Gold Rush in Colombia: Part 2

by Amanda Tello

The lure of profits has attracted the attention of more than just the state and multinational corporations (MNCs) to the mining industry. The FARC guerrillas and paramilitary successor groups have assumed greater roles in Colombia’s unlicensed mining sector in recent years. The police estimate that these groups “extort from or have direct control over mines in 489 out of Colombia’s 1,119 municipalities.” Armed groups engage in unlicensed mining in many different ways, making it difficult for the government to formulate a cohesive response. According to an Insight report, guerrillas in Antioquia charge a tax on mining equipment that enters their territory (3 million pesos, or $1,600) in addition to a monthly maintenance tax (1 million pesos, or $530). If miners do not comply with the guerrillas’ mandates, their equipment is destroyed. In other cases, guerrillas and paramilitaries control mine production and tax the amount of gold produced by each miner. Many analysts believe that armed actors turned to gold mining as an additional source of revenue as pressure on coca cultivation and trafficking increased.

New York Times

In addition to security concerns, artisanal mining is also viewed as a source of environmental degradation. Colombia has the highest rate of mercury pollution in the world and other harmful chemicals like cyanide are often used in small-scale mining operations, polluting nearby bodies of water and seeping into the ground. Although the detrimental effects of artisanal mining are real and worrisome, the pollution caused by large-scale, industrial mining is far greater and more harmful. The Cerrejón mine in La Guajira, for example, has “polluted rivers, caused lung diseases, made land fallow and displaced communities.” Moreover, local campaigns have been launched to teach artisanal miners how to mine sustainably.

The Government’s Problematic Response
       
In response to the environmental and security threats posed by unlicensed mining operations, the government has begun shutting down mines it defines as “illegal.” In the first four months of 2011, “military and police closed 121 mines and arrested over 600 people.”  Concerned with potential investors, the Santos administration has also created a prosecutor’s office for environmental crime composed of 22 attorneys specializing in environmental law. The exact legal ramifications of this office are yet to be determined but it will “reportedly prioritize investigations related to environmental contamination, invasive use of protected land, and unlicensed exploitation of resources.”
   

Colombia Reports

The government claims to be cracking down on “illegal” mining in part because it is a security threat. However, Peace Brigades International points out that the “government does not differentiate between illegal mining and informal mining (mining without a license) and in fact equates informal artisanal mining with illegal mining allied with the guerrilla in order to justify the militarization of mining areas.” A report from the Consultancy on Human Rights and Displacement (CODHES) argues that the large U.S.-backed military and paramilitary presence in mining zones is intended to “protect private investment” and “suppress social protest” through violence and displacement. These actions further propagate the notion that unlicensed, artisanal mining is both dangerous and illegal. Recently, Colombia’s Mining and Energy Minister, Mauricio Cardenas, even went so far as to declare that, “police should destroy the machinery confiscated from unlicensed mines, in the same way that police destroy cocaine laboratories.” Although the government insists that its goal is to work in collaboration with local communities and small-scale miners, both its mining laws and representatives continue to discredit the people it claims to represent.

Resistance

Artisanal miners who lack legal paperwork assert that the government is trying to undermine their traditional sources of livelihood and displace them from their land so multinational corporations can operate. Additionally, unlicensed miners insist that they are being unfairly targeted by the government given the fact that, “extortion is a widespread phenomenon that also affects licensed companies and their contractors.”

Protest against mining in Cajamarca – Colombia Reports

In response, local communities of small-scale miners are uniting in order to challenge the government’s biased support of MNCs at the expense of their land and livelihoods. Coalitions of miners, campesinos, environmentalists, social organizations and lawyers have been organizing throughout Colombia. For example, community members and miners established a Family Farmer Reserve Zone in Guamocó, a legal entity that enables “small-scale farming and mining communities to establish territorial boundaries,” support local enterprises, obtain legal land titles and protect the environment. Participants hope to replace old models of development that promote the “indiscriminate pillaging of resources” and create alternative models for sustainable, local development. In other regions, grassroots organizations are mounting educational campaigns to teach artisanal mining communities sustainable mining practices and to raise awareness nation-wide about the destructive environmental and social impacts of large-scale mining operations.

To learn more about mining and Colombia’s “gold rush,” consider watching a video from PBS and/or Al Jazeera.

Watch a music video from Afro-Colombian group, ChocQuibTown, entitled “Oro,” or “Gold."

Special thanks to Peace Brigades International for their research on this topic.

Gold Rush in Colombia: Part 1

by Amanda Tello

Colombia is one of the most bio-diverse, resource-abundant countries in the world. Home to the Amazon rainforest, the Andes mountains, la Guajira desert and the Pacific and Caribbean coasts, it contains more than “10% of the world’s plant and animal species.” Beneath the rich soil lie the keys to Colombia’s energy development as well as the sources of continual violence and displacement: oil, coal, emeralds, silver, nickel, copper and – gold. Before the arrival of the Spanish conquistadors, gold mining was an important means of survival for the indigenous population and continues to support millions of small-scale miners throughout the country. The recent surge in prices and demand for gold have sparked a modern-day “gold rush,” which has ignited a conflict between local communities and an influx of foreign corporations looking to profit from Colombia’s vast natural resources. The state’s desire to capitalize on the mining boom and present Colombia as an investment-friendly country has especially threatened Afro-Colombian and indigenous communities who inhabit strategically important territory and practice small-scale mining in many areas.

Mining Boom 

In recent years, the Colombian government has been campaigning to increase production in the extractive energy sector as a “development” strategy that will bring employment, infrastructure and wealth to the country. Beginning under the Uribe administration, the government implemented the “National Plan for Mining Development and Environmental Policy Vision Colombia 2019,” which seeks to “convert Colombia into a ‘mining country’” by establishing mining districts targeted for development. Current President Juan Manuel Santos has enhanced the government’s support for extractive industries, declaring mining an “activity for public utility and social interest” that will bring “prosperity to all.” Consequently, the number of mining licenses granted to individuals and multinational corporations (MNCs) has increased significantly in recent years. According to a report published by Peace Brigades International (PBI), “Mining in Colombia: At What Cost,” “between 1990 and 2001 in Colombia, 1,889 mining licenses were awarded (157 per year), but by 2010 there were already 8,928 concessions (4,839,149 hectares) and 20,000 applications pending.” In other words, 40% of Colombian territory has either been awarded or solicited by multinational corporations in the mining and energy sectors.

Minister of Environment; Right: Minister of Energy and Mining. El Tiempo

The modern “gold rush” in Colombia has been further fueled by the increase in market price and worldwide demand for the precious commodity, with a substantial portion of that demand emanating from the United States. The price of an ounce of gold increased from US $700 in 2008 to US $1,800 today, providing a strong incentive for corporations to invest in Colombia. Moreover, Vision Plan Colombia 2019 hopes to increase gold production from 40 tons annually to 80 tons in the next year. The combination of these factors has led to record foreign direct investment (FDI) in Colombia. During an interview at the World Economic Forum, Colombian Energy and Mining Minister Mauricio Cardenas said he “expects a $10 billion investment in crude oil, energy and mining projects in 2012.” In 2011 alone, “82% of the FDI in Colombia went to the energy sector” and overall investment grew by 113% to $14.4 billion.

Legislative Reforms 

With the hope that mining would become an economic “engine of growth,” the government enacted legislative reforms to benefit the mining industry. Law 685, referred to as the Mining Code, was passed in 2001 under the advisement of a law firm representing “half of the mining companies found in the national mining registry,” including a number of Canadian companies that now comprise 43.41% of the mining corporations in Colombia. Under this law, mining companies no longer need licenses for all phases of mining activity so they can begin the exploration phase without obtaining authorization. Subsequently, companies do not run the risk of losing their licenses due to potential environmental degradation or protestation from local communities.

Open Pit Mining Outside Segovia – PBI

Following a recommendation from the World Bank, Colombia “eliminated the State’s role in direct investment,” which not only limited its power to oversight and regulation but also “ended the possibility of State earnings from net returns.” Therefore, the state only benefits from the “surface rights fees and royalties that companies pay during exploration and mining phases.” Corporations also benefit from low royalty levels and tax exemptions, which are lower now than they were in the 1990s. Currently set at 4%, the royalty rates for gold extraction are so low that some experts argue Colombia is effectively paying “multinationals to extract their resources,” especially given the enormous environmental and social costs that large-scale mining operations often inflict.

The Plight of Afro-Colombians and Indigenous Peoples

Listening to President Santos’ rhetoric on the potential of the mining industry to create employment, foster security and alleviate poverty, it appears to be a win-win situation for citizens and corporations. However, a more complicated picture emerges when the plight of Afro-Colombian and indigenous communities are considered. Colombia is home to more than 102 indigenous groups totaling almost 1.4 million people and between 4-13 million persons of African descent. The competition over mining operations oftentimes threatens the resource abundant territories and livelihoods of Afro-Colombian and indigenous peoples, many of who have been mining in their communities for decades or centuries.

Although the Constitution formally recognizes the rights of Afro-Colombian and indigenous communities in the form of “collective land titles” and reserves, they face constant threats from armed actors and the “implementation of economic development or mega-projects,” such as mining. The government has further exacerbated the precarious plight of these groups by awarding mining licenses in indigenous reserves and collective territories belonging to Afro-Colombians without first obtaining the “prior and informed consent” of local communities – a right guaranteed in the Colombian Constitution as well as the UN Declaration on the Rights of Indigenous Peoples. For example, in July 2010, the UN Permanent Forum on Indigenous Issues determined that “mining concessions had been awarded in 80% of legally recognized reserves.” Not to mention, 27% of indigenous peoples and 60% of Afro-Colombians live outside of legally recognized territory and thousands of pending requests are being delayed in order to ensure the development of mega-projects.

Afro-descendent Community Lands – Indigenous Reserves -- PBI

Many inhabitants of these territories have been practicing small-scale, artisanal gold mining for generations. It is estimated that five million people subsist on small-scale mining in 44% of Colombia’s municipalities. However, many of these mines are not legally registered with Ingeominas, the government agency responsible for mining operations. According to reports from InSight, 6,000 small-scale mines are not legally registered, which comprises as many as 50% of Colombia’s mines. The 2001 mining code mandated that small-scale miners register their operations within a three-year period. Subsequently, the government was overwhelmed with requests and the “the legalization process quickly fell into a limbo.” Out of 2,845 requests submitted during the stipulated time period, only 23 were approved. Additionally, many miners in remote regions were not aware of the new requirements, lacked the resources to apply or found that their lands had already been ceded to MNCs.

PBI

Although small-scale mines produce the majority of Colombia’s gold, they face growing competition from primarily Canadian, English and South African mining corporations. As a result, small-scale miners “find themselves increasingly marginalized and in some cases persecuted for their traditional labor,” which is viewed as an obstacle to modern, industrial mining and investment. In fact, mncs have been found guilty of partnering with paramilitaries and other armed actors in order to intimidate labor union and community leaders and displace local populations from resource rich lands.

According to PBI and the National Mining Company Minercol Workers Union:

“80% of the human rights violations that have occurred in Colombia in the last ten years were committed in mining and energy-producing regions, and 87% of Colombia’s displaced population originate from these places.”

“At least 20 trade unionists from the mining and energy sector suffered attacks or attempted assassinations in 2010 and 78% of the crimes against trade unionists were committed in mining and energy areas”

According to professor and author Mario Murillo, the state’s support of large-scale mining projects and failure to obtain the “prior and informed consent” of impacted communities has paved the way for the disappearance and displacement of indigenous and Afro-Colombian peoples. Consequently, these marginalized groups make up a disproportionate number of the 3-4 million people displaced in the conflict thus far. It is estimated that indigenous peoples represent up to 7% of the displaced population and Afro-Colombians up to 17%. As PBI’s report astutely surmises, the decades-long conflict in Colombia is essentially a “competition over the use of the soil and subsoil for implementing economic projects,” in which Afro-Colombian and indigenous peoples are tragically viewed as obstacles to progress.

Special thanks to Peace Brigades International for their research on this topic.

Paying the High Price of Gold

By Brooke Denmark
Witness for Peace International Team- Nicaragua

This article originally appeared in the Canadian journal Alternatives International.

It is no secret that gold mines wreak havoc on the environment. Less widely known is the incredible amount of power free trade agreements have granted to gold-mining corporations to cause this damage. The North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA), as well as other pacts, include chapters that allow corporations to sue signatory nations for lost profits if a new law, such as an environmental or health regulation, threatens its investment. This is exactly what is happening now in El Salvador. A decision is imminent in the first case of its kind to be heard under CAFTA, Pacific Rim Mining Corp. vs. El Salvador. Anti-mining groups, environmentalists and trade justice activists throughout the Americas are poised for a response from the CAFTA tribunal, which could set a precedent for mega-projects throughout the region.

Pacific Rim, a Canadian-based mining corporation, is suing the government of El Salvador for violating its investor rights under Chapter 10 of CAFTA. The company claims that the government of El Salvador violated its investor rights by failing to issue a permit to begin operations. Since Canada is not a member of CAFTA, Pacific Rim is suing El Salvador under a U.S. subsidiary. The government of El Salvador acted in response to calls from a wide network of civil society groups, including communities potentially affected by the mine, environmentalists and the Catholic church, who rallied together to block the mine. They argued that the mine will contaminate El Salvador’s already limited water supply and cause serious environmental and health issues. Individuals involved in the movement have met violent repression for their opposition and the case is already stained with blood. Four Salvadoran anti-mining activists have been assassinated over the past two years. Those cases remain unresolved.

As Pacific Rim struggles to open its gold mine in El Salvador, another Canadian based company, Goldcorp, is closing up shop in Honduras after over a decade. In the mine’s wake, surrounding communities face chronic health problems and depleted natural resources. The situation is a testament to the kind of destruction the anti-mining movement in El Salvador is fighting to avoid.

The striking jade greens and golden yellows visible in the stream photographed are a result of acid drainage that will last for up 100 years. This is the water that communities near the San Martin mine use daily to bathe and wash laundry. According to a recent report by Honduran human rights leader Dr. Juan Almendares, the Honduran government has documented high levels of arsenic in the blood and urine of children living near the mine. Almendares’ report also shows that the Honduran government dragged its feet in revealing information about the contamination and in doing so, allowed the gold mine to continue harmful operations. Now Almendares and other human rights groups are calling for Goldcorp to pay for the environmental and health problems it left behind.

There are many international actors at play in the corporate web of gold mining. To trace the genealogy of the San Martin mine in Honduras, for example, we begin with Honduran company Entre Mares. Entre Mares used to operate as a subsidiary of Glamis Gold, a formerly Nevada-based gold company which was bought out by Goldcorp in 2006 to form the world’s third largest gold mining company. Three years before merging with Goldcorp, Glamis Gold was entangled in a similar struggle as Pacific Rim.

In 2003 Glamis Gold began a suit against California under NAFTA’s Chapter 11 for $50 million in damages. Glamis Gold brought the case against California after the state denied the corporation the right to construct an open pit mine. California reacted to outcry from environmental and indigenous rights groups arguing that the mine would cause environmental destruction and encroach on sacred sites. In this case, in order to submit a claim under NAFTA, Glamis Gold attempted to file as a Canadian company even though it was based in Nevada at the time. The tenuous nature of this claim is one of the reasons why it failed.

Ultimately, the tribunal ruled in favor of California. While the United States is not immune to being sued by corporations under these free trade agreements, so far it has been on a winning streak. Not all nations and states attempting to block damaging mega-projects have been as lucky. NAFTA tribunals have already awarded over $200 million to investors claiming lost profits. NAFTA’s Chapter 11 provided the model for CAFTA’s Chapter 10 and similar measures in other free trade agreements. Public Citizen calculates that there are currently $12 billion in pending claims under NAFTA-style tribunals related to the environment, health and transportation.

With the price of gold reaching record highs in light of the global financial crisis, gold mining will remain a hot issue. One analyst quoted in a U.S. News and World Report article on gold mining states that “if gold prices continue to remain elevated, then [gold] prices are up, costs either stabilize or go down if the economy weakens further, and that could be a recipe for fat profit margins [for gold mining stocks]." As the gold mining industry stands to further benefit in the coming years, those being poisoned by its deadly practices, such as children living near the San Martin mine, will continue to suffer.

For now, social and environmental justice groups hope that the Pacific Rim decision will fall on the same side as the NAFTA tribunal’s ruling in the Glamis Gold case. A win in El Salvador would show the international community that groups resisting invasion of these mines stand a chance against a Goliath.

All photos taken by Fernando Reyes in Valle Siria, Honduras.