Pitfalls and Pipelines - Philippine Indigenous Peoples Links

174 Pitfalls and Pipelines: Indigenous Peoples and Extractive Industries
All companies, regardless of ownership structure, can
borrow money. Those who lend money to the company in
the form of debt are called creditors. The creditors are mostly
banks. They will receive interest on the loan, while shareholders
are entitled to receive dividends if the company is in profit.
The vast majority of mine financing, however, is from equity. 4
Remember that some companies may be registered in
more than one country and float their stock on several different
stock exchanges. A company may also operate under different
names in different countries. This is where the research
mentioned in Chapter 2.1 becomes so important. Ensuring
the full and correct name of a company, and all its associated
subsidiaries is particularly important. All of a parent company’s
subsidiaries should be investigated, as it may provide
you with other examples of corporate misbehavior, and other
potential allies.
It is more likely that if a community is dealing with a multinational
that it will be a public company. Therefore, much of
the following text concentrates on public companies. Bear in
mind, however, that one of the world’s largest natural resource
companies, Glencore, was a private company until it “floated”
on the London and Hong Kong Stock Exchanges in 2011. 5
It also provides by far the greatest opportunities for public
engagement. Shareholders are the real owners of a public
company, and the management—chair, board and chief executive
officer (CEO)—are appointed by the shareholders to
run the company on their behalf. As such, a community can
effectively appeal to the public over a project. Even better, the
board and chair are elected by the shareholders at a public
Annual General Meeting (AGM) of the company, where they
must report on progress and face questions from concerned,
voting, shareholders. The opportunities this provides are explored
below.
That is the good news on public companies. The “not so
good” news, is that in practice the majority of shareholders
tend not to be members of the general public (or at least those
who own the majority of shares tend not to be, at least directly).
In the first place, management will likely own a large “chunk”