Looking into Canada’s controversial mining sector

Across the planet, local communities have accused Canadian mining companies of human rights violations, with many human rights organizations demanding governmental intervention.

Protesters blocked a gold mine in Penasquito, in northern Mexico, controlled by the Vancouver-based firm Goldcorp over a water dispute. Local communities blocked the entrance to the mine, only allowing workers to leave for four days and demanded the company make good on its commitment to supply nearby villages with water.

In a statement, the company admitted that there were some outstanding commitments between the two parties but that all negotiations were broken off due to the protests. Michael Harvey, Goldcorp’s director of corporate affairs, said in a statement that the company was open to dialogue with the local communities, but it would not negotiate under continued blockade, which it deems illegal.

On Oct. 21, nine human rights experts spoke in Ottawa, outlining the problems Mexico faces with Canadian-owned mines.

Gustavo Lozano from Network of Mining Affected Peoples said human rights abuses “have resulted from the arrival of Canadian mining projects, in states such as Guerrero, where entire territories have been militarized, families forced to flee their homes, and their water and land contaminated.” Guerrero state is now infamous for the disappearance of 43 students in 2014.

Daniela Pastrana from Periodistas de a Pie, believes the Canadian state must do more to pressure the Mexican government to put an end to the human rights crisis. Yet she is skeptical any action will be taken due to economic interests. She also stated Canada should consider itself partly responsible for the 180,000 homicides and 33,000 disappearances in Mexico over the past 10 years.

On Oct. 17, 40 members of the U.S. Congress criticized the removal of restrictions on mining in Alaska’s Bristol Bay region, home to half the world’s sockeye salmon. The main concerns most residents have are that the mine will contaminate the water and kill off the billion-dollar fishing industry in the region. Northern Dynasty, a Vancouver-based firm, met with the head of the Environmental Protection Agency (EPA) to ask for restrictions on the Pebble mine.

By end of September, hundreds of families had been displaced by the Filipino army to make way for a mine jointly operated by Australian and Canadian firms MRL Gold and Egerton Gold. Reports reaching the environment group Kalikasan People’s Network for the Environment (Kalikasan PNE), documented 400 families being displaced in Mt. Banoi, with two unconfirmed reports of civilian deaths. When Kalikasan PNE went to investigate on a fact-finding mission, they were reportedly denied entry by the police.

In mid-September, police forced Friends of the Earth activists out of Cookstown Hotel in Northern Ireland after they tried to confront Dalradian Resources. Community groups worry the Toronto-based firm’s proposed gold and silver mine would contaminate the Owenkillew River special area of conservation. Friends of the Earth claim that a Environment Impact and Assessment (EIA) was not required for this mine when it should have been. The organization released a statement: “The absence of an EIA is in spite of the fact that the Department could not rule out likely significant environmental effects, which were subsequently identified by the Department for the Owenkillew River Special Area Conservation.”

Export Development Canada (EDC) is a government-linked investment fund that has poured $100 million dollars into a mining company in India that has been blacklisted by the world’s largest sovereign wealth fund for “systemic human rights violations.” John H. Andersen, a senior official with the Norwegian fund, wrote in a letter to Vedanta after studying the mining firm’s operations, “Following its assessment, the Council has decided not to recommend the re-inclusion of Vedanta in the Government Pension Fund Globe’s investment universe.” Human rights organizations say EDC’s support for Vedanta shows that Canadian institutions lack oversight when it comes to tracking human rights violations and environmental records of companies it finances.

Toronto’s Barrick Gold’s African subsidiary Acacia Mining has received the most attention this year, after John Magufuli, the president of Tanzania, condemned the company for robbing the country of $100 billion from 1998–2017. In May 2017, a governmental panel concluded that the company had significantly underreported the percentage of gold and mineral sand it had exported. The controversy led Magufuli to fire the minister of mining and the Board of Minerals Audit, while the Tanzanian parliament has also voted to review mining contracts to block companies from pursuing the country in international trade tribunals.

While the political battle over royalty payments grows, human rights violations have escalated at the North Mara mine. A recent mining watch fact-finding mission discovered that new cases have come to light of seriously un-remedied harm related to encounters between victims and mine security and police who guard the mine under a Memorandum of Understanding (MOU) between companies involved and the Tanzanian Police force. New cases documented in June included loss of limbs, loss of eyesight, broken bones, internal injuries, children hit by flying blast rocks and by teargas thrown by security as they chased so-called intruders into nearby villages.

At least 22 people have been killed and 69 injured near the North Mara mine since 2014. A 2016 government report found security paid for by Barrick Gold had killed 65 people and injured 270 since 2006, yet Tanzanian human rights groups estimate that 300 mine-related deaths have occurred in the past 10 years. Canada’s High Commission, Ian Myles, set up a meeting with Barrick Executive Chairman John Thornton and President Magufuli.

Two years into its term, the Trudeau government has yet to fulfill any promises on reining in Canada’s controversial mining sector. On the campaign trial in 2015, the Liberals released a statement where they supported an act Respecting Corporate Accountability for Mining Oil and Gas Corporations in Developing Countries. This act would have withheld some diplomatic and financial support from companies found responsible for significant abuses abroad. During this same period, the Liberals released a letter about the mining sector where it noted that a Liberal government will set up an independent ombudsman office to advise Canadian companies, consider complaints made against them and investigate those claims where it is deemed warranted.

So why are Canadian governments so silent when it comes to our mining sector?

Since the 1960s, the Toronto Stock Exchange (TSX) has kept a close relationship with the industry by attracting U.S. capital into extractive projects at home. These projects usually had terms that exempt tax on profits for the first three years, require low royalties and allow corporations to write off much of their asset value by claiming depreciation.

By the 1980s, many legal reforms helped to solidify the TSX position in the industry with schemes like flow-through shares where a major tax incentives were given for investments into small mining firms. While the industry hailed this as a necessity to survive, Vijay Jog, a professor at the University of Calgary found otherwise: from 2007 to 2012 this policy has diverted an estimated $2.5 billion away from the public.

Currently, three-quarters of the world’s mining companies are headquartered in Canada and approximately 60 per cent of them are listed on the Toronto Stock Exchange (TSX). More then half of the global industry is then located on the TSX, with the bulk of this investment coming from outside of Canada.

Alain Deneault– author of Imperial Canada Inc., marks Canada as what he calls an “accommodation state:”  a country that has committed to offering political and financial concessions to a specific industry in the era of corporate globalization. In other words, he says, Canada is a legal haven for the industry, “a country where no real strong constraints apply to mining corporations.”

The Canadian government’s ability and willingness to tax the industry are also weak due to the continual expansion of global trade networks throughout the world and monies ability to transcend national borders. The continual expansion of global trade networks throughout the past century-and-a-half have gradually pushed Canadian tax policy in an increasingly business-friendly direction. Now, in the 21st Century, Toronto has become a safe heaven for the industry, given its near total absence of financial regulation. With such a harmonious relationship, the Canadian state is know dependant on the industry and if the state decided to antagonize the industry then the capital flight that would ensue could do serious damage to the economy, which no political party dares do.

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