn Technology Group in 2010.

Making judgments

“You can be sure that we know how platinum is obtained and what the conditions in the mines in South Africa are,” Bock said. “But it’s really difficult for us to make judgments here from a distance.” There have been “repeated and sometimes very long and very intensive labor disputes” at South African mines in recent years, he said.

Bock is a board member of the UN Global Compact, an initiative for businesses committed to aligning their operations in areas of human rights, labor and environment.

“I can’t imagine that BASF can approve, or tolerate, such conduct by one of its suppliers,” Dufner said in Seoka’s translated speech. “As the main customer, why haven’t you given a response to the massacre and given your condolences? We’re asking you to do this here and now.”

What happened at Marikana is etched in Lonmin’s memory and “we’re doing everything we can” for the families, Sue Vey, a spokeswoman for the miner, said by phone. The company will wait for the findings of an inquiry into the deaths and the subsequent recommendations, she said.

A report on the Marikana killings was presented to South African President Jacob Zuma on March 31. The government isn’t obliged to publish its findings.

BASF uses platinum, palladium and rhodium in its catalytic converters used in cars. The company bought 450 million euros ($501 million) worth of precious metals from Lonmin in 2014 and has had a close relationship for about 30 years, Bock said.

©2015 Bloomberg News

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