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Goldcorp Drilled by Shareholders

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June 8, 2010

Goldcorp Drilled by Shareholders

Mining company challenged at AGM to respect host communities

by Valerie Croft

Protesters outside the Goldcorp AGM call on the company to clean up the environmental devastation it has caused. http://allan.lissner.net/ Photo: Allan Cedillo Lissner

TORONTO—Shareholders of Canadian mining giant Goldcorp Inc. got a glimpse—albeit brief—into the lives of Central Americans whose land is being exploited by the company for gold. Some even paid attention.

Representatives from communities hosting Goldcorp mines in Central America made their way from Honduras, Guatemala and El Salvador to address the company’s annual general meeting (AGM) in Toronto on May 19, 2010.

Protestors said they came to show their support for the international delegation, including Feliciano Orellana from Guatemala (left) and Carlos Amador from Honduras (right), among others, who were speaking inside the AGM representing their communities in speaking out against Goldcorp's projects throughout the Americas http://allan.lissner.net Photo: Allan Cedillo Lissner

Shareholders learned about the devastating effects Goldcorp’s operations have had on communities in Central America. The presenters told of an increase in health problems, cracked houses, widespread social conflict and the criminalization of protest in their towns and villages.

Carlos Amador, a teacher from Honduras, challenged the company's reclamation process at the closed San Martin mine in central Honduras, which in 1999 displaced 14 families and contaminated water to the point beyond which even the World Bank recommended.

"Who will control the acid drainage? Who is going to clean up the water contaminated with heavy metals?" he asked.

The AGM was not an easy venue for the visitors to tell their stories. Goldcorp attempted to cut Javier de Leon of Guatemala short during question period when de Leon tried to explain the environmental, health and social devastation brought by a Goldcorp mine to his town of San Miguel Ixtahuacan. He had previously been given less than a minute to address the meeting. When a supporter of the visiting group refused to be silent—protesting that de Leon deserved to be heard after traversing a continent to address the meeting—President and CEO Chuck Jeannes relented and gave de Leon the platform.

All the presenters spoke of the need not only for effective and fair consultation with potentially impacted communities before mining operations begin, but also the consent of those communities.

To that aim, a shareholder resolution was brought forward by Kathryn Anderson of the Maritimes-Guatemala Breaking the Silence (BTS) Network, which called on Goldcorp to adopt a corporate policy on free, prior and informed consent (FPIC) by September 1, 2010.

FPIC is a central theme of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and is the basis of Article 169 of the International Labour Organization, which states that before a mega-project—such as a mine or a hydroelectric dam—can begin on Indigenous lands, residents need to be consulted about the proposed project and to give their informed consent.

The Goldcorp operations influenced by Anderson’s proposed policy would impact not only Indigenous communities, but all communities dependent for survival on natural resources.

Specifically, the resolution calls on Goldcorp to respect UNDRIP as best practice with regards to FPIC rights; to note the legal difference between consultation and consent; to implement the proposed policy retroactively to ensure that all Goldcorp’s mining licenses were obtained in adherence to this policy; to cease all operations, expansions, and exploration where consent of the affected population has not been obtained by the state; and to apply this policy to any license with partial or full Goldcorp ownership.

“The shareholder resolution was brought forward because in cases like San Miguel Ixtahuacan [in Guatemala], we have seen the results of not having FPIC. Communities have not had the full disclosure of costs, benefits, and risks of open-pit gold mining,” said Anderson. “When a full discussion is not there, it creates an enormous amount of conflict.”

In its pre-AGM letter to shareholders, Goldcorp urged its investors to vote against Anderson’s resolution, saying the company would be launching its own human rights platform at the AGM.

In fact, just days before its AGM, Goldcorp released a Human Rights Impact Assessment (HRIA) of the Marlin Mine in San Miguel Ixtahuacan—the result of a petition by shareholders. Initial assessments of the HRIA by various NGOs, including Amnesty International, express concerns that affected communities were not invited to discuss whether or not the study would have been appropriate or beneficial. Although both a Goldcorp representative and an investor sat on the steering committee for the HRIA, no resident was given such a privilege. Meanwhile, both the communities and NGOs argued that the study would only increase social tensions in the already-fractured communities; the assessor, On Common Grounds, itself concluded that the study resulted in escalated social tensions and polarization between and among communities.

Shareholders representing 90 per cent of Goldcorp’s shares voted against Anderson's proposed resolution. She was surprised by the 10 per cent of shares in its favour, given that shareholders rarely vote against the company line. “We do not have an explanation for that yet,” she said. “Did someone advise a large block of shareholders to vote against Goldcorp in this instance? Or is it because people specifically read and heard our concerns?”

Although Goldcorp claims it participates in consultations with populations affected by its mines, company representatives refuse to articulate a detailed consultation process or put one into company policy. Furthermore, nowhere does Goldcorp claim to respect the rights of communities to say no to mining, which is a keystone of Anderson’s resolution.

When it ignored the results of community-organized consultations in 2005 in Sipakapa, a region bordering the Marlin Mine—where 11 out of 13 communities unanimously opposed the mine’s presence—the local government was pressured to address the issue. The municipality of San Miguel has since organized its own upcoming consultation. Goldcorp General Counsel VP David Deisley said the company is not legally required to respect the results of such a consultation.

Goldcorp in general, and Jeannes in particular, consistently deny FPIC is directly applicable to the company, arguing the laws for consultation and consent apply to governments, not corporations.

Nelly Rivera de Silva of El Salvador explained that despite a moratorium on all mining exploitation in her country, she will be directly impacted by Goldcorp’s proposed Cerro Blanco mine to be built in Guatemala several kilometers upstream of Lake Guija—a binational lake. The lake is the tributary of the Lempa River, the most important watershed in El Salvador. Another 13 mining projects line El Salvador’s border with Guatemala, and 42 line its border with Honduras.

Rivera explained that she came to Canada to address Goldcorp on home soil and to inform people of the local repercussions of gold mining.

Goldcorp’s eight-page glossy handout on Corporate Social Responsibility (CSR) states: “Sustainable operations are dependent upon good working relationships with the communities in which we operate...We believe our transparent approach to doing business is the only way to fully engage our stakeholders in a meaningful, mutually beneficial relationship.”

But Rivera thinks this company line is an insult to shareholder intelligence.

“Why wouldn’t you think something is not quite right when members of the affected communities are coming all the way to Canada just to have their voices heard?” she asked.

As he was leaving the meeting, a shareholder addressed one of the 50 protesters demonstrating outside the AGM, asking why they were “anti-employment.” His sentiments reflect a feeling by many Canadians that mining companies are effectively bringing development and prosperity to people who would be starving if it weren’t for opportunities from the North.

De Leon had a different story. He maintained that Goldcorp is making millions in profit at the expense of the social fabric in Guatemala, where community tensions and social conflict are direct results of the affected communities having no say about the open-pit gold mine.

De Leon has felt this tension point-blank. After receiving numerous death threats, he was shot at four times on April 19, 2010, a few days before his departure for Canada. He said the majority of such threats come from mine workers or people with personal connections to the mine. Feeling tense, vulnerable, and worried for his family’s safety, de Leon said that a majority of investors do not know or care about this reality.

“No shareholder wants to hear what we have to say. They only want to see the renewal of their investment,” he said. “No-one claims ownership of the damages done to the environment, to society, or to the politics of Guatemala.”

Referenda have been organized across Guatemala to address the lack of informed consent, but neither the national government nor the company recognizes these consultations as legitimate, even though in some cases 100 per cent of an affected population has voted against mining.

Although it wouldn’t legally uphold FPIC, Bill C-300, a private member’s bill tabled by Liberal MP John McKay, could create some legal options for communities impacted by Canadian mines.

The Canadian government provides political and economic support to Canadian mining companies like Goldcorp operating abroad, through embassy relations, tax incentives and investment support with public funds like the Canada Pension Plan. Bill C-300 would make this political support and public money contingent on Canadian companies meeting certain human rights standards—standards these companies have already agreed to in various voluntary principles on corporate social responsibility, many of which are found in the CSR standards for Export Development Canada.

The bill would establish a legal complaints mechanism allowing people who wish to report human rights violations to do so with the Canadian Department of Foreign Affairs and International Trade (DFAIT). If DFAIT concludes that a company's actions violate established guidelines for responsible behaviour, the company’s political and economic support from Canada would be withdrawn.

Bill C-300 is a watered-down version of recommendations made at the 2007 National Roundtables on Corporate Social Responsibility, which was approved by the Prospectors and Developers Association of Canada. Nevertheless, the mining industry has launched strong opposition to the bill.

Rare for a private member’s bill, C-300 has passed through two votes in the House of Commons, and is currently at the end of its committee stage. MPs have reported receiving more letters in support of C-300 than any other bill in recent memory. If it succeeds in the committee, the bill will return to the House for a third and final vote; and if passed, it will go to the Senate. Since the Conservative Party opposes the bill on the basis that it would hurt the image of Canadian mining companies and their global competitiveness, the bill will likely die in the Senate because of a Conservative majority.

All four Central American activists who flew to Canada to speak to Goldcorp’s shareholders were adamant that voluntary standards for Canadian companies do not protect against human rights abuses. Although they were all in support of Bill C-300, they continue to push for free, prior and informed consent to be a focal point of Canadian legislation.

Valerie Croft worked in Guatemala as an International Accompanier in 2008 and is active in issues relating to corporate accountability.

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Bill C-300 update

Upon returning to the House of Commons for the fall session, the first thing that the MP’s will debate is Bill C-300. The Bill is slated to have the first hour of debate for third reading on the day that MP’s return – September 20, 2010.

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