Blog Entry

Canadian Mining Undermines Democracy in Central America

Canada’s multinationals work hand-in-hand with corrupt governments and threaten democracy in post-conflict Central American nations.

Guest blog by Alexandra Pedersen.

Canadian mining companies account for 75 percent of the world’s extractive corporations. Canada is literally digging up the globe.

Minister of Foreign Affairs Ed Fast says, “Canada’s mining sector … leads the world in responsible mining practices, and we are proud of the prosperity that this sector is creating at home and in every corner of the globe.”

However, the political, social and environmental costs are far greater than the Canadian government or mining corporations would have you believe.

In Latin America,Canada and its extractive industry are viewed as the new conquistadors; they are thirsty for land and minerals and hungry for power. Canadian mining companies are often positioned at the epicenter of community conflicts in both Indigenous and non-Indigenous communities, and linked with violence, environmental degradation, corruption and murder. Research produced by Canada’s own Prospectors and Development Association of Canada (PDAC) found that Canadian mining companies accounted for the most human and environmental rights abuses globally. Harrowing examples in Guatemala, El Salvador and Honduras further erode Canada’s claims of bringing “good” to the world.

Canadian mining companies’ environmental and human rights abuses have been well documented by affected communities, NGOs and transnational solidarity groups. Such injustices are tangible examples of deep structural violence that Canadian extractives are inextricably linked with. Their actions, under the guise of “development,” have undermined governance in countries where democracy can be described as “uneven.” Legal scholar Debbie Johnston writes:

“Canada’s extractive industry routinely seeks out unexploited natural resources located in underdeveloped nations that feature weak, failing or often oppressive governments that, in turn, rely on foreign investment of capital and technology to exploit their resources, to prosper, and in some cases to stay in power.” Canadian companies actively choose to operate in Central American countries with corrupt governments and often limited public support.

Guatemala, for example, is currently embroiled in a high-level corruption scandal. Thousands from across the country flood the plazas of municipalities and the capital each weekend, demanding an end to corruption, impunity and even the resignation of former-military general and current President Otto Perez Molina.

While the president remains in office, many of his ministers have resigned. This includes Minister of Energy and Mines, Erick Archila, who oversaw the licensing of many Canadian mining company’s exploration and exploitation projects. Archila now faces criminal charges for having granted an exploitation license to Canada’s Tahoe Resources Inc. “without adequate consideration of the more than 250 community complaints against the project,” writes Ellen Moore of NISGUA. In 2012, Tahoe Resources opened their silver mine in the municipality of Santa Rosa despite wide opposition from Indigenous Xinca and campesino residents. Since 2005, approximately 1 million Guatemalans have voted “No” to mining in their territories through community consultations. “Consultas” conducted in Indigenous territories are protected under the International Labour Organization’s (ILO’s) Convention No. 169, which outlines community rights to free, prior and informed consent regarding policies and development projects that affect Indigenous ways of life. Despite overwhelming opposition, numerous Canadian extractives continue to operate in the country.

Canadian mining company Goldcorp Inc., whose Marlin Mine operates in Indigenous Mam and Sipakapense Maya territories, continues its 10th year of operation in Guatemala despite overwhelming rejection of their gold mine by locals. Goldcorp has relentlessly criminalized Indigenous and campesino men and women who oppose the mega-project and even evaded an order from the Inter-American Commission on Human Rights (IACHR) to suspend operations after human rights and environmental concerns were brought to the international body.

In Honduras, Canada played a crucial role supporting the 2009 U.S.-backed military coup. It refused to sanction the de facto military regime which seized power because of Canadian economic investments in the country. Soon after, the Canadian Embassy lobbied for reforms in the Honduran mining law, despite open opposition in civil society to open-pit mining operations. According to a 2012 report by MiningWatch Canada, from “January 2010 to January 2013, Canadian representatives worked hard to help pave the way for a law that would be more favorable to the interests of Canadian companies.” Similarly, the Council on Hemispheric Affairs found that Canada was one of the key influences in establishing the National Association of Metal Mining of Honduras (ANAMINH), which allows for lifelong concessions, tax breaks and subsurface land rights for Canadian mining companies. Canada has tipped the scales in their favor by lobbying for greater concessions for foreign investment in the Honduran mining sector.

Beyond the new mining law, Canada positioned itself favorably in the 2014 Canada-Honduras Free Trade Agreement, which benefits industries’ commercial relationships with the state. The Council of Canadians, a social justice advocacy group, believes that the FTA will “weaken the ability of government to legislate for the public good and undermine community, human, labour and environmental rights.” In Honduras, 52 percent of all conflict stems from the management of natural resources. Goldcorp’s presence in the Siria Valley has attracted considerable concern regarding the multinational’s use and contamination of local water supplies and subsequent health concerns related to metallic extraction. Despite reported environmental and human rights violations, the company continues to operate with impunity.

In neighboring El Salvador, the government placed a moratorium on mining in 2008 in response to an overwhelming public outcry to ban extractive processes and protect the country’s dwindling clean water supply. Upon implementation, mining licenses previously granted were revoked, thus putting extractives out of business at a time when the price of gold was over US$1,000 an ounce.

In response, Canada’s Pacific Rim Mining Corp. (now OceanaGold) sued El Salvador for US$301 million, roughly the equivalent of 5 percent of the country’s GDP. Without a doubt, suits such as this threaten democratic decision-making processes in El Salvador (and other countries), as well as the country’s financial ability to provide funds for health care and education. These cases are increasingly heard at the International Centre for the Settlement of Investment Disputes (ICSID), an arbitration tribunal of the World Bank. According to Mining Watch Canada, the number of investor-state suits has risen from just three in 2000, to 169 in 2013; 50 percent of which are brought against Latin American nations. Ultimately, corporations have the ability remove decision-making power from citizens by financially strong-arming poorer nations in international courts.

Canada’s role in Central America has undermined democracy in the region. Canadian mining companies are often found supporting less accountable administrations and propagating corruption at local and national levels. Beyond their appalling Indigenous, human rights and environmental track record, Canadian transnationals risk tainting future generations with governments characterized by even more corruption and impunity and that continue to place the interests of foreign capital over the public’s interests.

By undercutting rights-based efforts by communities, organizations and governments, Canadian extractive corporations are destabilizing already fragile post-conflict states such as Guatemala, Honduras and El Salvador.

Alexandra Pedersen is a critical Canadian and a PhD Candidate at Queen’s University.

This article was originally posted on Telesur English: