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Home > English > Alternatives International Journal > 2012 > April 2012 > CIDA under-fire for partnering with mining company

CIDA under-fire for partnering with mining company

Friday 30 March 2012, by Stephen Eldon Kerr

The Canadian government’s decision to partner with mining firm Barrick Gold and development NGO World Vision Canada for a corporate social responsibility (CSR) project in La Libertad, Peru, has been met with criticism from human rights activists.

The project, led by World Vision, was announced last September by Canadian Minister of International Cooperation Bev Oda, and will be funded equally by the Canadian International Development Agency (CIDA) and Toronto-based Barrick Gold. The La Libertad project is one of three pilot CSR projects that CIDA claims will reduce poverty in Peru, Ghana, and Burkina Faso.

Justin Broekema, press secretary at the Office of the Minister of International Cooperation, said that the project will "increase the incomes and standard of living for nearly 1,000 families [by supporting] small income-generating projects in agriculture". Broekma said that CIDA decided to support the project to help the local community diversify their economy and reduce their dependence on the mining industry.

Dave Toycen, President and CEO of World Vision Canada, is grateful for CIDA’s support, and said that the project "will help residents of Quirulvilca, Peru, especially women, youth, and people with disabilities, become more involved and influential in their own community planning."

However, Miguel Palacin, the General Coordinator of the Andean Coordinator of Indigenous Organizations (CAOI), criticized the project in a strongly-worded letter sent to World Vision, Barrick Gold, and CIDA.

In the letter, Palacin noted the "bad track record" of Canadian mining companies, arguing that "companies such as Barrick Gold are the source of many conflicts because of the dispossession of lands, destruction of water sources, and the ignoring of international rights." Rather than partnering with mining companies, Palacin believes CIDA should ensure Canadian companies respect the rights of indigenous peoples affected by mining.

However, CIDA is adamant that the La Libertad project will benefit the local community. Broekma stated that the municipal authority, government departments, the private sector, and the local community are all involved in the project’s implementation and are consulted on a regular basis.

Mining is big business in Canada: Over 75 percent of the world’s exploration and mining companies are headquartered in the country. In 2008, these 1293 companies had an interest in 7809 properties in over 100 countries around the world. Mining and exploration companies based in Canada account for 43 percent of global exploration expenditures, exploration which is funded by financial markets in Toronto and Vancouver — the world’s largest source of equity capital for exploration and development.

Yet Canadian mining companies have long been criticized for misconduct abroad. In a report commissioned by the Prospectors and Developers Association of Canada in 2007, Canadian companies were singled out for perpetrating almost half of all documented cases of misconduct around the world, including causing community conflict, engaging in environmentally unsound practices, and violating human rights. The report was unreleased until it was leaked by MiningWatch in 2010.

Given the history, it is perhaps unsurprising that in Peru local opposition to Barrick Gold’s presence goes back several years, and has been increasing. On February 9, 2007 at least 3,000 people demonstrated against ongoing Barrick Gold operations in the district; in June 2011, the municipality of Santiago de Chuco created a conservation zone around one of Barrick’s mines, because the area provides clean water for over 8000 farmers; and on February 9 of this year, rural dwellers descended on Lima — some having walked 557 kilometers — to join thousands of others in the National March for Water.

This local-level opposition is fodder for critics who contend that Barrick Gold’s CSR program is an attempt to placate the local population. Barrick Gold denies this, arguing that mining companies must work with local communities to obtain a "social license to operate."

The company’s rhetoric does not accord with its actions: Barrick Gold was quick to contest the Santiago de Chuco municipality’s creation of the conservation zone by appealing to the Third Constitutional Court in Lima.

Barrick Gold’s heavy handed approach to local resistance is consistent with the behavior of Canadian mining companies abroad. A series of documents sent to The Guardian by WikiLeaks show that mining companies are attempting to pacify local resistance across Latin America. In one, Felipe Cantuarias, Vice President of Commercial and Corporate Affairs for Minera Antamina, a copper and zinc producer, notes that mining companies will "have to take on more social responsibilities in the communities, providing jobs or visible infrastructure projects," if they are to appease often-hostile local politicians.

In another, Cantuarias recommends that foreign Embassies "urge the Catholic Church to rotate bishops operating in [mining] regions," to ensure that "anti-mining teachers and priests, who engage in inappropriate activities," do not ferment opposition to the mines.

Regardless, CIDA will push ahead with the La Libertad project, a fact consistent with the organization’s focus on promoting and supporting CSR by Canadian companies operating abroad, as outlined in their 2009 document "CSR: Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the Canadian International Extractive Sector". Broekema noted that ultimately CIDA "would like to see all Canadian companies donate to international development projects."

The leaked cables also reveal that the Canadian Ambassador to Peru was "impressed that NGOs, such as Oxfam UK, regularly consult the public opinion surveyors to obtain a feel for what issues and concerns motivate communities, [and] appeared to be well ahead of the [mining] companies" in this area.

The failures of CSR programs on this front are well documented. Catherine Coumans, research coordinator at MiningWatch Canada, has written that CSR projects "will not and cannot address the long-term harm and development deficits caused by mining impacts, such as the depletion and contamination of surface and ground water upon which local food security and livelihoods depend, or the loss of national level revenues through tax evasion schemes, or the creation of resource dependent economies as described in the ‘resource curse’ literature."

In a separate report, Coumans reviewed CSR programs and found them inadequate with respect to human rights norms, accountability mechanisms, and support for community agency. Coumans noted that CSR programs are "characterized by the evolution of an ever-increasing array of voluntary codes, standards, and alternative accountability mechanisms," and are implemented by companies that strongly resist regulatory and legal reforms.

Others agree with Coumans. Daviken Studnicki-Gizbert, Associate Professor of Latin American History at McGill University, calls CSR "a well-established piece of the PR strategy deployed by the mining industry and its champions."

But CIDA continue to throw their weight behind CSR programs, calling them "win-win" programs, even if this means supporting companies such as Barrick Gold.

In 2009, a team of researchers from Harvard and New York University’s Law Schools found clear evidence of environmental and health problems around a Barrick Gold run mine in Papua New Guinea. The researchers also documented accounts of physical abuse, forcible evictions, and gang rape perpetrated by the mine’s security personnel.

In one account, a 25 year old woman relates how waste from the mine had ruined her farming land, forcing her to search for gold in a waste dump, where she was caught by security personnel. She was gang-raped by three of the armed guards and forced to eat the condoms they had used.

Another woman was raped near a mine dump area, and said that "whenever security guards catch the ladies, that’s what happens." The woman was tried for trespassing and told the magistrate that she had been raped, but the magistrate said that women normally "give this excuse," before he sentenced her to five months in prison.

The researchers also noted the close relationship between the mine’s security personnel and the Papua New Guinean police force.

Reports by Amnesty International in 2010 and Human Rights Watch in 2011 stress that the abuses have not stopped, and that Barrick Gold do seem to understand the gravity of the abuse. In fact, writing in the Globe and Mail, Barrick Gold Chairman Peter Munk said that "gang rape is a cultural habit" in Papua New Guinea, prompting Papua New Guinean Minister of Mining John Pundari to demand an apology from Barrick Gold.

Emilie Lemieux, a former Gordon Global Fellow, has looked at the initial stages of the CIDA-funded CSR project at Barrick Gold’s mine in La Libertad, and found that the project "seems to fulfill the basic social needs the company is looking to address, as well as the Canadian embassy’s interest to work in CSR, rather than the needs of the local population."

José de Echave, director of the Collective Rights and Extractive Industries Program at CooperAcción, a Peruvian NGO that supports local actors affected by mining, agrees. He said that "as long as resources are not managed by the Peruvian government, mining companies direct their actions based on their own interests."

According to De Echave, the result of this is that mining companies hire development experts to co-ordinate initiatives such as the World Vision led project in Peru. The companies’ approach to becoming involved in health, nutrition, and education relies on forming alliances with experienced NGOs, meaning companies most often work with non-local NGOs instead of relevant actors and authorities in the community.

Lemieux corroborates this, noting that CSR codes "do not require that communities be consulted or that they provide consent for the implementation of CSR projects decided upon by corporations." Lemieux found that, in Peru, "consultation with local actors is non-existent and the project is led exclusively by external actors."

Professor Studnicki-Gizbert, echoing Lemieux’s sentiments, said that development projects are "as much about form as financing," and that the decision to reorient CIDA towards co-financing development projects with NGOs and mining corporations is consistent with "the Conservative government’s support of corporate self-regulation instead of public accountability."

However corporate self-regulation, as it stands, remains an ineffective means of regulating the mining industry. CIDA’s pilot project with Barrick Gold and World Vision Canada in La Libertad is not proving otherwise.