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Taking Stock of Canada’s Mining Industry: Ecuadorian Landmark Lawsuit Challenges Canadian Mining Impunity PDF Print E-mail
Written by Jennifer Moore   
Tuesday, 11 May 2010 05:50
Source: Briarpatch Magazine

Marcia Ramírez hopes to set a precedent in Canadian courts that will benefit peasant farmers and indigenous peoples across the Global South.

A community leader in her mid-20s, Ramírez is one of three Ecuadorian plaintiffs suing the Toronto Stock Exchange for over $1.5 billion. The lawsuit alleges that violence in their rural community could have been avoided had the TSX not listed the Copper Mesa Mining Corporation (formerly Ascendant Copper), which is also named in the lawsuit. The TSX Group and TSX Inc. are accused of causing or materially contributing to alleged violence committed by the company in response to local opposition to an open-pit copper mine. An environmental impact study had indicated that the mine would displace several communities and jeopardize the health of forests and rivers in the northwestern valley of Intag. The defendants have vigorously denied the allegations.

“I ask the noble people of Canada,” Ramírez stated in her comments when the civil suit was filed in March 2009, “that you demand from your elected authorities significant changes in your national legislation so that what has happened with Copper Mesa in Intag will never happen again, not in Intag nor in any other part of the world.”

The TSX is a principal source of global mining financing today and specializes in services for junior mining companies like Copper Mesa. According to the Mining Association of Canada, 55 per cent of the world’s publicly traded mining companies were listed on the TSX at the end of 2008, far more than any other stock exchange. Canadian stock exchanges also provided 31 per cent of the world’s mining equity and handled 81 per cent of financing transactions for the global mining industry between 2004 and 2009.

In Latin America, a prime target for Canadian mining investments, Canadian-listed companies operate roughly 1,400 projects and have been the focal point of widespread protests and human rights abuses throughout the region. Just in the past year, anti-mining activists have been reported killed in Mexico, El Salvador and Guatemala in presumed relation to Canadian projects. In Argentina and Honduras, Canadian operations have led to complaints of water scarcity, contamination and illness. In Peru, a Canadian mining operation has provoked opposition among northern Amazonian peoples who question why a national park intended to protect their territory was reduced by half, giving miners access to pristine forests in headwaters of great importance to them. Alleged human rights violations and abuses by such companies are seldom investigated and almost never brought to justice.

As a result, Canadian mining companies have developed a reputation for human rights violations and environmental devastation that even the United Nations Committee on the Elimination of Racism has complained about. Members of the Canadian Network on Corporate Accountability were also dismayed when the government released a belated response to a series of public recommendations on the Canadian overseas extractive industry in March 2009 that only reaffirmed its commitment to the status quo: voluntary Corporate Social Responsibility guidelines. The government’s position “falls far short of international human rights norms,” said Amnesty International. KAIROS, a faith-based organization advocating for human rights, ecological and ecumenical justice, complained that Canada leaves “mining-affected communities with no recourse.” MiningWatch added that the government’s complaint mechanism “undermines the principle of independent fact-finding.” One survey of Canadian mining companies has also demonstrated that adherence to international standards by our overseas extractive industry is “inordinately” low, especially among junior mining companies.

In other words, voluntary principles are not enough.

Intag, Ecuador, says no

The Ecuadorian community of Intag has a long history of opposition to large-scale copper mining, beginning with the expulsion of a Japanese mining company in the 1990s. In 1997, Bishi Metals left the area when locals balked after obtaining a copy of its environmental impact assessment, which detailed how its projected open-pit mine would cause deforestation, dry up rivers and displace at least four local communities.

Following this victory, Intag continued organizing, aware that although Bishi was gone, the copper remained. Various initiatives were undertaken to demonstrate that Intag could live without mining, including a local conservation organization, an ecotourism project, a women’s committee, a committee of all the rural parishes in the valley, a coffee co-operative, a community newspaper, a local radio station and a community development association.

By the time Copper Mesa acquired mineral rights in Intag in 2004, it was local organizations rather than the technical challenges of working in the remote area that would prove to be its greatest obstacle. As a result of the strong collective response, the company never managed to get a drill in the ground.

According to Polivio Pérez, president of the Community Development Council for the rural parish in which Copper Mesa’s project is situated, “the company came in trying to buy support and divide the communities” in an effort to weaken local resistance. When it could not gain enough support, he continues, “they tried to enter by force.”

Prior to listing the company in 2005, the TSX was warned that violence and human rights abuses could result from facilitating access to capital. Human rights abuses had already been documented by the well-respected Ecumenical Human Rights Commission in Quito (CEDHU), including physical mistreatment, death threats, persecution, slander, false charges against community leaders and intimidation. Such concerns motivated the county mayor to write a letter to the finance and audit committee of the TSX urging them not to list the company. The company’s own prospectus, which the stock exchange requires of companies before they are listed, also indicated “the potential of further escalating violence” given existing problems with its community relations in Intag.

It was no surprise, then, that things heated up once the company was listed and started raising funds.

The worst incident, both Ramírez and Pérez agree, occurred in December 2006 when heavily armed security guards were hired to reach the company’s mineral claims and set up camp.

Villagers blocked the only access road to the potential mining site with a single-link chain and stood guard. A sign posted on a nearby tree read: “Mining companies are prohibited here. We don’t sell our land, we defend it.”

The residents, including men, women and children, refused to let the private security agents pass. But the guards were impervious to their arguments and began to fire their weapons and to spray Ramírez and others at close range with tear gas. Israel Pérez, the third plaintiff in the case and Polivio’s brother, was shot and injured in the leg.

In response, local residents successfully carried out a peaceful citizen’s arrest and the guards were held in a local church for several days until local authorities arrived. “Despite being assaulted with tear gas and bullets,” says Polivio Pérez, “we were able to demonstrate once again the strength of our local organization and our decisiveness [against mining] here.”

The incident was captured on film by two German journalism students and is featured in Malcolm Rogge’s 2008 film Under Rich Earth. Ultimately, government authorities suspended the project and declared that they were unable to process the company’s environmental impact assessment.

Months later, after company directors had been personally informed about the December events and persisting tensions, individuals believed to be linked to the company assaulted and uttered death threats against Polivio Pérez. The statement of claim for the lawsuit alleges that the directors could have done more to avoid further confrontations, such as actually signing and implementing the “Voluntary Principles on Security and Human Rights” that the company publicly purported to respect.

Challenging Canada’s “judicial paradise”


The Toronto-based Klippenstein legal firm, best known for its defence of the Dudley George family against the province of Ontario, is representing the Ecuadorian villagers in their suit against the TSX and Copper Mesa. Their lawsuit, Murray Klippenstein says, seeks “the same level of corporate accountability that is expected in all other areas of Canadian life.” He anticipates a tough battle.

In 1997, the last time a mining company was sued in Canada, the plaintiffs were told to go elsewhere. Twenty-three thousand Guyanese villagers filed a class-action lawsuit against Cambior after the collapse of its tailings dam at the Omai Mine, which polluted their water supply. But the Quebec Superior Court ruled that it was not the best jurisdiction for the case. When the suit was later filed in Guyana, it was dismissed and the plaintiffs were ordered to pay the defendant’s legal costs.

In order to address jurisdictional issues, explains Klippenstein, the Intag lawsuit focuses on decisions that stock exchange and company executives made in Ontario, “rather than on the finger that pulled the trigger in Ecuador.”

This aspect of the legal strategy appears to be working. The Toronto lawyer says that the TSX and Copper Mesa have decided not to challenge the Ontario court jurisdiction. This puts them one step ahead and potentially trims years off the time they might have spent in legal battles before going to trial.

However, it is not just the reticence of Canadian courts to deal with cases of abuse beyond our own borders that this case aims to confront, but also the skittishness of an entire industry to subject itself to legal oversight.

Given the weak reporting requirements for listing on the TSX and the lack of relevant legislation in Canada, author Alain Deneault calls Canada a “judicial paradise” for our overseas mining industry. “Listing on the Toronto Stock Exchange,” writes Deneault, who co-authored an exposé of Canadian mining abuses in Africa entitled Noir Canada, “is a way of seeking shelter in one of the more permissive stock exchanges in the world, while taking advantage of the reputation of the rule of law in Canada – all the while knowing that one is outside of state control and regulation when operating overseas.”

The Toronto Stock Exchange openly markets itself to companies hoping to work in areas with weak governmental institutions and vulnerability to conflict and violence. Its own online promotional materials give the example of the Democratic Republic of Congo as one potential site for which it can help companies raise financing.

In other words, the Intag lawsuit is just the tip of the iceberg. Just as Klippenstein’s legal team will argue that members of Copper Mesa’s board of directors and the TSX had significant prior indications that further violence and human rights abuses could result from listing Copper Mesa Mining, it is highly possible that a plethora of other such cases exist for which this lawsuit could set an important precedent. Coincidentally, the same year that Copper Mesa was listed, La Presse reported that another junior mining company was allegedly implicated in the massacre of about 100 Congolese civilians.

Great expectations


MiningWatch Canada is a coalition of 18 faith, social justice, indigenous and union organizations. Communications and Outreach Coordinator Jamie Kneen told Briarpatch that if the lawsuit succeeds it could really “open the door” for other communities that have been harmed as a result of Canadian mining operations. From the Congo to Papua New Guinea to Guatemala, people who have faced illegal land appropriations, forced relocation, water contamination, threats or even murder could sue.

The lack of suitable mechanisms for addressing such disputes in Canada has also drawn the attention of parliamentarians and legal experts. Recently, Supreme Court Justice Ian Binnie, speaking at the 2008 Canadian Bar Association conference, urged Canada to draw up new legislation that would provide a forum for foreign citizens and companies to have such cases heard. In the spring of 2009, two Members of Parliament initiated attempts at legislative reform by tabling private member’s bills. NDP MP Peter Julian’s Bill C-354 aimed to replicate the U.S. Alien Tort Claims Act, which allows foreign citizens to fight global human rights violations in U.S. courts, while Liberal MP John McKay’s Bill C-300 would make public financing for the extractive industry subject to government oversight. Up against a fierce industry lobby and government opposition, both bills were stalled when Parliament was prorogued.

“It’s not fair,” says Ramírez, “that a foreign company comes onto our land and violates our rights, when all we want is to live in a clean environment and to defend our water and our land.” She hopes, after the procedural battles are over, for a cathartic day in court when “the stock exchange will listen and understand that we’ve been hurt by a company of theirs.”

Ramírez, the other plaintiffs and the legal team will face a tough fight. But the underlying principle of their case is straightforward, says Klippenstein: “You shouldn’t harm somebody and you shouldn’t use your money to hire someone whom you know is likely to do harm” – a golden rule that Canadians would likely agree to in any other circumstances.

However, only time will tell whether Canadian courts are prepared to hear Ramírez’s voice and those of many others calling for a 180-degree turnaround in a sector rife with human rights and environmental abuses.

 

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