MAC: Mines and Communities

Latin American Update

Published by MAC on 2006-07-08

Latin America Update

8th July 2006

Communities in the Intag region of Ecuador have been resisting for the last ten years Ascendant Copper's plans for large-scale copper mining. The organisation, DECOIN,and Friends of the Earth Canada are asking for signatories in support of a letter to the Ecuadorian president which highlights concerns about the peoples' human rights.

A court in Chile has ruled against Barrick Gold, in favour of competing mineral claims by a local miner. What does this mean for the future of the Pascua Lama project? Will it merely substitute one form of exploitation for another?

A Latin American correspondent asks whether current public "round tables" in Canada will succeed in imposing domestic standards on its mining companies - such as Barrick - as they forage overseas.

Although Peru's Congress recently approved a law, requiring mining companies with tax stability contracts to start paying royalties, the companies claim the move to be "unconstitutional."

What a cheek!

Help lobby the Ecuador president on Ascendant Copper

Doctor Alfredo Palacio
Constitutional President
Republic of Ecuador
Plaza de la Independencia,
Quito, Ecuador

Junin Mining Project (Ascendant Copper Corporation): Concern over Human Rights Situation

Mr. President,

The undersigned international organizations are very concerned with the human rights situation in the Intag area of Imbabura province, in relation to the presence of the Canadian mining company, Ascendant Copper Corporation. We are especially concerned with threats posed by the Junin mining project to the human rights to food, water, housing and health, as well as the safety of those defending these rights. We are also concerned that decisions by democratically elected local and regional bodies are undermined by the actions of the company.

Mr. President, Ecuador has ratified the International Covenant on Economic, Social and Cultural Rights (CESCR) as well as other human rights documents which oblige the state of Ecuador to protect the above mentioned rights. We therefore urge you to ensure that the activities of Ascendent Copper Company comply with international human rights and environmental standards. We ask that your government investigate the denunciations coming from the Intag area, its residents, and some of the Quito-based human rights groups regarding the behavior of the company and its contractors- including Daimi Services. We also ask you, given the opposition of the democratically elected local and regional bodies to the mining project, to consider the revocation of any licenses awarded to the company. In any case we urge you to take preventive measures to avoid violations of the human rights to food, water, housing and health.

According to reliable sources in Ecuador, the Japanese International Cooperation Agency’s (JICA) 1996 Environmental Impact Study predicted that four communities and over one hundred families would have to be relocated in order to make room for the open-pit copper mine. The area currently under discussion for mining is substantially larger, which also means that impact on the population will be even greater than predicted in 1996. Forced relocation constitutes a major interference with the right to housing and poses severe threats to the right to food of those families who loose access to productive resources. Any government is therefore obliged to regulate large-scale development projects in such a way that forced relocation is reduced to a minimum and that project-affected persons are not worse off than before the project.

The JICA study predicted contamination of rivers and streams with lead, arsenic and other heavy metals, as well as “massive deforestation”, which would be enough to start drying out Intag’s climate, and impact dozens of mammal and bird species threatened by extinction. The study also mentioned impacts to the biodiverse Cotacachi-Cayapas Ecological Reserve. In addition, the Intag area is extremely rich in water resources which are under threat by the mining project. As state party to the International Covenant on Economic, Social and Cultural Rights, the government of Ecuador has to act according to the following principles:

“Before any action that interferes with an individual’s right to water is carried out by the State party, or by any other third party, the relevant authorities must ensure that such actions are performed in a manner warranted by law, compatible with the Covenant, and that comprises:
(a) opportunity for genuine consultation with those affected;
(b) timely and full disclosure of information on the proposed measures;
(c) reasonable notice of proposed actions;
(d) legal recourse and remedies for those affected; and
(e) legal assistance for obtaining legal remedies ”

We urge you to ensure that these principles, which so far have been ignored, will be implemented in the Junin project by the relevant supervising state authorities.

We have received information, that, to date, ten local community residents face criminal charges for a variety of measures taken to protect the rights of the project-affected communities. We do not want to judge nor condone the measures the communities felt necessary to take to defend their communities’ way of life and their land, but we understand they would have never taken place had the communities’ rights to be previously consulted and to be involved in democratic decision-making been recognized. We are very concerned that those defending communities’ rights are not only being subjected to criminal charges but also that their safety is not guaranteed.

Representatives of some of our organizations have visited the Intag area and witnessed first hand the social conflicts generated by the presence of the mining company, and have received information about methods of intimidation used by the company to try and implement a mining project that is clearly opposed by the majority of Intag’s residents. We are aware that in May of 2006, all of Intag’s local governments publicly asked for the company to leave Intag, and have noticed that the company has opted to ignore the wishes of these locally elected officials. It is also worth noting that for years the government of Cotacachi County has adopted, and publicly manifested the same position regarding the mining project. Given the opposition of the democratically elected local and regional bodies to the mining project, the intimidation of local residents, the far reaching impacts on the local population, the health of the human and natural environment and on the development of the whole region, we ask you to consider the revocation of any licenses awarded to the company.

In closing, we would like to thank you in advance for taking action to protect all human rights (civil, cultural, economic, political, social) as well as environmental rights in the Intag area. Please inform us about any action you have taken in this regard.


Please send signatures to Andree Germain at Friends of the Earth Canada (

If possible, also send an electronic signature to be included in the letter.

You may - in addition - send a fax straight to the president: +593 2 2580 714

The deadline for the sign-on is Tuesday, July 11th noon, Canadian time.

The Intag communities are organizing a demonstration to be held in Quito next Thursday the 13th and it is intended that the letters will reach the president in time for this event.

For more information on the struggle of the Intaq communities please visit the website of DECOIN, or watch the documentary "The curse of copper":

Barrick land buy null and void


22nd June 2006

Santiago - A Chilean court on Wednesday declared Canadian miner Barrick Gold Corp's purchase of 8 600 hectares of land around its planned Pascua-Lama gold mine null and void, the financial news website reported. Barrick Gold Chile officials weren't immediately available to comment on the court decision, but a spokesperson said a statement would be issued shortly.

After a five-year trial, Judge Maria Isabel Reyes ruled in favour of the defendant Rodolfo Villar, who sold the mining rights to these 8 600 hectares for approximately $20.

"The judge's ruling forces the restitution of Villar's mining concessions on a land that completely surrounds Pascua-Lama on the Chilean side," Villar's attorney Hernan Montealegre told the website.

"All the planned roads, water wells, meteorological wells, channels, camps, etc., would be on this site, so in reality exploiting this territory becomes impossible."

Once the court notifies the mining company, it has 10 days to file an appeal.

The $1.5bn gold and silver mine recently obtained the national environmental commission's final approval to go ahead with the mine, amid heavy protests from environmental groups. Construction on the mine is to begin later in the year. The mine, which straddles the Argentine-Chilean border, is to come on line in 2009.

In its first 10 years, Pascua-Lama is expected to produce an average 750 000 ounces of gold and 30 million ounces of silver each year. The mine's life is estimated at 20 years, unless new reserves are found.

The Real Blunder of Pascua Lama

by Lucio Cuenca Berger National Coordinator, Latin American Observatory of Environmental Conflicts -- OLCA

26th June 2006

Pascua Lama exists as a bi-national mining project because in the year 1997 the governments of Argentina and Chile signed the "Treaty of Mining Integration" dealing with with the border region along the Andes, and which constitutes the legal framework governing the development of the mining business. Before this treaty, it was not possible to mine this mountainous region because deposits located in Chile in "borderized zones" and in Argentina in "border zones" and/or "security zones," were areas subject to restrictive laws.

The transnational mining companies, Barrick Gold in particular, pursuaded the governments of both countries that it would be beneficial to create a legal instrument to facilitate the mining business in the border regions.

A recent ruling of the 14th Civil Court of Santiago (case # 1912-2001) reversed the mining claims of March of 1997, by which Rodolfo Villar García ceded to mining company Minera Nevada -- subsidiary of Barrick Gold in Chile -- the rights to properties where the Pascua Lama mine is being constructed. This brings the thorny problems of this complex conflict to the fore. The judge completely nullified the contract between Villar and Barrick Gold, and ordered the return of rights of ownership in the properties Amarillo Norte and Tesoro (where Pascua Lama is located) to Rodolfo Villar.

Those of us opposed to the Pascua Lama project - no matter who may be its owner - understand that this is a property dispute between miners and provides only a temorary setback to mining operation. It isn't the end of the story. Take the declaration by Villar's lawyer, Hernán Montealegre, that, "if there is an interesting offer, this possibility will be examined by Mr. Villar and I don´t think that Barrick would commit suicide and has to be ready to pay something that comes near to the real value of this property and clean up the shameful image that it's swindled a person by paying them $10,000 pesos and violating the Constitution."

What would really constitute a bigger obstacle for Pascua Lama is the implications of a ruling on some of the legal points generated by the Binational Mining Treaty with Argentina to concretely facilitate development of the bi-national project. The Mining Treaty establishes that, in order to have operations along the border, the parties need to sign Additional Specific Protocols, where the "area of operations" and the procedures are determined for each project.

In the case of Pascua Lama, this protocol was signed and set into law by the Decree of the Ministry of Mining on December 11 of 2004. In this protocol -- among other things -- the "area of operations" is detailed, limits are set and Nevade Ltd Mining Company's 193 mining claims ("already constituted") and the eight "in process" are identified. In this list there are "Amarillos" of 3,600 hectacres and "Tesoros" of 2,100 hectacres. These mining claims are those which were returned to Rodolfo Villar, and one could thus conclude that the decree contains serious flaws and should be itself nullified.

It is painfully obvious that the Chilean government has enacted this Decree with such defects. One might think that the government didn't know. But this case has a long history which the authorities could not ignore. For example - in the event that an order was decreed over the disputed claims which "prohibits the signing of acts and contracts and/or encumbrences and/or transferrals over each of the beforementioned mining properties." This would make it sufficient to request a certificate of ownership which is valid in the mining district of Vallenar. Our authorities, when they want to make things easier for the "big investors," leave certain matters aside, and other matters pass easily above the law.

Focusing on the principle of invalidation, Article 53, and following articles of the Administrative Arocedures (Law 19.880) which regulates the acts of the authorities under the Decree, it is clear that the decrees should be nullified where there are serious flaws.

This could be the moment to start to rectify a series of other irregularities and illegalities which have been denounced, but which the governments in power has, up to now, ignored in the face of pressure from the transnational mining companies.

It is now up to the Ministry of Mining - and President Bachelet - to put up or shut up



8-14th June 2006

Santiago, Chile -- T.O.-based mining giant Barrick Gold will move mountains - literally - to get to buried treasures of silver and gold. But three glaciers?

The controversial Pascua Lama project, which many fear will toxify river systems north of the Chilean capital, is the latest example of Canuck firms mucking with local ecosystems abroad in ways they'd never be allowed to do at home.

But that may all change for the Barricks of the world beginning this week in Vancouver. There, mining companies, the feds and environmental groups sit down for the first of five cross-country round tables to discuss a mandatory corporate code of conduct for Canuck mining companies operating outside Canada.

The ultimate goal, says Catherine Coumans, a spokesperson for Ottawa-based MiningWatch, is legislation that will make it easier to sue Canadian companies here for eco trangressions elsewhere. "Management decisions are being made here and finances are being repatriated here," argues Coumans. "Companies should be held to account."

Existing codes of conduct, she says, are strictly voluntary and include no consideration of human rights. For example, the ethics code of the Export Development Corporation (EDC), an arm's-length agency of the federal government, is weaker, critics say, than those of even the World Bank which is not exactly a model and U.S. export credit agencies.

Opposition groups' only recourse is a complaint to the international Organization for Economic Co-operation and Development (OECD) but that org has no investigative or sanctioning powers. 0MiningWatch wants a mechanism that goes beyond just hearing complaints, perhaps through the establishment of an international ombudsman's office, to ensure that the standards companies practise at home are followed abroad as well.

In the case of Barrick's Pascua Lama project, Chile's National Commission for the Environment initially paid no attention to the fact that the company planned to remove 300,000 cubic metres of ice from three glaciers the Toro 1, Toro 2 and Esperanza to get to the gold deposit.

It was only after farmers and other indigenous groups with land claims in the region held numerous protests, including in the capital, that a review was undertaken.

The fear among locals is the effect the proposed mine, an open pit, will have on streams, the sole source of water for farms in the region 660 kilometres north of Santiago.

True, Barrick plans to build a water treatment facility and retaining wall to hold waste rock collected during the mining process and prevent contaminants from leaking into surface and underground water sources.

The company has been working with the Farmers' Water Management Council and has, says Fernando Gonzalez, the council's president, agreed to meet monitoring requirements to reduce the potential for accidents.

"At our request,'' says Gonzalez, "Barrick will build a larger water reservoir that holds raw water before it goes through the treatment plant and is then returned to the river."

But Antonia Fortt, an environmental engineer for the Washington D.C.-based Oceana Foundation, says, "The treatment of the water will never return the purity of water to the rivers, because the Chilean norm is lax when compared with the Canadian standards."

Barrick has recently been ordered by the Region of Atacama Environmental Commission not to touch the glaciers. The company says it's willing to forgo an estimated 1 million ounces in gold buried under the glaciers (the mine is expected to produce 17.2 million ounces).

But Fortt points out that there's nothing preventing Barrick from burrowing underground to get to the gold.

And the company is only offering qualified assurances. Toronto-based vice-president of corporate communications Vince Borg tells NOW that Barrick will "try to work within the framework of the agreement."

Borg says any fears about the mine affecting water quality have been stirred up and are not based on fact. "Frankly, there has been too much discussion of the glaciers from activists."

Fortt and others who remember Barrick's El Indio mine disaster, when cyanide and arsenic from tailings destroyed sections of the Elqui River in '95, point out that Chile's Environment Commission has a history of ignoring the transgressions of mining companies. Barrick has also shifted gears on Pascua Lama. The project was approved in 2001 but was then delayed because of weak gold prices. Now, all of a sudden, it has gotten bigger, spilling over the mountains into Argentina via a partnership with American mining giant Homestake.

Tomas Mosciatti, who heads the nation's largest privately run news network, says the situation has only been aggravated by Chile's economic crisis and a pro-growth agenda that has led to the relaxation of eco standards.

"The government looks away," he says. He points out that there are some 400 mining operations in the Atacama region, employing 12,000 miners, but only two government inspectors.

Rodrigo Rojas, former head of the region's environmental commission, responds that "the conditions we imposed on Barrick Gold give us the protection for sustainable development."

But there are still those who think the fix was in for the project.

"This was a sham," says Mirna Inostroza, who heads up the Huasco Valley Defence Council and has a small farm in the interior of the valley where she grows traditional medicinal plants and runs a small eco-tourism business. "Mining is not environmentally friendly. That is a concept that miners invented."


Ten miners must start paying royalties

BN Americas

6th July 2006

Ten mining companies in Peru do not declare or pay mining royalties because they have been protected by tax stability contracts, local newspaper Gestión cited Nahil Hirsh, head of the country's tax regulator Sunat as saying.

However, the country's congress recently approved a law requiring mining companies that have signed tax stability contracts with the state to start paying royalties.

The 10 companies are BHP Billiton Tintaya (now owned by Switzerland's Xstrata), Antamina, Milpo, Santa Luisa, Sipán, US-owned Doe Run Perú, Los Quenuales, Barrick Misquichilca, Yanacocha, and Cerro Verde, according to Gestión.

Mining companies argue that the new law is unconstitutional because the stability contracts are locked into Peru's constitution and that the change in the rules will deter mining investment.

The law still needs to be ratified by Peru's executive branch, which will return it to congress because it is not constitutional, gold miner Buenaventura CFO Carlos Galvez told BNamericas.

"If they don't do it [the executive], we [mining companies] will have to go to the constitutional tribunal or international courts," said Galvez.

Buenaventura's direct operations already pay mining royalties as they do not enjoy tax stability contracts. But the gold miner, Peru's largest, has minority interests in Yanacocha and Cerro Verde, which will be impacted by the law.

Peru approved a 1-3% sliding royalty on concentrate sales in June 2004 but companies that had previously signed stability contracts were protected from the measure.

By Emily Russell,


El verdadero traspié de Pascua Lama
26 de Junio del 2006
por Lucio Cuenca Berger.
Coordinador Nacional. Observatorio Latinoamericano de Conflictos Ambientales - OLCA

Pascua Lama existe como proyecto binacional porque el año 1997 los gobiernos de Chile y Argentina firmaron un "Tratado de Integración Minera" cuyo ámbito de aplicación está referido a zonas fronterizas cordilleranas y constituye el marco jurídico que regirá el desarrollo del negocio minero. Anterior a la vigencia de este Tratado no era posible explotar estos yacimientos por estar en "zonas fronterizas" en el caso chileno o "zonas de frontera" y/o "de seguridad" en el caso argentino, espacios que en ambos países estaban sujetas a regímenes de restricción.

Las empresas mineras transnacionales, y en particular Barrick, persuadieron a los gobiernos de ambos países de lo conveniente de crear este instrumento para facilitar el negocio minero en las zonas limítrofes.

El reciente fallo del 14º Juzgado Civil de Santiago (causa Rol nº 1912-2001) que revirtió la compraventa realizada en marzo de 1997, en la cual Rodolfo Villar García cedía a Compañía Minera Nevada – filial de Barrick Gold Corporation en Chile- los derechos de propiedad minera donde se construye el proyecto Pascua Lama pone nuevamente en el tapete las distintas aristas de este complejo conflicto. La jueza declaró la nulidad absoluta del contrato de compraventa que había celebrado Villar con la compañía y dio orden de revertir las inscripciones de dominio que existen en las propiedades Amarillo Norte y Tesoro (en esta última se ubica Pascua Lama), restituyéndose a su estado anterior, cuando el minero Rodolfo Villar era el propietario de éstos derechos.

Los que nos oponemos al proyecto Pascua Lama en cualquiera de sus versiones y sea quien sea el titular propietario, entendemos que esta es una disputa de propiedad entre mineros y es un revés circunstancial para la explotación minera. No constituye un revés insalvable. Se extrae de las declaraciones del abogado del señor Villar, Hernán Montealegre, quien precisó que "Si hay una oferta interesante, esa posibilidad va a ser examinada por el señor Villar y no creo que Barrick sea suicida y tiene que estar dispuesta a pagar algo que se acerque al verdadero valor de esto y a limpiar la vergonzosa imagen que tiene por haber engañado a una persona pagándole $ 10 mil y de haber violado la Constitución".

Lo que si pudiera constituirse en un obstáculo mayor a Pascua Lama, son las implicancias del fallo sobre uno de los instrumentos que se generan a partir del Tratado Minero con Argentina para facilitar concretamente el desarrollo del proyecto binacional. El Tratado Minero establece que a petición de los inversionistas para tener facilitaciones fronterizas, las partes deben suscribir Protocolos Adicionales Específicos, donde se determina el "área de operaciones" y los procedimientos para cada proyecto.

Para el caso Pascua Lama este protocolo se firmó y promulgó por Decreto del Ministerio de Minería el 11 de Diciembre de 2004. En este protocolo-entre otras cosas- se detalla el "área de operaciones", se dan sus límites y se publica la nómina de 193 pertenencias mineras "ya constituidas" y 8 "en trámite" de la Compañía minera Nevada Ltda. En este listado figura "Amarillos" de 3600 hectáreas y "Tesoros" de 2100 hectáreas. Estas pertenencias mineras son las que el reciente fallo restituye al señor Rodolfo Villar, por lo que se puede concluir que el decreto contiene vicios de nulidad y debiera derogarse.

Llama poderosamente la atención que la autoridad del gobierno chileno halla promulgado este Decreto conteniendo estos vicios. Alguien pudiera pensar que el gobierno no sabía. Pero hay antecedentes en el proceso judicial que la autoridad no podía ignorar. Por ejemplo, en la causa se decretó una medida precautoria sobre las pertenencias en disputa que ordena "prohibición de celebrar actos y contratos y/o de gravar y/o enajenar sobre cada una de las pertenencias mineras antes señaladas". Por lo tanto, era suficiente pedir un certificado de dominio vigente en el conservador de minas de Vallenar. Nuestras autoridades, cuando desean facilitarle las cosas a los "grandes inversionistas" se dejan llevar con facilidad y actúan pasando por alto el derecho.

Atendiendo al principio de invalidación, articulo 53 y siguientes de la ley de procedimientos administrativos(Ley 19.880) que regula los actos de la autoridad que dictó el Decreto, ésta debiera derogarlo de oficio por existir un vicio de nulidad. Ocasión que, además, pudiera usarse para empezar a subsanar una serie de otras irregularidades e ilegalidades que se han denunciado, pero que los gobiernos de turno, acogiendo la presión de la transnacional minera, sistemáticamente han ignorado. La palabra la tiene la Ministra de Minería y la Presidenta Bachelet.

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