Mining War in Ecuador




E

cuador
has recently been the setting for intense resource conflict. In
May 2003 attorneys representing more than 30,000 Ecuadorian Indians
filed a billion-dollar lawsuit against ChevronTexaco Corporation.
They charged Chevron-Texaco with systematically destroying the environment
and homeland of a number of indigenous groups. From 1971 to 1992,
the company dumped millions of gallons of crude oil into human-made
lagoons in the region, causing massive contamination. The suit was
filed in Lago Agrio, a small oil town in the Ecuadorean Amazon.
As the trial continues, the reckless practices of the oil industry
are being held up for public inspection in Ecuador and elsewhere. 


Less
well publicized, but of great significance to Ecuador’s attempt
to attract foreign mining investment, are growing conflicts between
peasant, indigenous, and environmental alliances, and transnational
mining companies. At the urging of the World Bank and the International
Monetary Fund, Ecuador, along with many other countries, passed
new mining laws in the 1990s to encourage investment. Ecuador provided
a long list of tax breaks and replaced mineral royalties with minimal
annual payments ($1.00 to a maximum of $16.00 per hectare of mining
concession during the peak production phase) to local and national
governments. Environmental regulations were also weakened. Moreover,
the Mining Development and Environmental Control Project, financed
by the World Bank, provided investors with a networked computer
database providing comprehensive information and management of mining
claims on a provincial basis. 



Biodiversity
Hot Spot 



T

he
proposed Junin open pit copper mining project is situated in the
largest remaining remnant of Ecuador’s western cloud forests.
After decades of logging and agricultural encroachment only 12 percent
of these forests remain. Nonetheless, the remaining forests are
considered to be, botanically, some of the most diverse on the planet.
It has one of the highest rates of endemic species of any forest
in the world. Jaguars, ocelots, spider monkeys, and Andean spotted
bears inhabit this region. The proposed mining area is also located
within a protected community conservation reserve and in the buffer
zone of the state-owned Cotacachi-Cayapas Ecological Reserve. Cotacachi
county has about 30,000 inhabitants and covers approximately 580
square miles. 


Bishimetals
Exploration of Japan, a subsidiary of Mitsubishi Corporation, was
the first transnational with rights to the mining concession. That
company’s environmental impact study predicted that the mine
would cause widespread deforestation, desertification, and contamination
of rivers and underground water sources with heavy metals such as
lead, arsenic, cadmium and other toxic substances. Construction
of the mine would also require the resettlement of more than 100
families from 4 communities. One indication of the company’s
disregard for the community was the latrine employees built on the
banks of the Junin river so that human waste flushed directly into
the major source of water for residents downstream used for domestic
and farm needs, including cooking, drinking, bathing, and irrigation.



In
May 1997, after repeated attempts to meet with government officials
to express their opposition to the project, about 200 residents
from 8 communities surrounding the mining area occupied the company’s
mining camp. When mining and government authorities failed to appear
for the meeting requested by residents, protestors burned the camp’s
wooden structure as an expression of the community’s rejection
of the mining project. Prior to lighting the match to the gasoline-soaked
building, furniture, utensils, etc. were inventoried and stored
in the community center. Several weeks later, the items were transported
by mule to the parish seat three hours away where they were delivered
to municipal authorities. Three peasants were charged with terrorism,
subversion, and destruction of private property. Members of the
Organization for the Defense and Conservation of Intag (DECOIN)
and Accion Ecologica, an environmental organization in Quito, were
named as unindicted co-conspirators, though neither organization
was involved in the mining camp incident. Mitsubishi pulled out
of the project shortly afterwards. 



Alternatives
to Mining 



R

ealizing
that it would only be a matter of time before another company came
along to exploit Junin’s copper, local residents worked to
develop sustainable development alternatives to the boom and bust
economy of extractive resource exploitation. With its primary forests,
waterfalls and biodiversity, the area has great ecotourism potential.
With help from U.S. and European environmental groups, Carlos Zorrilla,
president of DECOIN, raised funds so that the community was able
to buy about 5,000 acres of land and set up an environmental preserve.
There is also a “fair trade” coffee-growers’ association
that markets shade-grown organic coffee in fair trade venues in
the United States, Japan, and Europe. Association members receive
more than double the price paid by local buyers for their coffee.
In September 2000 the Cotacachi Municipal government approved the
declaration making the county the first Ecological County in Ecuador.
     


The
ordinance provides for the municipal government to “prioritize
and encourage sustainable economic activities over all others, declares
the conservation of native forests and biodiversity a priority,
and prohibits the establishment of industries that contaminate the
environment with toxic substances, such as heavy metals.” 



Mining
Conflict: Round Two 



A

ll
this did not discourage Ascendant Holdings from acquiring the Junin
property in July 2004. Ascendant is not a mining company; it is
a mine promotion company. They speculate on new mining properties,
do feasibility studies, and then sell the property to a large mining
company for a hefty profit. With China’s recent industrial
expansion, Chinese corporations are on a mineral acquisition binge
and are willing to pay premium prices for a reliable supply of copper.
Ascendant is registered in Canada and listed on the Bermuda Stock
Exchange. The company is working on a public offering on the Toronto
Stock Exchange, according to CEO Chris Werner of Sheboygan, Wisconsin.
The firm’s president, Paul Grist, has an office in Quito. 


In
contrast to the recent past, most mining companies have recognized
that controversial mining projects cannot proceed without the informed
consent of the local community, or a “social license to operate.”
Not Ascendant. Without informing the local government, the company
set up a camp less than a mile from Junin’s community reserve.
DECOIN has objected to the company’s invasion as a violation
of the local consent provision of the Ecuadorian Constitution as
well as the municipal ordinance that declares Cotacachi an Ecological
County. It appears that company personnel aim to reestablish the
camp at the old Mitsubishi site. This area is wholly within the
community reserve. Furthermore, local residents have reported that
mining company officials are trying to create divisions in the community
by collecting signatures asking for the removal of families in the
Junin area that oppose the mine.





Paul
Grist has responded to criticism of his company by saying that roughly
75 percent of local inhabitants throughout the region are supporting
them. However, at an August meeting, representatives from five communities
surrounding the Junin mining concession met in Barcelona, one of
the potentially affected communities, and reaffirmed their decision
to reject the presence of Ascendant in their communities by signing
the Barcelona Declaration. The declaration rejects the actions,
intimidation and threats aimed at their communities and local opposition
leaders. It also reaffirms their desire to seek more sustainable
and less destructive projects which do not cause divisions within
their communities nor the resettlement of their communities and
neighbors. 


The
mayor of Cotacachi, Auki Tituana, a Kichwa Indian, has asked for
an injunction from the Constitutional Tribunal to invalidate the
Junin mining concession, which he believes was illegally granted
by the federal government. At a July 2004 rally organized and paid
for by Ascendant, the company’s representative, General Cesar
Villacis, publicly accused the mayor of hiring a community leader
to kill him. 



Organizers
are Slapped 



A

scendant
responded to this outpouring of local resistance by suing the Intag
monthly community newspaper for libel.


INTAG

is the main source of information about the consequences of mining.
The company claims that damages suffered at the hands of the newspaper
amount to a million dollars. The company is also suing for their
legal fees and court costs. The article the company found offensive
was the report of a community meeting on the proposed mine where
various government officials and locals pressed their views. “We’re
proud of our contribution for the past four years to the creation
of a community with the information necessary to distinguish between
truth and lies, and thus able to make decisions based on facts…we
will not allow the miners to silence the voices of those protagonists,”
said Mary Ellen Fieweger, editor of the paper. 


In
the U.S., this kind of bullying tactic is called a Strategic Lawsuit
against Public Participation or a SLAPP suit. The aim is to intimidate
and silence those community members who dare to raise legitimate
questions and concerns about the local community impact of various
corporate-sponsored projects. The lawsuits are rarely, if ever,
successful because they are blatant attempts to stifle free speech
and dissent, rights guaranteed by the Constitutions of both Ecuador
and Canada. They do, however, drain the opposition of energy and
resources, which is why they are so popular with transnational corp-
orations. 


DECOIN
has organized a letter writing campaign to protest Ascendant’s
SLAPP suit and has been offered pro-bono legal assistance from the
Center for Economic and Social Rights (CDES) based in Quito. CDES
is also taking the case to a special Ecuadorian court to challenge
the legality of the mining concession. 



Fraud
Investigation 



S

upporters
of DECOIN have asked the Toronto Stock Exchange and the Ontario
Securities Commission (OSC) to investigate a possible case of fraud
involving Ascendant’s claim that the Junin deposit is “one
of the largest undeveloped copper-molybdenum deposits in the world”
at 1.36 billion tons. This figure exceeds Mitsubishi’s earlier
estimate of 318 million tons by such a large margin as to raise
serious questions of misleading and inaccurate information being
sent to potential shareholders. While market conditions frequently
result in upwardly revised estimates of economically recoverable
ore, the magnitude of this discrepancy stretches credibility. The
earlier estimate was based upon diamond drilling; the upwardly revised
estimate is based upon Ascendant’s in-house reevaluation.






Resisting
Colonialism 



T

he
time when resource corporations could ride roughshod over the rights
of resource-rich communities in Latin America is long since past.
The centralizing and anti-democratic tendencies of neoliberal reforms
advanced by the World Bank and the IMF have generated decentralized
and democratic tendencies among indigenous people, peasants and
workers. In 2002, popular protests halted the Bechtel Corporation’s
privatization of Cochabamba’s water system and several mining
ventures in Bolivia. The following year, President Gonzalo Sanchez
de Lozada tried to push through a controversial deal to export Bolivia’s
natural gas through Chile to the U.S. The move provoked mass protests
and he was forced to resign. His successor, President Carlos Mesa,
offered a referendum to give Bolivians a voice in the government’s
plans for the gas industry. 


In
neighboring Peru, the Manhattan Mineral Corporation, a Canadian
company, had mistakenly assumed that because they had acquired a
concession from President Fujimori to develop the Tambo Grande copper-zinc
deposit, they could construct a mine. In June 2002, residents conducted
a referendum on the question of whether the mine should go forward.
Over 93 percent of those participating voted “No.” Manhattan
Minerals’ stock price fell approximately 30 percent in the
following days. In 2003 the Peruvian government terminated the company’s
option on Tambo Grande. Canada’s

Northern Miner,

a mining
industry newspaper, editorialized (12/3/04) about the lessons of
Manhattan Minerals, which was forced to write off a $60 million
investment for a penny on the dollar. “It wasn’t legal
uncertainty that killed the Tambo Grande project. The development
met with sustained resistance from both local landowners and First
World activist groups, who raised the public’s consciousness
with a tendentious advertising campaign against Manhattan Minerals.”







 





Al Gedicks teaches
sociology at the University of Wisconsin-La Crosse and is the author
of



Resource Rebels:






Native Challenges
to Mining and Oil Corporations



(South End Press, 2001).
Mary Ellen Fieweger provided much of the information for this article.
She is a teacher, writer, and translator who has lived in Ecuador
for 27 years.