MAC: Mines and Communities

Chile - Legitimacy of Barrick Gold's project memorandum questioned

Published by MAC on 2015-09-16
Source: MiningWatch Canada

Report questions legitimacy of memorandum between Barrick Gold and Diaguita indigenous communities

Latin American Observatory of Environmental Conflicts (OLCA) & MiningWatch Canada release

15 September 2015

Santiago/Ottawa - While Barrick has been offloading assets and reducing operational costs in order to improve its standing with shareholders, the social costs of the Pascua Lama project in Chile's Huasco Valley continue to grow.

Despite company statements that community relations around Pascua Lama have improved with the signing of a Memorandum of Understanding (MOU) with Diaguita Indigenous communities in 2014, a report published by MiningWatch Canada and the Latin American Observatory of Environmental Conflicts (OLCA) indicates that Barrick's MOU undermined the ongoing resistance of Indigenous and non-Indigenous residents to this project.The report is based on testimonies from the Huasco Valley, in Chile's northern Atacama region, that were gathered by anthropologist Adrienne Wiebe. The testimonies state that the process to develop the MOU was confusing and manipulative, and lacked the full support of communities that signed on.

In the case of one Diaguita community, Sierra de Huachacan, the divisions created as a result of the MOU having been signed without the consent of the whole community gave rise to three Diaguita organizations where before there was one.

"What stands out from conversations with local residents is the lack of transparency and clarity during the process of developing the MOU, and how this led to a lot of confusion and conflict within the communities," remarks Wiebe, who travelled to Alto del Carmen in March 2015.

The results of this study echo complaints that local communities issued when the MOU was first announced. At that time, they hoped to counteract the company's national and international public relations campaign that presented the agreement as a great advance that would set new precedents with regard to extractive industry projects and Indigenous peoples.

In contrast, the report concludes that the MOU that Barrick promoted with backing from the Chilean government constitutes an abuse of indigenous rights and a problematic attempt to achieve the much desired social licence to operate.

This report, together with publications from other researchers regarding the MOU, indicate serious questions regarding its legitimacy, the manipulation of local communities, and lack of political will on the part of the Chilean state to effectively safeguard Indigenous rights and of mining-affected communities.

The author proposes further research on the potential role played by the Canadian state in the development of the MOU, given the Canadian government's stated intent to promote the interests of Canadian mining companies (despite the costs to affected communities) and its efforts to avoid growing opposition to Canadian-owned projects from Indigenous and non-Indigenous communities around the world.


Adrienne Wiebe, Report Author, adriennewiebe2(at)
Lucio Cuenca, Latin American Observatory of Environmental Conflicts (OLCA), l.cuenca(at)
Jen Moore, Latin America Program Coordinator, MiningWatch Canada, jen(at)

Report 'A Problematic Process: The Memorandum of Understanding between Barrick Gold and Diaguita Communities of Chile' is available in ;English and Spanish.

Another Canadian gold mine: Barrick Gold and the Indigenous communities of Huasco, Chile

30 September 2015

This week’s guest writer is Adrienne Wiebe, staff person for MCC Alberta. A trained anthropologist, Adrienne summarizes the findings of a longer report she undertook forMiningWatch Canada and the Latin American Observatory of Environmental Conflicts (Observatorio Latinoamericano de Conflictos Ambientales or OLCA).

In March of this year, I visited the beautiful Huasco River valley in the Andes Mountains in northern Chile to learn about the impact of a gold mine on the local people and their valley. The mine is operated by Toronto-based Barrick Gold, the largest gold mining company in the world. Straddling the height of the Andes Mountains between Chile and Argentina, thePascua-Lama site boasts one of the largest reserves of gold and silver ever discovered – an estimated 15.4 million ounces of gold and 675 million ounces of silver.

The mine has been plagued with challenges and controversy since construction began in the late 1990s. Of primary concern has been the negative environmental impact of the project, particularly given the location of mineral reserves underneath and near glaciers that are part of a watershed that serves this fragile but fertile valley. The small glacier-fed river in the valley enables small-scale irrigation and cultivation of food crops and vineyards. Threats to the supply and quality of the water have been the primary concern. Several times over the last 15 years, operations have been halted because of environmental violations. A denunciation by local community groups was accepted by the Inter-American Human Rights Commission in 2009.

Indigenous peoples and social license

A meeting with Diaguita community leaders in the Huasco Valley, Chile to talk about the impact of the Pascua-Lama mine. Photo by Adrienne Wiebe.
Given the generally negative local perception of the mine, Barrick has been focusing in the past ten years on gaining the support of the local Indigenous population. These are people who identify as Diaguita, the traditional Indigenous people in the area, and who represent about half of the current area population. However, until 2006, the Diaguita were not an official “ancestral people” recognized by the Chilean government.

Barrick was involved from the beginning in the process of what the company called “rescuing” Diaguita culture. The company funded cultural classes and documentation and application for Indigenous status for residents. It was also involved in the formation of Indigenous state-recognized community groups.

In May 2014, the company signed a Memorandum of Understanding (MOU) with 15 Diaguita communities that it helped to form. According to Barrick Gold officials, the agreements met the requirements of international guidelines of the rights of Indigenous peoples to consultation, participation, and to set their own development priorities as laid out by the international Indigenous and Tribal Peoples Convention, (International Labour Organization ILO – No. 169). Barrick felt that this MOU set a new standard for mining companies around the world in their relationships with local Indigenous communities.

A problematic process

However, local community members presented a different story. Palinay, a Diaguita artisan, objects to the commodification and exploitation of her Indigenous identity:

“We dress up for ceremonies and photos when we sign agreements. We are learning the Quechua language, the language of the Inca Empire, not the local language, because [Barrick brought] someone from the Quechua area who came to teach ceramics and taught people some Quechua words. Those people signing the MOU are a caricature of our culture. Barrick is using Indigenous status to legitimize its presence. We need to make an effort to guard our authentic culture, preserve it, and transmit it to our children.”

Jhon Meléndez, a Diaguita and a spokesperson for the Coalition for Water of Huasco Alto (Asamblea del Agua del Huasco Alto), is a member of a small Diaguita community which was one of the groups that did not sign the MOU with Barrick:

“Although we have lost a lot of our culture, we maintain our traditions. We are not ‘rescuing’ our Indigenous identity, like Barrick says; rather we are ‘preserving’ our identity.”

For many of the local people, Barrick Gold was in a conflict of interest when it utilized its immense resources to finance the registration of Indigenous identity, form government-recognized Indigenous communities, and then sign agreements with these groups.

The result: social conflict

According to the community members I spoke with, the development and approval of the MOU was a confusing process, which lacked transparency, and created social conflict and division. Barrick Gold provided handouts of money to community groups that resulted in accusations of mismanagement, bribery, and cronyism. Because of the conflicts, today there are two or three Indigenous organizations in communities where previously only one existed.

Since 2013, mining operations at Pascua-Lama have been suspended because of environmental and regulatory compliance issues. In early September 2015, an indefinite halt of operations was announced because of escalating costs (the project has cost more than $5 billion to date), the declining price of gold on the international markets (a price of $1,500 per ounce is needed to make the project feasible), and share-holder dis-satisfaction with performance.

However, while mining operations may have halted for now, the Pascua-Lama mining project has done enduring damage to the social fabric of the valley.


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