MAC: Mines and Communities

Canadian mining CEO resigns after attacks

Published by MAC on 2012-06-12
Source: Statement, Canadian Press, Ipolitics

The Chief Executive Officer of a Canadian mining company has resigned.

Nothing extraordinary in that. Except that it came days after community representatives and trade unionists drubbed his company for lack of transparency in its perpetuation of both labour and land conflicts at a Mexican mine.

Just a week earlier landowners and mine employees, along with Canadian allies, also filed a complaint against Excellon under the OECD Guidelines for Multinational Corporations, with the National Contact Point in Ottawa.

Previous article on MAC: Canadian miner breaks conflict resolution process with Mexican workforce

Excellon Resources, Inc CEO Resigns Following Mexican Community and Labour Representatives' Visits to Ottawa and Toronto

Joint press release

5 June 2012

Toronto, 5 June, 2012 - Jeremy Wyeth, Chief Executive Officer of Excellon Resources Inc., handed in his resignation to the Board of Directors on June 4 following a confrontational shareholder meeting on May 31 in Toronto.

The resignation comes only days after members of the communal landowners group, Ejido "La Sierrita", attended Excellon's shareholders' meeting to vote against stock options for the board of directors and demand that the company resolve community and labour disputes at the La Platosa mine in Durango, Mexico. The resignation also comes a week after both landowners and employees in Mexico, along with Canadian allies, filed a complaint against Excellon under the OECD Guidelines for Multinational Corporations with the National Contact Point in Ottawa.

During the shareholder meeting, community representatives Daniel Pacheco and David Espinoza insisted that the company send Canadian management to a negotiation in early June to resolve a long-simmering land conflict with the Ejido La Sierrita. "Your management in Mexico has failed to respect its agreement with our community and avoided coming to the table to resolve our legitimate concerns. We need your Canadian management to attend negotiations in early June to ensure significant change. Only then will we know that Excellon is taking the peaceful resolution of these conflicts seriously," said Mr. Pacheco at the May 31st meeting.

The representatives also insisted that the company engage in negotiations of a legitimate collective bargaining agreement with workers in the mine.

Shareholders noted the drastic difference between the community member's account of what is happening in Mexico and the company's official statements regarding the conflicts.

"It is clear that shareholders were not happy with the company leadership in last Thursday's meeting," said Mark Rowlinson of the United Steelworkers (USW). According to Mr. Rowlinson, shareholders were concerned about the recent acquisition of land in northern Canada and the lack of of transparency on the part of Excellon to its shareholders regarding the company''s perpetuation of both labour and land conflicts at the La Platosa mine in Mexico.

The USW and ProDESC have routinely communicated with shareholders over the last year and warned of the lack of disclosure on community and labour problems which, the union alleges, is a reason for the depressed stock price. Last week, the USW sent Excellon-s major shareholders a copy of the OECD complaint filed by various worker and community stakeholders. The shareholders' concerns in the meeting were evident in heated exchanges that several shareholders had with Board of Directors Chairman, Peter Crossgrove, as well as in the narrow margin of what was supposed to be a routine vote to ratify stock options to the board of directors.

After a year of continued concern about the conflicts at La Platosa and stagnant share prices, shareholders expressed that they were looking for something new. Mr. Wyeth's departure may herald the company''s response.

"It is our hope that these changes also indicate a willingness on the part of the company to change tack regarding its perpetuation of both labour and social conflicts at the La Platosa facility." Said Mr. Espinoza.


Christopher Benoit, ProDESC (Project of Economic, Social and Cultural Rights)
(tel) +55-5212-2230

Jennifer Moore, Latin America Program Coordinator, MiningWatch Canada
(613) 569-3439

Daniel Pacheco, Ejido "La Sierrita", +52-416-876-2502
Mark Rowlinson, United Steelworkers, 416-544-5961

Mexico-Canada mining spat illustrates failure of accountability offices: NGOs

by James Munson

29 May 2012

A delegation of Mexican miners who accuse their Canadian bosses of union busting are asking Ottawa for help after the ombudsman put in place by the Harper government to handle mineral conflict overseas failed to resolve the crisis.

Workers from the La Platosa silver mine in Durango, Mexico, complain that Excellon Resources Inc., a junior exploration and production firm headquartered in Toronto, have fired union organizers, dumped wastewater, and neglected the community's concerns.

The miners have travelled to Canada this week to voice their disagreement through an international complaint mechanism known as the OECD Guidelines for Multinational Enterprises, bypassing the Extractive Sector Corporate Sector Responsibility Counsellor set up by the Harper government.

Despite visiting the mine last year, the counsellor, Marketa Evans, was not able to resolve the conflict because her office is voluntary and the company pulled out of mediation talks. That fact, and the community's continued rocky relationship with Excellon, have led mining NGO's to argue the counsellor's office is ineffective.

"(The counsellor) has been given a mandate that is absolutely lacking in its ability to hold companies to account," said Jennifer Moore, Latin American program coordinator with MiningWatch Canada, at a press conference in Ottawa on Tuesday.

The conflict began after Excellon signed a deal to lease land from the La Sierrita ejido in Durango state in 2008. An ejido is a system of communal farmland ownership used across Mexico.

"Today the company has only complied with the minimum of clauses in the contract," said Juan Daniel Pacheco, a former president of La Sierrita ejido's general assembly, at the press conference.

Excellon is suppose to build a water treatment plant that would leave the mine's effluent clean enough for farm use, said Pacheco. The mine is seeking to use 10,000 gallons of water a minute in a planned expansion of its operations in an arid desert region, he said.

"Water for us is gold," said Pacheco. "And the company is not complying with these clauses that are necessary for social development in our community."

The community has also written a land-use plan designed to develop the La Sierrita region that Excellon has refused to follow, he said. As well, the company has begun exploring for ore beyond the contract's parameters.

But the real conflict is over labour rights.

On February 2 2009, Jose Paulin Contreras died under a rock fall inside the La Platosa mine, said Juan Francisco Rodriguez, a worker at the mine and former colleague of Contreras, at the press conference.

Excellon classified the death as non-professional, said Contreras. Nevertheless, the company agreed to give Contreras's relatives a lump sum of nearly $3,000. Mexico's social security program gave the family of four a monthly stipend of $180.

The seemingly small sum spurred the workers to unionize.

"The company turned its back on our colleague and his family, and as a result of that we realized we had to organize and collectively bargain in order to secure our lives and those of our families," said Rodriguez.

The miners formed their local of the National Mining Union of Mining, Metallurgic, and Similar Workers of the Mexican Republic in November 2009 and soon felt pressure from Excellon to desist.

"The company has fired us, harassed us, demoted us and lowered the salaries for several of my colleagues but we continued to fight for a collective bargaining agreement or our families," said Rodriguez.

Excellon has also been involved in creating a phantom union with no actual members at the mine to avoid collective bargaining, he said.

This showdown was exactly the kind of thing the Canadian CSR Counsellor office, created in March 2009, was made to handle.

Created in the wake of a groundbreaking federal report that called for the regulation of Canadian mining companies overseas in 2007, the CSR office has since been derided by civil society actors as a weak and ineffective tool for suffering communities.

When the counsellor received the La Platosa complaint last year, she made two trips to Durango to evaluate the situation and begin talks with Excellon. The company, initially enthusiastic, pulled out of mediation and forced the counsellor to close the file last fall.

At the press conference, Rodriguez thanked Marketa Evans for visiting the mine and listening to their concerns.

"Unfortunately, following Ms. Evans visit in Mexico, there haven't been any results from the process and that's why we've come back to Canada," he said.

Canadian NGOs who specialize in bringing accountability to the mineral sector say the counsellor's narrow mandate means it's doomed to fail, as the Excellon conflict indicates.

"When the CSR complaint was closed in October, we basically declared it a failure," said Moore of MiningWatch. "Her hands are tied from the beginning."

"When Excellon didn't want to sit down, she had no further options. She had no further mechanism for sanctions - for investigations - to carry out a process that would bring resolution for the community."

Perhaps more damning is that with the CSR counsellor now out of the picture, the community around La Platosa has resorted to using a nearly 15-year-old complaint mechanism instead of the newer office.

The OECD Guidelines for Multinational Enterprises were created in 1976 as set of ethical rules that companies headquartered in signatory countries have to abide by. Canada joined in the late 1990s.

Companies can have complaints brought against them by people anywhere in the world. The complaints are delivered to what's called National Contact Points, which are basically the government department (usually foreign affairs) assigned to process complaints.

If two countries are signatories to the guidelines, then one of them takes the lead on processing the complaint.

In the Excellon-Durango spat, Mexico is taking the lead since it is also a signatory to the guidelines.

But at the core of the Mexican delegation's visit to Canada are worries about Mexico's ability to process the complaint impartially.

The Mexican Labor and Social Welfare Ministry, which is included as one of that country's National Contact Points for the OECD Guidelines, has a history of hostility toward the national mining union, said Christopher Benoit, who works in Mexico City with the Economic, Social and Cultural Rights Project, or PRODESC.

According to Mexican press reports, the Labor Ministry has refused to recognize the current leader of the union for the past six years until a Mexican Supreme Court decision this month forced them to overturn their position. That leader, Napoleon Gomez Urrutia, is currently living in self-imposed exile in Canada because of criminal charges that Benoit called "trumped up."

"So the request is asking Canada to take a lead," said Benoit. "The result would hopefully lead to a mediation process whereby a collective bargaining agreement can be reached."

It's an odd situation, given that the venue in which the OECD Guidelines are enforced is usually one without corruption issues. That's because in most situations the complaints come from a developing country that is not part of the OECD Guidelines and thus the complaint is processed in a developed country where the company in question is headquartered. Whereas in this case, Mexico is developed enough to part of the OECD Guidelines, but is not necessarily free from corruption in parts of its government.

"We've come to have the company stop taking advantage of Mexico's corrupt labor system," said Rodriguez, one of the miners at the press conference.

MiningWatch, the Canadian Labour Congress, the United Steelworkers and the Mexican national mining union filed their request to the Canadian National Contact Point, the Department of Foreign Affairs and International Trade, on Monday.

"So far the response that we've had from the National Contact Point is that they would defer to the Mexican office and offer support to that office," said Moore. The department cited "administrative" reasons for the deferral to Mexico, she said.

"Our view on the guidelines is that these are exceptional circumstances and the Canadian side should take the lead given hat we cannot be confident that the Mexican side could give impartial, fair and neutral treatment to this case, and to successfully mediate the dialogue the workers are seeking," she said.

The Department of Foreign Affairs and International Trade did not directly answer a request for comment .

"Canada's mining sector leads the world in responsible mining practices," says an email sent from department spokesperson Me'shell Gulliver Belanger, when an response on the complaint was requested.

At the press conference, a representative from the Canadian Labour Congress called on Canada to take more responsibility for it's mines overseas.

"Excellon's behaviour in Durango is not a Mexican problem, it's a Canadian problem," said Hassan Yussuss, secretary treasury for the congress.

The Mexican delegation plans to visit Excellon's annual general meeting in Toronto on Thursday.

Excellon did not respond to a request for comment.

Complaint filed against Excellon Resources by landowners and workers in Mexico

The Canadian Press

30 May 2012

OTTAWA - Communal landowners and workers at the La Platosa mine have filed a complaint against Excellon Resources in Canada and Mexico accusing the company of violating labour rights and failing to comply with a land use contract.

David Espinoza, president of the group of communal landowners known as La Sierrita, said the company has failed to build a water treatment plant and has not provided the landowners with food services contracts at the mine or ensured preferential hiring.

"We own this land and entered into this agreement with an explicit understanding that we would be equal business partners in the venture. Instead, the company has ignored its obligations," Espinoza said in statement Tuesday.

Company officials did not immediately respond to a request for comment about the allegations, which have not been proven.

The groups filing the complaint said it is the second time that workers have complained about labour rights violations at La Platosa.

The first complaint was submitted to the Canadian Extractive Sector Corporate Social Responsibility Counsellor in 2011, but they said there was no resolution.

The La Platosa mine in Mexico is a silver, lead and zinc operation.

Excellon was forced to stop operations at its La Platosa last year as a result of demonstrations.

Production stopped after protests limited access to the property to essential service workers and security personnel.

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