MAC: Mines and Communities

Canadian police raid Calgary miner over bribery allegations

Published by MAC on 2011-09-06
Source: Globe and Mail, ALAI, statements (2011-08-29)

But Canada remains "a paradise for corporate impunity"

Canada's mounted police (RCMP) have raided the Calgary office of Canadian mining company, Blackfire.

The RCMP alleges that the company channeled bribes into the personal bank account of a small-town Mexican mayor, to ensure protection from anti-mining protesters.

Not surprisingly, Blackfire claims it "never knowingly paid bribes to anyone".

In November 2009, a Blackfire employee, as well as a former employee and one-time contractor, was arrested for the shooting of anti-mining activist Mariano Abarca Roblero.

Mr Roblero's murder prompted several social justice organisations - including MiningWatch Canada - to travel to Mexico and then urge the RCMP to probe allegations of corruption. However,  the police say they are not investigating his death.

The Mexican Network of Mining Affected Communities has also issued a statement which indicts Canada's overall poor record on corruption investigations. 

The Network claims that: "The Canadian government’s slow pace continues to cover up those companies that violate laws beyond its borders.

"This also explains why the majority of the world’s mining companies have their headquarters in Canada or are registered in this country, a paradise for corporate impunity".

"Since Canada approved the Corruption of Foreign Public Officials Act in 1998 only two cases have been addressed".

See earlier story on MAC: A victim's son speaks out - Canada

ESPAÑOL

RCMP raid Calgary miner over bribery allegations

By Greg McArthur

Globe and Mail

29 August 2011

The RCMP has raided the office of a Canadian mining company in Calgary alleging in an affidavit that the company funnelled bribes into the personal bank account of a small-town Mexican mayor to ensure protection from anti-mining protesters.

On July 20, a team of Mounties executed a search warrant on the office of Blackfire Exploration Ltd., a privately owned junior whose operations in the southern Mexican state of Chiapas have been embattled since 2009, when a vocal opponent of its barite mine was murdered in a drive-by shooting.

The company has not been charged with a crime and says it is co-operating fully with the RCMP investigation, which is part of a broader effort by the Mounties to enforce Canada's Corruption of Foreign Public Officials Act - the law that forbids the payment of bribes abroad.

In a sworn statement in support of the search warrant application, Constable Terri Lynn Batycki alleges the company illegally paid a local mayor, Julio Cesar Velazquez Calderon, about $19,300 (CDN) "to keep the peace and prevent local members of the community from taking up arms against the mine."

When the mayor's requests became more exorbitant and sleazy - including demands for airline tickets and a "sexual night" with one-time Playboy model Niurka Marcos - the company complained to the state government that they were being extorted, Constable Batycki alleges.

In a statement, Blackfire said it never knowingly paid bribes to anyone. The company, which began mining in Mexico in 2008, explained that it was under the impression that the thousands of dollars it transferred were for the benefit of the citizens of the small town of Chicomuselo, destined for its fair and other public works.

"When we became aware that funds were possibly used for other purposes, we took immediate steps to stop payments..." the statement said. "We expressed our deep concern that contributions intended for the public were not being used accordingly."

Relying on the company's banking records, which were obtained through judicially approved production orders, as well as documents from Mexico, Constable Batycki alleges that Blackfire's Mexican subsidiary regularly transferred payments, month-by-month, directly into Mayor Calderon's personal bank account.

However, it was not allegations of bribery that first brought Blackfire under the glare of public scrutiny. In 2009, when the mayor stopped supporting the mine, protesters took over the site. By November, tensions were high, and three men - a Blackfire employee, as well as a former employee, and one-time contractor - were arrested for the shooting death of anti-mining activist Mariano Abarca Roblero.

Mr. Abarca's murder is not being investigated by the Mounties and Blackfire has condemned his killing, but his slaying prompted several social justice organizations, such as MiningWatch Canada, to travel to Mexico and encourage the RCMP to probe allegations of corruption.

Alexandra Wrage, whose non-profit company TRACE International provides training to companies and lobbyists on how to comply with anti-bribery laws, said that the allegations about Mayor Calderon's escalating needs fit a classic pattern.

"As soon as you mark yourself as a company that's willing to play along, the demands usually increase both in number and in value - and in this case, outrageousness," Ms. Wrage said. "Once you're in bed with these guys, you lose control of the situation very quickly."

The investigation is one of more than 20 that the RCMP has said is being probed by its anti-corruption units, which were launched in 2008. In June, Calgary-based Niko Resources paid a $9.5-million fine after pleading guilty to bribing a Bangladeshi energy minister with a luxury SUV, as well as a trip to Calgary, New York and Chicago.

Pierre Gratton, the president and chief executive officer of the Mining Association of Canada, said his members support the law. He stressed that Blackfire was not a member.

He said he did not believe that bribery is a big problem for the industry, but added: "If there are companies running afoul of the law then the government should deal with the companies if they get caught."

- With a report from Andy Hoffman


Canadian civil society welcomes RCMP raid on Blackfire Exploration's offices

MiningWatch Canada & others release

29 August 2011

(Ottawa and Toronto) MiningWatch Canada, Common Frontiers, the United Steelworkers (USW), and Council of Canadians welcome news of an RCMP raid on the Calgary office of Blackfire Exploration, the privately-held company whose barite mine in Chiapas, Mexico has been in the news since the November 2009 murder of anti-mining activist Mariano Abarca.

The Globe and Mail reports that the RCMP raided Blackfire's offices on July 20, 2011, alleging that Blackfire "illegally paid local mayor, Julio César Velazquez Calderón about $19,300 (CDN) ‘to keep the peace and prevent local members of the community from taking up arms against the mine.'"

"It's encouraging that Blackfire's operations are being investigated under the Corruption of Foreign Public Officials Act," says Jamie Kneen, Communications Coordinator for MiningWatch Canada. "It's really the only law that holds Canadian companies accountable for their activities outside the country. We hope that it will bring about some justice in this case.

"If a case this egregious can't be successfully prosecuted there's little hope for accountability in the myriad of other cases we are hearing complaints about."

Following Abarca's murder, and at the request of the Mexican Network of Communities Affected by Mining, MiningWatch, Common Frontiers, and USW organized a fact-finding delegation to Chiapas. The delegation's findings brought serious social and environmental impacts of the mine to public attention and led to the request for a bribery investigation, sponsored by nine organizations including the Council of Canadians.

"The RCMP investigation is a positive development, but it's also just the tip of the iceberg," says Rick Arnold, former coordinator of Common Frontiers, who accompanied the delegation. "Local residents with whom we spoke held Blackfire responsible for the murder of Mariano Abarca, which also has yet to be fully investigated."

Following the shooting of Abarca in front of his home on November 27, 2009, three past company employees were jailed, but they still await court appearance relating to this murder.

Despite company claims that it practices environmentally responsible mining, the delegation also found no indication of any environmental mitigation at the mine site, which remains suspended since December 2009. The company initiated legal action in the Chiapas court system to try to overturn the decision of the Chiapas Ministry of Environment and Housing (SEMAVI) to suspend the mine.

"Blackfire should leave Chiapas, once and for all, and issue a public apology to local communities," said Mark Rowlinson, Legal Counsel for the United Steelworkers who also participated in the delegation. "We saw first hand the human and environmental impact of the company's presence in Chicomuselo. The costs to the community have already been too great."

José Luis Abarca Montejo, son of Mariano Abarca, who has taken a leadership role in his community since his father was killed, made a visit to Canada in September 2010, when he supported calls for stronger legislation to regulate Canadian mining companies overseas. " I think the government of Canada should be more careful with these companies who come to Mexico and treat us badly," Abarca said to Embassy Magazine in Ottawa. "I call on the Canadian government to do something because we're the same as any other citizens. We have rights too."

 -

For more information, please contact:

Jamie Kneen, Communications Coordinator, MiningWatch Canada, jamie(@)miningwatch.ca (613) 569-3439
Rick Arnold, former Coordinator, Common Frontiers - Canada, rickarnold(@)i-zoom.net, (905) 352-2430
Mark Rowlinson, Counsel, United Steelworkers, mrowlinson(@)usw.ca, (416) 544-5983
Stuart Trew, Trade Campaigner, Council of Canadians, strew(@)canadians.org, (416) 979-0451


Canadian Mounted Police pursue Blackfire

Press Release: Mexican Network of Communities Affected by Mining - Chiapas

29 August 2011

The Royal Canadian Mounted Police (RCMP) raided the offices of Blackfire Exploration Ltd in Calgary, Canada on July 20 as part of investigations into accusations against the company and its directors of having bribed the former mayor of the Municipality of Chicomuselo, Chiapas, Mexico, Julio César Velázquez Calderón. [1]

This conflict, which is steeped in irregularities, illegalities, and collusion between the Canadian mining company, the Mexican federal government and environmental authorities, the Chiapas state government, and the municipal authorities, culminated with the assassination of anti-mining leader Mariano Abarca Roblero on November 27, 2009.

One year and four months after a complaint was made to the RCMP for investigation into bribery in this case, in March 2010, [2] the RCMP has begun to act on the evidence brought forth and on the confession of the company. Not in vain, Transparency International published a report in May, which put Canada in last place in the struggle against bribery and corruption among G7 countries and among member countries of the Organization for Economic Co-operation and Development (OECD), which includes around forty nations. [3]

The Canadian government's slow pace continues to cover up those companies that violate laws beyond its borders. This also explains why the majority of the world's mining companies have their headquarters in Canada or are registered in this country, a paradise for corporate impunity.

Since Canada approved the Corruption of Foreign Public Officials Act in 1998 only two cases have been addressed. En 2005, a small fine was levied against an Alberta based company, and there has been an additional case of corruption in [Bangladesh].

On the other hand, only six days after assuming his post on January 6, 2011, the new mayor of Chicomuselo, Límbano Miguel López, decried that "the ex-public officials (ex Muncipal President, Julio César Velásquez Calderón, ex Trustee Alirosay Muñoz Pérez, ex Alderman Conrado Flores Hernández, in collusion with ex Treasurer Lidubin Ramos Cifuentes and ex Director of Public Services Abigail Morales Ramírez) still had not handed in the cheque-books for the city's public accounts, leaving the books of the treasurer in disorder (...), nor have public works records and tax records had been found." [4]

Terri Lynn Batycki of the RCMP alleges that Blackfire illegally paid Julio César Velásquez Calderón "to keep the peace and prevent local members of the community from taking up arms against the mine." In response to these accusations against Blackfire, Pierre Gratton, President and Executive Director of the Mining Association of Canada, said that he supports the law, indicating that Blackfire is not a member of this association, and denying that bribery is a big problem within the mining industry.

Not only is the culture of corruption and of poor public management under ex Mayor of Chicomuselo clear, but bribing municipal authorities is a common practice among multinational mining companies given that it is the municipality that must authorize land use changes and other aspects necessary for mining companies, as well as who may assert territorial control and security for mining investments.

Within this context, we demand that the RCMP determine who is responsible and punish those found guilty as soon as possible. It is also urgent that the RCMP make a visit to Chiapas in order to further their investigations.

In the same way, we demand that the governor of Chiapas, Juan Sabines Guerrero, facilitate investigations into the corruption of ex Mayor of Chicomuselo in response to the complaint and supporting evidence of money changing hands between Blackfire and former Mayor of Chicomuselo, which REMA and Otros Mundos A.C. brought before the Prosecutor's Office of the State Congress of Chiapas and the Council of the Municipality of Chicomuselo.

Timeline [5]

Blackfire out of Chiapas!

[1] http://www.theglobeandmail.com/news/national/rcmp-raid-calgary-miner-over-bribery-allegations/article2145226/

[2] See the following document: http://www.otrosmundoschiapas.org/index.php/mineria/86-mineria/631-solicitan-a-la-policia-real-montada-de-canada-investigar-a-la-minera-blackfire.html

[3] http://www.theglobeandmail.com/news/politics/canada-ranked-worst-of-g7-nations-in-fighting-bribery-corruption/article2032347/

[4] http://www.diariodechiapas.com/noticias/2011010619312/region/siembran-el-caos-exfuncionarios-municipales-corruptos-de-chicomuselo

[5] To see all of the prior incidents in the Blackfire case, see: http://www.otrosmundoschiapas.org/index.php/mineria.html

[6] See the following documents: http://www.otrosmundoschiapas.org/index.php/mineria/99-mariano-abarca/583-los-pagos-de-la-minera-canadiense-blackfire-al-presidente-municipal-de-chicomuselo-chiapas.html

[7] See the following document: http://www.otrosmundoschiapas.org/index.php/mineria/86-mineria/631-solicitan-a-la-policia-real-montada-de-canada-investigar-a-la-minera-blackfire.html

[8] See the following: http://www.otrosmundoschiapas.org/index.php/mineria/99-mariano-abarca/781-rema-chiapas-demanda-investigacion-por-corrupcion-del-ayuntamiento-y-la-empresa-canadiense-blackfire.html


Resistance to the mining industry in Mexico

By Andrea Caraballo*

América Latina en Movimiento (Translated by Scott Campbell)

2 August 2011

Part 1

"...In Mexico they have been beating us down a lot with these mines. There are several activists who have been murdered, there is a lot of persecution; but life goes on through the communities and countries."

These are the words of Rurik Hernández, member of the Broad Opposition Front (F.A.O.) to the San Xavier Mine, in the municipality of Cerro de San Pedro, belonging to the state of San Luis Potosí, Mexico. This is an open-pit mine extracting gold and silver, where cyanide is used as an extractor in the heap leaching process. After ten years of legal rulings, the F.A.O. has won some victories; the company doesn't have permits, they were able to cancel the project. However, the company keeps mining.

But the F.A.O. also participates in advising groups, peoples, communities and movements who are facing off against other mining ventures.

Many are aware of the gold extraction process, but what can you tell us about the iron mines?

To understand the matter we have been investigating the iron mines; mainly here in Mexico, in the state of Oaxaca. In Santa María Zaniza, called Zaniza Project. It's a Mexican company affiliated with the Chinese - half of the company is Chinese. The processing of iron is dangerous, principally because they are huge open-pit mines and the means of obtaining the mineral is by very finely grinding all of the earth. Then they use magnets and the iron has the ability to be attracted to this magnet; so they magnetize and pull. The dust that remains, which doesn't have the mineral they need, is usually put in the tailings dams or piled on the land around the pit.

What risks are there to the health of those nearby?

The main risk that we've detected up to now in what we've investigated is that the rock is so finely ground it is like powdered sugar. So the wind carries it very easily and the people inhale it. This dust they remove the iron from is generally in very mineralized areas, it has different minerals, not just the ones they're looking for: it also has lead, arsenic, heavy metals; and it is those that create health risks. The wind carries this dust, bringing it to rivers, streams, lakes; it contaminates the water sources the people drink from. It also gets in their houses; even their food, without us being aware of it.

To have contact with heavy metals in this way causes cancer and many illnesses. Here in Mexico there is the example of Lázaro Cárdenas, in Michoacán, where there is an iron mine. The dust kicked up contaminated the water. The people from that community have an elevated rate of cancer in the region and basically it is due to mining activity.

As well, the open-pit, as we have seen in many places, removes all the trees and removes everything; it has a very severe impact on the environment. They get rid of mountains and valleys over great expanses, they impact rivers, be they on the surface or underground, and where a mine arrives, that area can't be planted due to the serious environmental destruction and the huge consumption of water.

What is the iron extraction process?

Usually, where the extraction project is they put in a pelletizing plant or they build a pipeline which transports the ground up iron, they mix it with water and pump it through this pipeline for hundreds of kilometers to the where the pelletizing plant is; and in the pelletizing plant they pack it and ship it. If not, they put a blast furnace in the area which melts it and they just take the plates or beams for export to the market, principally to Asia, given all the growth. The impacts of iron mining on the environment are very severe, because they are very large projects and usually are projects that operate for a long time. Gold extraction doesn't last more than 13 or 14 years, but iron extraction can go on for 40 or 50 years, depending on the size of the deposit.

What have you learned through this experience?

Well, what we have learned in the end is that the mining companies are very organized. They have a defined strategy, a work plan that they have copied from mines all over the world; they have learned from all over how to get these projects underway. First they go to the government, they see how the mining legislation is, what the regulations are, and they look at how convenient it is. If it doesn't suit them, they push from some reforms or legislative changes, they undertake campaigns to say that the mining and megamining industries are good for the national economy because it brings work, it brings investment; and that is something that many governments go for. The idea of saying that they are going to bring in billions of dollars with this investment and they are going to give work to thousands of families, they see it as a part of development, of progress for the communities; and they don't repair much of the environmental damage because it doesn't suit them.

But something else that we've learned, that we still find difficult, is the division it creates in the communities. The companies carry out social work, anthropological studies, in order to learn what they can do in order to divide the communities and then they start to detonate these points of division. It creates fights inside of families, it creates fights between people, misunderstandings and disagreements begin and it gets to the point where they won't even talk; and so some go over to the company's side and they are easily bought off. They offer them work or give them a little money and they make them believe that the people who oppose the mining project are against them, that they are against progress, against their right to work, their right to seek well-being and that is how they are able to make these issues personal.

Could you tell us more about the strategies these companies use?

There are well-defined strategies for community division, for coopting the authorities, the corruption of judges and primarily to see that in any place, at any cost and by any means the mining project is imposed. The mining projects don't accept "no," they accept a "no" from the communities; but the minerals are there, they're not going anywhere. The minerals are going to remain underground and they have all the time in the world to create the conditions in the region, be they social, political or economic, so that the project is imposed.

We see that the main indications are that roads or highways are being built where before they weren't necessary, and we also see that government officials from various agencies or ministries begin to show up, the environmental authority, the secretaries of the economy, who are the ones which regulate the concessions here in Mexico; it is a broad network and they seek out the corruption at all levels of government, well, so that the projects, when the communities don't want them, they are imposed. And they condition support for the towns based on signing on that they accept the mining project.

What message would you give to other places that are facing megamining?

The message is to resist; life continues. Here in Mexico they have been beating us down a lot with these mines. There are several activists who have been murdered, there is a lot of persecution; but life goes on through the communities and countries, and, well, the greeting that is sent from Mexico, from the Broad Opposition Front, is that they know that they are not alone, that we are here in Mexico, but also in Argentina, Chile, Peru or in Colombia there are other organizations facing the same thing, and to seek out contact for a continental alliance; we look to the south in order to learn from the peoples and to see that we are one people, just at different latitudes, but from Mexico to Patagonia we are one people. Greetings to everyone in Uruguay, who are resisting the Aratirí and Zapucay mines.

How can one contact you or learn more about the work of the F.A.O.?

We are online, at a blog called proyectocerro.blogspot.com; also on Twitter as @faoantimsx, and on Facebook, frenteamplioopositorfao. There we can link up and what you need, we are there to share it.

--

* Andrea Caraballo is coordinator of the C.A.S.A. Collective, based in Oaxaca, Mexico, and a member of the Colectivo Contraimpunidad in Montevideo, Uruguay.

Edits: Ana De León and Saúl Hernández.

http://www.colectivocasa.org/

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