Guatemala 's new mining law widely rejectedPublished by MAC on 2009-05-05
A proposed new mining law for Guatemala has been criticised by human rights and environmental activists as being "just as bad" as the old one. They are insisting, inter alia, that higher royalties be obtained from mining companies and public consultations should determine whether or not a project be allowed to proceed.
Civil society organizations call for a new mining law
23rd April 2009
Current legislation deprives communities of benefits, allowing corporations to use up important resources.
Last November, more than 6,000 people from 49 predominantly Mayan Mam villages, made their way to the Santa Barbara town hall to vote on mining exploration licences, recently granted by the Guatemalan Ministry of Energy and Mining to Montana Exploradora, a subsidiary of Vancouver-based Canadian Goldcorp Inc.
The villagers were called to the plebiscite by their community leaders and were asked by Mayor Jesús Sales, whether or not they approved of four mining prospection licenses in their area, in the northern department of Huehuetenango.
The town hall was packed to the brim. Children held makeshift banners that read "No to Mining" and when asked by the mayor whether they wished for these projects to go ahead, the building was shaken by a resounding "No!"
Then, the people of Santa Barbara were asked to vote by a show of hands. Everyone later filed onto the stage to sign a community statement, a copy of which was sent to Congress, the Ministry for Energy and Mining (MEM) and the Presidential Social Communications Secretariat.
Water already scarce
Ensconced in the Sierra de los Cuchumatanes mountain range, Santa Barbara is prone to drought during the dry summer season, which runs from October to early May, and communities feared that mining projects in the area would make the problem worse.
Montana already runs two mining projects in San Miguel Ixtahuacán and Sipakapa, in the northern department of San Marcos and one of the most contentious issues in that region has been the fact that the corporation is allowed unlimited use of the area´s water resources.
In a press release issued by the municipality of Santa Barbara after the plebiscite took place, Mayor Jesús Sales, stated: "Our communities, through their municipal authorities and traditional indigenous leaders urge the Guatemalan State to respect the decisions of those who will be affected by metal mining and abide by ILO Convention 169. We urge the state to annul the licenses halt any further mining activity in our municipality."
According to Carlos Guárquez, director of the Guatemalan Association of Indigenous Mayors and Authorities, to date, 31 municipalities across the country have held popular consultations or plebiscites, in which mining activity was rejected. Twenty-three of these plebiscites were held in Huehuetenango alone.
A New Mining Law
In 2008, the Center for Legal, Social and Environmental Action, or CALAS, successfully petitioned the Constitutional Court to strike down aspects of the Mining Law. The court found that the law was unconstitutional because it did not require sufficient consideration to be given to the environmental consequences of mining before a license was issued. The law allowed for mining to an unlimited depth and allowed contaminated water from mines to be discharged into rivers.
A new version of the law is scheduled to be debated in Congress. However, human rights and environmental activists point out that the new bill proposed by the Congressional Commission on Energy and Mining is just as bad as the original version as favors the mining corporations to the extent that it fails to even distinguish between metal and non-metal mining. Not surprisingly, this bill has the full support of the Energy and Mining Ministry.
On March 19, indigenous and environmental organizations presented the commission with series of demands which they believe should be included in the new mining law such as higher royalties from the mining corporations and the retroactive payment of royalties for existing mining projects in which the corporation makes six figure annual profits but pays the state a pittance.
Royalties from mineral extraction are currently only 1 percent, shared between the state and the affected municipality, whereas a project the size of the Montana´s Marlin mine operating in Canada would be subject to a royalty fee of 13 percent of total production, under the current legislation.
But royalties are not the only point of contention. Indigenous and environmental organizations have also called for a new model of natural resource management that is more in tune with the needs of local communities.
Their main demand is that mining projects be subject to public scrutiny and debate, which means that popular consultations should be heeded and should determine whether a license is granted.
If these recommendations are included in the new mining law, Goldcorp´s subsidiaries Montana and Entremares could face prosecution for failing to consult local communities before beginning a project.
Undeterred, Goldcorp has pressed ahead with the new projects such as the Escobas gold mine in Mataquescuintla, Santa Rosa, and the Cerro Blanco project in Jutiapa, both in eastern Guatemala. The latter also contemplates the construction of a geothermal energy plant.
The government also appears to be little inclined to make any changes to its current energy policy, despite opposition from local communities and is covertly seeking foreign investment in uranium mining.
During the first week of March, a government delegation traveled to Russia seeking investment in infrastructure, oil and mining projects.
"Recent studies show that we have a huge potential to produce uranium but we need investment and technology in order to exploit these opportunities to the fullest," said Alfredo Pokus, vice mining and energy minister during the scarcely publicized trip.
Energy and Mining Minister Carlos Meany has been more cautious.
"There is no certainty about the country´s uranium reserves," he said, although three uranium prospection licenses have already been granted: two in Finca Sarroguacax, Cobán, in the northern department of Alta Verapaz, managed by landowner José Martín Montenegro Calderón and one in the eastern department of Chiquimula, operated by Guatemala Copper SA, a subsidiary of Canadian corporation Creso Resources Inc. -Latinamerica Press.