Glamis in Guatemala: A Project Alert on the Marlin Mine
23 March 2005
Read a report on the Marlin Mine and the effects of foreign investment in mining in Guatemala from the perspective of those impacted by the industry.
Project Alert #1, March 23, 2005.
Written by Eric Holt-Giménez and Lyra Spang at the Bank Information Center.
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[También Disponible en español]
On March 4th the Compliance Advisory Ombudsman - the office that investigates complaints regarding projects financed by the International Finance Corporation - received a visit from three village representatives from the town of Sipacapa, Ixtahuacán in the Department of San Marcos, Guatemala. The men wanted to know the status of their recently filed complaint against the IFC's $35 million loan and $10 million equity investment in the Marlin mine. What follows is a report on this IFC investment from the perspective of the villagers being affected by the project.
Background
In 2002 Glamis Gold Ltd., a Canadian mining company based in Reno, Nevada, acquired the Marlin mine in the Department of San Marcos, Guatemala. Situated approximately 90 miles northwest of the nation's capital, the open-pit mine is expected to yield some 217,000 ounces of gold per year over an 11-year period. [1]
As a $157 million-strong corporation with a $33 million cash flow, Glamis could easily have obtained private financing for the Marlin operation. Nonetheless, concerned to mitigate the social and political risks of its investment, it sought out a loan from the publicly-owned World Bank.[2] Despite a reportedly contentious Board debate on the project, in June of 2004 the IFC- the Bank's private sector lending arm- lent Glamis $45 million.[3] After quickly buying up land in the town of San Miguel, Ixtahuacán, Glamis' wholly-owned subsidiary Montana Exploradora de Guatemala began construction on the mine. Glamis expects to begin actual production in late 2005- a year ahead of their projected schedule.
Despite Montana Explorador's claim of local support for the project, the operation has been the subject of widespread protest, both within and outside of the site area. In January of 2002, the Guatemalan government sent 700 armed troops and police to forcibly disperse thousands of protestors that had blocked the transit of Glamis mining equipment in Los Encuentros, Sololá for over a month. The operation left one villager dead and several others wounded.
Aside from a growing national anti-mining movement led by broad sectors of the Catholic Church and national indigenous organizations, protest against the mine stems from various project failures in the IFC-financed operation. These include a flawed consultation process; allegations of forced land sales; the mine's unregulated use of municipal water; fear and a lack of personal security in the project area; and the absence of clear development benefits for the villagers who will be affected by the project.
What Consultations?
The mine may violate the International Labor Organization's (ILO) Convention #169 on Indigenous and Tribal Peoples, an indigenous rights convention ratified by the Guatemalan government as part of the 1997 Peace Accords. Article 15 (2) of the Convention stipulates that in the case of subsurface resources on indigenous lands, governments must "consult these peoples, with a view of ascertaining whether and to what degree their interests would be prejudiced, before undertaking or permitting any programs for the exploration of exploitation of such resources pertaining to their lands."[4]
Villagers assert the Guatemalan government never consulted them.[5] Glamis claims it held consultations with villagers before beginning construction on the mine itself, though in an independent poll taken by Prensa Libre, a Guatemalan newspaper, 37.75% of villagers claimed they hadn't known about the mining concession.[6] Others complain that the company only talked about the benefits of mining, not the risks to health or the environment. Ninety-five percent of those polled by Prensa Libre were currently against the project. This undercuts Glamis' assurance of the mine's "broad community support."
Residents of Sipacapa also complain that their attempts to obtain information from company management are often met with evasiveness or outright hostility. Juan Tema, a native of Sipacapa, claims, "Whenever we ask them about the effects of the cyanide or the over use of our water, the mining engineers say, who are we to be asking such questions? Are we the experts?" While specialists at the IFC admit that Glamis may not have carried out the best consultations, they insist that technically, neither the company, nor the bank have violated ILO 160. Villagers counter that adequate information was not provided in a timely manner. This raises the question of just what "consultation" means, and how much it can mean if the community does not have the right to say "no."
Water
Villagers in the area are understandably concerned that the deep well drilled for mining operations will put their already limited water supply at risk. At the request of Madre Selva, a local environmental group, independent mining expert Robert Moran, Ph.D. carried out an extensive review of the Environmental Impact Assessment- EIA carried out by Glamis in accordance of IFC regulations. Dr. Moran visited both San Miguel, where the mine is located, and Sipacapa, were the ore will be processed. His report is highly critical of the company's assumptions and of the lack of basic facts and direct measurements to back up its environmental claims.[7] According to Dr. Moran, the EIA lacks baseline indicators, provisions for a permanent water monitoring system, current data on water availability in the region, information on the chemical composition of the ore, waste rock and tailings, and measurement of possible toxic effects on wildlife from exposed tailings… standard information in most mining EIAs.
Land
By Guatemalan law, while Glamis now owns the rights to the subsurface resources in San Martin and Sipacapa, it must buy the land over its concession. Sale must be voluntary. However, some residents complain that these sales were effected through intimidation. Others claim that communal land was been sold without community consent.
Personal Security
Company guards maintain tight security over the construction site of the Marlin mine. This has not led to greater levels of safety or security for residents of San Miguel and Sipacapa. Tensions between company employees and residents run high. Ajchmol, an indigenous community development organization in the area, reports that gunfire is now commonly heard at night and that residents are afraid to move about.[8]
Sustainable Development
According to the IFC, once in operation, the mine will pay the municipalities of San Miguel Ixtahuacán and Sipacapa some $350,000 annually in royalties. These funds will be earmarked for municipal development. Meanwhile, Glamis and the IFC contracted the Washington-based Citizen's Development Corps (CDC), to establish the Fundación Sierra Madre (FSM) to carry out community development projects.[9] The residents of Sipacapa already have a municipal integrated development plan developed by their own communities, which was never considered. Further, they have been denied access to FSM's development plan and financial information. They are concerned that they will see little actual or sustainable development through an institution that is basically controlled by the mining company. The IFC claims, "The responsible extraction of mineral resources is one of the few ways that local indigenous people can hope to break the cycle of poverty."[10] In meetings in Washington D.C. with village representatives, the IFC presented villagers with an "either/or" scenario: either they accept the mine, or they will continue to live in poverty. Representative Juan Tema responded, "There are many paths to development. In any enterprise there are winners and losers, costs and benefits. We need to know the whole story to make good decisions."
From NAFTA to CAFTA?
Glamis is currently suing the American government for 50 million dollars for enforcing California state regulations that made their Imperial Project on sacred indigenous land in unprofitable, claiming that this was a violation of NAFTA- The North American Free Trade Agreement.[11] They have also been forced to clean up some of their open pit mining operations in the USA. Increasing public opposition and cost effectiveness issues in the North may be reasons why Glamis Gold now invests in Guatemala, where environmental regulations are lax and national mining laws encourage foreign-owned extractive industries.
On March 14th the Seattle Post Intelligencer reported massive protests against the recent 126-12 vote in Guatemala's Congress to ratify the Central American Free Trade Agreement- CAFTA. The CAFTA agreement gives many concerned with the Marlin mine even more cause for worry. If Glamis can invoke CAFTA in Guatemala, it will make it very expensive for the Guatemalan government to unilaterally pull out of the agreement. Protesters demanded that the president of Guatemala, Oscar Berger, veto the treaty.
Complaint to the Compliance Advisory Ombudsman of the IFC
In response to request by villagers for help, Madre Selva, a Guatemalan NGO, helped file and co-signed the official complaint with the CAO. In mid April, the CAO will send investigators from the Ombudsman's office to determine if there are significant concerns regarding a failure of the IFC to comply with its own social and environmental safeguard policies. They will attempt to ascertain if there are any concerns which might require closure as a pre-condition for moving forward on the project.
Complaint filed with ILO
The Syndicated Union of Guatemalan Workers (UNSITRAGUA) filed an official complaint with the International Labor Organization on the 20th of January, 2005, stating that the Guatemalan government, via its support of the Marlin mine, has violated convention 169 on the rights of indigenous groups, specifically article 4, which states that no actions should be taken in indigenous communities that are not explicitly desired by the communities themselves, and article 6, which states that public consultations must take place each time legislative or administrative actions might directly affect them (3).
The document states: "These mining permits were granted without previous consultation with the departments' population, which is mainly indigenous.
Recent News
The Church Continues to Denounce Open Pit Mining.
In a press release written at the Annual Episcopal Conference and published the 28th of January, 2005, Guatemalan Bishops reaffirmed their stance against open pit mining. They expressed their fear that continuing this practice would cause irreversible damage to health, water supplies, the environment, and the way of life for people. They noted that continued mining at the current pace and scale could keep the country from sustainable growth and make it difficult to develop other sectors, such as forestry and tourism. The bishops also noted that without an open and inclusive dialog about the issue, mining could lead to violence and human rights abuses, especially of the weaker groups involved in the dispute. In conclusion they called for a halt to concession granting, open and fair consultations with affected communities, inclusion of indigenous peoples in the decision making process, a reevaluation and rewriting of the mining regulations and policies of the country, the implementation of ILO 169, and the creation of a independent and balanced consultative group on mining. Read the full document here: http://homepage3.nifty.com/CADE/Espanol/mineria%20es.htm#R
Mining Expert Sandra Cuffe meets with World Bank Personnel, speaks at Seminars in Washington.
Rights Action employee Sandra Cuffe, an expert on mining issues in Guatemala and Honduras, recently came to Washington DC on a speaking tour. On March 4th and 5th she spoke at seminars hosted by the Moriah Fund (March 4th) and the Bank Information Center (March 5th). She also discussed the Marlin mine with the Advisor to the U.S. Executive Director at the World Bank and with Compliance Advisory Ombudsman, Meg Taylor. Ms. Cuffe has just finished an in depth report on mining in Guatemala and Honduras that may be read in English at: http://rightsaction.org/Templates/special_reports.index.htm
End Notes
(1) Glamis is one of several North American companies taking advantage of new liberal legislation passed in the late 90s that grants foreign companies massive mining concessions. Ten per cent of Guatemala is currently covered by mining licenses, the majority of which are held by foreign interests. 90% of the land covered by these licenses is in indigenous territory. In addition, national regulations make any mineral wealth state property, which the government can then sell to whoever it chooses.
(2) According to the IFC, "Glamis wants IFC's participation in Marlin first, to mitigate the political risk associated with working in Guatemala… [the]IFC can play a strong and positive role in the project by facilitating community partnerships, [and] enhancing project's environment and social management…" However, it is also clear that the IFC investment provides Glamis with political insurance because "foreign governments [will] think twice before interfering in a World Bank project" (Cuffe, 2005:25).
(3)read the website here
(4) Read the convention here.
(5)According to Defensoría Q'eqchi' an indigenous human rights organization, "The granting of hundreds of concessions by the Ministry of Energy and Mines constitutes a serious violation of the rights of thousands of Guatemalans, indigenous or not, who where never consulted nor informed that the subsurface rights of their lands had been concessioned (sic) to a mining company." (In Cuffe, 2005)
(6)Read the article here (in Spanish)
(7)read Moran's report.
(8)Byron Palacios in conversation with IFC representatives Fabio Pittaluga, Michael Swetye, and Kent Lupberger, March 8, 2005.
(9)Recent activities of the FSM include a sewing workshop and a baking workshop, as well as a free health fair and prenatal clinic. However, residents were told that they had to bring their own sewing machines, and pay for the cloth, flour, yeast and firewood. Whether or not a market actually exists for these products was not determined.
(10)Read the IFC's Glamis webpage here.
(11) Read the article here.
Civil Society Contacts
In Guatemala:
Rights Action Guatemalan regional office: email
In the United States:
Rights Action www.rightsaction.org email:
Global Response www.globalresponse.org email:
NISGUA (Network in Solidarity with the People of Guatemala) http://www.nisgua.org email:
Washington Office of Latin America (WOLA) http://www.wola.org email:
Friends of the Earth USA: www.foe.org email:
In Canada:
Friends of the Earth Canada: www.foecanada.org email:
Mining Watch Canada: http://www.miningwatch.ca email: