MAC/20: Mines and Communities

Glamis Gold and the IFC: Gross Mismanagement in Guatemala

Published by MAC on 2005-12-10

Glamis Gold and the IFC: Gross Mismanagement in Guatemala

by The Halifax Initiative & FoE Canada

10th December 2005

The Marlin mine in the western highlands of Guatemala is the subject of a recent investigation by the World Bank's Compliance Advisor Ombudsman (CAO). The mine, which is owned by Canadian company Glamis Gold, is financed by the International Finance Corporation. In its report, the CAO reveals a series of institutional failures in project assessment and management on the part of the IFC's Oil, Gas, Mining and Chemicals Department.

The CAO began investigating allegations relating to the Marlin mine in May 2005, following receipt, in March, of a complaint by MadreSelva, a Guatemalan environmental organization. The claim alleged that the Guatemalan government failed to consult local indigenous groups about the mining concession, in violation of Convention 169 of the International Labour Organization (ILO). The claimants also alleged that they were not informed of the dangers associated with the use of cyanide in gold extraction, that the excessive use of water by the mine compromised scarce community water resources and that the construction of the mine exacerbated social tensions, creating conditions for violence.

The CAO report was released in September 2005. While the CAO dismisses complainants' concerns regarding water resources in Sipacapa, the area least affected by the mine, it reveals glaring oversights on the part of the IFC. The Report found numerous instances "where increased clarity and greater rigor on behalf of IFC would have been helpful to addressing issues raised by complainants" (p. 39) . A partial list of the most serious shortcomings identified in IFC due diligence and project management includes:

· The IFC failed to guarantee that adequate consultations were carried out with affected populations (p. 33). The CAO confirms findings made by the Guatemalan Human Rights Ombudsman. In May 2005, the Guatemalan Ombudsman issued a report arguing that the licence for the Glamis mine should be revoked because the government failed to consult affected communities about the concession, in violation of ILO Convention 169.

· The Environmental and Social Impact Assessment (ESIA), which the IFC used to review the project, prior to loan approval, was fundamentally flawed. Moreover, several environmental management plans were formulated post project approval, and in some cases, after construction began (p.19).

· The IFC failed to ensure that the project met each of the IFC's relevant environmental and social safeguards and other basic procedural requirements (p.20).

· The IFC failed to indicate how it expected the company to address concerns identified by an independent audit of the company's ESIA or how the IFC planned to monitor the implementation of recommended improvements (p.20-21).

· The IFC failed to adequately assess the adverse socio-economic impacts of the mine (p. 26).

· The IFC failed to assess the potential security and human rights issues associated with mine development in a country with a long history of violence and social marginalization (p. 34).

· The IFC failed to assess the Guatemalan government's capacity to effectively mitigate conflicts that might arise in the region and to regulate the project, a capacity that the report describes as very weak or nonexistent (p. 32-33, 39).

The IFC's response to these damning findings is both ruefully inadequate and highly misleading. In a September 8 press release, the IFC disregarded the multitude of institutional failures identified by the CAO and the series of recommendations made by that office to address these failures. Instead, the IFC held the CAO report out as vindication of its involvement in the project.

Given the CAO's finding that the IFC inadequately assessed the Marlin project prior to loan approval, the community of Sipacapa demands:

· an immediate end to all project-related activity in Sipacapa. The community opposes mineral development in Sipacapa. The community demands that the company leave Sipacapan territory, and that it remove all machinery and installations;
· that the Bank offer Sipacapa real development support that responds to community needs.

If these demands are not met, IFC must recall its loan.

Finally, the IFC's extreme mismanagement of the Marlin mine and its unwillingness to adopt institutional reforms call into question its role in the extractive industries. Recent criticism regarding Marlin comes in the wake of the World Bank Extractive Industries Review. The Review called on the World Bank Group to dramatically reform its involvement in these sectors, ensuring that such involvement is consistent with the Bank's poverty alleviation mandate.

In keeping with this assessment, the IFC's Oil, Gas, Mining and Chemicals Department must either be dramatically reformed to reflect the recommendations of both the Extractive Industries Review and the CAO, or should be shut down.

The President

The World Bank / Washington, D.C.

1st December 2005

We, the undersigned legal representatives of Civil Associations for Development and Community Development Councils of the Municipality of Sipacapa, in the Department of San Marcos, Guatemala, hereby respectfully state:


a) As you know, Glamis Gold Ltd., which undertakes open pit mineral exploitation, established the Montana Exploradora de Guatemala S.A. company to develop the Marlin I mining project in the municipalities of San Miguel Ixtahuacán and Sipacapa in the Department of San Marcos, Guatemala. These municipalities are populated by the Mam and Sipakapense Mayan peoples. Montana began operating in these municipalities despite the lack of government consultations with the inhabitants. We consider this to be a violation of indigenous peoples' human rights, as guaranteed under the Peace Accords, particularly the Accord on Identity and the Rights of Indigenous Peoples, and under Convention No.169 of the International Labour Organization (ILO) on Indigenous and Tribal Peoples in Independent Countries, which was ratified by Guatemala in 1996.

b) On February 19, 2004, the inhabitants of Sipacapa staged a peaceful march to demand, among other things, that the municipal government inform the population regarding the advantages and risks associated with this kind of activity and that the local population be asked to give its opinion regarding mining activity, which could be detrimental to the social, cultural, and environmental interests of our territory. On May 31 of the same year, an event was undertaken with the principal authorities in the Department: deputies, the Governor and mayors, to bring our concern regarding open pit mining to their attention.

c) The Guatemalan Government's failure to fulfill its legal obligation to consult with the population, as established under the laws of Guatemala, including the Municipal Code, laws governing the Development Councils and ILO Convention 169, was taken advantage of by the company Montana/Glamis. According to the company, it undertook "consultation activities with the communities." The public is not aware of such activities and they are not a substitute for the expression of a people that is the legal owner of its territory.

d) As a result of the above, the Sipakapense people organized and carried out a community consultation on June 18, 2005 to establish its position on mining. Of the 13 villages comprising Sipacapa, 11 disapproved of mining, only one voted in favor, and another abstained.

e) On June 21, 2005, the Municipal Council issued a MUNICIPAL AGREEMENT, which, in its operative section, states: "Agrees: 1) To abide by the outcome of the Community Consultation carried out on June 18, 2005 by the community authorities of the villages in the Municipality of Sipacapa, San Marcos." Thus, in accordance with law, the decision of the citizens is to reject the exploration, exploitation, and extraction of minerals in the territory of the Sipakapense people.

In light of the above we hereby respectfully


I. Support for the decision of the Sipakapense people, as expressed in their Consultation, to REJECT the exploration, exploitation, and expansion of metal ore mining in their territory; the withdrawal of the installations and offices of Montana and Sierra Madre from the municipal district of Sipacapa; and the provision of guarantees that the Sipakapense territory will not suffer any damage or negative impact as a consequence of mining activity.

II. That, in honor of its original mission to reduce poverty, the World Bank support the Sipakapense people with a development project that is based on the management of their territory and natural resources, which constitute the ancestral legacy of the Mayan people, and that is generated by the inhabitants themselves for their economic, social and democratic advancement, in a manner that is compatible with the Mayan Cosmo vision that respects Mother Earth.

III. In the event that points I and II are not met, that the World Bank withdraw the loan granted to Glamis Gold.

Comunicado de Sipicapa al Presidente del Banco Mundial

Señor: Presidente

Banco Mundial, Washington.

Los que suscriben somos representantes legales de Asociaciones civiles de desarrollo y Consejos de Desarrollo Comunitarios de las diferentes comunidades que conforma el municipio de Sipacapa del departamento de San Marcos, Guatemala, ante usted respetuosamente exponemos,

a) Es de su conocimiento que la empresa Glamis Gold Ltd. que se dedica a la explotación minera a cielo abierto, ha montado la empresa Montana Exploradora de Guatemala, S.A., para que desarrolle el proyecto minero Marlin I, en los municipios de San Miguel Ixtahuacán y Sipacapa del departamento de San Marcos, Guatemala. Estos municipios son habitados por los pueblos Mayas Mam y Sipakapense, empresa que se instaló sin haber consultado a los pobladores de parte del Gobierno de Guatemala por lo que consideramos que hubo violación de los derechos humanos de los pueblos indígenas, que están salvaguardados en los Acuerdos de Paz, específicamente en el Acuerdo de Identidad y Derechos de los Pueblos Indígenas, así como el Convenio 169 de la OIT Sobre Pueblos Indígenas y Tribales en Países Independientes, esto ratificado por Guatemala en 1996.

b) El año 2004 el 19 febrero, los pobladores de Sipacapa realizaron una marcha pacífica donde entre otras cosas se pidió al gobierno municipal que se informara a la población de las ventajas y riesgos de este tipo de actividad y se solicitó que se efectuara la consulta a los vecinos sobre su opinión acerca de la actividad minera que podría lesionar los intereses sociales, culturales y ambientales de nuestro territorio, a si mismo el 31 de mayo del mismo año, se realizó una actividad con las principales autoridades del departamento; diputados, gobernador y alcaldes, para hacerles llegar la preocupación respecto al tema de minería a cielo abierto.

c) El incumplimiento del gobierno guatemalteco con su obligación legal a consultar con el pueblo, establecida en las leyes de Guatemala, Código Municipal, Leyes de los Consejos de Desarrollo, el Convenio 169 de la OIT fue aprovechado por la empresa MONTANA/Glamis con el fin de lograr el respaldo político y económico del Banco Mundial. Según la empresa, se realizó "actividades de consulta a las comunidades" que jamás se conoció en público y acción que no podría sustituir la representatividad de un pueblo propietario legal de su territorio.

d) Como consecuencia de ello el pueblo Sipakapense se organizó y efectuó una consulta comunitaria el día dieciocho de junio de 2005 para fijar su posición frente a la minería con los resultados de 13 aldeas que compone Sipakapa, once demostraron desacuerdo con la minería, levemente en uno dijo sí y otro se abstuvo.

e) El día veintiuno del mismo mes de junio el Consejo Municipal emitió un ACUERDO MUNICIPAL la cual en su parte resolutiva dice: "Acuerda: I) Acatar el resultado de la Consulta Comunitaria efectuada el dieciocho de junio del dos mil cinco por las autoridades comunitarias de las aldeas respectivas de este municipio de Sipacapa, San Marcos". Por lo que desconformidad a las leyes, la decisión de los ciudadanos es no a la exploración, explotación y expansión de minerales en el territorio del pueblo Sipakapense.
Ante lo expuesto, respetuosamente,


I. Respaldo a la decisión del pueblo Sipakapense, expresada en la consulta, de NO a la exploración, explotación y expansión minera de metales en el territorio Sipakapense, así como el retiro de las instalaciones y oficinas de Montana y Sierra Madre del municipio de Sipacapa; y que se asegure que el territorio Sipakapense no sufra ningún daño o impacto negativo como consecuencia de la actividad minera.
II. Que el Banco Mundial - en honor a su misión original de búsqueda de disminución de la pobreza - apoye al Pueblo Sipakapense con un proyecto de desarrollo basado en el manejo del territorio y de los recursos naturales, que es la herencia ancestral del pueblo maya, y que sea generado por los mismos habitantes para su progreso económico, social y democrático, que sea compatible con la cosmovisión maya de respeto a la Madre Tierra.

III. En el caso que no se cumpla con los puntos I y II, que el Banco Mundial retire el préstamo concedido a Glamis Gold.

Sipacapa, 01 de diciembre de 2005.

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