Corporate Indifference: The ESB’s Legacy in Colombia

A year later, questions remain.

Written by Vincent McCarthy, CFA

Featured in The ESG Factor Magazine, Issue 21 | Q1 2025

You can’t be “Sustainable” at home and indifferent abroad. The ESB’s legacy in Colombia demands answers.

Some readers have asked for an update on my piece last year – The ESB’s Colombian Coal Habit – which covered the ESB, Ireland’s majority state-owned energy company, and their legacy impact on the environment and local communities in the region of La Guajira, Colombia. Almost a year on, here are my thoughts on the situation.

Recap

Over the last two decades, the Electricity Supply Board (ESB) has imported coal from the Cerrejón mine in Colombia to help power the national grid in Ireland. The open-pit mine is 700 square kilometres – an area comparable to County Louth.

In 2021, the Global Legal Action Network (GLAN), based in Ireland, in collaboration with other organisations, lodged a complaint with the OECD against the ESB, based on “serious human rights abuses and devastating environmental pollution.” GLAN says the ESB purchases coal from the Cerrejón mine “with full knowledge of the human rights violations and environmental harms occurring” and that this “does not align with the company’s due diligence duties.”

An initial assessment in 2022 found the complaint merited further examination. At the same time, the ESB had quietly resumed shipments of the coal, which was exposed in 2023 and later confirmed by the ESB. In September 2023, the ESB and local communities agreed to consider entering a mediation process.

Mediation Process

The mediation process failed and the final statement from the Irish NCP has yet to be published. It appears the local communities who have seen their environment destroyed, their water and soil contaminated, and the health of their families negatively impacted have little hope of redress. The ESB purchased coal from the mine for over two decades. Yet, there is no legal requirement for them to assist the affected communities. Who is policing the supply chain?

That’s the problem with the system. We have an Irish company, the ESB, majority owned by the Irish State, buying coal from a mine in Colombia, owned by a Swiss multinational, Glencore, incorporated in Saint Helier, Jersey, and listed on the London Stock Exchange — but where is the legal and regulatory oversight to protect the environment and local communities? European companies should be held to European standards. We can’t assume companies will just do the right thing abroad.

The ESB promotes itself as a sustainable company, talking up their transition efforts, but they have shown no empathy towards the local communities who are fighting for survival. As expected, the issue of precedent is most likely what dominated their approach to dealing with the mediation process. The thinking will be along the lines of: If we accept our responsibility and contribute to the restoration of the environment for local communities and initiatives to improve their standard of living, then we’ll be made to pay elsewhere too.

Bettercoal? Better for Whom?

The locals want a better life by getting back what the mine has taken from them: mother earth. The ESB has abdicated oversight responsibility to Bettercoal, an organisation established in 2012 by major coal buyers, including utilities. The ESB is a member. The ESB therefore does not rely on its own due diligence of the supply chain.

So, do we believe the word of local communities fighting for justice or do we accept the corporate speak of Bettercoal and their funding companies? I am with the locals. It is not enough to say improvements have been made at the mine. It is the legacy impact that needs to be addressed.

“ESB believes that its active membership of Bettercoal provides the best platform to achieve continuous improvement in the mining industry.”

– ESB

Voices from the Ground

A powerful statement from Rosa María Mateus Parra, Human Rights Lawyer, highlighting the human cost of Colombia’s coal exports to Europe.

The ESB Position

I reached out to ESB for an update, to which they shared with me a link to a page on their website which provides their latest position. You make up your own mind on it. My reaction reading their update is the executives at ESB are either brazen to publish such an update publicly or they just lack awareness and empathy.

Under the Bettercoal section they say that:

Bettercoal has developed a rigorous assurance system to ensure that the performance data we build around Bettercoal producers is as robust and accurate as possible.

The ESB relies more on the assessment provided by Bettercoal than their own due diligence.

“In 2018, Bettercoal assessed Cerrejón in detail across 31 criteria which include human rights, workers’ rights, ethics, community engagement, environment, pollution, biodiversity and compliance with laws and regulations.

This assessment found that Cerrejón meets requirements in relation to 15 of the criteria; substantially meets the requirements in relation to a further 12 criteria, and partially meets the requirements on a further four. The assessment does not record any misses or fails for any of the criteria. The public report can be viewed here.”

Are we to be comforted by the 2018 assessment, 7 years old? Meets, substantially meets, and partially meets. Even if one was to agree the Bettercoal standards were high enough, the Cerrejón mine doesn’t even meet those standards. The next time I’ll deliver a project to one of my clients, I’ll let them know we have met 48% of the agreed objectives, substantially met 39%, and partially met 13%. I am sure they’ll accept that as good enough and payment will be forthcoming.

“Based on the assessment the assessor and the mining company agreed a Continuous Improvement Plan (CIP) to address 29 areas identified where the mining operation has not fully met the Bettercoal code. The CIP is independently monitored by the assessor. Of the 29 items agreed in the CIP, 28 are now closed with a single item remaining open and being worked on by the mine. Fifteen of the closed items will be fully closed once on-site verification has happened.”

Closed and fully closed? Language is a wonderful tool to obfuscate.

Colombia’s History

The ESB are aware of the issues reported in the media in relation to the mine. The locals fighting for justice point to the destruction of their environment, the various forms of pollution and the health consequences. According to the ESB, many of the issues are related to Colombia’s history.

“ESB is aware of Colombia’s difficult history which has had severe impacts on its people over many years. We are also aware of issues reported in the media in relation to the Cerrejón mine, many of which are related to Colombia’s history. We are committed to remaining vigilant on all these issues and will continue to engage with Bettercoal to exert influence and drive improvements. We bring such issues to Bettercoal for their assessment as a matter of course.”

So, it is not the dirty and noisy extraction of the black stuff from the ground? Maybe the locals should just study their history harder — instead of moaning about pollution.

Kindly, the ESB will bring any such issues to Bettercoal for them to assess.

2020 to Present Day

The update from the ESB notes that:

“Over the last decade, the predominant sources of coal for Moneypoint have been from Colombia (principally from the Cerrejón mine) and Russia. In the period up to 2020, ESB shifted away from use of Colombian coal and Russia was the primary source of supply. In fact, Moneypoint had not taken delivery of any coal from Colombia in the period from 2018 to early 2022.”

Why shift from Colombian coal? Bettercoal did their 2018 assessment. I guess Russia has better coal.

Then in 2022, Russia invaded Ukraine for the second time. They annexed Crimea in 2014. There was no public outcry that time, so corporates continued to work with Russia as normal. This time around, working with Russia was off the table and the ESB had to source coal elsewhere. But good coal is hard to find. So, the ESB had to return to Colombia.

“Due to the lack of suitable coal being available from other sources at that time, ESB secured replacement coal for Moneypoint from Cerrejón to ensure uninterrupted supplies were available to support the security of supply needs within the State.”

I thought Bettercoal has a rigorous assurance system in place? Surely then Colombia would be the first place to look for replacement coal.

Instead, because there was a lack of “suitable coal” from other sources at the time, the ESB had to return to its old flame, El Cerrejón, even as the local’s fight for justice continued.

South African and Australian Coal

Since then, they have shifted to South Africa and Australia to meet their coal needs.

“Since then, ESB has supplemented its sources of coal to include South Africa and Australia, subject to availability of these coals on the market. Until such time as coal is no longer used at Moneypoint (2025) and to ensure Ireland’s security of supply needs are met, ESB may need to secure coal from Colombia if alternative sources are not available.”

Colombian coal is now a last resort, it seems. But still an option, if needs must.

To conclude the section on Use and Sources of Coal at Moneypoint Station, they bluntly remind us:

“To ensure we source coal in an ethical and responsible way on the international market, as well as addressing concerns about operations at such coal sites, ESB joined Bettercoal in 2014.”

For the local communities impacted by the extraction and purchase of coal from the Cerrejón mine, words like “ethical” and “responsible” have no meaning. For them, the coal is ‘stained in blood’.

Conclusion

In response to the ESB’s email with the website link, I went back to them with a range of questions politely addressing the indifference evident in their public position on the Cerrejón mine. All they said was, “We have nothing further to add at this time.”

I understand that the ESB do not own the mine. So, they may feel that they are not culpable. However, they have purchased coal from a mine that has severely impacted local communities and their environment. If sustainability is about accountability for supply chains, then the ESB bears responsibility. It is not enough to outsource that responsibility to Bettercoal, an industry-funded organisation.

In the ESB’s Sustainability Leadership Plan, they state:

“We are taking a regenerative or ‘net positive’ approach to our actions as we want to restore and regenerate communities and natural ecosystems, creating the conditions for human and natural life to thrive.”

Is there substance to these words? Prove it. Help the communities impacted by the Cerrejón mining activity. Directly.

This is not just an ESB issue. It is across various industries and companies. The system does not protect the poor disadvantaged communities. Companies and their executives are disconnected from what is happening on the ground, across the world, in their supply chains. The executives will have their ergonomic chair. Further down the supply chain, the health and safety standards are not the same. Swap chairs for a day, and the executives might understand.

Until responsibility for the past is part of corporate transition plans, committed to a “sustainable future”, sustainability is just a slogan.

End

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