Monthly Archives: April 2016

Canada: Mining conduct abroad deserves another look

Wednesday, April 27, 2016 12:00 AM

The Liberals have been busy in their first six months in office mending Canada’s bruised image abroad.

The prime minister’s many trips to the United Nations in New York, Washington, and other world capitals have earned him a lot of global goodwill. And besides the selfies, the world is noticing that Canada is now taking seriously climate change and the too-high number of murdered and missing indigenous women here.

But one area the Liberals haven’t touched, where Canada’s international reputation remains blackened, is Canadian mining companies’actions abroad. With Canada home to many of the world’s top mining firms, some have been alleged to have harmed the environment or violated the human rights of people in communities hosting their operations in recent years. That’s not to say every Canadian mining company is bad—they’re not—but we hear a lot about a few cases of alleged wrongdoing committed either directly by a company or its subsidiaries or security forces on its behalf.

That latest was a New York Times cover piece on Mayan village women in Guatemala who allege they were gang-raped by men who had come to evict them from land they said belonged to a Canadian firm. One of the women is suing Hudbay Mineral Inc. The company, which was not the mine’s owner at the time of the evictions, denies any wrongdoing.

While the allegations are unproven in court, the case is seen as a test for how far Canadian courts are willing to go to hold companies accountable for their actions abroad.

Last week we reported that the Liberal government so far appears mostly uninterested in changing the way mining firms are held accountable for alleged abuses in poor countries. Several ministers with related files dodged our questions about change to mining-sector accountability, or declined to say whether change was needed. The Liberals have endorsed a controversial office of an extractive- sector corporate social responsibility counsellor and an extractives institute brought in under the former Conservative government.

But the Liberal government shouldn’t be satisfied sticking with the status quo, or just waiting to see what the courts decide. It should actively examine whether the current account- ability system works effectively. A lot of voluntary measures were put in place for corporations by the past Conservative government that human rights advocates deemed lukewarm and without teeth. There have been campaigns for an inde- pendent ombudsperson, and for human rights to be sewed into trade deals in a more meaningful way.These options deserve careful study. The government must also look at how to better prevent abuses from happening in the first place, not just ensure accountability after they’ve taken place. Ultimately this will benefit rather than burden Canadian mining operations. In an increasingly globalized world a well-earned good reputation is always a worthwhile investment.

The Liberals love consultations. They’ve turned to them on the Trans-Pacific Partnership trade deal, and defence and foreign-aid policy reviews. The government should show it’s serious about “continually assess[ing] its CSR policies,” in the words of a foreign ministry spokesperson, and consult Canadians with a view to improving the current flawed system. Ultimately this will also benefit rather than burden Canadian mining operations. In an increasingly globalized world, a well-earned good reputation is not just a worthwhile investment. It’s a necessary one.


Mining stakeholders in Africa set to have a common law



– The document is a product of case studies on human rights impact as per the African Charter.

– It also calls for easy and quick access to justice by setting up independent and accessible grievance mechanisms.

– The new law is set to be launched at Ngondi in Naivasha on Wednesday, April 27, 2016.

– KeNRA officer Mwambi Mwikamba described the document as one of the best legislations if adopted.

The push by various mining stakeholders in Africa to have a common mining law is set to be achieved as a model mining law is set to be launched in Kenya this week.

Once adopted, the law, which is a product of a synthesis of case studies, will solve a number of issues affecting communities living in areas endowed with natural resources.

“The studies were carried out in communities in five countries among them Angola, DRC, South Africa, Zimbabwe and in Kenya [where it] was carried out in one of the oldest mining areas, the Kenya Fluorspar Mining in Kerio Valley,” said International Alliance on Natural Resources in Africa (Ianra) coordinator Anne Mayher.

The document is a product of case studies on human rights impact as per the African Charter on Human and Peoples’ Rights (African Charter), she added.

“We have been having complaints on infringement of human rights at community level. That is why we decided to carry out research at grassroots level so as to have legislation owned by community,” read a press statement sent to newsrooms.


Among the principles in the document are setting procedure of acquisition of land and resettlement of people whenever minerals are discovered in their ancestral land.

It also calls for easy and quick access to justice with calls for the State to bear the primary responsibility by setting up independent and accessible grievance mechanisms composed of a panel of environmental, legal and social experts which shall be established through a community consultation process.

Natural Resources Alliance of Kenya (KeNRA) officer Mwambi Mwikamba, described the document as one of the best legislations if adopted adding that it will end atrocities experienced in all mining areas, not only in Kenya, but in other parts of Africa.

Mr Mwikamba said the principles are part of the proposals which have been included in the Mining Bill 2015 which is waiting for assent by the president.

“The document comes at a time when Kenya is in the process of changing from colonial mining law to a new legislation which tries to adopt some of these principles.

“The Bill, which has passed different stages, tries to address some of these issues, if not all,” said Mr Mwikamba.

“We shall continue to lobby for the adoption of these principles to end conflicts being experienced between various mining stakeholders, among them government-Community, community-investors and government-investors,” he added.

The new law is set to be launched at Ngondi in Naivasha on Wednesday, April 27, 2016.


Wave of foreign lawsuits against local miners hits Canadian courts: Human rights groups are backing several claims against firms operating in Guatemala, Eritrea

April 19, 2016, 6 a.m.
Law & Politics
By Nelson Bennett

In the coming months, the BC Supreme Court is expected to decide whether a civil claim against a B.C. company with a mine in Eritrea can be heard in Canada.

Three former Eritrean mine workers claim Nevsun Resources Ltd. (TSX:NSU) was complicit in the Eritrean government’s use of conscripted labour and other human rights abuses at the company’s Bisha mine.

Should the court decide the claim can be heard in Canada, it could have wider implications for Canadian mining companies operating in countries with less than sterling environmental and human rights records.

More than three-quarters of the world’s mining and exploration companies are based in Canada and operate in 100 countries, according to a McCarthy Tétrault report on mining and the courts.

The Nevsun claim is one of three that have been launched against Canadian mining companies since 2014.

Toronto’s HudBay Minerals Inc. (TSX:HBM) faces three separate claims, which include allegations of rape and murder committed by security forces acting on behalf of HudBay at Guatemala’s Fenix mine, which it acquired through a merger in 2008 and sold in 2011.

Even though HudBay didn’t own the mine when the alleged rapes occurred in 2007, the company might still be held liable if the allegations prove true, according to Nicholas Hughes, co-chairman of McCarthy Tétrault’s mining litigation group.

“It depends on how the merger operated,” Hughes said. “If the merger operated as such that there was an amalgamation, then you bring in all the problems into the merged company.”

In December, the BC Supreme Court ruled against hearing a civil claim launched by seven Guatemalans against Tahoe Resources Inc. (TSX:THO), whose Guatemalan security personnel were accused of using excessive force during a violent protest at its Escobal silver mine.

Tahoe argued that Guatemala, not Canada, is the proper jurisdiction for such a claim. The court agreed and stayed the proceedings – a decision that is being appealed by the Canadian Centre for International Justice (CCIJ), which helped launch the claim. CCIJ is also assisting the Eritreans in their claim against Nevsun.

Canadian courts have jurisdiction to hear cases against Canadian companies operating overseas.

But in the Tahoe case, the court decided that in countries with a functioning court system, it is more convenient to hear the cases in those countries.

That argument might be harder to make in the Nevsun case because its Bisha mine is in a country that the United Nations (UN) says is plagued with “widespread and gross” human rights violations, including forced labour and a “total lack of rule of law.”

“Indeed, with no parliament meeting and the court system controlled by the executive, it could even be affirmed that there is no rule of law in Eritrea,” a 2015 UN commission of inquiry on Eritrea stated. “It is not law that rules Eritreans, but fear.”

If the BC Supreme Court agrees there is no real means of legal redress in Eritrea, it could open the door for the claims to be heard in B.C.

“If justice can’t be done, that will be weighed heavily by the court,” Hughes said.

The Tahoe, Nevsun and HudBay claims are part of a recent trend of Canadian mining companies operating abroad being taken to court in Canada by litigants who claim they cannot get justice in their own countries.

It poses a dilemma for Canadian courts, because to an extent they are being asked to impose Canadian law on sovereign nations, since the alleged crimes may have been committed by personnel acting on behalf of the state.

According to human rights organizations like CCIJ, Canadian mining companies have operated for too many years with impunity in countries with lax environmental and human rights standards, so they are trying to bring some of the more high-profile cases to court in Canada.

According to CCIJ, Canadian resource extraction companies often use subsidiaries set up to act as firewalls to insulate them from liability. Nevsun, for example, owns the Bisha mine in Eritrea indirectly through a complex link of subsidiaries.

Nevsun Resources (Canada) owns 100% of Nevsun (Barbados) Holdings Ltd., which owns Nevsun Africa (Barbados) Ltd., which owns 100% of Nevsun Resources (Eritrea) Ltd., which owns 60% of the Bisha Mine Co. The Eritrean National Mining Corp. owns the remaining 40% of the Bisha Mine Co.

Nevsun disputes the suggestion the ownership structure is intended to insulate the company.

“This ownership structure is common international practice that is done for several reasons related to flexibility in future ownership changes, tax planning, operational management segregation and accountability,” the company said in an email to Business in Vancouver.

Regardless of intent, the use of subsidiaries might not insulate companies from liability, if a Chevron Corp. case is any indication of where the courts may be headed.

Last year, the Supreme Court of Canada made a ruling that could give mining and oil and gas companies with overseas operations a case of the litigation jitters.

“It’s relatively limited as to its ultimate legal impact, but it has got everyone hot and bothered,” Hughes said.

In that case, Chevron Corp. (NYSE:CVX) inherited the liability of Texaco, which was hit with a US$9.5 billion judgment against it after a group of indigenous people sued for environmental damage in Ecuador.

Chevron claimed the ruling had been procured through fraud and went to court in New York seeking a Racketeer Influenced and Corrupt Organizations Act application. The U.S. courts accepted the argument and issued an injunction against those suing Chevron.

So the litigants filed suit in Canada.

They applied to have the judgment they received in Ecuador enforced in Canada against Chevron Canada Inc., a subsidiary of Chevron, even though Chevron Canada had nothing to do with the Ecuador operations.

They went after the Canadian subsidiary because the parent company, Chevron, has no assets in Canada.

A laundry list of legal questions will still need to be ironed out in the Chevron case. But the fact that a Canadian court has opened the door to the possibility of enforcing judgments by a foreign court against a Canadian subsidiary suggests that companies might not be insulated against liability through their subsidiaries and could face costly legal battles.

The Nevsun case could also prove to be an interesting test case. Eritrea has been condemned by human rights organizations for using indefinite military conscription. Conscripts are forced to work on government projects and for private companies, according to the UN and Human Rights Watch.

It is alleged that conscripts were forced to work on the Bisha mine project by Segen Construction Co., which is owned by Eritrea’s governing party. In its response to the Eritrean claims, Nevsun said that if forced labour had occurred, the company was unaware that it had.

A report by Human Rights Watch, which had “extensive dialogue” with Nevsun, suggests Nevsun might have had little say or control over the workforce in Eritrea.

“Its efforts to investigate the allegations have been obstructed by Segen itself, and Nevsun has professed itself powerless to compel its contractor to co-operate,” the 2013 Hear No Evil Human Rights Watch report states.

Nevsun disputes the report.

“Their information is not only outdated and incorrect, their primary information source on the Bisha mine is not reliable,” the company stated.

The report concludes with a warning: if Canadian mining companies can’t operate in Eritrea without ensuring the welfare of workers, “they should not invest there at all.”

Canadian companies can protect themselves from civil claims by insisting that their foreign subsidiaries and security forces adhere to higher environmental and human rights standards, Hughes said.

Mark LaLonde, director of risk solutions for Xpera Risk Mitigation & Investigation, which specializes in security and intelligence, said one of the biggest problems for Canadian mining and oil and gas companies operating in countries like Eritrea and Papua New Guinea is the local security forces they hire to protect their workers and assets.

“We’ve seen in eastern Europe and some parts of Africa where it’s organized crime groups running security, or they’re one step away from being an armed militia, or they’re an armed far-right wing group, or they’re running security companies so they can buy firearms for the company and resell them on the black market.”

There is nothing wrong with hiring local security personnel as long as there is proper oversight by someone who will ensure they adhere to international human rights standards, LaLonde said.

“One way to mitigate your risk is to insert a western company to manage your local guard services,” LaLonde said.

The recent claims against Canadian mining companies have prompted renewed calls from Liberal MP John McKay for a Canadian ombudsperson that would investigate complaints about Canadian extraction companies operating abroad.

Pierre Gratton, president of the Mining Association of Canada, said an ombudsperson could do nothing to prevent the kinds of civil claims now being brought before Canadian courts.

“An ombudsman is a non-judicial process that helps parties resolve disputes where legal issues … best left to the courts are not at play,” he said. “In short, John [McKay’s] ombudsman would have no role to play in the HudBay example.” •

Claims test reach of Canadian courts

Araya vs. Nevsun

In a claim launched in November 2014, Gize Yebeyo Araya and two other Eritreans now living outside of Eritrea as refugees say that Nevsun Resources Ltd. (TSX:NSU) is responsible for the actions of a government-owned contractor, Segen Construction Co., that used forced labour and violated international human rights laws.

According to the claim, Nevsun either “expressly or implicitly” condoned the use of forced labour and mistreatment of workers in the construction of its Bisha mine.

Hearings were held earlier this year in BC Supreme Court, and a decision on whether the claim can be heard in Canada is expected in the coming months.

Nevsun indirectly, through subsidiaries, owns 60% of the Bisha mine; the Eritrean government owns 40%.

Between 2008 and 2012, more than 1,000 conscripts of Eritrea’s national service program were forced to work on the Bisha mine’s construction, and some workers who had voluntarily joined Segen Construction Co. were not allowed to quit, according to the claim.

Eritrea has mandatory and indefinite military conscription, with soldiers often forced to work for public and private companies, according to the United Nations (UN). Such was the case at the Bisha mine, claimants say.

Nevsun denies the allegations. And if the alleged abuses had occurred, the company says, it was unaware that they had.

Nevsun insists that contractors were prohibited from using forced labour on the Bisha mine project.

Nevsun also disputes the characterization of Eritrea as a rogue state with no rule of law. It argues that Eritrea has a functioning court system and legally forbids forced labour.

Any claim should therefore be tried in Eritrea, not Canada, the company says.

“The rule of law applies and state actors including public officials are subject to Eritrean laws and the jurisdiction of the Eritrean courts,” Nevsun states in its response to the claim.

But if Eritrean law prohibits forced labour, the government is flouting its own law, according to Human Rights Watch.

“We produced a pretty long report on the national service program a few years ago, and there’s really no way to look at it other than an immense program of forced labour,” Chris Albin-Lackey, a senior legal adviser for Human Rights Watch, told Business in Vancouver. “The service is indefinite. The conditions people endure are horrific.”

According to the UN, Eritrea lacks the basics of a functioning civil society. It has no constitution or legislative assembly, national elections or independent press. A UN commission of inquiry last year concluded Eritrea is a country with “widespread and gross” human rights violations with a “total lack of rule of law.”

Albin-Lackey said forced labour is the primary cause of a massive flight of refugees out of Eritrea.

García vs. Tahoe

In June 2014, Adolfo García, on his and six other complainants’ behalf, filed a civil suit in BC Supreme Court against Tahoe Resources Inc. (TSX:THO) claiming damages in a violent incident that took place in 2013 at Tahoe’s Escobal silver mine project in Guatemala.

On April 27, 2013, the protests at the mine over environmental concerns turned violent when, according to Tahoe, 20 people, some of them armed with machetes, stormed the mine’s gates. Tahoe said there had been reports that outside protesters had been bused in.

The mine’s security personnel responded with pepper spray and fired rubber bullets and buckshot, injuring the claimants.

Those injured claim Tahoe was ultimately responsible for their injuries and allege that the response of the mine’s security team was planned and ordered by the mine’s security manager, Alberto Rotondo Dall’Orso, who is facing criminal charges in Guatemala.

A lawyer from Guatemala who gave expert testimony said in an affidavit that Guatemalan law allows for claims of negligence, battery and vicarious liability.

Stefan Ioannou, an analyst for Haywood Securities, said there are questions about the merits of the allegations against Nevsun. But should a Canadian mining company be found guilty of human rights abuses, it would be bad for the Canadian mining sector’s image.

“If there are allegations and they’re proven to be true, it’s definitely a black eye for the mining industry in general.”

Angélica Choc, German Chub Choc and Margarita Caal Caal vs. HudBay Minerals Inc.

Forced evictions, rape, murder – these are some of the allegations levied against HudBay Minerals Inc. (TSX:HBM) in three separate civil claims launched against the Toronto mining company as a result of protests and illegal occupations of a mine it used to own in Guatemala.

One of the claims against the company predates the company’s ownership of a mine where clashes between security personnel and protesters resulted in the allegations of murder and rape.

HudBay owned Compañía Guatemalteca de Níquel, which owned the Fenix ferro-nickel mine in Guatemala. It sold the property in 2011.

In Caal vs. HudBay, it is alleged that security forces acting on behalf of the mining company raped 11 women in January 2007 as part of a forced eviction of an illegal occupation of the Fenix mine area.

HudBay did not own the mine at the time. It was acquired through a merger with Skye Resources Inc. in June 2008.

In Choc vs. HudBay, mine security personnel allegedly killed community leader Adolfo Ich Chamán on September 27, 2009. According to the claim, Chamán was hacked with machetes and shot in the head.

The company said an “armed mob” attacked the Fenix mine and ransacked a hospital and police barracks on site, stealing AK-47s and using them to fire on security personnel. Five were injured in the violence.

In Chub Choc vs. HudBay, German Chub Choc was allegedly shot and paralyzed by security personnel in the same riot.HudBay says all the incidents stem from what it calls an illegal occupation of the property that belonged to the mine. The occupation began in 2006, it says.

In 2009, the company negotiated an agreement, approved by the government, to return those occupying the land to their original villages, and agreed to build a new school and water system and to improve roads.

Most abided by the agreement but some continued to occupy the land.

As for allegations of forced evictions, HudBay says no one was ever evicted while it owned the mine.


How a $900-million lawsuit is shaping the future of Canada’s natural resource landscape

Damon van der Linde
Friday, Apr. 15, 2016

SEPT-ÎLES, QUE. — Flying in a helicopter over the Bay of Sept-Îles, Alexandre Pinette points to the mouth of the Moisie River where it empties from the north into the St. Lawrence River. Members of his Innu community used to live by the river every summer to fish salmon and trap, but he said they were moved by the government in 1949 to the permanent Uashat and Maliotenam reservations.

“When the Innu came back in spring, their houses were destroyed. They had disappeared,” said Pinette, his voice crackling over the helicopter intercom. He adds that Innu were also displaced between 1948 and 1950 from what is now the Iron Ore Co. of Canada’s port, where huge mounds of the sparkling mineral are sorted and then loaded into waiting cargo ships.

A 578-kilometre railway stretches north from Sept-Îles’ deep-water port to where the mineral is dug from the ground. Here, the Innu claim the mines and other facilities have ruined the environment, displaced members from their territory and prevented them from practising their traditional way of life, while not giving much back to the community.

For the band councils of the Innu of Uashat-Maliotenam and Matimekush-Lac John, the almost 60 years of alleged damage is worth suing IOC for $900 million.

Although the allegations have yet to be proven in court, this case has already changed Canada’s natural resource landscape by clearing the way for Aboriginal communities to directly sue companies for damages instead of only being allowed to seek compensation from the government. The end result could be tens of billions’ worth of new lawsuits against Canadian companies.

The Innu have Impact Benefit Agreements with other companies in the area, including ArcelorMittal SA, which owns an iron ore mining operation just a few kilometers from IOC that started in the late 1950s.

Documents obtained by Radio-Canada show that the Uashat-Maliotenam band council receives between $12 and $15 million a year from these agreements, depending on the companies’ production.

But the Innu do not have one with IOC or its parent companies, global mining giant Rio Tinto, which acquired a 58.7-per-cent sake in 2000, Mitsubishi and Labrador Iron Ore Royalty Corp.

The Innu say IOC has sold nearly a billion tonnes of iron ore from its mines (at varying prices) in Schefferville, Que., and Labrador City, NL.

Negotiations broke down with Rio Tinto without a settlement in 2012 and the Innu got word the company was looking to sell its IOC assets. In March 2013, the Innu band councils sued.

“We sent a strong message to the company and all of their investors that would like to buy this company: before thinking to buy something, you should look at what is behind it,” said Jean-Claude Pinette, director of the Uashat mak Maliotenam land and protection office.

IOC was founded in 1949 and the success of its iron exports allowed the town to grow from 2,000 inhabitants in 1951, when the first ship carried ore from the port, to 14,000 in 1961 and a peak of 31,000 in 1981.

The court case alleges IOC has long discriminated against First Nations. The most common complaint is that Innu workers were not given proper safety equipment, and were laid off after 59 days, just one shift short of the 60-day requirement for joining the union.

At the Uashat community centre, Bruno Jourdain, 84, said he worked for IOC in 1959 and wasn’t given a respirator when working around the iron dust.

“It was a deplorable situation, because everyone at that time wanted to work to support their family,” he said.

Although IOC declined to comment on the litigation, Arlène Beaudin, the company’s public affairs director in Sept-Îles, said its mining activities benefit everyone in the community.

“We share all the activities in town. We get together in schools, our kids and the Innu kids are all over the town and every time we invest in an activity in Sept-Îles, it’s good for everybody,” she said. “It’s not them or us, we are in Sept-Îles all together.”

The Innu say their complaint is with the company that has made profits, not the people who make their living directly or indirectly from it.

Florent Vollant, who was born in Labrador City near the Quebec border, said before the mine, his parents were trappers, hunters and fishers who traded furs with Hudson’s Bay Co. His parents also worked as guides when the prospectors came, helping them navigate the difficult terrain. But he said his family was displaced by iron mining operations close to to the Wabush mines.

“My parents believed in the mining companies,” he said. “But after a few years, the land became inhospitable and we left.”

Now a renowned Innu singer, Vollant in October 2014 was among those who hauled two enormous chunks of iron ore that were presented to the Sept-Îles Innu communities by Prime Minister Pierre Trudeau in 1970 to mark 100 years since the discovery of deposits in the Schefferville area onto a flatbed truck and dumped them 900 kilometers away in front of Rio-Tinto’s Montreal office. The chunks were dubbed the “Stones of Shame.”

That symbolic protest came one month after the Quebec Superior Court rejected a motion to dismiss the Innu’s lawsuit, which the company said should be between the Innu and the government.

The IOC’s motion was rejected in October 2015 by the Supreme Court of Canada, creating a precedent in the country’s highest court for native communities to seek compensation directly from companies for alleged violations of Aboriginal title.

On the same day, the Supreme Court also rejected a motion to throw out a case against another Rio Tinto subsidiary, Rio Tinto Alcan, brought by First Nation groups in B.C.

“It was a significant victory for all First Nations and an important legal precedent,” said Montreal-based lawyer James O’Reilly of O’Reiley and Associates, which is representing the Innu. “The result is an immutable right to sue a company.”

Norton Rose Fullbright is representing IOC with a team that includes François Fontaine, who has worked on such high-profile cases as defending SNC-Lavalin Group Inc. in its Libya fraud case.

IOC now states that the action brought against it seeks recognition of Aboriginal rights over a large territory that includes land in Newfoundland and Labrador. As a result, it intends to present a motion to strike the Quebec Superior Court ruling, saying the court doesn’t have jurisdiction over land outside the province.

Legal experts say this is the beginning of a long process that could take about seven years to unwind.

IOC has estimated crude iron reserves will last about 27 years at the current production rate, meaning operations will be technically viable long after the case is likely over.

Rio Tinto could, however, still sell the project to another company.

“They will not buy only the installations, they will not buy only claims and mining operations,” Pinette said, “they will have to buy also the problems from this lawsuit.”

Justin Connidis, a professor who teaches mining law and policy at Queen’s University in Kingston, said the government could potentially force a settlement if it believes the lawsuit would cause severe damage to the national or provincial economy.

He said this is part of a larger change to Canada’s natural resource landscape — one where local communities, whether they are First Nations or not, must be consulted.

“You should be very concerned about having social licence from that community regardless of what their black letter rights are because there are so many things in terms of valid protest and legal protests people can do to make the process uneconomic that you’re far better to say, ‘How can we all work together?’” Connidis said.

Connidis said what is even more important than this individual case is that the federal government has indicated it plans to implement recommendations from the Truth and Reconciliation Commission, which will require the corporate sector to have free and prior consent before starting resource projects on Aboriginal land.

But he biggest problem IOC faces in the short term is not litigation, but the low price of iron ore, which has fallen from a high of nearly US$190 a tonne in early 2011 to a low of US$37 in mid-December 2015. Prices have rallied since then, to $63.74 in the first quarter of 2016, but analysts warn of more downside ahead because there hasn’t been any real increase in steel consumption.

“It’s probably at a price that is not economic for (IOC) to operate,” Connidis said.

With economic difficulties caused by the drop in global iron price, the population of Sept-Îles has fallen to just over 25,000.

“The Innu are our economic partners. It’s a reality that we are used to working with these people,” said Marc Brouillette, Sept-Îles chamber of commerce president.

Although Maliotenam is surrounded by trees and the St. Lawrence River, Uashat is not separated from the city of Sept-Îles by anything other than a street sign. Houses on one side of the sign are in Sept-Îles and the others are in Uashat.

“We’re not the only ones here and we have to respect that,” said Brouillette, referring to Sept-Îles’ non-First Nations community. “Sometimes there are divergences like the litigation, but (the Innu) are a people of compromise and a people of consensus.”


Mexican Indigenous Protests Shine a Spotlight on the Damage Done by Canadian Mines

By Nathaniel Janowitz
April 13, 2016

Indigenous groups and small farmers from six Mexican states have been marching in the capital this week with a long list of demands. These range from policies to reactivate the rural economy to greater legal protection against massive infrastructure projects on their land.

The thousands of marchers — most of them wearing traditional clothes or cowboy hats and large belt buckles — have caused several days of traffic chaos. They have also set up a tent city around the interior ministry.

Francisco Jiménez, one of the main organizers of the protests, said the most immediate demand is for talks with Interior Minister Miguel Angel Osorio Chong.

“We want the government to address our issues,” said Jiménez. “This march is for the defense of our territories, our dead, the political prisoners, the lack of water, and the revitalization of the Mexican countryside.”

The group had converged on the capital from Guerrero, Oaxaca, Tlaxcala, Puebla, Veracruz and Chiapas — all of them resource-rich states in the south or center of Mexico with significant indigenous populations who often suffer acute levels of poverty.

Jiménez, who is from Chiapas, put particular emphasis on the demand for a new law giving local communities more say over concessions to exploit mines, and build hydroelectric plants, as well as other major infrastructure such as highways.

“In our communities, there’s gold, there’s silver, and there’s gasoline, but the money these generate does not support us and only benefits the international companies and the rich elites,” the activist said. “Mexico needs legislation that requires the authorities to consult the local residents before giving concessions. And the wealth made must be shared.”

Jiménez took particular aim at Canadian mining companies, claiming nearly 70 percent of the country’s mining concessions are Canadian owned.

He specifically pointed at Goldcorp, a Toronto-based company, which owns many major concessions throughout Mexico and has several functioning mines already at work. One of these mines, in Mexico’s violent Guerrero state, was the focus of kidnapping attempts by local cartels that saw a number of employees extorted and murdered last year. Goldcorp was criticized for not finding ways to protect its workers.

Related: Mexican Workers at Canadian Mines Are Under Constant Threat of Cartel Kidnappings, Killings

“Canadian mining companies are disproportionately at the centre of conflict in countries like Mexico and in many other countries around the world,” said Jen Moore, the Latin America program coordinator for MiningWatch Canada, a non-profit organization based in Ottawa that focuses on Canadian public policy and mining practices.

Moore said 60 percent of the world’s mining companies are based in Canada, and that number jumps to 70 percent in Mexico, as Jiménez also claimed. She mentioned eight different Mexican states specifically that are currently facing environmental or human rights concerns due to Canadian mining operations.

“The self-determination of affected communities is violated from the moment a mining concession is granted without a community’s free, prior, and informed consent,” she said. “This has happened all over Mexico and in many other places and is part of how the current mining model is structured to violate affected peoples’ rights from the get go, well before any mine is built.”

This week’s protests in Mexico City were timed to coincide with the 97th anniversary of the assassination of Mexican revolutionary hero Emiliano Zapata. He was killed in 1919 after he rose up against the revolutionary government he had helped install after it began reneging on promises to prioritize rural communities.

Many of those on the march feel that Zapata’s focus on rural rights is as relevant in Mexico today as it was then.

“We’re living in a crisis, of hunger, misery, poverty, and a lot of emigration. The farmers, and the young people especially, are abandoning our land, and leaving their families, for the United States,” said Caralampio López, raising his voice over a loud ska band playing rebel music to entertain and rally the protesters nearby.

López, the local leader from the state of Chiapas who led a group of 200 to join the Mexico City protest, had particularly harsh words for mining companies.

“The government allows the mining companies to operate, but we don’t,” said López visibly upset, his voice rising as he spoke. “They pollute our resources, they contaminate the air and water. They’re polluting Mother Earth.”

Related: Raped by Canadian Gold Mine Guards, These Women Are Looking for Justice

Follow Nathaniel Janowitz on Twitter: @ngjanowitz


Tanzania: Acacia Mining to Pay U.S.$20 Million in Corporate Tax in 2016

12th April 2016

ACACIA Mining PLC is to pre-pay 20 million US dollars in corporate taxes this year after signing a Memorandum of Understanding with the Tanzania Revenue Authority (TRA) last month in Dar es Salaam.

According to the Acacia’s CEO, Bradley Gordon, this proactive move was initiated by Acacia Mining PLC in recognition of the time the company has been operating in the country.

Acacia Mining, which entered the Tanzania mining sector as Barrick and later as African Barrick Gold 15 years ago has been making profit, according to Mr Gordon, in his internal communication to Acacia staff at the weekend.

However, much as the company has in most cases declared net profit across the mines it owns the fact of the matter is it has not yet recouped the USD 3.8bn it has invested into building and developing the three mines it owns.

Under Tanzanian mining law and the terms of the Mineral Development Agreements between Acacia Mining PLC and the government any profit made is used to offset the initial investment and therefore during that period the company is not required to pay any corporate tax.

Mr Gordon says in elaborating the issue of profit that “when running a business one needs to first exclude all costs from your income before you can declare a profit – the cost in this case is the initial capital cost that has been invested to develop the mines”. “Whilst we make net profits, these are not taxable and our current projections are we aren’t due to pay corporate taxes until 2018”, he says.

According to Mr Gordon, the fact that the MOU between Acacia and TRA has been signed and has been recognised as a pre-payment by all parties makes it clear that in the TRA’s opinion, no corporate tax is currently owed by Acacia and therefore none has been evaded.

In its recent ruling, the Tax Revenues Appeals Tribunal (TRAR) accused the gold mining giant of running a sophisticated tax evasion scheme in the country.

Acacia has since appealed to the Court of Appeal against the ruling asserting that the company’s financial reports conformed to international best practices and were audited by global accounting firms and government organisations.


London-listed Acacia Mining accused of “sophisticated tax evasion” in Tanzania

Thursday 7 April 2016 14:15 GMT

London-listed gold miner Acacia Mining has been accused of engaging in “a sophisticated scheme of tax evasion” in the East African country of Tanzania where it operates.

The tax revenue appeals tribunal accused the company of paying dividends to its shareholders worth $412.5m between 2010 and 2013, but evading 10 per cent withholding tax by declaring losses.

The company, formerly known as Barrick Gold, denied the charge and said it plans to appeal.

Read more: Centamin share price jumps as it ramps up gold production

Acacia, which is one of the largest gold miners in Africa, said on its website that the tribunal’s judgments was “fundamentally flawed”.

“Acacia and its subsidiaries fully comply with all international and domestic tax legislation and have not and never will undertake any form of tax evasion or tax avoidance schemes,” the company’s statement added.

It comes a month after Acacia said it had reached an agreement with the Tanzanian authorities to pre-pay approximately $20m in corporate tax this year.

Read more: Gold prices are heading upwards – and here’s why experts think they’re going to keep rising

“We proactively initiated discussions with the Tanzania revenue authority in 2015 as we believe that our business is of a scale and maturity that it should be paying a fair level of corporate taxes as part of our contribution to the Tanzanian economy,” Brad Gordon, chief executive of Acacia, said at the time.

“We believe this agreement is mutually beneficial for all parties as we receive greater certainty over future Vat receipts and Tanzania sees an earlier corporate tax contribution from Acacia than previously envisaged.”


Guatemalan Women’s Claims Put Focus on Canadian Firms’ Conduct Abroad


LOTE OCHO, Guatemala — Her husband was away in the fields, she said, when the truckloads of soldiers, police officers and mining security officials arrived. A half-dozen armed men swarmed into her one-room house, blocking her exit and helping themselves to the meal she had made for her children.

For a long time, the woman, Margarita Caal Caal, did not talk about what happened next that afternoon. None of the women in this tiny village high in the hills of eastern Guatemala did, not even to each other. But that day, Mrs. Caal said, the men who had come to evict her from land they said belonged to a Canadian mining company also took turns raping her. After that, they dragged her from her home and set it ablaze.

“The fear is not over,” she said recently, staring down at her hands while her daughter served coffee to visitors. “I still fear, all the time.”

Mrs. Caal has taken her case to the courts, but not in Guatemala, where Mayan villagers like her, illiterate and living in isolated areas, have had little legal success. She has filed in Canada, where her negligence suit, Caal v. Hudbay Mineral Inc., has sent shivers through the vast Canadian mining, oil and gas industry. More than 50 percent of the world’s publicly listed exploration and mining companies had headquarters in Canada in 2013, according to government statistics. Those 1,500 companies had an interest in some 8,000 properties in more than 100 countries around the world.

For decades, overseas subsidiaries have acted as a shield for extractive companies even while human rights advocates say they have chronicled a long history of misbehavior, including environmental damage, the violent submission of protesters and the forced evictions of indigenous people.

But Mrs. Caal’s negligence claim and those of 10 other women from this village who say they were gang-raped that day in 2007, as well as two other negligence claims against Hudbay, have already passed several significant legal hurdles — suggesting that companies based in Canada could face new scrutiny about their overseas operations in the future. In June, a ruling ordered Hudbay to turn over what Mrs. Caal’s lawyers expect will be thousands of pages of internal documents. Hudbay, which was not the owner of the mine at the time of the evictions, denies any wrongdoing.

Canadian law does not provide for huge American-style payoffs, even if the court rules in the plaintiff’s favor. But the Hudbay case is being watched carefully because it appears to offer a new legal pathway for those who say they have suffered at the hands of Canadian subsidiaries. A ruling in this case, experts say, could also help establish powerful guidelines for what constitutes acceptable corporate behavior.

“Up until now, we just have not had judicial decisions that help us consider these sorts of relationships,” said Sara Seck, an expert on corporate social responsibility at the Faculty of Law, Western University, in London, Ontario. “For once, the court is going to look at what really happened here, and that is important.”

The behavior of multinational companies working in poor countries has come under increasing fire in recent years. Social expectations have changed, experts say, with many citizens of rich countries demanding that corporations be more responsible in the countries where they operate.
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In Canada, efforts to define a code of good behavior for extractive corporations are longstanding, if so far unsuccessful. Many mining companies are based there because Canada offers a concentration of expertise in mining finance and law, and the government offers incentives including tax breaks.

A bill that would have created an ombudsman to investigate complaints and deny access to government loans — and even consular services — to companies accused of behaving poorly failed by a narrow margin in 2010 after facing fierce opposition from the extractive industry. John McKay, a member of Parliament from the Liberal Party who sponsored that bill, said he expected Canada’s new government to try again soon.

“There are companies out there doing things that they would never do in their own countries,” he said.

In a 2014 report, the Council on Hemispheric Affairs, a policy group in Washington, concluded that Canadian companies, accounting for 50 percent to 70 percent of the mining in Latin America, were often associated with extensive damage to the environment, from erosion and sedimentation to groundwater and river contamination. Of particular note, it said, was that the industry “demonstrated a disregard for registered nature reserves and protected zones.”

At the same time, the report said, local people were being injured, arrested or, in some cases, killed for protesting.

Victims, however, have had little success gaining access to Canadian courts. Their lawyers have often tried to get cases heard on the basis of violations of human rights or international criminal law. But most were told that Canada had no jurisdiction, and that their claims would be more appropriately heard in the country where the events took place, even if that country’s courts were notoriously corrupt or otherwise dysfunctional.

The lawyers for the plaintiffs in the Hudbay case, Murray Klippenstein and Cory Wanless, took a novel approach, however, making a simpler claim. They said the Canadian parent company was negligent for failing to put an effective monitoring system in place to understand what its Guatemalan subsidiary was doing. Framing the claim in this way allowed the plaintiffs to draw a clear connection between the negligence and Canada.

In addition to the claims brought by Mrs. Caal and the other women who say they were raped in Lote Ocho, Hudbay, based in Toronto, is facing claims over the death of a prominent local leader, Adolfo Ich Chamán, 50, and the shooting and paralysis of a bystander, German Chub, 28, during demonstrations against mining in the nearby town of El Estor in 2009.

Hudbay lawyers moved to have the case dismissed both because of jurisdictional grounds and because it was “plain and obvious” that the claims would fail. Before the ruling on jurisdiction, they dropped that claim and went forward with the other one. In July 2013, however, the judge ruled it was not obvious that the claims were without merit.

Turning to the courts has not been easy for the plaintiffs, most of whom speak only Q’eqchi’, a Mayan language, have had little or no schooling, and find the prospect of going to Canada terrifying. In addition, they face animosity from a sizable portion of the local population, particularly in El Estor, where there is a giant nickel processing plant.

Hudbay officials dispute most of the plaintiffs’ claims. They say that no mining security officials were present during the Lote Ocho evictions and that no rapes took place. The company’s website also points out that at the time, Hudbay had nothing to do with the mine. It was owned by Compañía Guatemalteca de Níquel, a subsidiary of another Canadian company, Skye Resources Inc., which Hudbay bought in 2008, assuming its liabilities. Hudbay has since sold the mine.

Hudbay officials also maintain that there was no negligence in 2009 when it did own the mine. Officials say the killing of Mr. Ich, a teacher, and the shooting of Mr. Chub, a farmer, took place as the mine’s security guards were defending themselves from armed protesters.

But some recent events appear to lend credence to the plaintiffs’ claims. The head of the mine’s security during the 2007 evictions and the 2009 shootings, a former army colonel named Mynor Padilla, is now on trial in Guatemala over the shooting of Mr. Ich and Mr. Chub.

Moreover, an army officer and a paramilitary officer were convicted in February of raping and enslaving indigenous women in the 1980s, during Guatemala’s long civil war, suggesting, some advocates say, that such behavior has long been entrenched in this country. During the war between the United States-backed government and leftist rebels, the indigenous population in this region was repeatedly attacked for trying to make land claims.

Even now, the local Q’eqchi’ population believes much of the land in the area belongs to it, and not to the mining company.

At the time of Mrs. Caal’s eviction, there was no mining anywhere near Lote Ocho, but mining officials moved to evict the villagers anyway. The community is made up of about a dozen scattered, flimsy wooden houses, home to about 100 people, most of them children.

There is no electricity here or a school for the children. The village is a bumpy 45-minute ride in a pickup truck uphill from the nearest town. But that costs money, so most of the villagers walk there using a footpath, which takes about two hours.

Mrs. Caal said the armed men who attacked her during the eviction were so brutal with her that she could not get up from the spot where they had left her. But when her husband asked what had happened to her, she told him only that she had fallen, afraid of how he might react.

It is still a subject she turns to reluctantly.

“Remembering is reliving,” Mrs. Caal said. “It hurts. It hurts as a woman.”