By Steve James

NEW YORK, April 29 (Reuters) - Two U.S. mining giants won battles over their reputations last week in the industry's balancing act between profits and sensitivity to the environment and communities in developing countries.

Newmont Mining Corp. <NEM.N> and a senior executive were acquitted of criminal charges of dumping toxic waste in Indonesia, and the company approved a shareholder resolution holding it more accountable for the impact of its operations.

And Freeport-McMoRan Copper & Gold <FCX.N> avoided a potentially crippling strike at its vast Grasberg mine in the same country by settling with native Papuan workers who had walked out over more money and career prospects.

The cases highlight changes in corporate attitudes in the more than two decades since 3.500 people in Bhopal, India, died from toxic fumes from a chemical plant operated by Union Carbide. That was a public relations disaster for the company, which is now a subsidiary of Dow Chemical Co. <DOW.N>.

"Nobody wants to be viewed as an environmental ogre. And Dow is still taking hits over Bhopal," said lawyer Kevin Holewinski, a partner in Washington-based international law firm Jones Day.

"Corporate America recognizes their reputations are important," he said, noting there would likely be more shareholder pressure on oil, mining, chemical and timber companies to be socially aware.

"Three years ago this was not an issue, but we are seeing more of it, especially in the context of climate change," said Holewinski, who has defended companies on environment issues.

Last Tuesday, Newmont's shareholders overwhelmingly approved a resolution sponsored by the Christian Brothers Investment Services asking the company to review how it engages affected communities and addresses opposition to its operations in Indonesia, Ghana, Peru, the United States and Romania.

Christian Brothers, a faith-based investor, owns about 45,000 Newmont shares.

"Naturally, we're delighted that the measure was adopted, and Newmont is proud to have encouraged our shareholders to vote for it," Chief Executive Officer Wayne Murdy said.

"The mining industry suffers from a legacy of poor performance. That is why we strive to be leaders in our industry and are committed to being responsible stewards of our environment."

His comments came the same day a court in Indonesia found Newmont executive Richard Ness not guilty of allowing the dumping of arsenic and mercury-filled waste from a gold mine into Buyat Bay on the island of North Sulawesi. The World Health Organization and other scientific studies supported Newmont's argument that the water was not polluted.

ACTIVISTS NOT SATISFIED

But some environmental activists were still not happy.

"It's time for Newmont to take a serious look at how it conducts its business," said Keith Slack, senior policy adviser for Oxfam America.

"It should call on experts who are completely independent of the company and won't just say what it wants to hear. It should also seek input from affected communities themselves."

Radhika Sarin, international campaign coordinator for the environmental group Earthworks, said investor pressure was crucial to changing relations between big corporations and the people whose lives are affected by their operations.

"Newmont shareholders are right to be concerned about community opposition and environmental risk measures. These issues can influence a company's reputation, share price, and ability to obtain permits," she said.

Lawyer Holewinski said it was a growing trend. "Investors are now demanding a wide range of disclosures from companies. And companies are learning to become more conscious.

"The (Newmont) resolution does not surprise me. Shareholders recognize that the nature of their investments depends on the environmental exposure of the company," he said.

"(But) Investors can only control so much, they can't control judicial systems overseas, so they are making sure they do what they can (by holding companies accountable)."

In the Freeport case, a group representing native Papuan workers at Grasberg, reached a deal on April 21 to double the basic monthly salary to 3.1 million rupiah ($341) from 1.5 million. Workers had initially asked for 3.6 million rupiah a month.

As part of the deal to end a three-day walkout that disrupted, but did not shut down operations, the company also agreed to set up a department to handle the welfare of native Papuans. The workers had demanded more career opportunities for native workers, improved recruiting and better pensions.

"We agreed to be responsive to their concerns over minimum wage," Chief Executive Officer Richard Adkerson said on Freeport's earnings call last week. "This is an ongoing feature of the industry around the world.

"It is something all of us have to deal with in a way that is responsive to the market and the concerns of the work force."

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