Mining Gold, and Outrage, in Guatemala

Rolando Lopez Crisostomo is a long way from his village in the Western Highlands of Guatemala. Sipping coffee in a cramped kitchen in East Vancouver, he explains the purpose of his journey - to let us know that a Canadian company is digging an unwanted open-pit mine on Mayan land.

In a conflict that has claimed two lives and pitted indigenous communities against the Canadian and Guatemalan governments and mining interests, Crisostomo's people seem destined to lose.

Despite what he claimed was almost unanimous local opposition, the Marlin gold mine, which is owned by Vancouver-registered Glamis Gold, will start full production this month.

Glamis Executive Vice President Chuck Jeannes said the mine has the backing of the Guatemalan government as well as indigenous communities in the area.

The World Bank-supported project is being promoted as a necessary step for economic development in the region. Mayan communities, many of which live in grinding poverty, have been offered jobs, schools and help with local business ventures, among other benefits.

"The responsible extraction of mineral resources is one of the few ways that local indigenous people can hope to break the cycle of poverty," according to the Bank.

Crisostomo said they don't believe the promises, and they don't want to face the environmental devastation.

"The indigenous communities have clearly stated that they reject mining companies in Guatemala, particularly open-pit mines," added Crisostomo.

Not enough consultation

He said indigenous Guatemalans, which account for over half the population, simply do not trust that the mining companies and the government will keep their promises of putting some of the huge wealth to be generated by the mine into communities.

The Mayans have already been betrayed, according to Crisostomo. Under the 1996 peace accords, which Canada helped broker, indigenous communities must be properly consulted and agree with any resource extraction.

That hasn't happened, he claimed.

"The government allowed the mine in without following the proper authorization procedure," said Crisostomo.

A 'misunderstanding'

An internal audit ordered by the International Finance Corporation, an investment arm of the World Bank that contributed $53 million to the project, "found a genuine difference in understanding amongst the parties about the purpose of consultation with and disclosures to local people."

The report said that, while project officials thought it was enough to inform communities of their plans, the communities felt it was ultimately their decision. "The government of Guatemala has not been able to provide effective guidance about this issue," the report noted.

Jeannes said Glamis went to great lengths to inform people in the region about the mine. But neither the company nor the Guatemalan government felt it necessary to obtain full consent from local communities. Such a system would undermine federal law, he said.

"If you take it to its logical conclusion, it's anarchy," added Jeannes.

In response to what they saw as an inadequate consultation process, local communities organized their own polls. In the district around the town of Sipacapa, 11 of 13 communities voted against the mine (one voted in favour, one abstained). A ballot referendum was also held in Sipacapa in June, with 98 percent of the voters rejecting the mine.

Glamis called the referendum "corrupt" and noted that the mine is located closer to San Miguel Ixtahuacan than neighbouring Sipacapa. The company issued a release claiming, "in a fair election, a majority of the residents of both Sipicapa and San Miguel Ixtahuacan would support its activities."

Jeannes admitted there is less support for a mine in Sipicapa, but said the company's own polling data shows "the majority of the people in the vicinity of the mine are very supportive of it, because they're seeing the benefits of it."

He refused to disclose the numbers or the method of measuring support.

Guatemala's leading newspaper, Prensa Libre, printed the results of a survey last November that found almost 96 percent of the respondents in the region were against the project.

All that glitters…

Guatemala isn't the only country where gold mining is facing controversy.

In Peru, mining accounted for over $8 billion in foreign sales in 2004, but surrounding communities remain impoverished. Anti-mining protests have become common in recent years. In 2003, protesters forced the Canadian company, Manhattan Minerals, to abandon its $374 million gold and copper project. Other projects have since been shut down.

According to Reuters news service, Peru's Energy and Mines Minister Glodomiro Sanchez admitted, "The state has failed to channel its resources properly and people have a right to feel aggrieved."

Last month, another Canadian company, Placer Dome, was sued by a province in the Philippines for allegedly destroying an entire coastal ecosystem and dumping massive amounts of toxic waste.

Crisostomo said Guatemalans have learned from the experiences of other countries.

"We've exchanged information with people in Honduras where Glamis made promises and didn't fulfill them," Crisostomo said. "In other countries like Bolivia and Peru, companies made promises and didn't keep them."

Mining companies are also under attack in richer nations.

Activist groups such as Earthworks, which staged a protest march down New York's Fifth Avenue, have been attempting to mobilize consumer pressure against the troubled industry.

All this comes at a time of rising demand and record prices. The price of gold recently hit a 17-year high of almost $600 per ounce, partly fueled by record world jewelry sales, according to an extensive New York Times report on the global mining industry.

Gold mining's silver lining

The World Bank and mining companies claim they are bringing desperately needed economic development to poor countries like Guatemala.

Glamis says it has already put millions into community development projects, and plans to contribute $4.75 million more over the next decade. The money will go toward improving health and education (Glamis is already paying 35 teachers' salaries, according to Jeannes), among numerous other goals. The company estimates the mine will contribute almost $600 million to the Guatemalan economy.

Jeannes blames resistance to the mine on "misinformation" put out by "the more radical environmental organizations who simply do not approve of mining as an appropriate activity anywhere."

He cited Oxfam as an example of such a group.

"They've come in and made statements about how we're going to pollute the water and leave a big mess and put chemicals in the countryside, and that's just not the way the modern mining business works," he said.

Industry watchdogs share Crisostomo's skepticism about promises made by mining companies.

"Detailed economic studies have been done in places like Peru and Ghana where there's a lot of mining activity and a lot of Canadian investment," said Jamie Kneen of Mining Watch Canada. "Mining creates poverty where it's installed. It creates wealth in Toronto, it may create some wealth in the local elite, but the net effect in the region is going to be negative."

"The industry keeps saying, 'That's all in the past and we're doing things properly now.' But frankly, it isn't," he added.

The Canadian connection

Glamis Gold's corporate office is located in Reno, Nevada, but the company is registered in Vancouver and listed on the Toronto Stock Exchange.

The Marlin mine is strongly supported by the Canadian Embassy, which has sponsored public forums and flown Guatemalan indigenous leaders to Vancouver, as well as neighbouring Honduras, where Glamis also has operations (the strategy may have backfired - Kneen said some of the Guatemalans were "horrified" by what they saw in Honduras). The ambassador has even engaged in televised debates.

"The Canadian Ambassador was up to his wazoo basically promoting the company and promoting mining," said Kneen.

In a November 2004 Prensa Libre op-ed, Ambassador James Lambert pointed out that mining companies are currently operating in 200 indigenous communities in Canada.

"These communities are creating the economic, cultural and social infrastructure necessary to secure their future and the future of their children," Lambert wrote.

Foreign Affairs spokesperson Andrew Hannan confirmed that the Embassy flew Jerry Asp, Chief of the Tahltan Band Council, to Guatemala last December.

Asp was brought down "to inform indigenous Guatemalans about the various issues to be considered when exploring the option of natural resources development for economic development."

One month later, Tahltan elders occupied their Telegraph Creek band office, in northern BC, to protest proposed mining and coal methane gas extraction in their traditional territories. Asp facilitated the deal with the province to open the area to resource extraction, but the elders said he did not represent them, because he won an election in which only 400 voters participated.

'An environment of fear'

Crisostomo recalled Asp talking to Guatemalans about "how happy Canadian indigenous groups are with mining." But he was not surprised to hear about the trouble in Telegraph Creek.

He wonders about the effect of the mine on the social fabric of his own community. People have received death threats, he said, and he worries that more people could die because of their opposition to the mine.

In January, after a 40-day blockade, the Guatemalan government sent riot police to secure the way for trucks carrying equipment to the mine site. One person was shot dead and about a dozen people were injured.

In a separate incident during the same month, a farmer was shot and killed by a security guard hired to protect the mine. Glamis says the shooting was the result of a personal dispute.

Already, Crisostomo said, the mine has brought "an environment of fear" to the Western Highlands.

Jared Ferrie is a Vancouver journalist.