A report on the company’s Annual General Meeting.

May 2nd saw a landmark victory for the campaign against the Ilisu Dam project in south east Turkey, with protesters dominating the Annual General Meeting of Balfour Beatty and some institutional investor support for a Friends of the Earth resolution calling on the company to adopt the guidelines of the World Commission on Dams.

The Ilisu dam project has been the subject of increasing controversy as it will affect 78,000 people, the majority of them Kurdish, destroy the ancient city of Hasankeyf and threaten conflict over water resources between Iraq, Syria and Turkey. Balfour Beatty, the UK-based construction giant, is bidding for the contract to build the Ilisu dam, as part of a Swiss-led consortium. However the company has been startled by the strength of the campaign against the dam, and now seems to regret their decision to get involved with the project two years ago. Lord Weir, the company chair, commented, "If we had known then how controversial this project would be we could have saved ourselves a lot of trouble by not taking part in it...". (The Guardian, May 3.) In a press release, the company also stated that Balfour Beatty has "committed itself to taking the WCD principles, criteria and guidelines into account in determining whether and how it should be involved in any future hydro-electric projects". (Balfour Beatty press release 2 May)

Protesting shareholders from a remarkable variety of groups turned up for the AGM. In addition to supporters of the Ilisu Dam Campaign, the Kurdish Human Rights Project and Friends of the Earth, representatives of trade unions, UCATT (construction workers), the RMT (railway workers) and the Campaign Against Tube Privatisation attended to question the Board over the company’s health and safety record. Also present were campaigners against the Birmingham Northern Relief Road, the UK’s first toll motorway which Balfour Beatty is building. Prominent individuals including Baroness Sarah Ludford MEP, John Austin MP, Lord Eric Avebury and Bruce Kent, former chair of CND, also attended on shares provided by the Ilisu Dam Campaign, as did members of the media.

The protests began with over 100 protesters unfurling banners and spoof share certificates reading "Balfour Beatty: One Share in 78,000 forced evictions; Oppression of the Kurds; Environmental destruction; and Construction worker deaths" outside the hotel where the AGM was held. This media photo shoot was covered by major national newspapers, the Financial Times, the Guardian and the Independent; Channel 4 News; investment press and trade press including Construction News, Building Magazine and Contracts Journal.

Shareholders then trooped into the AGM, where they were searched by security staff, taking with them copies of a spoof company annual report: "Balfour Beatty counter-report 2000, Balfour Beatty’s annus horribilis". This report, prepared by the Ilisu Dam Campaign and the Cornerhouse , highlights key controversial projects – including the Ilisu dam – in which the company is involved and argues that Balfour Beatty lacks a coherent strategy to manage reputational risks, urging shareholders to support Friends of the Earth’s Resolution no. 15. The Campaign used the report to brief the media, institutional investors and shareholders.

Questioning inside the AGM was dominated by protesters who massively outnumbered all other shareholders. The first session was devoted to company controversies other than the Ilisu dam project. Shareholders asked searching questions on a wide range of issues embarrassing to the company, ranging from bribery and corruption charges in Lesotho and the United States, to the company’s human rights and environmental policies, to the Birmingham Northern Relief Road and the company’s responsibility for last year’s Hatfield train crash in the UK, which saw four passengers killed. The chair finally brought this session to a halt after an hour and a half with many shareholders still wanting to question the board over a range of issues.

The second session of the meeting was devoted to a debate on Resolution 15 (calling on the company to adopt the WCD guidelines) and to concerns over Ilisu. Charles Secrett, director of Friends of the Earth, opened the questioning. He warned the board that this was an issue that would not go away, indeed that issues of corporate responsibility could only become ever more prominent. The only way for Balfour Beatty to protect its reputation and its profitability in future would be for the company to take real action over such controversial issues and to support Resolution 15 by adopting the WCD’s guidelines.

Resolution 15 was proposed by Friends of Earth, who had bought £30,000 worth of shares in Balfour Beatty, and backed by over 100 Ilisu Dam Campaign supporters, who were given Balfour Beatty shares. If adopted the WCD report’s guidelines would effectively bar the company from taking on the Ilisu Dam contract. Balfour Beatty’s board claimed sympathy for the recommendations but urged shareholders to vote against the resolution, as it did not want to be bound by them.

From the floor, a range of speakers (including MP John Austin) argued in favour of the Resolution. Questions were also taken on Ilisu. In particular shareholders questioned Balfour Beatty’s human rights and environmental policy statements, which the company developed following last year’s AGM protests. Kerim Yildiz, director of the Kurdish Human Rights Project, asked the board in which specific countries the company would not be prepared to operate. The company’s human rights policy states that Balfour Beatty will refuse to operate in any country which does not adhere to the Universal Declaration on Human Rights. Lord Weir was unable to name a single country. Indeed he seemed unable to make any links between the "philosophical" issues covered in policy statements on human rights and the environment and any specific cases. Significantly, he did not attempt to defend the Turkish government's appalling record on human rights.

When the vote on Resolution 15 was announced it emerged that 14 million votes had been cast in favour of the resolution, with 75 million abstentions and 75 million votes cast against.

For the Board to ‘fail to win the support of more than 40 per cent of institutional shareholders’, in the words of the Financial Times (May 3), was a major blow to Balfour Beatty. Institutional investors who abstained sent a clear message to the company’s directors that all was not well. Investors such as the Universities Superannuation Scheme have recently adopted policies of active and considered abstention in such cases. "Abstentions should usually be read as shareholders who sympathise with the resolution but don’t want to go the whole hog," commented Pensions Investment Research Consultants, which advised clients to support the resolution (Financial Times, May 3.) Although the resolution was defeated, a strong warning had been delivered to Balfour Beatty’s’s board of directors. The result compares with one of the most successful shareholder actions ever in the UK, brought by Greenpeace against BP last year, which saw 45% abstentions.

But the story ended with a bizarre twist. Later that day Balfour Beatty announced that there had been a mistake in the voting. The abstentions stood, but three institutional investors who supported Friends of the Earth’s resolution had made a mistake, the company claimed, having accidentally ticked the wrong box on the polling form. The alleged errors were quickly rectified after phone calls from Balfour Beatty’s company secretary to the fund managers in question, so ultimately Balfour Beatty, who denied any pressure was put on the fund managers, claimed a majority vote against the resolution. The correct results, the company claimed, stood at 3,416,218 votes for the resolution and 102,211,464 votes against.

Charles Secrett, Friends of the Earth’s director was unconvinced. He told the Independent newspaper, "Balfour has been scurrying around behind the scenes in a desperate attempt to shore up support. I suspect they twisted the arms of these institutions… Whatever the final vote, it is clear that we’ve got the company rattled." (The Independent, May 3)