Is Canada's Gold Corp. Good for Guatemala? Pt2

  November 21, 2011

Is Canada's Gold Corp. Good for Guatemala? Pt2

Lyuba Zarsky: Environmental and health effects are a violation of human rights
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Lyuba Zarsky is a Senior Research Fellow at the Global Development and Environment Institute at Tufts University and a member of the GDAE-sponsored Working Group on Development and Environment in the Americas. She is an Associate Professor in the Graduate School of International Policy and Management at the Monterey Institute of International Studies in Monterey, California. She is co-author of the book Enclave Economy: Foreign Investment and Sustainable Development in Mexico’s Silicon Valley (2007); and contributing editor of International Investment for Sustainable Development: Balancing Rights and Rewards (Earthscan Press, 2005)


Is Canada's Gold Corp. Good for Guatemala? Pt2PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Toronto. A new study's been done to assess Goldcorp's claims, by the Global Development and Environment Institute at Tufts University. The report's called Searching for Gold in the Highlands of Guatemala: Economic Benefits and Environmental Risks of the Marlin Mine. Now joining us is one of the authors of the report, Lyuba Zarsky. She joins us from our studio in Washington. Lyuba is an associate professor at the Monterey Institute for International Studies. She's also a senior research fellow at the Global Development and Environment Institute at Tufts University. Thanks for joining us, Lyuba.


JAY: Now, when we talk to activists in the area of the mine--and, in fact, we ran a piece about a year ago about this, and we'll link it, we'll have it below this piece--most of the complaints seemed to be about water and water contamination, other than the fact--this issue of lack of sharing of the value of the mine. But Goldcorp says this about the water. They say that groundwater is regularly monitored by Goldcorp, and an independent community environmental monitoring association, and two separate Guatemalan government ministries. And according to Goldcorp, as of the spring of 2010, no negative water samples have been found. What do you make of that?

ZARSKY: The way that risk works for a mine is that the risk grows over the period of the mine's operation and into the closure period, while the benefits tend to be greatest early on in the operating period, and then tend to dissipate as the mine closes. Right? So we need to understand that there's these two different time dimensions: economic benefits now, less later; environmental risks lower now, and growing, potentially, later. So lots of issues on the water. The water, the potential for water contamination is probably the most serious long-term environmental risk of the mine. So monitoring is happening now. The community association that is monitoring the mine is in fact paid by Goldcorp. And a human rights assessment that was done, actually, by the company, or at the behest of shareholders for the company, noted that this is problematic, this does not constitute an independent or credible source. When we went to examine the independent (supposedly) government sources of monitoring, what we found was that the government reports are mainly accepting the reports provided by the company. So we do not at this time have independent, credible, third-party, transparent assessment of the environmental and health conditions of the mine. And it is for that reason that the Inter-American Commission for Human Rights last year, as a precautionary measure, ordered the Guatemalan government to suspend operations until a baseline study could be conducted, an independent assessment could be put in place.

JAY: But they have not actually suspended operations, is that correct?

ZARSKY: They did not suspend operations. On the other hand, a series of independent studies have been conducted, which are preliminary and do not claim to be conclusive, but have found--and probably the most troubling of them, what they found, for example, was the leaching of arsenic into ground water, into the wells, potentially in the wells that people are drawing from to drink. The really long-term hazard of a gold mining operation is the potential for--and, in fact, for most mining operations, is the potential for the leaching of heavy metals into the water, groundwater and surface water surrounding a mine. And this is a problem that can last for generations.

JAY: One of the main ingredients in gold mining is the use of cyanide. Goldcorp has this to say about its use of cyanide. It says, in 2009, Marlin became the first mining operation in Central America to be fully certified under the International Cyanide Management Code for the manufacture, transport, and use of cyanide in the production of gold. So they're saying the Cyanide Code is a voluntary industry program and that Marlin mine has lived up to it. Is that true?

ZARSKY: I think that the--Goldcorp has invested in cutting--you know, in good technology for cyanide management. And we welcome--it's welcome to see that it is trying to embrace good practice in cyanide management. But, again, a study for that was done for Goldcorp. An independent study by a group called Intrinsic found that while the policies are in place and they are good, again, there's not--there aren't surprise visits to monitor, there aren't independent assessments of risk exposure, for example, to workers, etc. So, you know, the--but the risk that I think was really not even thought about when the mine was constructed is climate risk. The mine, the tailings pond, the operations there at the mine, were built based on expectations of precipitation of rainfall looking backward. But, in fact, Guatemala is one of the high-vulnerability countries when it comes to climate change. It is already in a pattern of increasing flood intensity and hurricane and tropical storm intensity. But in the Highlands it's the flood intensity that's very problematic. And one of the risks for mining operations is that tailings ponds can be breached, and there you could have a cyanide spill, despite Goldcorp's best intention with processing. So there are risks that have not been taken into account. And perhaps one of the most troubling things that we found is that there's not a public mine closure plan for this mine, and the surety bond, the amount of money that has been put up to cover reclamation costs, and particularly in the event that there has to be a quick pullout, is $1 million. Well, a study came out just last month trying to estimate what it would really take to close and reclaim and monitor the mine after closure, and the estimate was $49 million. So the absence of a public mine closure plan, the lack of adequate monies in place to continue monitoring the mine after closure, is part of what we--what led to our conclusion that the environmental risks are going to be long-lasting and could be very high. One of the things that the company likes to brag about is the amount of--the social projects that it has invested in voluntarily. And it claims that the total amount has come to over $15 million. But we need to recognize that the--if--. And we couldn't document that. I've asked for documentation. But assuming it's true, that comes to about 1.7 percent of all the revenues, all the earnings that this mine has generated in the last five years. So that's--1.7 percent is the return, if you will, to the local people, and in exchange for a very long-term environmental risk.

JAY: And one of the things, in terms of dealing with mining company practices, other than the struggle of the people of Guatemala, is what happens in Canada, where so many mines are located. I think Canada is the leading nation in the world for registered home of mining companies, both Canadian-owned and foreign-owned. There was some legislation talked about in the last couple of years to have a kind of code of practices for Canadian mining companies. Did anything come of that?

ZARSKY: A lot of work is being done on international standards, and including codes of practices, on different issues. But right now I think we have to conclude that even best practice is not anywhere near enough, anywhere good enough. And some of those codes of practice have to be the embrace of free prior and informed consent by indigenous and local communities living near the mine, the practice around fair share and equitable sharing of benefits, and of high standards of environmental practice, including climate risk assessment and mine closure plans. These are not yet standard industry practice.

JAY: I guess some of these countries might want to follow the route of Hugo Chavez and just nationalize the gold mines. Is that being talked about anywhere other than in Venezuela?

ZARSKY: Nationalization is not on the agenda, but resource nationalism is. And, in fact, a recent study by Ernst & Young said that resource nationalism, which is the fancy way of saying a push by host country governments for a higher share, is the top risk to metals and mining companies in 2011. Interestingly, the fourth-highest risk out of ten was the social license to operate, the recognition that what these companies are doing is in fact sound, socially responsible. Procurement is an important aspect of the kinds of benefits that a mining company could bring, but there's really no data in Guatemala about what might be purchased locally. There's only an aggregate number. In other countries, it turns out that that number includes, from other case studies, both goods and services that are imported, but purchased locally, as well as produced in the country. And that needs to be unpacked. It is unlikely that Goldcorp sources everything--the cyanide, the diesel, all that they use--within Guatemala. And, hopefully, a future study will unpack that a little more.

JAY: Thanks very much for joining us.

ZARSKY: Thank you.

JAY: And thank you for joining us on The Real News Network.

End of Transcript

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.

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