Canadian Companies Abroad: A motherlode of debate
By Mike Milne
An open-pit mine is never a pretty sight. But in contrast to the lush green hills that surround it, the Marlin Mine in San Miguel Ixtahuacán, Guatemala, looks like five square kilometres of dusty moonscape.
The Marlin Mine produces more than $300 million a year in silver and gold for its parent company, Vancouver-based Goldcorp Inc. For investors, low royalties and cheap labour make the mine a thing of financial beauty.
However, some of the company’s shareholders — including The United Church of Canada’s pension plan — are now weighing the attractiveness of Goldcorp’s proven profitability against human rights and environmental issues at the Marlin Mine. Some church leaders argue the plan should sell all its shares in the company. Others say it’s easier to exert pressure for change on a company like Goldcorp if you remain invested in it.
The focus on Goldcorp is part of a growing emphasis on mining in church justice networks. About three-quarters of the world’s mining companies are based in Canada, and they find themselves under more and more scrutiny by investors concerned about their ethical track records. Mining is “the key issue for many of our partners now, not just in Asia but Latin America and Africa, too,” says Bern Jagunos, the General Council staffperson for justice programs in Asia. “Goldcorp is just one of the manifestations.”
Concerns about Goldcorp’s Marlin Mine first came to the attention of a Nova Scotia-based Guatemala human rights solidarity network called Breaking the Silence in 2004. United Church members of the network went on to form a group called Mining the Connections that is part of the Church in Action committee of Maritime Conference. When it learned early last year that the United Church pension fund holds shares in Goldcorp, Mining the Connections sent a proposal on the issue to General Council.
Its motion, adopted at last summer’s meeting in Kelowna, B.C., asks the church’s Pension Board to consider avoiding investments in any company that “has ignored or failed to take into account the needs, interests and rights of Aboriginal communities affected by its operations.” In an even more pointed reference to the Pension Board’s holdings in Goldcorp, the motion asks the board “to engage with affected Mayan communities” and to “undertake shareholder advocacy” where its investments have raised concerns about “environmental, social and human rights impacts.”
The United Church Pension Board’s policies already prohibit investments in gambling, tobacco, weapons and pornography. At last fall’s meeting of the Executive of General Council, Pension Board chair Charles Black reported that ethical investment advisers had already flagged problems with Goldcorp. But instead of selling its 120,000 shares, said Black, the volunteer board hired an advocacy group called SHARE (Shareholder Association for Research and Education) “to engage the management of Goldcorp” over concerns at the Marlin Mine.
Worth about $5 million, the pension plan’s Goldcorp shares are a small fraction of its billion-dollar holdings. But Black says his board’s priority is to provide a good return for pension plan members. Unless an equally profitable alternative in gold mining could be found, it “would be in violation of our fiduciary duty to the plan members to sell these shares.”
The Marlin mine was established in 2004 by Canadian mining company Glamis Gold. Built with the help of a $45-million World Bank loan, it began production in 2005. Goldcorp took over Glamis Gold in 2006 and has since paid off the construction loan.
The chief complaint about the Marlin Mine, from the mainly Mayan people living around it, is that it was established without proper prior consultation or their consent. The mine provides jobs for about 350 locals, but votes taken since then have shown that most of the 53,000 people in the vicinity oppose it.
Community groups say mine operators have coerced local people, most of whom are subsistence farmers, into selling their land; damaged area homes through blasting and trucking operations; curtailed local water supplies; and released pollutants into local rivers. Gold and silver are extracted from the ore using cyanide in a leaching process that can use up to 250,000 litres per hour of water. A pond holding mine waste is a current threat to local water supplies and will need to be managed long after the end of the mine’s 10- to 20-year lifespan.
The killing of at least one local man opposed to the Marlin operation has been linked to mine security workers; another man died and others were injured in mine-related protests.
Mining the Connections is campaigning hard to raise awareness about the Marlin Mine. As well as keeping in touch with Guatemalans affected by the mine through visits to San Miguel Ixtahuacán and hosting return delegations to Canada, the group has created a resource kit on mining, backed a speaking tour and co-hosted a two-day forum on mining and ethics.
SHARE, the advocacy group hired by the United Church Pension Board, reported minimal progress in its efforts to persuade Goldcorp to improve its track record on community relations. Peter Chapman, SHARE’s executive director, says Goldcorp has responded to environmental concerns by moving toward international standards in managing cyanide.
In response to earlier shareholder pressure, Goldcorp hired consultants to conduct a human rights impact assessment at the Marlin mine site. Two years in the making, the report from British Columbia-based On Common Ground is expected this spring.
Meanwhile, another human rights impact assessment is under way, this one from the University of Notre Dame’s Center for Civil and Human Rights in Indiana. The request for the assessment came from Cardinal Quezada Toruño, the Roman Catholic archbishop of Guatemala City. Two years in the making, the Notre Dame study is expected in draft form this spring and will likely address accusations of heavy metal contamination of water.
Doug Cassel, a lawyer and director of Notre Dame’s human rights centre, is leading the project. He says the church connection helped researchers gain the trust of most communities around the mine and hopes the report will outline “the lessons of the Marlin Mine for other mines in Guatemala.” The report will look not only at the human rights responsibilities of the company and the government of Guatemala, but also at those of the government of Canada, he says.
The United Church Pension Board is awaiting its own report. In late March, Mining the Connections chair Kathryn Anderson and two General Council Office staff members travelled to Guatemala to get a first-hand look at the mine and meet with locals and mine officials.
Before leaving Canada, Anderson said she was pleased that Allan Hall, the General Council’s head of human resources and a member of the Pension Board, was part of the group. “We have seen slow movement on this up to now,” she noted.
Hall said he would report his findings to the Pension Board on his return but was unlikely to make specific recommendations around the Goldcorp investment, saying he could “only offer my best opinion and advice.”
Whether the reports or visits sway the church’s Pension Board remains to be seen. For now, Black is committed to the strategy of shareholder engagement, and says selling the Goldcorp shares “doesn’t accomplish a hill of beans, really, aside from making a few people feel better.”
The church’s most recent and perhaps most dramatic use of divestment was in 1986, when it divested all church and pension fund shares in companies with direct investments in South Africa, as a protest against apartheid. That move — strongly opposed by church financial staff, who favoured shareholder engagement — affected shares worth $28 million, at a time when church and pension fund investments totalled $400 million. A worldwide campaign of divestment is credited with helping to bring down apartheid.
The Canadian government will soon consider its own investments in mining companies. Bill C-300, a private member’s bill currently before Parliament, would link government-related funding for mining companies to a clean environmental and human rights record. It has come under heavy fire from mining lobbyists, says Ian Thomson, of the ecumenical justice coalition KAIROS. But even if it fails to pass, the bill will force Canadians to wrestle with their responsibility for mining operations around the world.
“If there’s any country that’s going to take the initiative on mining and corporate responsibility,” says Thomson, “it has to be us.”
VIA Sarah Thomson
Membership and Communications Coordinator
Social Investment Organization