MAC: Mines and Communities

Excellon Once Again Break Negotiation with Communal Landowners of La Sierrita

Published by MAC on 2012-08-21
Source: Statement, Reuters, iPolitics, Upsidedownworld

Excellon Once Again Break Negotiation with Communal Landowners of La Sierrita

ProDESC Press Release

13 August 2012

Durango Secretary of State Recognizes the Community’s Goodwill and Regrets Excellon’s Unwillingness to Negotiate

Mexico City, D.F. Excellon quickly broke an attempted negotiation with communal landowners La Sierrita on Monday, August 13. The meeting took place in the offices of the Mexican federal Secretary of Government in Mexico City.

Jorge Triana Tena, representative of the Liaison Unit of the Secretary, hosted the meeting along with Arturo Yañez and Jaime Fernández Saracho, representatives of the Secretary of Labor and of Government of the State of Durango, respectively.

The landowners’ representative body (Ejido as it is known in Spanish) was represented by its Negotiation Committee, members of which travelled over 10 hours from Durango to attend the meeting. The Negotiating Committee was led by the president of the General Assembly, David Espinoza. Members of the Proyecto de Derechos Económicos Sociales y Culturales (ProDESC), advisors to the Ejido, were also present. Robert Moore, Chief Operating Officer of Excellon Resources Inc., and his attorneys represented Excellon de México S.A. de C.V. at the table.

Before the meeting, Mr. Triana Tena assured the communal landowners that the company was ready to negotiate. After a short introduction and not even five minutes into the meeting, Mr. Moore took the microphone and asked if the peaceful protest at the entrance of the mine had been lifted. The government representative responded that it had not been lifted and the landowners stated that, as before, they were willing to lift the blockade during negotiations as the two parties made advances to resolve their grievances.

Mr. Moore quickly stated, “I am very disappointed in the government. You told us that the blockade would be lifted before we sat down to negotiate today. While the blockade continues, we do not have anything to discuss.” With that, he stood up and left the room.

After a break, Mr. Fernández Saracho stated that he recognized the goodwill of the Ejido representatives to dialogue and added, “I hope that [Excellon’s representatives] are able to gather themselves and that we can restart negotiations. I respect Excellon, but I do not agree with its position.” Mr. Triana Tena, of the Liaison Unit, assured the community that the government “is equally as outraged as you are” with Excellon’s posture.

The Ejido’s president, David Espinoza, made clear that the Ejido has been ready to negotiate. He insisted that the Ejido was ready for negotiation on August 2 in a meeting with the federal government in Gómez Palacio, Durango – a meeting which the company refused to attend – and it would be ready when Excellon decided that it is willing to negotiate. “We have struggled to defend our human rights and our right to self-determination of our land by means of a just, equal and respectful relationship with the company.”

Alejandra Ancheita, ProDESC director and advisor to the Ejido, stated that: “It is not possible that the government tolerate a company that violates the rights of the Ejido members. The government cannot accept a company that places conditions on the State and Federal Government. What the Company is doing is an offense.” She also denounced the continued attacks and disparagement of the Ejido and ProDESC on the part of Excellon and Carlos Pavón Campos, the leader of the Sindicato Nacional Minero, Metalúrgico Don Napoleón Gómez Sada, a union that has allied with the company. “It is important to us that you, representatives of the government, have been witness to Excellon’s intransigence.” She added.

Background Information:

In 2008, after three months of conflict between the company and the Ejido, the two parties signed a new land rental contract which included important progress for both parties. The contract also established clauses in which the company was obligated to contribute to development projects for the Ejido that would better the quality of life of the community.

Nonetheless, in the last four years, the company has failed to comply, and has even violated, the clauses of this agreement. The Ejido members have tried to sit with company representatives and review the violations of the land rental contract to resolve the conflict since November of 2011 without success.

“Ejido members were forced to initiate this protest after almost eight months of attempts to dialogue with Excellon to resolve several non-compliance and violations of the land rental agreement that it signed with us in 2008,” said Daniel Pacheco, Ejido member. “It is unfortunate that a company that earned 30 million dollars in gross profit in one year, largely from the La Platosa mine, can't make the minimal commitment to support development of our community,” he added.

The Ejido General Assembly, after exhausting its efforts at dialogue and due to the unwillingness of the company to work together, decided to exercise its legitimate right to peacefully protest the company's La Platosa operations. The Ejido hopes that the company will comply with the clauses of the land rental agreement including its obligation to build a water treatment plant for water expelled from the mine, the granting of concessions for transportation of minerals and food services in the mine, just rental payments, among others.

The Ejido, through its Negotiation Committee, has attended several meetings with the state and federal government to resolve the conflict under a human rights framework. While the position of the Ejido has proven flexible, the company has radicalized its position; insisting that the Ejido pay it economic damages and threatening to close to the mine.

Contact: Alejandra Ancheita, ProDESC (Proyecto de Derechos Humanos, Económicos, Sociales y Culturales), (Tel.) +55-5212-2230, +55-5212-2229, +55-3334-6045

Excellon Resources declares force majeure after blockade in Mexico


8 August 2012

Silver miner Excellon Resources Inc declared force majeure on concentrate delivery contracts in Mexico due to a month-long blockade by members of a local land cooperative at its La Platosa mine.

Force majeure is a contract clause that allows a company to miss shipments due to circumstances beyond its control.

The delivery contracts were with Consorcio Minero De Mexico Cormin Mex, S.A. DE C.V.

The mine will remain under care and maintenance during the blockade, the company said in a statement.

Shares of Excellon, which has a market value of $133.8 million, closed at 48.5 Canadian cents on Tuesday on the Toronto Stock Exchange.

OSC complaint alleges mining firm kept investors in the dark

By James Munson


2 August 2012

A team of lawyers is calling on the Ontario Securities Commission to investigate a Canadian mining company in Mexico for allegedly failing to inform investors of a lengthy dispute with local landowners.

Excellon Resources Inc., based in Toronto, have not filed a material change report despite the fact the community of La Sierrita have blockaded its La Platosa mine in Durango state, Mexico for nearly a month, forcing all extraction to cease.

A material change report is filed with a securities regulator and posted publically whenever a company's assets change dramatically, so that investors are informed on the company's health.

The Justice and Corporate Accountability Project, a group of law students and volunteer lawyers headed by Osgoode Law School professor Shin Imai, say that previous cases indicate that losing control of a mine site is considered a material change that must be reported.

"As an investor I would want to know that - is there tenure secure or not?" said Imai in a phone interview.

The lawyers filed a complaint with the OSC last Friday that outlines the long-standing fight between Excellon and the Ejido La Sierrita community. An ejido is a system of communal land ownership used across Mexico.

The troubles go back to Excellon's efforts to expand the La Platosa mine.

In 2008, the company signed an agreement with the ejido in 2008 to rent 1100 hectares of their land in exchange for preferential hiring, compensation and the construction of a water treatment plant, the complaint says.

But the ejido have repeatedly expressed their belief that Excellon has not lived up to its requirements set up in the contract, something the company denies.

The conflict escalated in the last two months after a series of meetings aimed at finding a solution went belly-up.

Members of the ejido travelled to Ottawa and the company's annual shareholder meeting in Toronto this spring to get the company's brass to pay attention.

After a couple of meetings in June, the company abruptly cancelled another planned for July 6 with no resolution having been achieved.

The ejido began blocking the mine two days later.

A contentious election over union representation on July 5, where a Mexican rights group alleges intimidation and vote fraud took place, has only compounded the company's troubles in the region.

On July 26, the ejido and the company held another meeting that once again failed to deliver a deal.

Excellon's executive at the meeting, vice-president Brendan Cahill, eventually offered to give back 50 per cent of the land to the ejido immediately and return the other 50 per cent within a year if the blockade were stopped, according to Prodesc, a Mexican rights group that is supporting the land owners.

The ejido did not accept the offer immediately but have said they'll go after the most lucrative parcels of land first if they do go with the proposal, according to Prodesc. They also believe they have grounds to rescind the agreement due to Excellon's failure to implement its conditions.

In that meetings' wake, the lawyers from Osgood Law School filed their complaint to the OSC, which focuses on the fact that not only has Excellon not filed a material change report, but it also has repeatedly downplayed the dispute over the last month in news releases.

The day after the blockade began, Excellon issued a release on promising mineral discoveries made during exploration.

In the following weeks, the company painted the blockade as a result of the union vote and did not mention the fight over the land leasing agreement.

Excellon did respond to an earlier complaint made by the laweyers on July 16 to the OSC, which forms the foundation of the latest one but focused more specifically on the company's requirement to be forthright with investors about material changes, according to Ontario securities law.

The company "wishes to advise its stakeholders that the recent allegations against the Company by the Justice and Corporate Accountability Project, regarding the Company's disclosure obligations are in all respects baseless and founded on false information," says a July 19th release.

The company has met all of its disclosure obligations, it adds.

Peter Crossgrove, Excellon's executive chairman and CEO, is quoted in the release as stating that the conflict revolves around the union vote, not the land rental agreement.

"I understand the concern of our shareholders regarding what is effectively a confrontation between competing unions for control over the workforce at La Platosa," the release quotes Crossgrove. "The unions along with local groups have resorted to a deceptive campaign based on fabricated information and false allegations, all of which is unfortunate for our stakeholders, including our dedicated employees and the local communities. The Company is pursuing all legal avenues to resolve these matters."

Another press release stated that the dispute would be resolved in a few days and that locals from a nearby community were travelling to the mine to counter-protest. But neither of those things ever happened, according to the lawyers' complaint.

That's not forthright enough for regulators because the blockade amounts to a major hit on the company's finances, say the lawyers.

All of the company's production in 2011 came from the La Platosa mine and the same was planned for this year, according to Excellon's regulatory filings.

The company was processing stockpiled ore at its mill in Miguel Auza but that was expected to run out in several days, said a July 16 news release.

The lawyers are pointing to Rex Diamond Mining Corporation vs. OSC, a 2010 Ontario court case, as precendent for their complaint.

In that case, Rex Diamonds, a Canadian firm operating in Sierra Leone, had an agreement to use land in that country for a mine.

Under the terms of their land use agreement, Rex Diamonds were suppose to begin operations but failed to do so.

The government threatened to revoke their land agreement and eventually did, all of which was not filed in material change reports back home in Canada.

The court agreed with the OSC that Rex Diamonds breached its reporting requirements but not telling investors that its tenure was under risk.

According to the Osgood Law School group, Ontario securities law gives a company ten days to report a material change.

The OSC have not yet replied to the lawyers, according to Imai, and the commission does not comment publically on correspondence it receives.

Excellon did not return a request for comment.

The results of the union vote, which will determine who will represent the workers during upcoming negotiations with Excellon over a collective agreement, have not yet been released by the Mexican Labour Department.

Mexican Farmers Battle Canadian Mining Company for Control of Their Land

Written by Paul Bocking

20 August 2012

Civil disobedience has halted production at Mexico's "top grade producer of silver." Farmers of the La Sierrita village, a close knit community of about 50 families, located 40 minutes north of the city of Gomez Palacio, Durango, have shut down the La Platosa mine owned by Canadian firm Excellon Resources for over a month.

This comes in response to the company's refusal to negotiate with the community over its requests for the preferential hiring of local people on whose land the company operates, as well as pay the rental rates for its use. Labor conditions within the underground mine where many local residents work is also an issue. Dozens of community members have maintained a nonviolent blockade of the one road into the mine, allowing only essential maintenance workers to pass, resulting in extraction grinding to a halt.

In recent years mining operations have drawn local protests from Peru to Tanzania and Papua New Guinea. Mexico is the site of several high profile struggles, nearly all involving Canadian companies. Communities are opposing the loss of their land and its contamination with toxins, including arsenic and cyanide, which are used in abundance in the extraction of gold.

Unlike many of these conflicts, the residents of La Sierrita have succeeded in inflicting a substantial economic cost to the company. As in the case of an effective strike, it is hoped that the continued shut down of its sole mining operation will eventually force Excellon to yield. Along with the community's unified resolve to maintain the blockade, what distinguishes this struggle is that so far, it has succeeded in effectively disrupting the mine without triggering violent repression from the Mexican government or the company.

Many human rights activists are accustomed to campaigning against U.S.-based transnational corporations, which continue to dominate many sectors, but in the particularly violent, exploitative and dirty world of resource extraction, Canadian corporations are among the worst culprits. Since the mid-1990s, the Canadian-based mining sector has emerged to become the biggest in the world. The Toronto Stock Exchange is now the principal source of finance capital for mining operations. In 2010, Canadian mining companies held assets worth $129 billion internationally, with 90 percent owned by the 70 largest firms. Mexico is the second biggest country for Canadian overseas mining operations. With five mines, Goldcorp has the largest Canadian corporate presence in Mexico. Goldcorp also owns the infamous Marlin mine in Guatemala, where the company has been implicated in the deaths of human rights activists protesting its incursion into traditional indigenous territories.

Community and labor resistance

Excellon Resources began operations at the La Platosa mine in 2004, following the usual manner for mining companies in Mexico: with federal permits and state authorization, but without any prior negotiation or consultation with the local community, whose collectively held lands Excellon expropriated. Since then, the localejido - a type of rural community in Mexico whose land is owned collectively - has organized to challenge Excellon. In 2008 it succeeded in pressuring the company to sign an agreement determining a rental rate for the land, the construction of a treatment facility which would enable salinized water pumped from the mine to be used for farming in the drought-ridden region, preferential local hiring and the granting of cafeteria and transportation concessions to the ejido. Excellon has not complied to date, resulting in the La Sierrita ejido voting to erect the blockade on July 8. Like many communities in rural Mexico, La Sierrita grapples with high unemployment. Residents of the struggling ejido also lack access to basic education and medical services as well as running water. Daniel Pacheco, a local farmer remarks:

It is unfortunate that a company that earned $30 million in gross profit in one year [2011], largely from the La Platosa mine, can't make the minimal commitment to support development of our community.

The pressure brought the company's executive vice president Brendan Cahill from Canada to speak to the community three weeks into the blockade on July 26, demanding that the community end the blockade before entering negotiations. Unwilling to surrender a position of strength after four years of stalling on the company's side, the community refused. Cahill threatened to close the mine and immediately return half the land back to the ejido and the rest next year. The threat backfired. Aware of the discovery of new high grade silver deposits, Pacheco responded:

If they return 50 percent of our land tomorrow, we would be happy to ensure that our returned land is from that very area [with the new silver deposits] because we know that we can find another company that will not run roughshod over our rights as landowners.

Were Excellon to follow through on its threat and shut down the mine, it would of course have an immediate economic impact on the area, with 200 workers losing their jobs. However Pacheco's confidence recognizes the favorable position of the ejido: The high price of precious metals dictates that mining interests cannot stay away for long.

Holding back repression

The position of strength from which a tiny rural community can set the terms against a transnational mining company depends on its ability to take effective direct action without triggering crippling repression. Acts of repression frequently elicit condemnations and support from the broader public when widely publicized, but its impact depends on the extent that state authorities or corporate interests concern themselves with international opinion, and the ability of the community to overcome the fear engendered through acts of violence. Less disruptive protests in the past two years against Canadian mining operations in San Luis Potosi in northern Mexico and San José del Progreso, in the south, have resulted in attacks, death threats and the murder of anti-mining leaders, carried out by municipal police or private security forces contracted by the companies. Activists have not yet succeeded in either case in drawing a substantial amount of negative publicity to the mining companies directly involved. The response of the Canadian government has been negligible.

With so much money at stake mining silver from La Platosa, something must be holding Excellon back. It's not likely the consciences of those in its management. On July 5, three days before the blockade began, an election was conducted at the mine to determine which union would represent Excellon's workforce. Workers were galvanized to form a union when two years earlier, three miners accused by the company of theft were detained overnight at the mine and tortured by mine security guards and state police before being let go with a letter of apology from the general manager. No charges were ever leveled against the workers. A worker died underground that same year from a rockfall caused by insufficient safety provisions.

An international observation team including labor rights activists from Canada, the U.S. and Mexico arrived before dawn in the parking lot outside the gate to the mine property on the election day. We fanned out in the darkness along the road next to the gate so that we would be visible to workers arriving for the morning shift. I watched as workers arriving at the mine in rusted dusty cars or as passengers on the company bus, had to pass by 40 heavily armed and masked state police, whom I later witnessed receiving complementary styrofoam lunch boxes distributed by the company.

A group of the golpeadores (goons) take a break on their pickup in the mine's parking lot during the union election. Photo by Paul Bocking.A hundred men bused in by a competing company-controlled phony union, took up positions along the side of the narrow dirt road about 500 meters away. A group of international observers reported seeing several armed with large sticks. Though no overt acts of violence occurred, the atmosphere was markedly tense. Some police grew bored during the slow hours between shift changes, stowing their automatic rifles and drawing their cell phones instead, but a constant cold war existed between the observation team and the company union goons and security guards. The only person clearly enjoying herself was the lone taco vender at the edge of the parking lot, who witnessed a quadrupling of her daily clientele and fast sales of bottled water under the rising desert sun.

Later that day, assisted by six managers receiving ballots in violation of the previously determined voter's list, the company union won the election by a single vote over the national miner's union, Los Mineros, which the vast majority of the workers had previously joined. Intimidation appeared to have worked. Had international observers not been present, and had the Mineros union not decided to avoid provocations by not busing in supporters from other mines, it could have easily been worse.

Chris Benoit, an organizer with Proyecto de Derechos Económicos, Sociales y Culturales (PRODESC), a Mexican labor rights NGO which has been supporting the La Sierrita community and providing legal counsel, suggests in an email that members of the ejido have successfully "raised the political cost of taking action significantly" against the blockade, which is primarily comprised of families, children and the elderly. PRODESC, with transnational allies including Mining Watch Canada and the United Steel Workers union, has also demonstrated its ability to quickly raise publicity against the company. Following the unsuccessful meeting with the Excellon vice president on July 26, PRODESC, along with law students at York University in Toronto, filed a complaint with the Ontario Securities Commission, arguing that the Toronto, Ontario-based firm had not complied with its legal obligations to inform its investors of significant "material changes" to the status of its only mine: namely its closure for over a month due to a community conflict, as well as the company's subsequent threat to the ejido that it would shutter the mine permanently.

Through the effective organizing within the La Sierrita community and the support work coordinated by PRODESC, Benoit reports that the Mexican government has shifted its stance from aggressively pro-company, to intervening in more of a mediator role. At a meeting in Gomez Palacio, representatives of the federal ministries of the economy and agriculture as well as the Durango state government publicly called on the company to negotiate in good faith on August 2. Excellon's initial prediction that the "illegal blockade" would be shut down by Mexican authorities within "24 to 48 hours," has not come to fruition. Excellon chief operating officer Robert Moore walked out after five minutes of a second meeting brokered by higher level Mexican government officials on August 13 in Mexico City, protesting the continued presence of the blockade. State authorities reiterated their recognition of the ejido's willingness to negotiate and promised to continue pressuring the company to enter a meaningful dialogue. These developments are nearly unprecedented in Mexican mine struggles.

This example of successful local direct action and international support suggests future possibilities for organizing for social and economic justice against transnational corporate impunity and state acquiescence.

Paul Bocking is a secondary school teacher, union activist, amateur filmmaker and community organizer in Toronto. He is completing his Master's degree in Work & Society at McMaster University.


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