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Kurlander memo about mercury spill
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In this January 18, 2001, memorandum from Larry Kurlander to Newmont Mining CEO Wayne Murdy, Kurlander says the mercury spill has cost the company its "hard-earned reputation, a reputation that will be stained for many years to come," and admonishes Murdy to forfeit 50 percent to 100 percent of bonuses for top executives..
Memorandum
Date: January 18, 2001
To: W. W. Murdy
From: L.T. Kurlander
Subject: Mercury Spill, Gold Medal Performance, and the Bonus
To date the mercury spill has cost Newmont about $12 million. More importantly, it has cost us our hard-earned reputation, a reputation that will be stained for many years to come.
Ron Cambre said it best when he told all of us that responsibility for the spill starts in Denver and that he and the rest of us (the senior management group) are responsible. He is right. You must use the opportunity of the forthcoming bonus payment to make a loud statement to the entire organization (including the Board) and to the shareholders. We must make every effort possible to insure that this will never happen again and we are instituting policies and procedures to help prevent this. Moreover, those responsible will have suffered the consequences. It begins at the top. Ron Cambre should forfeit his entire personal performance bonus (100%). You should forfeit 75%; Dave Francisco 65%; John Dow, Bruce Hansen, Jim Mullin and I should forfeit 50%. As leaders of this enterprise we all have to share in the responsibility. Moreover, David Baker, Scott Barr and Carlos Santa Cruz should forfeit 50% of their personal performance bonus along with Nick Cotts (who failed to report the severity of the spill for two (2) weeks).
I recognize how painful this is, especially for those of us who are retiring (Cambre) or close to retiring (Mullin first and me later). Nevertheless, it is necessary to set an example, and that example starts with us.
In addition, Len Krol, David Baker and Tim Schmitt should forfeit 50% of their corporate bonus for undertaking specific roles in the Gold Medal Program and failing to do anything whatsoever to support the program. (There may be other officers as well.) Wayne, perhaps most seriously, in a memo written by George Conger on December 19, 2000, we, the senior management team, learned for the first time that we do not operate environmentally by U.S. standards in Peru. Ron, you, Dave Francisco and others have for years told the world that we do. Yet some years back, an apparent conscious decision was made to change to IFC and Peruvian standards - no one was told. Our environmental teams are not the Ministers of Good News - they are the guardians of our most treasured asset - our reputation. Moreover, there is concern that we are not operating at U.S. standards in Uzbekistan or Mesel. Dave Francisco has tried without success to get answers from the environmental team. None are forthcoming. Where is the environmental group? From what I know, it would not take a whole lot to fix the problems. But unless and until we have a strong, healthy relationship between the operating and the environmental group, this sort of thing will continue and I can promise you this - there is another mercury spill out there just waiting to happen - act now and it will be prevented. The environmental team should forfeit 50% of their corporate bonus for sanctioning the adoption of less stringent standards and failing to advise senior management and the Board.
You should announce to the board that Greg Etter was hired as vice president of external affairs and corporate responsibility. It will be his job to monitor all of our external responsibilities. And, beginning in 2002, we will publish in our Annual Report, an audit of all these relationships - government, social/community, environmental health and safety and we will announce beginning in 2001 concrete goals and objectives for all these relationships. Wayne, but taking these sample measures we can begin the journey towards becoming the "most respected minerals company in the world." Building your legacy as CEO can begin today - what a great opportunity. Seize the moment.