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Story Publication logo December 5, 2012

The New Conquistadors: Mining Policy as Foreign Policy II


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A battle is being waged in the rainforests of Panama – between those who want to keep their way of...

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A woman from the Ngobe village of Nueva Lucha, one of several communities threatened by Canadian mining companies. The Ngobe are an indigenous people native to Panama. Image by Lynn Burgess. Panama, 2012.

It is not inconceivable to think that the rainforest remains much the way Christopher Columbus would have found it when he first landed on the shores of what would become Panama in the fall of 1502.

The land is lush and green from the rains – locals say this area gets as much as five meters of rainfall a year. The jungle is thick with trees, their roots tangled into the ground as if they had been growing for centuries. And just as it was 500 years ago, underneath it all, there is the promise of buried treasure.

The indigenous hamlet of Nueva Lucha, nestled deep in the jungle, looks frozen in time with only a few hints of modernity scattered throughout: a new cement building, a seemingly endless supply of soda pop in plastic bottles, t-shirts bearing the names of American baseball teams the wearers have never seen play. The only way in is to trek for hours through the dense forest, with the help of an indigenous Ngobe-Bugle like Martin Rodriguez, who knows exactly where to turn, which river to cross, and which hills to avoid.

It's home to about 300 members of the Ngobe-Bugle, a small community of indigenous people who moved from their traditional territory in the north to this region many years ago. For income, the community relies on the gold that's in the riverbanks, but they search for it the same way their ancestors did centuries ago, large wooden pans shifting mounds of dirt round and round, sifting, sifting, until a speck of shiny mineral is left at the end.

But the Ngobe-Bugle's traditions are under threat from large corporations, mostly Canadian, looking to mine the forest to extract valuable copper and gold deposits.

"We have a special love for the land," Martin Rodriguez says, knee-deep in the river, moving a hunk of grey dirt around his wooden pan. Rodriguez is a small, stout man in his 30s, whose smile reveals a set of white teeth filed to fine points, a practice still observed in more traditional indigenous communities here.

"We know how things grow, how the land reacts, how the land evolves. We see ourselves as stewards for the natural resources and the environment," he says. "If the [Canadian copper mines] expand, they will eventually erode our way of life to an unrecognizable status. Our major concern has to do with the erosion of our culture, which is tied to the land."

To protect that culture, and the land they consider theirs by birthright, Rodriguez formed a group to oppose the mining companies, representing not just Nueva Lucha, but several other communities in the region. He chose the name Rey Quibian, after the indigenous chief who took on Christopher Columbus and and eventually chased his men out of Panama.

"We chose this name because King Quibian took up arms against the Spaniards to protect our natural resources." he explains. "The Canadians are doing the Spanish conquest all over again, and this time, they're coming to take all of our mineral resources."

Foreign investments rile Panamanians, despite possible returns

The "Canadians" are in fact two mining companies, on whose maps the village of Nueva Lucha is but a small dot on the edge of a massive concession. Petaquilla Gold is Canadian in corporate ownership only. Run mostly by Panamanians, it is listed and traded on the Toronto Stock Exchange and has been producing gold out of its open pit Molejon mine since January 2010, with production expected to double to nearly 100,000 ounces by the end of 2012.

Minera Panama is a wholly owned subsidiary of Toronto's Inmet Mining Corporation. Last December, it got the green light from Panama's Autoridad Nacional del Ambiente (ANAM), the ministry responsible for the environment, to go ahead and begin development on what will be one of the biggest copper mines in the world. The Cobre Panama project will strip 5900 hectares of tropical rainforest to make way for three open pits, as well as a new port facility and a coal-fueled energy plant that will power the entire project.

It is be the second-largest modern investment in the country, after the current expansion of the Panama Canal.

Panamanians are, at best, divided on the issue of mining. The most recent poll, conducted in March 2012 by the Latin American polling firm Dichter and Neira, showed that almost 75% of the population is opposed to open pit mining anywhere in the country.

One of the more outspoken anti-mining activists is Raisa Banfield. Architect by profession, and an environmentalist by passion, she's the director of the Sustainable Panama Foundation. She's tall, even taller in a pair of red heels, and with striking South Indian features, she makes an imposing spokesperson for the anti-mining forces, as well as a formidable foe for the pro-mining government of President Ricardo Martinelli. A Petaquilla mining executive once tried to challenge her by drinking water from a river downstream of the mine to prove it was potable. She politely declined.

But she's not so polite when talking about how Panama is being sold out to foreign interests. This mining concession, which was granted in 1997, she says, "provided very little profits to our country and this is the root of all our problems. It provided for a low royalty rate (just 2 percent), virtually no tax, virtually no benefits, and gave them access to all the land and water they need."

When asked about the economic development and jobs that will come with the mine, she sighs. "The government has allowed the mining companies to take over its responsibilities. When a large modern mine enters these small rural populations, there are significant changes, which are mostly negative. We've already seen it. Increased money circulating in the economy increases alcoholism and all the social problems around it. There's also increased prostitution around the mining communities. These don't go away when the mining companies leave."

An unholy trinity: Governments, corporations and NGOs

Like all mining companies operating in an age of increased environmental awareness, Inmet and Petaquilla are committed to "corporate social responsibility," known by its acronym CSR in mine-speak – which involves everything from reforestation (Inmet says it will re-forest almost every hectare of rainforest they're taking down), to building schools, like the one in Nueva Lucha, where they spent almost $80,000 to fly in all the building materials, to sponsoring training and farming diversification programs in the communities close to the mine.

Inmet wears it's CSR like a badge of honor, even putting $5 million a year into a development fund, a yearly commitment it promises to make for the next 30 years, until the life of the mine is over. A reminder hangs in the Toronto office of the company's director for CSR, Craig Ford. It's a blown up photograph of a young Ngobe girl, smiling over his desk from somewhere deep in the rainforest.

"On a community side," he says, "our role is to make sure, to the greatest degree possible, benefits – sustainable benefits – were going back into the communities. " Ford reiterates that the company had an extensive consultation process before submitting its proposal to the Panamanian government. And he's confident that the mine will bring to this part of the country what he sees it lacking: education, jobs, and growth.

Some companies themselves are getting a hand from the Canadian government to deliver on their CSR promises. It's a not-so-subtle change in the country's foreign policy that is making many observers uncomfortable.

Last year, Bev Oda, the minister responsible for the Canadian International Development Agency, or CIDA, announced an investment of $26.7 million to help reduce the footprints of Canadian mining companies in Africa and Central America. In announcing what's become known as the Devonshire Initiative, Canada's Conservative government more or less lifted a page from Inmet's corporate playbook—offering up taxpayers' money in Panama and other countries where Canadian mining interests are now operating. (Oda has since been replaced in the portfolio, after several spending debacles, one in which it was revealed she'd spent thousands of taxpayer dollars on a luxury hotel while attending a conference in London on international immunizations.)

This week, the new minister in charge of CIDA, former Toronto Police Chief Julian Fantino, defended the agency's ideological shift to a parliamentary committee in Ottawa. He said working with the private sector will make aid delivery more effective.

"As we look to the future and strive to maximize our results, we must also look to innovative solutions to development challenges. This includes using any and all legitimate tools and all partners available to us to meet this critical objective," he told the House of Commons committee.

"Working with the extractive sector is just one of the ways CIDA can work with private companies to make a bigger difference in the lives of those most in need," he said. But he was unable to provide a list of non-mining projects CIDA had approved since he was appointed minister in July.

By funneling the money through established NGOs like World Vision Canada and Plan Canada, the initiative creates partnerships between them and mining companies to build the kind of infrastructure and develop the kinds of social programs promised in their brochures.

Miguel Palacin, head of the Andean Coordination of Indigenous Organizations, sent a scathing letter addressed to CIDA, World Vision, and Barrick, a mining company operating in Peru, asking them to cease and desist.

"Canadian mining companies have a bad track record in our countries," he wrote, "where companies such as Barrick Gold are the source of many conflicts." Instead of proceeding with a development project opposed by the local population, Palacin continues, "we ask you, World Vision Canada/Barrick Gold/CIDA…. instead that you take responsibility to ensure that Canadian companies respect…the rights of the indigenous peoples affected before anyone seeks mining concessions in our countries."

Harry Kits, the extractives expert at World Vision Canada, says it's not so much that his NGO is helping Barrick with its CSR programs, but the other way around. "We were in that community already and wanted to make use of CSR money as well as CIDA money to improve the life of that community," he said over the phone.

Protests, he says, are always part of the dialogue. "We welcome the community's protests because that's exactly what we want to happen. We want the communities to engage and to say what their concerns are and to shape what the actual eventual development will look like. In the one mine we are looking at, we – World Vision Peru office – actually hired an outside consultant to review the environmental assessment done by Barrick. And out of that made some suggestion for changes in the way their operations should go forward."

But the idea of CIDA helping to fund projects of mining companies at a time when the agency is cutting back – and cutting funding to other NGOs – doesn't sit well with many Canadians. KAIROS, the ecumenical justice group that unites several different churches, had its CIDA funding cut in 2010. They'd been working with their partners in Central America to help educate rural communities on the impact of mining, something CIDA saw as counterproductive to Canadian business interests.

Earlier this year, the Mennonite Central Committee found out its annual request for $2.9 million in CIDA funding was turned down. The MCC has been a CIDA partner for years, working in India, Haiti, and Ethiopia, to provide water, food, and social aid. No reason was given, but the highly respected NGO was committed to "mining justice" around the world, and to helping educate indigenous people about their rights when a foreign mining company decides to move in.

It's a serious shift in policy that Canadians need to think hard about, says Stephen Brown, a foreign policy expert at the University of Ottawa. "That's why I'm concerned when CIDA starts funding projects because mining companies are providing support – basically mining companies are determining foreign aid priorities."

More worrisome, he says, by allowing mining interests to dictate where foreign aid dollars go, Canada is putting its reputation on the world stage in peril.

"We can make all sorts of arguments about national interests and those are important considerations," Brown adds. "But at the same time, for many issues, there's the right thing to do. And for a country like Canada that claims some kind of moral leadership in the world, it's important not just to be seen to do, but to actually do the right thing."

The Panamanian government seems all too pleased to have the Canadian companies and the NGOs they fund operate in the country, because ultimately, they get a piece of the pie as well, despite cries from the indigenous and environmentalist communities.

It's hard to imagine how anyone – let alone a small band of protesters who want to avoid violent confrontation – is going to stop Panama from its march to mineral dependency. The government is all too eager to grant large concessions to foreign companies, and recently raised its royalty rate from 2 to 4 percent of gross production.

Part of the problem, activist Raisa Banfield says, is a lack of strict environmental laws in the country to govern the mines and perhaps prevent further environmental damage. "(It) has to do with enforcement of whatever legislation there is. It's simply not followed through. It's not that we don't have legal structures, but they've been progressively weakened by our politicians who basically allow the (mining) companies to do whatever they want."

Five centuries ago, the Spanish arrived and exploited the region's abundant natural resources. What's happening now is no different, Banfield says. "It is a crying shame, that we are attempting to give away part of Panama, part of our sovereignty, part of our natural environment, to people who simply cannot manage it adequately."





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