by Sandra Cuffe
info@rightsaction.org * 416-654-2074 * www.rightsaction.org
Popular Summary 1
I. By Way of Introduction 3
2.1 The World Bank’s Private Parts 5
2.2 Friendly Canadians, eh? 6
2.3 The Usual Suspects: the US, private security companies...and the UN! 9
2.4 (Free) Trading Away Autonomy, Lands, Minerals, Rights and Development 10
2.5 What Indigenous Rights? 11
III. Reconstructing Guatemala and Honduras 13
3.1 A Very Brief History of Invasion, Persecution and Genocide 13
3.2 A Window of Opportunity 14
3.3 Highlights of the New Legislation 15
3.4 The New Invasion – Guatemala 15
3.5 Ongoing Occupation – Honduras 17
IV. Focus on Glamis Gold 20
4.1 Undermining First Nations Sacred Sites 20
4.2 The Siria Valley – Development or Zone of Human Sacrifice? 21
4.3 Brightening Guatemala’s Future? 24
V. On the Ground: Community-based Resistance 28
5.1 Foreign Anti-Development Agitators? 28
5.2 Legitimate Community-based Resistance 29
5.3 Proposing Legislation Reforms 31
5.4 Global Justice? 33
VI. A Few Ideas on How to Get Involved 34
VII. For More Information 37
POPULAR SUMMARY
There is increasing international interest in local resistance to metallic mining activities, particularly in the opposition of indigenous communities in the department of San Marcos, Guatemala, to Glamis Gold Ltd’s Marlin project. This interest and concern was stimulated by news of the murder of indigenous demonstrator Raul Castro Bocel by State security forces, when the Guatemalan government sent in the army and police to repress protests in Los Encuentros and ensure the safe passage of a convoy of mining equipment belonging to Glamis Gold.
This report focuses on the current situation in Guatemala and Honduras, as regards metallic mining activities, transnational companies and community-based responses. The current situation, however, cannot be discussed only in terms of mining in Guatemala and Honduras; the current situation is a product of recent legislation and regulatory framework changes, which, in turn, are the product of a ‘development’ model devised, promoted and carried out by the same global actors profiting from the unjust and exploitative neocolonialist global system.
Diverse global actors are involved in the mining industry around the world. The World Bank Group, via its private sector entities the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), is directly involved in financing and insuring transnational mining corporations, as well as its involvement as a direct shareholder in several mining projects. The World Bank and its sister institution, the International Monetary Fund (IMF), have also been involved in mining legislation and policy reforms – benefiting companies at the expenses of local peoples and communities – in dozens of countries worldwide.
Canadian government entities such as the Canadian International Development Agency (CIDA), the Department of Foreign Affairs and International Trade (DFAIT) and the Export Development Corporation (EDC), have played similar roles in promoting and implementing legislation and policy, financing and insuring mining projects and promoting the industry – using public funds – to support Canadian mining companies. The United States Trade and Development Agency (USTDA) and the Export-Import Bank are engaged in the same activities as their Canadian counterparts. United Nations agencies and private security/military companies promote and protect an industry that disproportionately affects indigenous peoples, as do the regional and bilateral ‘Free’ Trade Agreements that protect investors and further establish the neoliberal agenda.
Both with long histories of natural resource exploitation dominated by foreign control, persecution and genocide, Guatemala and Honduras have both been the sites of an onslaught of transnational mining company activity. Over one third of Honduras and one tenth of Guatemala are covered by mining concessions and licenses, many of which, in the case of Guatemala, are located in indigenous territory. This upsurge in metallic mining activity is the product of mining legislation reforms in the late 1990s, when global actors saw a ‘window of opportunity’ to pursue their ‘development’ agenda with the signing of the Peace Accords in Guatemala and Hurricane Mitch in Honduras. Dozens of Canadian and US companies are operating in the region.
A ‘leader’ in Central America, Canadian/US company Glamis Gold Ltd is currently involved in an arbitration case against the US under the North American Free Trade Agreement for protective measures taken by previous Californian governmental institutions to protect First Nations sacred sites from the damages of open pit mining. The same company operates the San Martin gold mine in the Siria Valley, Honduras, where devastating impacts include illnesses, water shortage, contamination, failed crops, and many others. Charges were laid against a representative of Glamis subsidiary Entre Mares for a number of environmental and other crimes; however, these cases lie ‘dormant’ in the Honduran ‘justice’ system, symptomatic of the global impunity in which transnational mining companies and other global actors operate. Glamis Gold is also the owner of the Marlin project in Guatemala, where indigenous communities’ rights and demands have been completely ignored and violated, as the January 11th murder of an indigenous demonstrator has shown.
From San Marcos to the Siria Valley to numerous communities and organizations around the world, community-based resistance is not the product of foreign anti-development agitators or ignorance, as mining companies and international institutions claim. In the face of the imposed ‘development’ model and regulatory framework that is at complete odds with their interests and local community development initiatives, communities are struggling to defend their lands, territory, water, resources, food sovereignty, environment, health and needs from the invasion of destructive mining activities operating amidst impunity and strong support from global actors. Despite this incredible power imbalance, several communities in Central and Latin America have successfully detained mining activities – at least temporarily.
While it is important to support the struggles, priorities, demands and needs of local communities, it is crucial that international solidarity initiatives address the global ‘development’ model of which mining is but one example. A global justice movement dealing with mining issues in Honduras and Guatemala must confront the unjust and oppressive global system and the global actors profiting from the continued exploitation.
In the interests of encouraging activism on these and related issues, a few ideas on how to get involved and some suggestions on where to look for more information are included.
For those who see history as a competition, Latin America’s backwardness and poverty are merely the result of its failure. We lost; others won. But the winners happen to have won thanks to our losing: the history of Latin America’s underdevelopment is, as someone has said, an integral part of the history of world capitalism’s development. Our defeat was always implicit in the victory of others; our wealth has always generated our poverty by nourishing the prosperity of others – the empires and their overseers. In the colonial and neocolonial alchemy, gold changes into scrap metal and food into poison. [i]
- Eduardo Galeano, Open Veins of Latin America
Galeano’s book, subtitled ‘five centuries of the pillage of a continent,’ was written in 1973, over 30 years ago. If one were to conceive of an updated version, it would essentially suffice to add a note at the end: 1973-present, More of the same. Or, as a friend joked, “and then it got bad.”
On January 11, 2005, the Guatemalan government sent in the army to repress demonstrators and protect a convoy carrying mining equipment to Glamis Gold Ltd's Marlin project in the majority indigenous highlands of San Marcos, a project actively supported by the World Bank and Canadian Embassy. Raúl Castro Bocel was killed by State ‘security’ forces as the convoy proceeded to its destination, despite the resistance of communities and groups around the country and despite the lack of consultation with affected indigenous peoples.
The Marlin project is but one of hundreds of mining concessions granted to transnational mining companies in Guatemala and Honduras. Glamis Gold itself is the owner of the San Martin gold mine in the Siria Valley, Honduras, the site of serious health problems, environmental degradation and company abuses. The same company has also taken the US government to arbitration under the investment protection clauses of NAFTA’s infamous Chapter 11, for Californian legislation protecting First Nations sacred sites from open pit mining.
What is going on in Guatemala? In Honduras? Where do all of these mining companies come from? What kind of legislation has facilitated the sudden increase in mining activity? What role do the World Bank, Canadian and US governments, and other global actors play? What kind of ‘development’ are they advocating? What are the responses of communities, indigenous peoples and organizations on the ground?
In solidarity with communities in resistance in Honduras and Guatemala, and in an effort to contribute to the global justice movement and its focus on ending global impunity and holding Northern actors accountable for their responsibility and complicity, this report attempts to begin to answer these questions. Section II: Setting the Stage looks at the ongoing role of global actors (the World Bank, North American governments, etc) in establishing the framework for mining activities around the world today. Section III: Reconstructing Guatemala and Honduras focuses on the same process and its results in these two Central American countries. Section IV: Focus on Glamis Gold takes a look at the activities of one important transnational mining company in the region. Section V: On the Ground briefly discusses local responses and community-based resistance in Honduras, Guatemala and beyond. Finally, Section VI offers some suggestions for how to get involved (in the global justice movement, not mining!) and where to look for more information.
When looking at mining activity today in Honduras and Guatemala, it is shortsighted to try to understand the situation without placing it in the context of historic and ongoing global inequality, domination, power, militarization and repression. Natural resource exploitation is not a purely environmental issue, isolated from the national and international political, economic and social orders designed to maintain an unjust and exploitative global system.
Fundamentally, the problematic way in which mining activities are being carried out in the world is one part of this much larger system. The ‘development’ model aggressively pursued by multilateral institutions, Northern governments and other global actors reflects the interests of big business instead of the priorities, needs and visions of communities themselves. It is important to note that responsibility and complicity lies not only with Northern investors and their government and multilateral institutions, but also with the populations of the North, both as consumers (over 80% of gold, for example, is for the jewelry industry) and as residents. The US and Canadian governments are advocating for and implementing a destructive ‘development’ model with public funds. Similarly, the World Bank and other multilateral institutions are the sum of their parts – member countries.
In Central America, communities have been displaced to make way for pools of cyanide solution, while private and state security forces protect deforested mountains being blasted and crushed to dust to extract ore. Many have spoken of the importance of black gold and now the blue gold (oil; water). Although a valid argument, let’s not forget precious metals themselves. The mining industry, using ‘modern’ technology, the open pit method, and toxic substances to reduce costs and attract investors, continues to wreak havoc around the world, with immeasurable impacts on the environment, health, indigenous peoples and communities.
The situation may not be as evident as that of the colonial mines operating with forced labour amidst conquest and genocide. Multinational mining companies have public relations people working on damage control, with ‘development’ foundations press releases to convince the world that they are in fact bringing progress, development and employment to communities. The World Bank Group, with shares in mining ventures supported by the International Finance Corporation, along with its sister institution the International Monetary Fund (IMF) couch their activities within the ‘Poverty Reduction Strategy’ doublespeak. Enormous sums of money have been invested to convince the world that mining (the exploitation of non-renewable resources) is beneficial for the ‘development’ of local populations and can, in fact, be sustainable.
“I’ve never seen a mine that fits my definition of sustainable development,” mine and water systems expert Dr. Robert Moran told the lunchtime crowd gathered to hear him speak at the National Mining Forum in Guatemala city – December 1-2, 2004, sponsored by the Guatemalan Ministry of Energy and Mines, the World Bank Group and the Canadian Embassy, among others. In mining, there are winners and there are losers, says Moran, and it is important to ask who wins and who loses – most of the winners do not live near the mine. The ‘golden rule’ is applicable to this industry, considers Moran: “those who have the gold, rule.” [ii]
Around the world, transnational mining companies, the World Bank Group, the US and Canadian governments and other global actors such as the UN have been engaged in an ongoing public campaign to calm the rising opposition to mining activities. In researching these issues in the case of Honduras and Guatemala, it has become increasingly clear that the World Bank and Canadian government have taken on leading roles in promoting the metallic mining industry. Similarly, while most of the companies active in the region were thought to be from the US and Canada, the parent companies of the vast majority are in fact registered in Canada. However, these companies merge, buy other companies, and enter into joint venture and other agreements faster than it is possible to follow their activities. Thus, while the majority of companies are listed as Canadian, many are in fact US/Canadian fusions, registered in Canada for financial purposes.
On the other side of things, communities, indigenous groups, grassroots organizations, NGOs and sectors of the Catholic Church have been involved in a variety of initiatives, ranging from direct action and community resistance to highly publicized proposals to reform the mining legislation in both Guatemala and Honduras.
As diverse organizations begin to realize the extent to which mining activity affects communities all over both countries, a phase of information gathering and sharing broadens, in order to counter the propaganda distributed by the companies and their institutional counterparts and the numerous strategies used to manipulate communities into acceptance. In an emergency congress of Mayan organizations held November 29-30, 2004 in Guatemala to analyze mining activities in the country in the face of the official forum from which indigenous peoples were almost completely excluded, one participant underscored the importance of information: “if we don’t manage the information, in some ways, we are blind…”
The increasing awareness and response to mining in Honduras and Guatemala is due to the increasing entry of foreign companies – mainly from Canada and the US – into the area, carrying out aggressive exploration programs in their vast collection of concessions. This onslaught of mining concessions, which is better known as ‘the new invasion’ by many indigenous organizations, is due in large part to the changes in the legislation regulating the mining sector in both Guatemala and Honduras in the late 1990s. In turn, these legislation changes are part of a much larger ‘development’ model, devised for the exploited (so-called ‘developing’) countries, carried out by and benefiting the same institutions, companies and countries that continue to profit from the neo-colonial system.
As many transnational companies began to expand their exploration activities away from home towards a stronger focus on the mineral/profit potential of the exploited (‘developing’) countries, these same countries were rewriting their mining legislation, liquidating State mining enterprises, and offering foreign investors tax breaks and other benefits. In recent years, over 70 countries around the world have ‘modernized’ their mining legislation. [iii]
Far from a lucky coincidence for the corporations, the changes in mining legislation and policy in different countries around the planet have been part of the neoliberal agenda of the World Bank, International Monetary Fund (IMF), and regional ‘development’ banks, such as the Inter-American Development Bank (IDB). This framework that places investments and profits above the interests of local communities and peoples is also reflected in the various multilateral and bilateral trade and investment agreements.
In the case of mining, aside from the powerful companies lurking in the shadows, the key players on the global stage have been the World Bank Group – in particular its private sector lending arm, the International Finance Corporation (IFC), along with the Multilateral Investment Guarantee Agency (MIGA) – and the US and Canadian governments, representing the interests of North American companies. Further down the road, these changes have often been implemented with the help of force; national security forces, US military aid, private security companies and mercenaries (private ‘military’ companies) have all had their role in protecting foreign mining investments.
Around the world, indigenous peoples are disproportionately affected by global mining activities, yet consultations are almost always lacking or manipulated, as are legal protections.
The World Bank is often confused with the International Bank for Reconstruction and Development (IBRD), which is in fact only one of five entities that make up the World Bank Group. The IBRD and the International Development Agency (IDA) both lend to governments for ‘development’ projects, in line with the usual perception of the World Bank as a whole. However, the World Bank Group is indeed a bank and is heavily involved in the private sector, through the International Finance Corporation (IFC), which lends directly to private companies and also holds shares in many of these projects, and the Multilateral Investment Guarantee Agency (MIGA), which provides insurance for private sector projects.
A crucial role was played by different World Bank institutions in developing the mining legislation that has facilitated the global expansion of exploration and exploitation by transnational mining companies. While most countries, especially in Latin America, had mining codes that reserved these rights either exclusively or partially for the State, the ‘modernized’ legislation opens the mining sector to foreign investment and ownership, reduces State profits to pitiful royalties (1%-3% is the norm), lifts restrictions and taxes on the import of equipment and does not require profits to remain in the country of operation.
As do others in the industry, the World Bank looks to the experience of certain countries to extol the benefits of these reforms:
Chile was a pioneer. In the early 1980s, Chile overhauled its mining policies and opened the sector to private investment by leveling the playing field. It removed barriers to entry and exit, established full transferability of mineral rights, and adopted clear and non-discretionary rules that apply equally to public and private, national, and foreign companies. [iv]
The assertion that Chile was a pioneer for its mining policy is troubling at best. In 1973, the democratically elected government of Chile was overthrown by a military coup, supported by the CIA and the US government. Fundamentally, at the root of this and many other ‘regime changes’ are alternative development models; countries are free to pursue ‘development’ as long as it does not step too far out of line with the interests of Northern governments and transnational companies. Among the coup’s supporters were North American mining companies, angry about Chilean president Allende’s plans to nationalize the country’s copper mines. ‘Chile’ under Pinochet was a pioneer in its use of torture, concentration camps, forced disappearances and the brutality of State repression. The country’s mining policy and legislation were the result of deals made between foreign mining companies and a military dictatorship. As several Latin American activists have commented, mining projects and laws are so much easier to approve when they can be taken care of between foreign companies and a dictatorships. Peru, for the mining legislation passed by Fujimori, is also often referred to as a role model.
Equally troubling is the World Bank’s assertion that countries saw the benefits of this ‘pioneer’ legislation and its benefits and thus decided to reform their own mining laws; “[t]he liberalisation and privatisation of mining are often portrayed as in line with free market orthodoxy. Ironically, these processes have required substantial policy intervention and financial subsidies from international agencies including the World Bank.” [v] By 1991, 71 Structural Adjustment Programs (SAPs) and 43 sectoral adjustment loans – now known as the ‘Poverty Reduction Strategy’ – had contributed to the privatization of the mineral sector around the world; in recent years, mining legislation has been ‘modernized’ in over 70 countries.
While the rewriting of mining legislation and the determination of national mining policy has often been included in broader SAPs, the Oil, Gas, Mining and Chemicals department (OGMC) of the IFC has also been directly involved in the reform of the mining sector, along with its direct support to and involvement in specific private sector projects. Although the World Bank frames its involvement in terms of ‘consultation’ and ‘competency of technical support,’ their own account of their involvement in a few Latin American countries – especially when it is noted that they describe this as a mid-level role, in comparison to the very active role taken in several African countries – is quite revealing,:
For example, the mining laws of 1992 in Mexico and Peru and the 1993-1995 amendments to the Argentine law were drafted by commissions of experts and representatives of key institutions from the private sector and government who were appointed by the Minister responsible for the mining sector. The World Bank provided input at the initiation of the process regarding the objectives and central characteristics of the new instrument. The mining law of Bolivia of 1997 and the amendments to the Ecuadorian law of 2000 were also drafted by ministerial appointed commissions of experts representing key institutions from the public and private sectors. The World Bank had a more active role, as it provided an initial diagnostic and then later technical support through specialized legal advisors, participated in key meetings of the commission, and provided comments on the drafts in the different stages of the work. [vi]
While this legislation has severely limited national governments and local communities’ ability to determine the course of the development of mining policy and projects, it has also handed over essentially all potential profits and benefits to the transnational companies. Along with the rewriting of mining laws, the IFC is also very involved in mining projects throughout the world, through its granting of loans to mining companies and as a direct shareholder in several projects. In 1996, during the intense period of legal reforms, IFC loans specifically to mining projects (excluding cement) came to US$643 million, while in the same year 22% of the insurance provided by MIGA went to mining projects.
Alliances of environmental, community rights and indigenous organizations have been campaigning against the involvement of the World Bank in the extractive industry for years. The World Bank Group considers that because it is “well-positioned to help countries overcome the policy, institutional, and technical challenges that prevent them from transforming resource endowments into substantial benefits, it should remain involved in the extractive industries.” [vii] One might argue that because the World Bank has been in a position to transform policy in favour of private corporations, it makes sense to remain involved in the extractive industries because they profit directly from the interests on loans to mining projects and from their direct involvement as shareholders. Quite simply, the World Bank is a BANK, representing the interests of member countries and big business.
While the World Bank often refers to the rigorous application of its safeguard policies, this has been one of the principle subjects of criticism. “These are guidelines. They are not legally enforceable standards,” [viii] explains Dr. Robert Moran. When the World Bank speaks of its environmental and social safeguard policies based on the ‘highlights of best practice,’ they are in fact referring to guidelines that are ‘self-regulating’; the companies themselves are to regulate their own compliance, as is the World Bank. The ‘rigorous’ safeguard policies rigorously safeguard the impunity of corporations and global actors.
Yanacocha: the World Bank, Newmont and Red Lagoons in Peru
Yanacocha is one example of World Bank involvement in mining. Facilitated by the mining, private investment and environmental legislation brought into effect in Peru with World Bank ‘assistance’ under the civilian dictatorship of Fujimori in the early 1990s, the Yanacocha project went ahead, under the ownership of Newmont Mining (51.35%), Peruvian Buenaventura (43.65%) and the International Finance Corporation (5%). With IFC financing in 1993, 1994 and 1999 (a US$100 million loan in 1999 alone), Yanacocha “is Latin America’s largest gold mine and one of the world’s lowest cost gold producers.” [ix] Yanacocha, explained Father Marco Arana, a sociologist and priest working with a community development organization in the near-by town of Cajamarca, means ‘black lagoon,’ but in his parish the mine is leaving red lagoons of heavy metal-laced acidic waters. [x] Local communities and organizations continue to denounce the impacts of repeated incidents of contamination, including a major mercury spill. There has also been significant opposition and resistance to the expansion of the Yanacocha mine, which is discussed in Section V.
Overall, the World Bank has been and remains a central actor in global mining, through its financing of and direct participation in projects and its active role in the legislation reform that has benefited transnational companies. Faced with a legal framework that is completely adverse to their interests, communities are also confronted with the top-down vision of development imposed by mining companies, considers José de Echave of Peru. [xi] The World Bank is responsible for the resulting social conflict, he adds, although the World Bank is certainly not the only global actor involved.
Snow, lots of snow, and ice. Bears. Mounties. Maple leaves… Suffice it to say that when most people think of Canada, mining companies and their global interests are unlikely to be the first things to pop into their heads. Canada is stereotyped as a protector and promoter of human rights and environmental protection in the world. Acting aggressively to promote the interests of one’s extractive industry transnational companies is usually associated with Canada’s neighbour to the south.
However, the Canadian government has been actively setting the stage for mining investment around the world, while at the same time supporting many of the Canadian corporations responsible for environmental destruction and human rights violations. In 2002, 56% of the world’s mining companies were Canadian, as was 54.5% of equity financing of global mineral exploration and development. From 1992 to 2001, Canadian mining investment overseas rose drastically from 27.8 billion to over 86 billion Canadian dollars, representing by 2001 some 12% of all Canadian investment abroad. [xii] “What essentially distinguishes Canada from [other countries home to major mining companies, such as the US and Australia] is the facility with which the country’s financial institutions have backed mining as an international project…” [xiii]
Financial institutions are far from the only Canadian entities backing mining; some of these actions are carried out under the aegis of the Canadian International Development Agency (CIDA), Canada’s so-called government ‘aid.’ In Zimbabwe, for example, CIDA has been instrumental in developing the mining industry since the late 1990s, with funding to the Zimbabwe Ministry of Mines for aeromagnetic surveys, the computerization of the mining licenses, technical training and last but not least, the development of new legislation. Although this support is often phrased in terms of support for environmental protection, according to CIDA representative Elizabeth Smith, “the benefits [of the CIDA project in Zimbabwe] are now being experienced by junior Canadian mining companies.” [xiv] A Natural Resources Canada report refers to its role as “the Canadian Executing Agency for a CIDA-funded project to provide the Ministry of Mines and Minerals Development of Zambia with environmental management and expertise in the mining sector.” [xv] CIDA also participated in the foundation of the Ministry of Mines in Botswana.
In Latin America, Colombia provides another example of direct CIDA involvement in the promotion of the mining industry, although in the case of Colombia this involvement is in the context of the so-called ‘civil war on terror and drugs,’ more accurately labeled a global conflict to protect foreign investments in the extractive industries and natural resources sectors. Not surprisingly, many of the geographical regions targeted by Plan Colombia, funded and with military ‘aid’ from the US, are the same key regions where US, Canadian and other foreign corporations have important oil, gas and mining projects. In the case of the southern region of the state of Bolivar, coordinated sweeps of paramilitary groups and mercenaries ‘secured’ the area for the entry of gold mining companies, killing, disappearing, torturing and displacing the civilian population. The south of Bolívar is not an isolated case in Colombia: “In the mining municipalities, on average, between 1995 and 2002, there have been 828 homicides, 142 forced disappearances, 117 injured, 71 people tortured, 355 death threats, and 150 arbitrary detentions, every year.” [xvi]
At the same time that these horrific and systematic human rights violations were (and are) occurring in mining areas, CIDA was actively involved in the process to change mining legislation to benefit foreign mining investment in Colombia – an involvement detailed in a report written by the State mining agency union SITRAMINERCOL after years of research. Beginning with ‘aid’ in the formulation of the 1996-1998 Mining Code, which was not passed due to organized opposition, CIDA’s involvement in the creation of mining, oil and environmental legislation in Colombia has been by way of their funding to the Canadian Energy Research Institute (CERI), whose private donor list reads like a who’s who of Canadian energy, oil and mining companies. CERI’s responsibilities related to the development of mining legislation in Colombia were to ensure compliance with environmental procedures and regulations and to carry out consultations with indigenous peoples.
In agreement with the Colombian Ministry of Mines, and with funding from CIDA, CERI contracted “Martínez-Córdoba and Associates” for these tasks. However, this same lawyers’ office was contracted by the government to formulate the new mining legislation. It is also the legal representative for half of the mining companies inscribed in the national mining registry. While the compliance with environmental procedures was seriously compromised, Martínez-Córdoba and Associates did not carry out consultations with indigenous communities, required by Law 21 of 1991, a law developed to regulate ILO Convention 169 on Indigenous and Tribal Peoples, ratified by Colombia. Instead, the government instructed its lawyers to copy Chilean and Argentinean mining legislation and in their presentation of the proposed legislation the same lawyers announced that the World Bank had ordered the privatization of the State mining agency, MINERALCO, S.A. After the failed attempt to pass the 1996-1998 Mining Code, the legislation was approved as Law 685 of 2001. Far from guaranteeing the rights of indigenous peoples and protecting the environment, Colombia’s mining law follows the path of other ‘modernized’ legislation, privatizes environmental auditing, and has been driving the continuing violations of indigenous and human rights in the country’s mining regions. [xvii]
DFAIT: Foreign Affairs for Canadian Mining Companies
Along with CIDA, several other Canadian entities have been involved in the support of the mining industry. DFAIT, the Department of Foreign Affairs and International Trade, has been active in arranging and facilitating meetings between representatives of Canadian companies and foreign government officials. Federal and provincial trade delegations and Canadian diplomats also promote Canadian investments in the mining sector. In a speech to the Club Minero (Mining Club) Luncheon in Argentina in 2000, then International Trade Minister Pierre Pettigrew declared that Canada was “keen to continue working in close relationship with the mining authorities of Latin American countries,” demonstrated by official Canadian agencies’ aid to Argentina in the implementation of its “mining development objectives” and by the regional Geomatics office established in the Canadian Embassy in Argentina in 1998 by then Minister of Natural Resources Ralph Goodale. [xviii]
Another active supporter of Canadian mining companies abroad is the Canada’s export credit agency, the Export Development Corporation (EDC), also funded by the tax-paying population. Along with nuclear reactors and other energy sector projects, mining ventures are often supported by the EDC, which specializes in financing and insuring projects that are most likely to result in environmental and social disasters, since private support for these projects is more difficult to obtain. Not subject to either the Canadian Environmental Assessment Act (CEAA) nor Canada’s Access to Information Act, the EDC is alarmingly untransparent and unaccountable. Through years of investigation, Canadian NGOs have uncovered details of EDC support to several mines around the world that have resulted in enormous environmental and social disasters. [xix] Perhaps the most famous is the case of the Cambior’s Omai gold mine in Guyana, South America.
In 1992, the EDC issued US$163 million in political risk insurance to Canadian gold mining corporation Cambior for the Omai gold mine in the Guyanese Amazon. A third of this amount was reinsured by MIGA, of the World Bank Group. On August 19, 1995, an earthen tailings dam collapsed, spilling some 3.2 billion litres of cyanide and heavy metal-laced waste into the Omai river, which empties into the Essequibo river, the country’s main waterway. The spill had devastating impacts on river life, farmers, fisher people and communities along the full length of the river. Despite official reports finding Cambior fully (ir)responsible for the incident, Canadian officials reportedly lobbied the Guyanese government to reopen the mine shortly after the spill. In response to the disaster, protests had erupted all over Guyana, with messages such as ‘Take Your Poison Back Home to Canada.’
From NGOs entrusted with indigenous rights and the environment, to government ‘development’ ‘aid’, to diplomats, to direct financing and insurance, Canada’s involvement in the mining industry worldwide reveals the truth behind their ‘promotion of corporate social responsibility’: like other global actors, Canada actively implements the ‘development’ model that represents and serves the transnational business agenda.
2.3 The Usual Suspects: the US, private security companies…and the UN!
In a similar fashion, the US government plays a significant role in supporting their own transnational mining companies. Private security and military companies also play an increasingly important role in protecting mining properties and interests abroad. The United Nations has had a somewhat ambiguous position that has nevertheless assisted companies.
The export credit agency in the United States – the Export-Import Bank – is similar to the EDC in its financing and insurance of US corporations, including mining companies. The US Trade and Development Agency (USTDA) provides grants to both the public and private sectors for the early planning activities of projects. Of course, funding is dependent on the awarding of the contract to a US company; payment is made from the USTDA directly to the US contractor. Among the grants related to mining in Latin America, the USTDA has funded several feasibility studies for mining projects in Bolivia, Brazil and the Dominican Republic. One project in 2001 provided a grant to bring four government officials from the province of Neuquen, Argentina, along with a representative from the US Embassy in Buenos Aires, to the US to meet with potential US investors in the mining sector.
Mercenaries For Mining
A fairly recent development has been the increase in the use of private security companies, private military companies and mercenaries by mining companies. In some cases, such as Colombia, there are direct links between mercenaries, private security companies, paramilitaries, State armed forces, US military aid, and mining projects. Increasingly, these private security-military companies are employed directly by transnational mining companies, although in many cases they are indistinguishable from mercenaries, their mandates are vague, and their regulation is almost completely lacking from national and international law; “they do not report on their activities except to these same private interests. Nothing requires them to report on their activities to the local population, to host governments or to the governments of the countries from which they originate.” [xx] In Ghana, Goldfields Ghana, a South African mining company, sub-contracted ‘John van Nostrand Associates Limited’ (now ‘Planning Alliance’), a private Canadian firm specialized in ‘human resettlement,’ to relocate more than 20,000 people. When some communities in the Tarkwa district refused the relocation terms proposed/imposed by Goldfields Ghana, this resulted in brutal human rights violations, including murder. [xxi]
UN the Good?
In contrast, the United Nations is (or at least was) generally considered to be a keeper of peace in the world, similar to Canada’s reputation. In the 1960s and 1970s, however, the United Nations Development Program (UNDP) was actively exploring for mineral deposits in several ‘developing’ countries. The objective was ostensibly to support efforts to exploit natural resources for national development. At the same time, however, many of these countries were run by notoriously corrupt military dictatorships engaged in the torture, forced disappearances and massacres. After abandoning its Centre on Transnational Corporations, the UN engaged in another initiative related to mining. The World Health Organization (WHO) teamed up with five major international mining companies (Placer Dome, BHP, Pasimco, Rio Tinto, WMC), some of which have been involved in serious human rights violations, to form the ‘World Alliance for Community Health.’ Considered an effort to clean up the negative image of the mining industry, the Alliance aims to “improve community health through the promotion, development and facilitation of projects led by the private sector.” [xxii]
The World Alliance for Community Health is not the only initiative of mining companies to convince the world that they are environmentally friendly, socially responsible and, more importantly, that mining is in fact sustainable. While at first it may seem ridiculous that the exploitation of non-renewable resources could be termed sustainable, this doublespeak has made its way into the way IFIs and companies speak about mining. The World Business Council for Sustainable Development, ironically representing many of the most destructive multinational companies in the world, contracted the International Institute for the Environment and Development to conduct “an independent two-year project of research and consultation seeking to understand how the mining and minerals sector can contribute to the global transition to sustainable development.” The ‘Mining, Minerals and Sustainable Development’ (MMSD) Project contributed to the mining industry’s successful lobbying for the inclusion of mining as a ‘sustainable’ activity by the World Summit on Sustainable Development. [xxiii]
2.4 (Free) Trading Away Autonomy, Land, Minerals, Rights, and Development
Another tool of corporations is found in the various bilateral and multilateral trade and investment agreements between the countries of origin of the major transnational corporations and the countries where their interests and investments lie. Mining companies are no exception.
The North American Free Trade Agreement’s (NAFTA) infamous Article 11, dealing with the protection of investments and the procedures for arbitration in the case of infractions, is being used as a model for most of the Free Trade Agreements currently driven by the US, including the Free Trade Area of the Americas (FTAA). As will be seen in Section IV, Canadian mining company Glamis Gold is using Chapter 11 to sue the United States for legislation in California that establishes special environmental regulations to help protect First Nations sacred sites from open pit mining. NAFTA’s Article 11 and its parallel chapters in other FTAs effectively eliminates the options of local, provincial/state and national governments to legislate or otherwise act in favour of the population when these actions might conceivably affect a company’s investment.
In preparation for (and as a condition of) NAFTA, Mexico changed Article 27 of its Constitution. This chapter had previously offered rights and protection for communal land – ejidos – and was applicable to numerous indigenous communities around the country. As communal land was legally considered inalienable, it afforded communities opportunities to determine the uses of their territory. With the changes to Article 27, in line with the ‘free’ market framework promoted by the IFIs, all land can now be bought and sold, placing private ownership over the rights of indigenous peoples and communities to determine their own path for development.
While these changes have obviously benefited mining companies, they have also been attracted by the reformed Mining Law of 1992 (developed with the ‘assistance’ of the World Bank) and the subsequent Foreign Investment Law. The Mining Law established mining as a ‘public interest’ activity and gives it priority over other land uses, opened up the majority of the sector to foreign ownership and offered significant incentives to attract foreign investors. The Foreign Investment Law and NAFTA’s Chapter 11 enshrined the rights of these investors, at the expense of the local population and national environmental legislation. [xxiv]
The investment protection clauses in Free Trade Agreements curbs possibilities for communities, regions and countries to determine what kinds of investments, projects or strategies will best serve the development of the country and the needs of the population. They essentially carve in stone the process of legislation ‘modernization’ and the privatization of natural resources and State assets, imposed by the World Bank. If a country party to such an FTA were to issue a moratorium on open pit mines (Costa Rica has declared one such moratorium), reform mining legislation to reflect demands for rigorous environmental regulations and mechanisms to consult, involve and benefit local communities, or nationalize mines or mineral assets, companies would immediately invoke the FTA investment protection clauses and take the country to arbitration, where the rights of investors would undoubtedly win.
On January 1, 1994, the date NAFTA entered into force, the Zapatista National Liberation Army (EZLN) leapt onto the public stage. Challenging the imposition of ‘development’ and ‘free’ trade in Mexico, the community-based Zapatista movement has worked to implement a different kind of development in Chiapas, based on local control, participatory democracy, indigenous autonomy and rights and community needs and priorities. Responses such as that of the Zapatistas are only logical, considering that the limited options of communities to pursue change through existing legal means are effectively eliminated by the ratification of these accords. Faced with the activities of a mining company on their communal lands, the indigenous population of Aquila, Michoacan, Mexico reflected on the subject: “In his visit to Chiapas, [Mexican President] Fox confirmed that the Zapatista movement ‘was a thing of the past.’ We ask him – if it was a thing of the past, then why do we have the same needs and lackings that have always existed?” [xxv]
Canada and the US, the countries of origin of the majority of transnational mining companies, have established FTAs and bilateral agreements with many of the countries in which these companies operate. In the case of Canada, it has been suggested that one of the driving forces behind the country’s negotiation of regional and bilateral FTAs and Foreign Investment Protection Agreements is the powerful mining lobby.
The vision of development and idea of the world expressed in Free Trade Agreements and in general in the neoliberal ‘development’ model – that the value of everything, including land, minerals, air, water and culture, lies in its measurable monetary value – conflicts profoundly with the cosmovision expressed by many indigenous peoples and communities – that the Earth (land, minerals, air, water, etc) is sacred; land and resources belong to no one and their use is communal.
Indigenous peoples have been disproportionately directly affected by mining activities around the world. MineWatch estimates that since 1940 over half of all uranium has been extracted from indigenous territories and that by 2010, half of all copper and gold mined will be on indigenous lands. [xxvi] While many activists see the current global trend in mining as a manifestation of “the imbalance of power between ordinary people and their advocates and the relentless expansion of the transnational business agenda,” [xxvii] it is importance to recognize that the imbalance of power between the latter and indigenous peoples is exponentially greater.
In Latin America, foreigners searching for gold and other metals within indigenous territories is not exactly a recent development; over five hundred years later, North American companies pursue the pillage begun by the Spaniards. Although today there are regulations, legislation and norms that refer to the respect of indigenous peoples’ rights, their consultation in all that affects them, and, of course, the social responsibility of corporations, the reality is not quite as cheerful:
In Guyana, for example, the reluctance of the government to recognize indigenous peoples’ rights in large part results from the pressure from international financial institutions, the mining lobby and senior government financiers to facilitate access to the gold, bauxite and diamonds in the interior. Likewise, in neighboring Venezuela, where indigenous rights are more weakly recognized than almost anywhere in Latin America, mining lobbyists proclaim that their country’s “natural vocation” is mining, leading to radical rewriting of national laws to facilitate mining by foreign companies on indigenous territories. [xxviii]
Looks OK on Paper: ILO Convention 169
While Latin American countries (Mexico, Ecuador, Costa Rica, Colombia, Honduras, Peru, Guatemala, Bolivia and Paraguay) account for over half of the ratifications of the International Labor Organization’s (ILO) Convention 169 on Indigenous and Tribal Peoples, the only international convention in force to deal specifically with indigenous rights, in most cases these rights have not left the paper on which they were written. Convention 169 ensures indigenous peoples’ control over their lands, resources and development; they are to be consulted for and participate in any projects or programs that directly affect them. In regards to mining, Article 15 (2) stipulates that:
In cases in which the State retains the ownership of mineral or subsurface resources or rights to other resources pertaining to lands, governments shall establish or maintain procedures through which they shall consult these peoples, with a view of ascertaining whether and to what degree their interests would be prejudiced, before undertaking or permitting any programs for the exploration or exploitation of such resources pertaining to their lands.
There are numerous serious obstacles facing the implementation of this and other rights guaranteed in Convention 169. It is the responsibility of ratifying States to develop and apply national legislation in accordance to the Convention; however, some countries simply have not done this. Others, as was described in the case of the formulation of Colombian mining legislation, do not bother to comply with consultations even when the mechanism has been established in national legislation. Many indigenous groups and organizations have criticized the ambiguous language of the Convention, arguing that it does not expressly give veto power to indigenous groups and communities for projects that will directly affect them and/or their lands. Others denounce the frequent manipulation of the ‘consultation’ process, especially where no procedure has been established to regulate consultations. Frequently, indigenous peoples and communities are ‘consulted,’ but their input or categorical rejection is not taken into consideration. Sometimes, consultations are carried out with one small group favorable to the project in order to obtain approval from a “representative” organization; there have also been accusations of the creation of ‘shadow’ or ‘parallel’ indigenous organizations specifically for this purpose.
The World Bank and ‘Consultations’
The World Bank’s own policies dealing with the consultation and participation of indigenous peoples in bank-financed projects face most of the same criticisms and failings as the implementation of Convention 169. Ironically, even though numerous consultations were held in order to revise the IBRD’s Operational Directive (OD) 4.20, the draft did “not include many of the most important recommendations made by indigenous peoples in the first round of consultations, including: the right to prior and informed consent, indigenous monitoring of Bank projects, and fair ‘mitigation’ requirements.” [xxix] If the policy draft consultation process itself is any indicator, not much can be expected from the actual World Bank policies regarding consultation with indigenous peoples. Moreover, what kind of protection could be expected from an institution that supports, insures, and makes a profit from mining projects affecting indigenous peoples?
Honduras and Guatemala have both been subject to ongoing pressure from the World Bank, US and Canadian governments and are parties to the Central American Free Trade Agreement (CAFTA) – awaiting ratification – and a similar Canadian FTA currently being negotiated. They both ‘modernized’ their mining legislation in the late 1990s, ushering in dozens of transnational mining companies, with exploration and exploitation concessions and licenses all over the two countries.
The pretext used for these changes has often been ‘reconstruction.’ In the case of Guatemala, the country’s 36-year armed conflict officially ended with the 1996 Peace Accords. Honduras was devastated by Hurricane Mitch in 1998. Both events offered an opportunity for ‘reconstruction’ and ‘transformation’; both events prompted legislation and policy reforms reflecting the neoliberal framework driven by International Financial Institutions (IFIs), North American governments and multinational corporations.
Guatemala and Honduras are being ‘rebuilt’ to the benefit of foreign investors and to the detriment of local communities. The current trends in global mining apply to the region, although mining is certainly not new to Central America.
Several scholars on the civilizations of the pre-hispanic Mesoamerican region report that much of the gold used came from the rivers in Lenca territory (now located within the borders of Honduras); many indigenous peoples in Central America engaged in small-scale artisanal mining. With the Spanish invasion, genocide accompanied the thirst for riches, as silver and gold mines were established throughout the Americas, sending indigenous slaves to their deaths in horrific working conditions. Where the indigenous population was not enough to refill the job openings left by fatal accidents and the deaths caused by the nature of the labour and health conditions, African slaves were brought in.
After over two centuries of their resources being drained to Spain, and after the division of the short-lived Central American Federation, one of the first things the newly ‘independent’ Central American Republics did to define themselves was to approve a wave of Liberal Reforms. The Reforms swept through Honduras in the 1870s. The first project to be carried out in this context was the “development” of mining. The national Liberal authorities granted themselves enormous mining land grants, hoping to attract foreign investors, along with their capital and technology. The 1880 Constitution (or ‘Prostitution of the Republic,’ as some Hondurans refer to it) embodied these policies: “The State will provide all that promotes the well-being and development of the country, fomenting . . . the import of foreign capital . . . by way of laws protecting this end, concessions of temporary privileges and other stimulating rewards.”
US companies were soon able to take control of the industry from the Hondurans, as well as the few English mining companies that had been operating in the country. Concession holders were exempt from taxes, could import machinery without paying customs duties and brought technical experts from the US to manage the mines. They were allowed to exploit the forest found within the concession and had unrestricted access to water sources.
All of these ‘benefits’ foreshadow those offered in current legislation in the country and around the world; Honduras has been governed by US interests almost since its proclamation of ‘independence.’ During much of the 20th century, mining enclaves owned by the infamous New York and Rosario Mining Company were found scattered over Honduras. Although there were a few significant strikes and actions by miners linked to the wider labour movement in Honduras, the enclaves continued to operate until mining operations began to wane. Throughout the same period, there were a number of occupations and interventions by the US Marines and other military forces in Honduras, in order to protect strategic and company interests.
Guatemala, in contrast, followed the path of most Latin American countries in terms of mining legislation and policy and did not immediately open the mining sector to full foreign ownership. However, in the wake of the military coup – organized and financed by the US, CIA and United Fruit Company due, once again, to the proposal of an alternative development model – that overthrew the democratically elected government of Jacobo Arbenz in 1954, mining legislation (Decree #272, 1955; Mining Code, 1965) and concessions were issued by a series of military dictatorships, engaged in ongoing negotiations with foreign nickel companies. Guatemala’s 1965 Mining Code was allegedly drafted by a representative of the International Nickel Company (INCO), the main player in the country through its subsidiary EXMIBAL (Exploraciones y Explotaciones Mineras Izabal, S.A.). In 1965, EXMIBAL was granted a 365 square kilometer mining concession in the area of El Estor, Izabal; however, growing opposition prevented the company from obtaining an exploitation agreement with the Guatemalan government. At a conference in 1969, demands and policy proposals were put forward and a Commission was formed to organize opposition to the project. [xxx]
In 1970, under the military dictatorship of Arana, the government initiated a campaign of repression against Commission members and the opposition in general. In the months following the state of siege declared in November 1970, two Commission members were assassinated (Julio Carney Herrera, lawyer; Adolfo Mijangos, lawyer) and a third (Alfonso Bauer Paiz, law professor) survived an assassination attempt. A month later, EXMIBAL reached an exploitation agreement with the Guatemalan government. It favoured the company, and most of the benefits set out for the State were manipulated by the company throughout the course of its operations, which ended in 1982 when the price of nickel dropped.
Although ongoing issues of impunity, environmental damages and indigenous rights violations have not been addressed, Vancouver-based Skye Resources has recently obtained a renewal of the concession, in complete violation of Convention 169 and betraying the government’s own pledges to consult affected communities.
The history of natural resource exploration and exploitation in the country has characterized by the accompanying pattern of persecution, assassinations and forced exile, considers Guatemalan activist and journalist Victor Ferrigno. In the 1970s, legislation regulating petroleum exploration and exploitation to attract foreign investors was passed; several congressmen who had opposed the code were assassinated. Oil and mining exploration activities were accompanied by military officers, who appropriated immense tracts of land in eastern Guatemala from indigenous communities and campesinos. The military was reportedly present in EXMIBAL company meetings, and the company was allegedly involved in the 1978 massacre in Panzós. In 1977, after a huge march of mine workers from Huehuetenango to the capital, the workers’ legal advisor was assassinated. It is almost impossible to prove definitively the exact reason for which these people were assassinated, comments Ferrigno, but the pattern is clear – the extractive industries have always been linked to persecution. [xxxi]
3.2 A Window of Opportunity
In 1996, after 36 years of armed conflict that left 200,000 people dead and/or disappeared – government forces were found responsible for 93% of the deaths and 80% of the victims were indigenous peoples, according to the UN Commission for Historical Clarification – Peace Accords were signed. Instead of following through with the Accords, seeking justice for the atrocities committed, or dealing with underlying issues of systematic poverty and exclusion, the Guatemalan government has been further implementing neoliberal policies of privatization and market ‘liberalization’ that aggravate these underlying issues.
In 1996, the government, by way of the Ministry of Energy and Mines, invited various transnational mining companies to carry out mineral exploration in the country. In 1997, a new Mining Law (Decree Number 48-97) was passed, conforming to the norms of reformed legislation around the world driven by the World Bank.
At the annual meeting of the World Economic Forum in 1999, Eduardo Stein Barillas, then Minister of Foreign Affairs of Guatemala, remarked that “[all] destruction carries with it an opportunity for foreign investment,” [xxxii] referring to Hurricane Mitch. Honduras was the country worst hit by the Hurricane, leaving thousands dead, thousands homeless and destroying infrastructure all over the country. Many of the country’s waterways were contaminated by the resulting opening of old mining sites, leaking mercury and heavy metals directly into the rivers and ground.
Instead of addressing the underlying inequality and structural poverty that caused this natural phenomenon to become a social, economic and environmental disaster of catastrophic dimensions, Honduras was quick to realize that the situation was “a window of opportunity to build for the future,” [xxxiii] and quickly put in place building blocks for the kind of future that the economic elite, World Bank and foreign investors had in mind. In a few months following Mitch, a series of laws and reforms were rammed through Congress: permitting private sector involvement in airport, road and energy projects; reforms in the banking sector to facilitate the mobilization of foreign resources; and a Constitutional reform allowing private investment in tourist development along the coast and on the islands in both the Caribbean and Pacific.
These initiatives were aided by the fact that the country was still reeling from the destruction and by the successful efforts of the government to rally social organizations and opposition groups to the calls for humanitarian aid and reconstruction. Several organizations have admitted that in the emergency period that followed Mitch, they engaged in the necessary humanitarian efforts to address the critical situation, and were thus sufficiently distracted from an analysis of the ‘reconstruction’ being implemented at the legislative and policy levels. The government of Carlos Flores Facussé, which had previously been heavily criticized and protested on all sides and was also allegedly directly involved in the resurgence of paramilitary and death squad activity engaged in political repression, was saved by the worst natural event that the isthmus had ever seen.
In this context, the General Mining Law was passed one evening by the National Congress, with little discussion, only a few weeks after Mitch hit Honduras. Numerous reports indicate that the legislation reform was part of a World Bank Structural Adjustment Program, and that the institution was heavily involved in assisting with the law’s formulation. In keeping with the World Bank’s methods, the private sector was involved in the process; a member of the National Association of Metallic Miners of Honduras has stated that transnational mining company lawyers drafted the law.
3.3 Highlights of the New Legislation
The new mining legislation in both Guatemala and Honduras is similar to, and likely based on, World Bank-guided laws throughout the continent. Furthermore, Canada allegedly played a role in the legislation changes; organizations in Guatemala report that within the context of the creation of the Alliance for Sustainable Development at the Summit of the Americas in Miami in 1994, a bilateral cooperation agreement was reached between Canada and the Central American Commission for Environment and Development (CCAD). Of the six themes identified by the Alliance, it seems that Canada financed a project dealing with private/public cooperation and dialogue regarding environmental regulations. Organizations indicate that this ‘cooperation’ also dealt with the new mining legislation in Guatemala. [xxxiv]
Although the State remains the owner of all subsurface rights, the new mining laws establish a system of concessions and licenses that essentially give away all potential profits and benefits from these rights, in exchange for a pitiful 1% royalty. In Honduras, the royalty is to be paid to the municipality in which the mine is operating. In Guatemala, the 1% is to be split between the municipality and the federal government. The majority of the other taxes to be paid by the mining companies to the State have either been reduced or are subject to the ‘tax holidays’ granted by both governments.
In terms of the benefits and rights of concession or license holders, several articles of the mining legislation of both countries have been repeatedly denounced by local activists. Article 23 of the Honduran General Mining Law gives the following benefits to concession holders: free use of unproductive government lands within and outside of the concession; use of private lands needed for the operation, including expropriation where necessary; use of water sources within and outside of the concession, for both the operations and company employees.
Mining concessions and licenses are irrevocable except in very limited cases, although these have never been invoked by the government even when ample evidence exists of serious violations. Both the Guatemalan and Honduran laws have dangerous clauses that give companies default approval and permission when authorities to not respond to Environmental Impact Studies and mitigation studies within the stipulated timeframe. Both include forced expropriation and involuntary resettlement and neither contemplates consultations with affected indigenous peoples and communities, although in both cases the legislation was passed after the ratification of ILO Convention 169.
3.4 The New Invasion - Guatemala
In Guatemala, the Ministry of Energy and Mines released some statistics in November 2004, confirming the results of a study by the El Estor-based indigenous rights organization Defensoría Q’eqchi’ – part of the El Estor Association for the Promotion of Integral Development (AEPDI) – in February 2004. Of the 147 exploration licenses and 264 exploitation licenses, 97 of the former and 38 of the latter are for metallic mining, spread out in 16 departments and 106 municipalities.
The Defensoría Q’eqchi’ underlines the recentness of this onslaught: 95% of these concessions were granted between 2000 and the present; the only current concessions granted before the new law were the EXMIBAL concessions in Izabal and old concessions for lead mining in Huehuetenango. It is important to note that the majority of the population of 9 of the 16 departments affected is indigenous. Communities, indigenous or not, have not been consulted nor even informed that the lands they live on and from have been concessioned to mining companies, the majority of which are foreign.
While the Ministry of Energy and Mines has identified – in November 2004, in the report prepared for the first National Mining Forum the following month – a number of transnational mining companies operating in the country. However, because these companies merge, acquire or create new subsidiaries and establish joint ventures and other agreements on such a regular basis, the information is in a constant state of flux. The government report also informed of new applications for metallic mining licenses – 63 for exploration and 6 for exploitation.
Among the transnational mining companies active in Guatemala, almost always under the name of subsidiaries, are:
- Glamis Gold Ltd (Entre Mares de Guatemala; Montana Exploradora de Guatemala), Canadian/US, owner of the fiercely contested Marlin project in San Marcos, the Cerro Blanco project, and several other licenses and joint venture agreements around the country. [See Section IV: Focus on Glamis Gold for further details]
- International Nickel Company, INCO (EXMIBAL), Canadian, owner of several concessions in Izabal, recently negotiated the sale of its controversial project with Skye Resources.
- Radius Gold Inc (Exploraciones Mineras de Guatemala), Canadian, focuses on exploration and then sells to or establishes joint venture agreements, of which Radius has a number with Glamis Gold.
- Jaguar Nickel Inc (Minera Mayamerica, Chesbar Resources), Canadian, owns a number of large nickel mining concessions in Izabal.
- Skye Resources Inc, Canadian, recently entered into an agreement with INCO to acquire the company’s nickel concession in Izabal.
- Icon Industries Ltd, Canadian, recently signed a binding letter of intent to acquire Corponiquel’s Rio Negro nickel project.
- Goldex Resources Corporation (Compañía Minera El Condor, Compañía Internacional Minera), Canadian, has 2 exploration licenses for gold projects near the border with Copan, Honduras.
- Firestone Ventures Inc, Canadian, has signed a letter of intent with Redhawk Resources Inc to acquire a zinc property in Huehuetenango.
- Silver Crest Mines Inc, Canadian, currently exploring a property in southeastern Guatemala, part of the company’s ‘Silver Triangle’ involving nearby concessions in Honduras and El Salvador
- Aurora Gold Corporation, El Oro Resources (Mayan Minerals) and Gifford Co (Minerías del Quetzal) are listed on the Ministry of Energy and Mines list as Canadian companies; however, some of the information regarding the parent company and its country of origin of other corporations was inaccurately reported in the list, so it is quite possible that these are not the names of the parent companies either.
As the Defensoría Q’eqchi’ pointed out in their February 2004 report: “The granting of hundred of concessions by the Ministry of Energy and Mines constitutes a serious violation of the rights of thousands of Guatemalans, indigenous or not, who were never consulted nor informed that the subsurface rights of their lands had been concessioned to a mining company. It is important to emphasize that the majority of the population of 9 of the 16 departments affected is indigenous, and that various small groups (Ch’uj, Sipakapense, Ch’orti, among others) will be in danger of ethnocide if the mining projects are carried out.” [xxxv] Communities and organizations around the country are becoming aware of these mining concessions and are actively organizing for community and indigenous rights and locally controlled development.
Amidst denouncements, alternative forums and actions, the Guatemalan government committed – during the official National Mining Forum, sponsored by the Canadian Embassy and World Bank, among others – to consult communities before any further mining concessions would be granted. Less than 2 weeks later, Skye Resources announced that new exploration licenses had been granted to EXMIBAL for its Niquecagua project in Izabal. [xxxvi] The same nickel project that was the source of indigenous rights violations and State repression under the ownership of INCO is now the subject of an agreement with Skye to acquire INCO’s 70% interest in EXMIBAL.
Less than a month after the granting of new licenses, Guatemala sent in the army to accompany a convoy, detained by inhabitants of Sololá, of mining equipment destined for Glamis Gold’s Marlin gold mine project in San Marcos. The ensuing conflict resulted in the murder of an indigenous demonstrator, as will be discussed in the following section: Focus on Glamis Gold.
3.5 Continuing Occupation - Honduras
In Honduras, numerous mining concessions and licenses were granted in the mid-to-late 1990s, before the ratification of new mining legislation. This was due to the ‘improved’ foreign investment climate established in Central America under pressure from the World Bank and International Monetary Fund (IMF). However, many of these companies waited for the new legislation to facilitate their exploration and exploitation activities; the new laws also attracted a landslide of new concessions and licenses to dozens of transnational mining companies attracted by the potential profits.
A few years ago, the government of Honduras had already granted over 30% of the country’s territory in concessions to mining companies, mainly from Canada and the US. Many of these, as well as more recent concessions, were approved after the General Mining Law came into effect. As in Guatemala, although to a lesser degree due to the difference in the proportion of the indigenous populations, some of these concessions affect indigenous peoples and lands. As in Guatemala, there have been no consultations, even though the mining legislation itself was passed after the ratification of ILO Convention 169. Government employees at DEFOMIN, the equivalent of a Ministry of Mines, insist that there are discussion sessions with government and company representatives to present the project to communities as part of the Environmental and Social Impact Study; however, these are clearly one-sided presentations to present a decision that has already been taken.
In contrast to Guatemala, a number of gold and silver mines have been established in Honduras in recent years. In terms of metallic mining, only one mine operated the country before the general Mining Law and by 2001 this had increased to four mines in operation. The most notorious of these is Glamis Gold’s San Martin gold mine in the Siria Valley, department of Francisco Morazan, discussed in the next section.
Another earlier project – the San Andrés silver mine in the department of Copán – has also been the subject of denouncements and protest. Originally owned by Toronto-based Greenstone, numerous abuses and human rights violations were committed in the forced expropriation and involuntary resettlement of a community in the municipality of La Unión. After intense pressure by the company, the last three families agreed to move when Greenstone Director Gerard Phillips bulldozed a water tank with a local resident atop it, breaking both of his legs. [xxxvii]
After Greenstone left the country bankrupt, the mine was acquired by the Atlantida Group, owner of the bank of the same name that was started by the Standard Fruit Company back in the heyday of the US-controlled banana industry. In January 2003, the San Andrés mine was the site of a massive cyanide spill, contaminating the Lara river, which provides drinking water for numerous communities and feeds into the river that provides the drinking water for the city of Santa Rosa de Copán, the departmental capital. Although local inhabitants reported witnessing the removal of evidence by the company, they managed to amass some 18,000 dead fish, a testament to the damage caused to the ecosystem and quite possibly human health.
Under various owners – New York and Rosario Mining Company, AMPAC, Geomaque Explorations, and now Breakwater Resources Ltd – the El Mochito zinc mine in the department of Santa Barbara has operated for decades. In the 1960s, students doing fieldwork in the area the nearby Yojoa lake found evidence of uranium contamination in the lake and fish. In 2001, based on a report by the Center for the Study and Control of Contaminants (CESCCO) that found the mine guilty of releasing lead, copper and cyanide-laced waste into a stream feeding into the lake and thus contaminating the water, fish and human inhabitants in the area, the Special Prosecutor’s Office on the Environment initiated legal proceedings against the company. [xxxviii]
The General Direction for the Promotion of Mining (DEFOMIN) is in charge of attracting investors, granting concessions AND ensuring compliance with environmental regulations and settling disputes. DEFOMIN and the Honduran government in general have unfalteringly come down on the side of the corporations, aided by the fact that six years later, regulation for the General Mining Law has yet to be written. Legislation such as the General Mining Law is accompanied by detailed regulation to guide its implementation, usually published – and required – within 90 days of the ratification of the law itself. The regulation, were it to exist, would presumably address procedures for important elements such as the forced eviction of communities and measures to address the violation of environmental and other regulations.
A recent investigation by independent newspaper (El Libertador) journalist Karen Soto revealed direct violations of the General Mining Law, related to the direct involvement of government representatives (both at the municipal level and in the National Congress) and their close relatives as associates of mining companies. [xxxix] The systematic impunity demonstrated by these examples is evident in the General Mining Law itself: Article 48 (Title VI, Chapter II) explicitly prohibits several authorities (including municipal government and Congress) and their close kin (definitely includes brothers!) from acquiring or benefiting directly or indirectly from mineral rights. In the case that a violation exists, the same Article (48) states that the acquired property or rights will be subject to Chapter VII of the same (VI) Title – a Title which only has six (VI) chapters!!!
The same investigation also revealed that in the Secretariat of Industry and Commerce only one mining company appeared in the registry, while only three appeared in the Chamber of Commerce and Industry of Tegucigalpa. [xl] It is in this context of a complete lack of transparency, government-company overlap and complicity and impunity that the following transnational mining companies operate in Honduras:
- Glamis Gold Ltd (Entre Mares de Honduras), Canadian, owner of the San Martin gold mine and numerous concessions around the country. (See Section IV: Focus on Glamis Gold)
- Silver Crest Mines Inc (Compañía Minera Maverick), Canadian, owner of four concessions, all of which have been subject to fierce (and in 2 cases, successful, at least for the time being) local opposition.
- Defiance Mining Corporation (Geomaque, Centroamerica de Representaciones), Canadian, owner of the Vueltas del Río gold mine in Santa Barbara, as well as numerous concessions; from April to June 2004 alone, Defiance applied for 35 mining concessions, covering 36,600 hectares (366 square kilometers; 141 square miles). Defiance has recently been bought out by Canadian co. Rio Narcea and is reportedly in the process of selling its Honduran properties and projects due to the Rio Narcea’s focus on Spain and Portugal.
- Breakwater Resources Ltd (AMPAC, Corporación Minera Nueva Esperanza), Canadian, is the owner of the El Mochito zinc mine, as well as dozens of concessions throughout Honduras.
- Maya Gold Ltd, with numerous concessions, was acquired by Centram Explorations, against which a ‘Cease Trade Order’ was issued by the British Colombia Securities Commission in 2003 for failure to file certain documents. The Honduran subsidiary Maya Gold, however, was actively applying for concessions in 2004, although the current parent company is unknown.
- Merendon Mining Corporation (Oro y Metales Preciosos), Canadian, is the owner of dozens of mining concessions in the department of Olancho, as well as Central America’s only gold refinery (located in Tegucigalpa) and several other companies, including the Merendon Hospitality Group, which plans on building luxury hotels in the country.
- Five Star Mining, US, owner of several concessions.
- Inglesrud Corporation (Minera Virgina), US, owner of concessions in Yoro and Olancho, where it is currently focusing on the ‘Los Hornos’ project
- Doublestar Resources Ltd (Standard Mining Corporation, Aurora Exploración), Canadian, owner of numerous concessions, including the upcoming ‘Zopilote’ project in Santa Barbara, co-owned with Defiance Mining Corporation. Doublestar is currently negotiating the sale of its Honduran properties and projects, although it is not known with whom.
- Globex Mining Enterprises Ltd (Minerías Centroamericanas), Québecois/Canadian, owner of the promising ‘El Transito’ gold project and other concessions in Honduras, although Globex refers to itself as a ‘here at home’ North American company.
- Gold-Ore Resources Ltd (Bienes Mercantiles), Canadian, together with Aur Resources is applying for a number of concessions to add to its collection.
- First Point Minerals Corporation (First Point Honduras), Canadian, owner of two major projects in Honduras and has an exploration agreement with mining giant BHP Billiton for Honduras, El Salvador and Nicaragua. In 2004, First Point applied for 5 concessions in the gold-rich municipality of Guayape, Olancho, where the local population and community-based environmental committees are prepared to defend their territory at all costs.
- Mena Resources Inc, Canadian, owner of the ‘Minas de Oro’ concession in Comayagua, which has encountered local opposition under several previous owners.
- RNC Gold Inc, Canadian, seems to be the reincarnation of Greenstone, as its main assets are mines in Nicaragua previously owned by Greenstone, and RNC now has the option to acquire a 25% interest in the San Andrés mine in Copán, Honduras, also previously owned by Greenstone.
- Brett Resources Inc, Canadian, owner of one concession and a Letter of Intent with Tierra Colorada gives Brett the option to acquire several more.
- Intrepid Minerals Corporation (Minera Geoex, Fenix, Gracias a Dios Minerals), Canadian, was previously the owner of several concessions around the country, including several enormous properties in the majority indigenous Mosquitia. Current status unknown.
- Fisher-Watt Gold, US, previously the owner of several concessions and projects. Current status unknown.
Because this kind of information is not transparent nor accessible in Honduras, the parent companies of several more concession holders are unclear, although the countries of origin of some of the ‘owners’ (subsidiaries) appear on a list of recent applications released by DEFOMIN in August 2004: Tajo Minerales (US); Maya Mining Company (US); EXPLOMINH (Canada); Tierra Colorada (Canada); Minera de Cordilleras (US); Recursos Santana (Canada); Eurocantera (Italy); Cerro del Sur (Canada); Comercial M y T Imp. y Exp. (Italy). Only a handful of concession applications were submitted by Honduran companies and individuals, and it is very likely that at least some of these are engaging in the common practice of ‘name-lending’ in order to further hide the identity of the real investors.
Opposition to mines and concessions has been growing over the past few years. Faced with the annual March for Life – organized by environmental and community rights organizations from Olancho and around the country to denounce illegal logging, mining and a host of other grave activities destroying the environment and community life – and with the official presentation of the Civic Alliance to Reform the Mining Law’s proposal to the National Congress, current president Ricardo Maduro announced that no new mining concessions would be granted until communities were consulted. In a public televised address, he promised to reform the General Mining Law (although the next day he clarified that this would in no way affect the mines currently operating in the country).
The presidential decree temporarily halting the concessions was not passed until weeks after the promises made by Maduro. In the meantime, 52 new concession applications appeared in the pages of national newspapers, courtesy of DEFOMIN. Among the metallic mining concessions, Geomaque (subsidiary of Defiance Mining Corporation) definitely won top prize; the company applied for more than 20,000 hectares (200 square kilometers; 77 square miles) in mining concessions in the departments of Olancho, Santa Bárbara, Francisco Morazan and Cortés.
While there are hundreds of metallic mining concessions owned by dozens of transnational mining corporations in Honduras and Guatemala, as well as several operational mines, the current upsurge in mining activities facilitated by the changes in national legislation and the involvement of global actors is being led by Glamis Gold Ltd.
Incorporated in 1972 under the laws of British Colombia, Canada, Glamis Gold Ltd is a publicly held Canadian Corporation. Its wholly owned subsidiary, Glamis Gold Inc, was established in the same year in Reno, Nevada, where the company’s head office is located. Glamis Gold bought out several other companies in order to acquire certain projects: Mar-West Resources Ltd, owner of the San Martin project in Honduras (1998); Rayrock Resources Inc, 2/3 owner of the Marigold mine in Nevada (1999); and Francisco Gold Corporation, owner of the El Suazal project in Chihuahua, Mexico, and the Marlin project in San Marcos, Guatemala (2002).
Glamis also owns the Rand mine in California, several concessions and ‘projects’ in Honduras and Guatemala, and according to its own reports has also been actively exploring in El Salvador and Panama. The company’s ‘Imperial Project’ in the Imperial Valley in southern California is worth taking a closer look at for its parallels with the situation in Central America, where the same “free” trade framework is being set up, giving investors protection and impunity while divesting indigenous peoples and local populations of their rights to determine and control the use and development of their territories and communities.
Glamis’ Imperial Project includes some 187 mining claims and 277 mill sites on over 1,500 acres (6.07 square km) of federal public lands in Imperial County, California. Acquired over the past 20 years, this project is owned by Glamis Imperial Corporation, another wholly owned subsidiary of Glamis Gold. The project is located within the ‘California Desert Conservation Area’ as designated by the Bureau of Land Management. This designation does not, however, prohibit mining within the Conservation Area. In 1994, through an affiliated company, Glamis filed its plan of operations with authorities in order to obtain approval to begin the exploitation phase.
The Imperial Project, however, lies within an area of sacred sites, and the Quechan Nation and organizations denounced the planned destruction of the region. In the late 1990s, the federal Advisory Council on Historic Preservation and the Department of Interior considered that the Imperial Project should not be permitted. In 2001, then-Secretary of Interior Bruce Babbitt issued the official decision to formally deny approval to the Imperial Project, supporting members of the Quechan Nation who declared that the mine would impair their ability to travel, both physically and spiritually, along a sacred pathway in the Californian Desert. Later that same year, the new Secretary of Interior overturned the decision to deny approval of the project.
Gray Davis, then Governor of California, took up the issue in 2002. In December, the California State Mining and Geology Board, an entity within the state’s Secretary of Resources, issued a temporary emergency regulation requiring the backfilling of all open pits and grading in order to restore the area to its approximate original topography. On April 7, 2003, Davis signed Senate Bill 22, which essentially made the emergency regulations permanent when the mine site is located on or within one mile of any Native American sacred site. Although not explicitly banning mines in the area, the measure is effectively ‘cost-prohibitive’ to companies, unwilling to cut deeper into their profit margin. In a press release issued the same day, Davis remarked that “Open pit, cyanide gold mining cuts deep into the earth. This causes permanent scars on significant cultural and religious sites. This measure sends a message that California’s sacred sites are more precious than gold.” [xli]
Of course, Governor Davis got it wrong. In the neoliberal “free” trade model of development, gold (and, more importantly, the sacred right of companies to mine it) is more precious than First Nations’ sacred sites, the interests of the population, or anything the government of California might have to say about the issue. On December 9, 2003, Glamis Gold Ltd filed a Notice of Arbitration against the government of the United States – for the actions of the Department of Interior and the State of California – under the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) and of the North American Free Trade Agreement (NAFTA).
It is revealing to note the titles of the articles from NAFTA’s infamous Chapter 11 invoked by Glamis Gold to support their rights to destroy Quechan sacred sites: Minimum Standard of Treatment (Article 1105) and Expropriation and Compensation (Article 1110)!!!
Naturally, these Articles are to protect investments, not peoples. Under NAFTA, “sacred site” is a foreign concept. Regarding compensation for the expropriation of investments, Paragraph 2 of Article 1110 stipulates that “[v]aluation criteria shall include going concern value, asset value, including declared tax value of tangible property, and other criteria, as appropriate, to determine fair market value.”
The Glamis Gold Ltd vs. United States Government Arbitration case has yet to conclude.
4.2 The Siria Valley – Development or Zone of Human Sacrifice?
“If the mine is development, it is a backwards, upside down kind of development,” remarked a member of the Siria Valley Regional Environmental Committee, in reference to Glamis Gold’s San Martin gold mine in the department of Francisco Morazan, Honduras. [xlii]
Acquired in 1998 when Glamis bought Mar-West Resources Ltd, the San Martin project was developed by the wholly owned subsidiary Entre Mares in the wake of the General Mining Law, although mining company representatives had been in the area since 1995. Community members and local organizations were not involved in any kind of consultation process for the mining concession, the Environmental Impact Study or the approval of the project. [xliii]
Community members also report that the company entered the area with promises of the heavens themselves: cyanide is completely harmless, and the mine will bring employment, development, investment, 5-star hotels, etc. The Regional Committee was organized by town and community members in the area who investigated the company’s claims and informed themselves and the population about the risks of health problems, environmental damages, etc. Despite protests, participation in open municipal hall meetings and other activities, the project received the blessing of the local authorities, who assured the population with echoes of company promises of development. [xliv]
The San Martin mine began production in 2000, despite widespread opposition to the project, which is located in the municipality of San Ignacio, Francisco Morazan. San Ignacio, together with the neighbouring municipalities of El Porvenir and Cedros, forms part of the Siria Valley. While strong in the municipalities of San Ignacio and Cedros, opposition to the mine was most powerful in El Porvenir, in large part because the mine itself is up against (and above) the boundary with the latter. Consequently, impacts have been more acute in communities in El Porvenir, especially in El Pedernal, the closest community to the mine along with Palo Ralo, which was evicted and relocated.
Medical brigades led by Doctor Juan Almendares Bonilla, a distinguished scholar and activist in the areas of holistic medicine, ecology and human rights, have studied the health problems in the community of El Pedernal from 2001 to 2003. The environmental organization Madre Tierra (Mother Earth), founded by Almendares, presented a report on their findings in October 2003. The findings, based on surveys and medical examinations, reveal an alarming increase in skin disease from 2001 to 2003. The prevalence of neurological, respiratory and ophthalmological (of the eyes) illnesses is also disturbing: in 2003, 80% of the population of El Pedernal suffered from skin diseases; respiratory illnesses, 28%; neurological, 59%; ophthalmological, 45%; and gastro-intestinal, 4%. [xlv]
Madre Tierra examined these health problems within the overall state of the quality of living in the Siria Valley, including the perceived decrease in the quantity and quality of water, increased poverty, deforestation, and other environmental destruction. The increased mental health problems – most notably insomnia, stress and anxiety – are undergoing further investigation. Although Madre Tierra believes it is possible that the population’s mental health is related to dermatological illnesses, as well as environmental destruction and the fear of developing further illnesses, they also stress the importance of conducting a study of the presence of heavy metals in the region. The findings on the multiple kinds of illnesses now apparently endemic to the community of El Pedernal could very possibly be linked to contamination, considers the organization. [xlvi]
When asked if an open pit cyanide-leaching mine might represent a health risk for nearby communities, a doc