What Role for Canada in the Americas? Corporate Accountability and the Extractive Industries

Jamie Kneen

National Program Co-Lead

What Role for Canada in the Americas?
Meeting the Challenge of Human Rights, Democratic Development, and Economic Justice in a Time of Global Crisis

A Policy Roundtable organized by CCIC’s Americas Policy Group

“Corporate Accountability and the Extractive Industries”

Presentation Notes
Jamie Kneen
MiningWatch Canada

I’d like to start with a story.

In the late 1990s, people in the Intag zone of north-west Ecuador learned that a Japanese company had discovered copper in their area. They were happy. As poor farmers the welcomed the possibility of more work and better incomes. But then they found out that the project would be a huge open pit mine that would destroy an entire mountain, displace four villages, and contaminate an entire watershed. The villagers mobilized, and when the government did not respond they ended up taking matters into their own hands, burning down the mining camp – but not before advising the company and removing and inventorying the contents so they could be returned to the company.

The communities decided to take development into their own hands as well, and set about establishing forest reserves and setting up projects for ecotourism, organic coffee, forest products, and handcrafts.

Fast forward to 2004: A Canadian exploration company buys the mining lease and begins buying up land. It uses a full range of tactics to get a foothold in the area, hiring local people but also hiring armed guards. People refusing to sell start to receive threats, shots fired into their houses and so on. The company even tried to have a new municipality created so it could avoid existing municipal restrictions. The villagers tried every legal mechanism at their disposal, but with only limited or belated success. They even tried, with us, to use the OECD Guidelines for Multinational Enterprises to complain to the Canadian government. They burned down the mining company’s farmhouse/office. The company responded with false criminal accusations, for example accusing people identified as local leaders of arson when they were known to have been elsewhere. And when the villagers blocked the company from undertaking illegal activities – blocking the road and only allowing in local people with legitimate business in the area – the company sent in armed paramilitaries. Several villagers were hurt, but somehow they managed to peacefully disarm the paramilitaries and eventually hand them over to police.

Three weeks ago, one of those villagers, Marcia Ramírez, came to Toronto to launch a lawsuit against the Copper Mesa company, formerly Ascendant Copper, and the Toronto Stock Exchange. (See www.ramirezversuscoppermesa.com for details.)

I tell this story because I was struck that while the Canadian Embassy in Ecuador has acted as a promoter and agent for Canadian mining interests in that country, as it does in many countries, Canadian policy supposedly rests on three pillars: prosperity (though they don’t say for whom), security, and democratic governance.

But reflecting on this story, it seems clear that Marcia and her neighbours have suffered on all three fronts.

In terms of prosperity: they’ve lost work, spent their savings on unforeseen costs, sacrificed time, lost crops – to prevent a complete loss of livelihoods they have struggled to build.

In terms of security: they’ve suffered threats, assaults, armed men attacking them in their own back yard, police took days to respond – except when pursuing false complaints against them.

In terms of democratic development: they’ve had to struggle to force the state apparatus just to respond to their complaints of illegal activity; the company’s concessions and most of its properties were eventually annulled, but government ignored their concerns in redrafting the mining law to conform with conditions set – or “encouraged” – by Canadian mining companies and the Ambassador.

Three themes can be picked up from this.

First is that this is an example of a pattern of conflicting development objectives that is recognizable across the region, including junior exploration companies like Ascendant/Copper Mesa, Pacific Rim in El Salvador, Infinito in Costa Rica, and Dorato in Peru as well as majors like Barrick Gold, Goldcorp, Hudbay, Yamana, Kinross, Iamgold, …etc. The conflicts play out differently depending on the situation; in some cases they are avoidable or resolvable and in other cases they are fundamental. In all cases they are a challenge to good governance that shows few positive examples.

Second is the role of the Canadian government in nurturing a positive policy environment for Canadian mining investment and supporting that investment directly through its embassies as well as indirectly through Canada Pension Plan investments, Export Development Canada, and its participation in multilateral lending institutions. And of course free trade treaties that are really more about investment than trade. On its own there is might be nothing wrong with this, but of course it does not exist in a vacuum. Economies societies are webs of relationships, and Canadian investment has significant effects and impacts both in Canada and in the target or “host” country. In addition, while economies are not zero-sum, non-renewable resources are: once they’ve been extracted, there are no second chances. Canada is set up as a model for resource-driven development, but without considering either the different historical legal, political, and technological realities or the true cost of that development in terms of abuse against Indigenous Peoples, poisoned air and water, and dead and disabled workers.

Third is the inability of the Canadian government to temper its support of mining with any meaningful consideration of, much less safeguards against, the impacts of large scale mining development on human rights, the environment, workers’ rights, indigenous rights, and democratic development. As Professor Rosemary Thorp pointed out at the recent conference at York University, extractive industries demand a high level of governance even as their very nature makes it impossible to develop or maintain. In fact the Canadian government relies on the “rule of law” in other countries even as it intervenes to influence those laws, and fails to recognize their failures. It seems that the Canadian embassy in Argentina may be involved in working to overturn a 2006 ban on open pit metal mining in the province of Mendoza, much as it is alleged to have done in Costa Rica. Meanwhile, Canadian government pronouncements periodically refer to Corporate Social Responsibility without indicating what that is. Even partial positive measures such as those recommended by the Advisory Committee to the Roundtables on Corporate Social Responsibility almost exactly two years ago have not even received a government response.

Overall it seems the Canadian government subscribes to two central narratives around Canadian mining in the Americas. One is that large scale mining equals development. As I’ve indicated, even in the Canadian example this is a dubious historical proposition and an equally dubious construct currently. At best it’s a 19th century prescription for the 21st century. Mining development in Canada depends on massive subsidies in tax benefits, infrastructure investment, and free ecological services for waste disposal etc., generating increasing profit while generating less and less employment per unit production. The benefits flow to the investors, and while this does (or used to) support savings and pensions, I think it’s recognized as a very poor way of driving an economy. In the international context it’s more fiction than fact, made attractive only by flawed and misleading economic measurements. Mining investment does drive increased GDP and foreign exchange earnings, but in the absence of extremely strict controls, most of that money does not stay in the country, much less provide a meaningful contribution to social development. In fact large scale mining activity often produces or worsens poverty on the ground even as it generates prosperity for us, and for the local elite, as villages are displaced, farms destroyed, watersheds dried up or contaminated, etc. in exchange for temporary jobs for a portion of those affected.

The other narrative is that conflict is created, not by the imposition of unwanted and destructive development projects, but by anti-development NGOs, often foreign, who according to one CIDA project with the Peruvian government, “live from conflict”. At MiningWatch we have found ourselves in the bizarre position of being accused of perpetrating genocide on the Shuar people of southeastern Ecuador simply for having published a report on the conflict between Corriente Resources and local Shuar and campesino groups. The accusations came from a pro-mining Shuar front group that the Canadian Embassy had helped launch, in a letter written on a company computer. Elsewhere, a student filmmaker who made a short documentary on a protest against a Canadian mining project in Guatemala (the Hudbay mine in El Estor, formerly Skye Resources, and Inco before that, going back to the 1960s) was alleged by the Ambassador of having staged it, using a paid actress.

So what are my conclusions for Canadian policy in the Americas? It’s difficult to make too many recommendations. On a general level, there are clear principles that Canada could be promoting and supporting to balance our investment activity: Free Prior Informed Consent for indigenous peoples; respect for human rights and core labour standards; rigorous fiscal and environmental controls; support for democratic institution-building and broad-based technical capacity-building; helping identify and protect “no-go” zones of great ecological, cultural, and social sensitivity.

Yet at this juncture such policy initiatives would have little credibility. Canada is one of three countries that opposes the UN Declaration on the Rights of Indigenous Peoples. We have investment treaties – sorry, free trade agreements – with Mexico, Chile, and Costa Rica with weak and unenforceable labour and environmental provisions, and are now ratifying similar agreements with Peru and Colombia. As Victor Baez pointed out, there are problems with democratic expression in all these countries. Added to the visible and uncritical involvement of our diplomatic corps in support of mining investment, and it’s not surprising that many of our partner organisations across the continent have told us, when we ask what role they’d like to see Canada play, that we should just stop. Perhaps then we could re-establish relationships based on a more balanced approach with some moral authority. At the moment we have none. We may be promoting prosperity, security, and democracy, but for whom? All too often the reality is greater poverty, insecurity, and repression.

Thank you.

Note re: governance and role of government vs. CSR when governments have followed neoliberal prescriptions and abandoned provision of basic services for its people. Canada should be encouraging improved governance, expansion of government services (health, education, transportation etc.) not foisting this off on unaccountable, inconsistent, and unavoidably self-serving corporate largesse. “CSR consists of corporation paying their taxes,” as the CCPA’s Shauna MacKinnon told the Canadian Community Economic Development Network almost two years ago. We’d have to approach this with some humility too. Ontario has two mining inspectors for some 3 dozen mines. Major mining projects can avoid all but the most cursory environmental impact assessment, and mining companies are increasingly allowed to use natural water bodies – fish-bearing lakes – as waste dumps. So we’d have to approach it more as a “lessons learned” than an example to follow. Clearly we have work to do at home as well.