Two human rights groups have filed a lawsuit against the London Metal Exchange (LME) for allegedly allowing the trade of “dirty metals” on its global exchange in violation of UK law.

The London Mining Network (LMN) and the Global Legal Action Network (GLAN) said Thursday they have filed a legal action at the UK High Court, stating the metals traded on the exchange are the proceeds of “environmental crime.”

The case primarily concerns the Grasberg mine in West Papua, Indonesia. The groups allege that the Grasberg copper traded on the LME constitutes “criminal property” as the circumstances under which it was produced would violate UK criminal law if they were to occur in the UK, according to media reports.

“If this case is successful, metal producers will have to change their harmful mining practices if they want to continue selling their products and access customers via the exchange,” the groups said in a statement seen by Kallanish. 

The groups claim that the West Papua indigenous communities are suffering because of over 200,000 tonnes of tailings, described as toxic mining waste, are thrown into the water sources in the region. 

“This case is about our fight against those who profit from the destruction of our people’s rivers, our forests and way of life,” GLAN quoted Dolly, a West Papuan indigenous community leader. “Our communities are experiencing the life-threatening effects of mining, we have no choice but to take up this fight because if we remain silent who will speak for us?”

The groups said similar problems have happened with mining operations elsewhere, including Brazil, Peru, Guinea and Russia, and hope their legal action against LME might “force” the companies to “revisit” their mining practices.

“Never before has a legal action of this sort been taken in the UK,” says GLAN Director, Gearóid Ó Cuinn. “It highlights to exchanges and other economic service providers that they can no longer continue with business as usual. Banks are especially implicated in the functioning of exchanges like the LME and are now on notice that they too may be in breach of proceeds of crime laws.”

Companies trading on the LME are required to undergo sustainability audits. An LME spokesperson tells Kallanish that the claim filed by the groups is “misconceived and intends to resist that claim.”

“The LME has undertaken extensive discussion with its market as to embedding further environmental requirements into its brand listing rules, but does not believe that global consensus has yet been reached on such requirements. The LME has therefore adopted a disclosure-based approach through LMEpassport, supporting the principle of consumer choice as to environmental credentials of metals brands,” the spokesperson adds.

It is unclear whether a similar lawsuit could be filed focusing on nickel produced in Indonesia, deemed the main driver of the current market oversupply and price collapse. Late last year, a UK court ruled in favour of the LME and the LME Clear confirming the actions taken in the nickel market in 2022 were lawful, rational and in accordance with the exchange’s rules.

The litigation was brought by US financial firms demanding $472 million in compensation after the LME cancelled $12 billion in nickel trade in March 2022 following a price surge of over 270%.