Canadian Mining Goliaths Devastate Mexican Indigenous Communities and Environment

Oaxaca, Mexico – For over two decades in many parts of Mexico, large corporations – mostly foreign owned but usually with wealthy Mexican partners – have developed huge projects in rural areas. Called mega-projects, the mines and resource extraction efforts take advantage of economic reforms and trade treaties like the North American Free Trade Agreement.

Emphasizing foreign investment, even at the cost of environmental destruction and the displacement of people, has been the development policy of Mexican administrations since the 1970s. When the National Action Party (PAN) defeated the old governing Party of the Institutionalized Revolution (PRI) in 2000, this economic development model did not change. In fact, the PAN simply took over the administration of this development policy and even accelerated it, while in the Mexican Chamber of Deputies the two parties cooperated to advance its goals.

But while these projects enjoy official patronage at the top, they almost invariably incite local opposition over threatened or actual environmental disaster. Environmental destruction, along with accompanying economic changes, cause the displacement of people. Families in communities affected by the impacts are uprooted and often begin to migrate. Nevertheless, the projects enjoy official support and are defended against rising protests from poor farmers and townspeople by the federal government.

(Photo: David Bacon)This economic model could have changed in Mexico’s national elections at the beginning of July had a party won that was committed instead to providing poor and indigenous communities with jobs and social services, to raising rural income and to protecting labor and social rights. This was the program put forward by Andres Manuel Lopez Obrador, the candidate of the left-wing Democratic Revolutionary Party (PRD).

The PRD did not win, however. Instead, the Mexican election campaign looked increasingly like those in the US, in which the two conservative parties, the PRI and PAN, were fueled by enormous corporate contributions. Heavy television coverage by two captive, corporate networks excluded the left entirely, while “impartial polls” announced the inevitability of the PRI’s return. And in the end, a wave of old-fashioned vote buying backed up the media circus.

The return of the PRI to power does not change Mexico’s social reality, especially not its country’s corporate-dominated development policy. The cost of this policy has become most obvious, and the conflicts over it the sharpest, in rural communities faced with huge industrial mining projects. Under a new PRI administration, these conflicts will almost certainly spread, particularly given the party’s history of using force against popular movements.

In Oaxaca and southern Mexico, growing anti-mining movements give a preview of what’s on the horizon. Sharp conflicts have already broken out over mines in Oaxaca where, in one community, indigenous leaders have been assassinated and the town deeply divided since the mine began operation. The companies and their defenders promise jobs and economic development. But affected communities charge that far more people lose jobs and their livelihoods because of the negative environmental and economic consequences.

In Oaxaca, Vancouver-based Fortuna Silver, Inc. began drilling exploration holes in a previously mined area of San Jose del Progreso. San Jose is a small town in the municipality of Ocotlan, an hour south of the state’s capital. Its 1,200 residents speak Zapotec, an indigenous language that was already centuries old when the Europeans colonized Mexico.

Fortuna Silver began exploration in 2006, and five years later, its mine went into full production. According to Flavio Sosa Villavicencio, a state deputy from the Party of Labor (PT), the company told him that in 2012 Fortuna expected to produce 1.7 million ounces of silver and 15,000 ounces of gold. Sosa Villavicencio said annual profits from the mine would reach 468 million pesos, or $39 million.

San Jose del Progreso lies in a valley filled with small indigenous towns, many of which have already lost more than half their inhabitants to migration. In an environment of economic desperation, money from the mine has a big impact.

Bernardo Vasquez, an opponent of the mine and director of the Coalition of People United in the Ocotlán Valley (COPOVU), explained to Canadian journalist Dawn Paley, before his assassination, that some residents enjoyed the benefits, while the mine opponents organized demonstrations to protest. The town became divided and Vasquez said the division extended into the schools, the health center and to the municipal offices.

In 2009, 300 people blockaded the mine over a month. Twice that number of police eventually descended on the demonstrators with dogs, guns, tear gas and a helicopter. People were beaten and two dozen arrested. In another confrontation a year later, the mayor was killed. Then, in January 2012, a group of opponents confronted a work crew laying water pipes, accusing them of building a water system for the mine. Police were called again and this time they shot and killed Bernardo Mendez, one of the leaders of COPOVU. After that, the town’s mayor fled, and the municipal offices were closed.

COPOVU leader Bernardo Vasquez, an agronomist, said he’d been threatened at least a dozen times by members of an armed group in the town, and the state Human Rights Commission issued an order of protection for him. However, while he was returning home on the evening of March 15, 2012, gunmen stopped his pickup truck and murdered him. His brother Andres and Rosalinda Canseco were both wounded and hospitalized.

COPOVU representatives Jorge Sanchez and Eustasio Vasquez said the killing was the work of “guardias blancas,” or paramilitaries, supported by the company. “We’ve seen them give money to people in the community who are against us and create a group called ‘Protecting Our Rights.’ These are people who now have new cars, when before they had nothing. They are the guardias blancas who kill and threaten.” Fortuna denied responsibility. The company’s CEO Jorge Ganoza told Canadian media, “We, as a company and our team in Oaxaca, are saddened by these senseless and continued acts of violence in the town of San José, related to a long-standing political struggle for local power. It is in no way related to our activities or involves company personnel.”

Community and social organizations throughout Oaxaca condemned the assassination. Servicios para una Educación Alternativa A.C. (Services for an Alternative Education, EDUCA) said the violence was a consequence of the government’s development policy. “Oaxaca has been converted into an arena for experimentation with the imposition of mega projects at any cost,” it stated. “The multimillion profits of the big mining companies and the human and social costs, will be paid as always by those ‘conflict-loving Indians,’ as they insultingly call those who defend their communities.”

The murder of Bernardo Vasquez was also condemned by the leaders of another Oaxacan town resisting mining projects, Capulalpam de Mendez in the Zapotec Sierra Juarez region. In March 2012, its municipal leaders demanded an end to the mining activity in the area of the Natividad mine and the cancellation of all the concessions given to its owners, another Canadian company called Continuum Resources. Between 2004 and 2006, Continuum Resources was given mining concessions for 50,000 hectares in the Sierra, most covering communal lands.

The mine had a huge environmental impact. The Natividad mine opened in 2002. Just four years later, in 2006, water problems grew so bad around the mine that the federal prosecutor for environmental protection ordered all work at the mine to stop. Community leaders accused the mine of having damaged the aquifers on which they depend and that 13 springs disappeared. “A community without water has no life on which future generations can depend,” a communal statement declared.

Water in the local river runs yellow and has a terrible smell, according to Capulalpam residents. The current Communal Welfare Secretary, Javier Garcia Juarez, says that in 2011 some of the dams holding back ponds of toxic residue from earlier mine operations collapsed. Tons of waste contaminated communal land belonging to the town and trees in the local forest were stained gray with the chemicals that had been used to separate gold and silver from the ore extracted from the mine.

That impact was particularly devastating for Capulalpam, which was declared “a magical town” by the federal government’s secretary of tourism. In the Sierra Juarez, there are over 200 species of orchid, including some that are in danger of extinction. People still sight jaguars, while monkeys, parrots and toucans are common, along with pumas, white-tailed deer and the dwarf magpie.

Despite this biodiversity, in 2011, another mining company, Minera Teocuitla, arrived in the community accompanied by agents of the Agrarian Reform Separtment. Minera Teocuitla is a subsidiary of Sundance Minerals, the business model of which involves developing mines next to other mining projects, even closed ones. The company proposed an exploration project called Geranio, directly north of the Natividad mine. Mine and government representatives demanded a meeting with community residents to authorize a new exploration contract.

On April 10, 2011, however, the Zapotec community’s general assembly announced it would not support the project. “The community of Capulalpam, exercising our rights as an indigenous and farming municipality, refuses permission to the companies Natividad, Minera Teocuitla, Continuum Resources, Arco Exploration or companies using any other name to carry out exploration or exploitation of minerals in our land.”

In Veracruz, a Canadian corporation, Goldcorp Resources, initiated exploration in the mid-2000s for two huge open-pit excavations halfway between the state capital Xalapa and the Gulf Coast. The company, with headquarters in Vancouver, and its Mexican subsidiary, Minera Cardel SA de CV, were virtually given a concession of 20,000 hectares by the federal government.

Edgar González Gaudiano published an analysis of the mine in the local newspaper La Jornada Veracruz, in which he estimated that the mine would produce 100,000 ounces of gold a year, with a value of about $1,660 an ounce at 2012 prices, or $166 million. Goldcorp would operate two huge open pits. The ore would be treated with cyanide, a strong poison, to leach out the metal. Cyanide bonds with the gold, essentially dissolving it. Later, the gold is separated out, leaving a large amount of cyanide-laced wastewater. That runoff is held in huge open-air ponds.

Gold mining with cyanide is a very dangerous process, yet more than 90 percent of all gold extracted worldwide relies on its use. In Romania in January 2000, a dam on one such pond broke and about 100,000 cubic meters of toxic wastewater and mud poured into the Danube River. The plume of cyanide traveled downstream, through Hungary and the former Yugoslavia, to the Black Sea, killing everything it touched. It was called the worst environmental catastrophe since the nuclear meltdown in Chernobyl.

At Caballo Blanco, each ton of ore would produce half an ounce of gold, so mountains of cyanide-treated tailings would quickly rise around the pit and the wastewater ponds. According to the Diario de Xalapa, another local newspaper, leaching out the gold would require 1.12 million cubic meters of water per year, depleting the aquifer on which rural farming communities depend.

An even greater danger might come from Mexico’s only nuclear power plant, Laguna Verde, less than ten miles away. The ore would be broken loose from the earth by virtually continuous explosions, using up to five tons of explosives a day. This section of Veracruz is geologically part of a volcanic region that includes some of Mexico’s most famous dormant volcanoes, including Orizaba, less than a hundred miles away, and the Cofre de Perote, which is even closer.

People from the towns closest to the mine, Actopan and Alto Lucero, said they’d been threatened to get them to sell their land to Goldcorp. Beatriz Torrez Beristan, an activist with the Veracruz Assembly and Initiative in Defense of the Environment (LA VIDA, in its Spanish acronym), reported to La Jornada Veracruz that in a public hearing on the project, “they told us they were afraid, that they’d been intimidated and felt forced to sell their land. There is definitely intimidation here and they’re criminalizing social and environmental protest.”

Goldcorp promised jobs and said the environment would be restored after the gold and metals had been extracted. “But we know that this can’t be,” Torres told reporter Fernando Carmona. “It’s impossible to restore an ecosystem that has been so damaged. You can cut down a tree and plant another, but you’ll never restore the complex ecological chain, with its many trees, birds and water.”

In February 2012, a Pact for a Veracruz Free of Toxic Mining was signed at a statewide assembly of environmental activists, who committed themselves to distributing accurate information about the exploitation of natural resources, alerting communities about potential threats, initiating legal actions and organizing peaceful demonstrations. Other groups opposed to the mine include REMA (Red Mexicana de Afectados por la Minería/ Mexican Network of Communities Affected by Mining) and RMALC (Red Mexicana de Acción frente al Libre Comercio/ Mexican Action Network on Free Trade) also organized opposition to Caballo Blanco.

Environmental damage from the mine is potentially so great that on February 28 Gov. Javier Duarte de Ocho announced he was opposed to its operation. But municipalities and states don’t make the basic economic decisions in Mexico. That power is in the hands of the federal government. And on March 13, 2012, Goldcorp announced it had received its first environmental impact report from the Federal Secretariat of the Environment and Natural Resources (Semarnat), a major step toward operating the mine.

Federal acquiescence to Goldcorp reflects the policy of Mexico’s four past administrations of virtually giving away the country’s mineral wealth. In 1992, Mexican President Carlos Salinas de Gortari modified the country’s mining law. This was the same year that he also changed Mexico’s land reform law to allow the sale of former communal (ejido) lands. Both were changes intended to allow foreign corporations to invest in huge projects in Mexico and to protect those investments. A year later, just before the North American Free Trade Agreement took effect, the ceiling on the amount of foreign investment that could be allowed in “strategic” industries (like mining) was eliminated.

Changes continued under Salinas’ successors, with both the PRI’s Ernesto Zedillo and the PAN’s Vicente Fox increasing the number of mining concessions given to foreign corporations like Goldcorp and to huge Mexican mining cartels like Grupo Mexico. Taxes on mining operations were eliminated. Companies only had to make a symbolic payment for each hectare of land granted in their concessions.

According to Carlos Fernandez-Vega, whose business column “Mexico SA” (“Mexico, Inc.”) runs in the left-wing Mexico City daily La Jornada, the amount of land given in concessions reached 25 million hectares at the end of Fox’s presidency in 2006 and then more than doubled, to 51 million, in just the first four years of his successor Felipe Calderon. “In the two PAN administrations, about 26 percent of the national territory was given to mining consortiums for their sole benefit,” he charges. In 2010, Fernandez Vega explains, Calderon granted four million hectares in concessions, in exchange for which the Mexican government received $20 million (US). The foreign and domestic corporations given the concessions made $15 billion that year (a 50 percent increase from the previous year). Those earnings were 750 times what they paid for the concessions.

Fernandez-Vega based his column on a study by Mexican academics Francisco López Bárcenas and Mayra Montserrat Eslava Galicia of the Autonomous Metropolitan University (UAM) in Xochimilco, called “Minerals or Life.” The Mexican Constitution, with its roots in the Revolution of 1910-20 and the nationalist government of Lazaro Cardenas of the late 1930s, puts forward goals for mining and other economic activity. They include, Barcenas Lopez and Eslava Galicia state, “using natural resources for social benefit, creating an equitable distribution of public wealth, encouraging conservation and achieving a balanced development for the country leading to improved conditions of life for the Mexican people.” The new mining law, however, says any potential resource must be utilized, which gives the exploitation of resources preference over all other considerations.

“Concession holders can demand that land occupied by a town be vacated, so that they can carry out their activities,” the two academics write. “If land is used for growing food, that has to end so that a mine can be developed there. Forests or wilderness are at the same risk. This legal requirement also applies to indigenous people. Their land used for rituals or sacred purposes, which contribute to maintaining their identity, can be leveled or destroyed. This provision violates ILO Convention 169 that protects indigenous rights.”

Language in the mining law now “prohibits states and municipalities from imposing fees on mining activity and therefore deprives them of any income from those activities that might benefit them,” the study concludes, even prohibiting them from charging fees for permits for the use of land or roads.

The mines promise jobs, but they produce very few, Oaxacan activists charge, while their social and environmental cost is high. Mining, which receives enormous support from the federal government, employs only 0.29 percent of Oaxaca’s working population, according to “Migration and Poverty in Oaxaca,” a study by Ana Marguerita Alvarado Juarez at the Autonomous University Benito Juarez of Oaxaca. Even the Mexican secretary of labor says the average daily wage for miners in Mexico is 150 pesos ($12.50). Low mining wages reflect the increased use of contract labor, in which workers employed by temp agencies have replaced thousands of people who formerly worked directly for the mining companies.

On the other hand, farming, which sustains over half of Oaxacan families, gets very little government support and small farmers receive practically none of it. The mining projects benefit, therefore, not the residents of local communities, but the shareholders of large corporations who exercise enormous influence on the federal government.

Aldo Gonzalez, a leader of the Union of Organizations of the Sierra Juarez of Oaxaca (UNOSJO) points out that the mega development projects promoted by the federal government, instead of creating employment and rising living standards, undermine them because they are “designed from outside and imposed on indigenous territories and intended to benefit investors instead of communities.” As a result, he says, “they have been met with protests by people and communities whose land and water has been taken.” Leaders of the Binational Front of Indigenous Organizations (FIOB) contend that this kind of economic development not only doesn’t stop the displacement of communities, but in fact causes it.

Gonzalez and FIOB leaders predict even greater efforts throughout rural communities in Oaxaca and the rest of Mexico to find alternatives to development based on mines and corporate mega projects. With a federal government committed to pushing those projects forward, however, even sharper conflicts are inevitable.

This article is based on research for a new book coming from Beacon Press next year – titled “The Right to Stay Home” – that examines the movements in Mexico opposing displacement and forced migration.