Press Responses: September 25, 2006

Mine Your Own Business
Should Canadian mining companies operating abroad abide by Canadian law?

by Hillary Bain Lindsay

Canada's Barrick Gold wants to build a mine in Chile. Local people don't want the mine. Should Canada step in?

"There are places and times where there simply shouldn't be mines," says Lucio Cuenca, director of the Latin American Observatory for Environmental Conflicts. One of those places, he says, is in the Huasco Valley in Chile.

Water is a scarce resource in the Huasco Valley and tens of thousands of farmers depend on run-off from nearby glaciers to irrigate their crops. This fact, however, did not deter Barrick Gold, a Canadian mining company, from proposing in 2005 to break up and move two of the glaciers to make way for an open-pit mine on the ancestral land of the Diaguita People.

Under Canadian law, there is nothing to stop Barrick Gold from doing this, says Catherine Coumans, research co-ordinator at MiningWatch Canada. "When companies go abroad, there are no standards here in Canada that they need to adhere to," she says. "Even if there are serious complaints, there is no link back, there are no penalties. There's a complete policy vacuum."

In theory, the countries in which Canadian companies are operating should be able to regulate mining activities, but as Coumans points out, this doesn't always happen in Canada, let alone in developing countries. Many countries don't have the regulatory regimes to deal with large-scale mining, she says, where others simply don't have the resources to enforce regulation, or lack the political will to do so.

Countries in the south often have their hands tied when it comes to foreign investment, adds Tamara Herman, a collective member of Alcan't In India, a solidarity group opposing the establishment of a bauxite mine and alumina plant in Kashipur, India - the mine is being backed in part by ALCAN, a Canada-based multinational. "Indebted countries are forced to turn to the World Bank and IMF who impose policies in return for providing debt relief," says Herman. "Policies often take the form of 'structural adjustment programs' that may require the privatization of state-owned sectors and resources."

Mining is often one of these sectors, continues Herman. "Many communities located on lucrative resources in southern countries have found themselves with little or no control over their lands and their livelihoods."

Despite popular resistance to Barrick's mine, the Chilean government "has obviously decided what side it's on," says Jamie Kneen, communications and outreach co-ordinator for MiningWatch Canada. The Chilean National Environmental Commission has given the project the go-ahead.

Opponents to the mine have achieved a significant victory, in that Barrick is no longer allowed to move the glaciers, but the fact that an open-pit mine will be located at the source of several rivers still raises serious objections among those whose lives and livelihoods depend on the water source. "Because of the mine's characteristics and where it will be developed, it is incompatible with community life in the valley," says Cuenca. "The project will affect glaciers and has already done so [due to Barrick's exploratory work] and the project will pollute water sources. In this area of Chile, water is a scarce resource. "

Construction of the mine is now on hold, largely due to a massive grassroots campaign led by Chilean farmers, indigenous people and environmentalists, but Barrick has indicated that the mine will still go ahead, says Kneen, and there's no formal mechanism to stop or appeal its construction from here, in Canada.

Coumans is hoping that a series of government roundtables that is making its way across Canada will change that.

The roundtables are examining mechanisms and tools to improve the environmental and human rights record of Canadian extractive industries operating in developing countries. The federal government, industry and civil society are participating in the process and Coumans is hoping it will result in mandatory environmental and human rights standards for Canadian companies operating overseas. So far, however, "there's no concrete commitment beyond talk."

Even the talk has its limitations, adds Coumans. To begin with, the roundtables are not open to the public. "That's a battle we fought and lost as civil society very early on," says Coumans, who is also sitting on the advisory board for the roundtables. "Both government and industry were adamant that they did not want a process that media could be sitting-in on. They wanted people to be able to speak freely."

In addition, the public sessions -- where members of the public can speak on the issues being covered during the roundtables -- are not open to the media.

Not surprisingly, the roundtables have received little media attention.

Although much of the public is not aware the roundtables are taking place -- and even if they were, they wouldn't be allowed to attend the closed-door sessions -- Canadian taxpayers are implicated in Canadian mining overseas. "These companies receive all sorts of [government] support services and financial support when they go abroad," says Coumans.

Canadian tax dollars subsidize mining work overseas in several ways, from Export Development Canada's support for projects, to Canadian Pension Plan investments, to tax breaks.

"It is clear that Canadian mining corporations profit from immense government support," says Herman, "and the roundtables can be perceived as an opportunity for solidarity movements, NGOs and other groups working on mining issues to organize together, lay the issues on the table and try to get some media attention."

That said, Herman doesn't think participating in the roundtables is worth the effort, having "no interest in legitimizing a flawed process."

"The danger is that the roundtables will be labelled 'public participation' and 'democracy,' when absolutely nothing will change for the communities on the ground," says Herman, who thinks it's quite likely that business as usual will resume once the roundtables end. "This has been the case for many so-called 'consultations' on trade and investment-related issues in the past."

The problem, says Herman, is that government and industry have too much control over the process and outcome. "Those lacking power and money should have the same amount of direct control as those with power and money," she says. Herman would consider participating in the roundtables, "if we knew that our input into the process would actually have a tangible impact on the public funding of corporations inflicting devastation in the south and the work -- or existence -- of our export credit agency." At this point, she believes that government and industry have too much to lose to allow a "real democratic process" to take place.

Mining is big business in Canada. Canada is one of a handful of countries leading the world in mineral extraction, says Coumans. "Over 60 per cent of the money that is made internationally for mining is raised here." Mining, she says, "is becoming the face of Canada."

Over the years that face has become marred by well-documented human rights violations and environmental disasters. According to the Globe and Mail, the top bureaucrat at the Department of Natural Resources was warned two years ago that Canadian mining companies with overseas operations could "seriously embarrass Canada" if they didn't take steps to reduce the risk of a major environmental accident.

The federal government has failed to put any legislation in place since then, but Coumans is hoping for some positive changes to come out of the roundtables. One outcome she is pushing for is mandatory regulations for Canadian mining companies operating overseas rather than voluntary ones. Gordon Peeling, president and CEO of the Mining Association of Canada who is also participating in the roundtables, would prefer voluntary measures. "We would like to see incentives to encourage companies to do the right thing. We think you get more with honey than with vinegar," he says.

For Herman, the debate between mandatory and voluntary measures is insignificant when compared to the changes that need to be made to the larger system; changes that still aren't being discussed. "The changes that need to be made are not small. We are talking about people having control over their lands and resources, which in itself threatens the very existence of the international capitalist structures that permit devastating resource-extraction activities," she says. "If there were no lands to mine cheaply, if people couldn't be displaced without consent, if democracy at the local and international levels was really flourishing, then resource-extraction would not be profitable for corporations."

Communities in the Huasco Valley don't want a "green" mine, or compensation for polluted waters, says Cuenca. They don't want Barrick to mine. Period. So far, grassroots resistance has delayed the project for almost a year and a half. Cuenca says he'll see the roundtable process through before he judges whether or not the Canadian government is ready to pick up the slack.

In the meantime, he is thankful that the roundtables have opened up some debate about the operations of Canadian mining companies in countries like his. "It shows that there's recognition that there's a problem," says Cuenca. "Canadian society needs to realize that what their companies are doing overseas is a problem that all Canadians need to deal with."