Blood of Extraction

by Todd Gordon

  The social impact of neoliberalism in Guatemala was more devastating than the already terrible wider trends in the rest of Central America over the course of the 1980s and 1990s. By the close of the latter decade 40 percent of the population remained illiterate, with the average adult receiving only 3.2 years of education. A third of children were malnourished. Half the population lacked electricity, and 64 percent went without running water. Under and unemployment crested at near 40 percent, and 65 percent of those employed eked out a marginal living in the informal sector. Poverty spiked from 70 percent of the national population in 1980 to 87 percent in 1991.344 In the context of the global commodities boom of the early twenty-first century, annual growth of gross domestic product (GDP) averaged 4.1 percent between 2003 and 2007, before slowing to 3.3, 0.5, 2.9, and 3.9 percent in the years between 2008 and 2011 as the global crisis centred in the United States and Europe began to impact Latin America and the Caribbean.345 National poverty fell modestly from 60.2 to 54.8 percent between 2002 and 2006, while rural poverty remained close to the same, shifting from 68 to 66.5 over the same period.346 Meanwhile, inequality worsened, with the share of national income going to the poorest quintile of society receiving 3.8 percent in 2002 compared to only 2.8 percent in 2006. Over the same period, the top quintile improved its share from 58.6 to 62.6.347 Expressed in terms of the gini coefficient, which measures income inequality (where 0 is perfect equality and 1 is perfect inequality), the Guatemalan figures were 0.542 in 2002 and a worse 0.585 in 2006.348

  By 2010, the situation remained dire. The average number of years of schooling for Guatemalan citizens was only 5.6, while in rural areas that fell to 3.8. Twenty-seven percent of the population was illiterate, youth malnutrition hovered at just under half the population, and scarcely 37 percent of youth of relevant age graduated from high school. Structural unemployment and underemployment afflict much of the population, while the average salary of those finding work barely covers the basic food basket. Those jobs that are available are increasingly found in the precarious corners of the informal economy.349 By 2012, more than 78 percent of the labour force survived in this sector.350

  Aside from occasional populist sophistry, there has been little structural deviation from this neoliberal course across the various administrations of Álvaro Arzú (1996–2000), Alfonso Portillo (2000–2004), Óscar Berger (2004–2008), Álvaro Colom (2008–2012), and Otto Pérez Molina (2012–2015). And there is little immediate sign of a change in course coming in the near future. A country report of June 2013 from the conservative British Economist Intelligence Unit (EIU) notes with satisfaction its projection for the 2013–2017 period: “The government’s overall stance will be pro-business, and macroeconomic management will remain orthodox.”351 Nonetheless, there are signs of worry for investors, which stem from the most powerful social forces within a slow and incipient rearticulation of popular movements after the long decline since the 1980s. “Rising opposition from peasant and indigenous groups has also caused delays in programmes to increase investment in the mining and energy sector,” the EIU laments. Social and ethnic tensions

  will be aggravated in 2013–2017 by growing opposition (in the form of roadblocks and strikes) to mining activities and the construction of hydroelectric plants in protected or indigenous areas. Large-scale protests are a possibility if the government takes a harsh stance in pushing ahead with new projects.352

  It is precisely in this sector of mining, where the new forms of violence associated with the neoliberal model in Guatemala are most advanced, and the new forms of popular resistance most insistent on making their presence felt, that Canadian capital has entered in such an aggressive fashion.

  CANADA AND THE RE-EMERGENCE OF MINING IN GUATEMALA

  Canada is one of the largest foreign investor nations in Guatemala, and was the second largest in 2009 and 2010, after the U.S.353 This investment is dominated by mining: as of May 2012, sixteen of seventeen active mining properties (in the exploration or production stage) in Guatemala were Canadian.354 Canadian company Goldcorp, the second largest gold producer in the world and Guatemala’s largest source of export-earnings, has become a powerful and extremely controversial force in Guatemala (as it has in neighbouring Honduras and Mexico). Goldcorp led the re-emergence of large-scale industrial mining in the country.355

  While large-scale industrial metal mining was an important part of Guatemala’s developmental strategy in the 1960s and 1970s, it declined as the civil war intensified in the 1980s. But as Dougherty observes, “the neoliberal policy regime emerging from the resolution of Guatemala’s 36-year civil war in 1996, and the portentous end of the Multi-Fibre Arrangement for Guatemala’s maquila sector, launched Guatemala’s quest for mineral capital.”356 The interests of Canadian mining companies have enjoyed significant advances in Guatemala since the end of the war and signing of the Peace Accords, though they have faced a considerable challenge from below and, as a result, have also experienced setbacks. Guatelama adopted a new mining law, “crafted with input from Guatemala’s nascent mining industry and foreign interests,” in 1997.357 In an effort to earn the goodwill of Canadian capital and compete with its Central American neighbours, the new law called for environmental studies, but made it easier for companies to obtain licences, relaxed limits on the size of concessions and reduced royalty rates paid to the state to a mere 1 percent. Guatemala’s Ministry of Energy and Mines also organized international mining congresses for foreign investors and made visits to Canada in the 1990s to meet with representatives of its mining industry.358 Behind the formal legislated support for Canadian companies, the latter also received informal behind the scenes support from the Guatemalan government, which, during the presidency of Oscar Berger (2004–2008), reportedly instructed officials from the Ministerio de Ambiente y Recursos Naturales (Ministry of the Environment and Natural Resources, MARN) to accept all relevant environmental impact studies. Under such favourable conditions, metal exploration by smaller so-called junior firms increased by 1,000 percent during the 2000s and the country has become one of the lowest-cost gold-producing countries in the Americas.359

  However, a moratorium was placed on the issuance of new licences (production and exploration projects continued) in 2006 by President Álvaro Colom, following a successful court challenge to the mining law by the Centre for Legal, Environmental and Social Action. The Centre argued that the law did not protect the rights of indigenous communities, including their right to prior informed consent over development projects that will impact them, as per article 15(2) of the International Labour Organization convention, to which Guatemala is a party.360 While Colom was viewed as a left-of-centre president, and gave MARN more discretion around environmental impact studies than the Berger administration, he was neverthless supportive of Canadian mining and never sought to challenge the influence of Canadian companies or defend the rights of impacted communities, as we discuss below.361 Indeed, when a new draft law on mining was introduced into the Guatemalan Congress in September 2009, activists criticized it for failing to adequately regulate water use, or require consultation with or prior informed consent from affected communities and, finally, for capping royalty rates at very low levels, between 1 and 10 percent.362

  Not long after taking office, the Pérez Molina administration set to work to re-energize the mining sector, introducing several amendments to the country’s mining law and lifting the previous government’s moratorium on the approval of new concessions, which was instituted in 2008 after the Constitutional Court had declared several articles in the extant mining law to have been unconstitutional. Sixty-eight new exploration and exploitation licenses were approved by his government in its first six months. The mining proposals include royalty rates higher than what had been established in the 1990s, but which are still low, at 4 percent for gold and silver and 3 percent for base metal production. With international commodity and oil prices high, the Pérez government did briefly flirt with
a constitutional proposal in 2012 that if passed would have stipulated that the Guatemalan government take as much as a 40 percent stake in new mining and oil projects. But, as a Pérez adviser reported a few weeks after the proposal was raised, “we realized it was making a lot of noise internationally and we decided to withdraw it.” With the mining industry quick to criticize the proposal, the Pérez government ultimately proved quick to demure to the whims of international capital.363

  It is evident that the Canadian embassy, with the support of Ottawa, supports particular companies despite their widespread involvement in human rights and ecological abuses. Nonetheless, in the context of growing and widespread opposition to Canadian companies, embassy officials have also taken a concerted role in defending the industry as a whole. This has been most explicit when the struggle against Canadian companies heated up in the mid-2000s. Then-Ambassador James Lambert—in a textbook case of operating as “a representative for Canadian mining companies”—responded to the escalating opposition by actually writing a 2004 op-ed article for the Guatemalan daily, Prensa Libre, extolling the virtues of Canada’s mining industry. “In Canada, mining exploration and exploitation is carried out in all provinces and territories, creating economic and social opportunities for many communities, including some 200 indigenous communities,” Lambert tells Guatemalans in an assertion with which many indigenous communities in Canada would take serious issue:

  Throughout our long history of nearly 150 years of mining production, our country has become one of the most “intelligent” administrators, promoters, users and exporters of natural resources in the world. Today, Canadian businesses are on the vanguard of high technology, environmental protection and social responsibility. This is why they are leaders of many of the most successful mining operations in the world.364

  It would be several years before empirical analysis of global mining-related conflicts, commissioned by the Mining Association of Canada, revealed the fact that Canadian companies have the worst record in the entire world; unsurprisingly, though, Guatemalans themselves were already privy to a burgeoning mass of first-hand evidence which contradicted Lambert’s glowing review of the industry. In December of that year, the embassy organized the National Mining Forum, again with the intention of fortifying the image of Canadian mining companies as unusually responsible actors within the global industry. The forum featured Jerry Asp, an Indian Act band leader from Tahltan First Nation in British Columbia who told Guatemalans that his community initially had similar reservations about mining developments twenty-five years ago, but have since benefited from allowing the investment to proceed.365 Two months later, Asp’s office was occupied by elders from his community seeking his removal from power for selling out to corporate interests after he expressed support for the B.C. government’s controversial mining plan.366

  Lambert then followed the Prensa Libre article and National Mining Forum with a nationally-televised debate defending Canadian investors. Glossing over Canada’s history of mining disasters and dispossession of indigenous peoples at home and abroad,367 Lambert argued to the national audience that

  the Canadian experience can be relevant here in Guatemala as has been the case in mining countries in the process of development, where mining operations are underway…We’ve learned a lot from this century-and-a-half of activity, especially good management of environmental issues in our country.

  Next, in an astucious manipulation of the facts, he attempted to mislead viewers by suggesting that “there is a series of standards” Canadian companies “must follow before proceeding with their activities at the international level.” As Lambert must well understand, there are no such mandatory standards enforced by the Canadian government domestically, nor imposed at the international level. To those community activists unconvinced by what Lambert was selling by this point in the debate, the ambassador offered the view that foreign mining investment is, in any case, an inevitable feature of modernizing economies and thus “sooner or later, indigenous communities in Guatemala have to face the reality of a global society,” implying that opponents of Canadian mining are anachronistic and parochial, rather than ecologically forward-thinking. Striking a particularly pious chord, Lambert then opined on the disquieting phenomenon of social movements refusing to roll over in the face of Canadian mining expansion, “activities that are within the legal framework of the country.” Indeed, for Lambert, while Canadian corporations were being depicted by opponents as perfidious exploiters of marginalized communities and the environment, it was rather the activists responsible for blockading mining activity that ought to have been the objects of scorn and ridicule. Their militancy “exceeds the norms of the country, and it’s worrying,” Lambert noted. 368

  Given the systematic and well-documented violation of international law captured in the refusal of Canadian companies to seek prior agreement or consent from affected communities in geographic zones slated for mining development, and given the Guatemalan government’s consistent abnegation of its responsibility—or possibly sheer inability—to ensure that Canadian corporations pursue such agreement or consent, Lambert’s televised intervention would be laughable, were it not so evidently tragic. With the benefit of hindsight, the ambassador’s public handwringing about the state of law-and-order with respect to Canadian investment becomes still more precious, as repression of anti-mining activists actually intensified and spread from Goldcorp’s Marlin to other Canadian projects in the years that followed. To FAIT, however, Lambert’s vigourous defense of Canadian mining was meritorious, helping earn him an eventual promotion to Director General for Latin America and the Caribbean.

  The embassy has not restricted itself to engagement in a national debate to advance the interests of Canadian multinationals. With the support of Ottawa, it has also worked somewhat less publicly to influence Guatemalan politicians and state officials. According to one official, embassy staff have “regular contact with” representatives of the Ministerio de Energia y Minas (Ministry of Energy and Mines, MEM), including the Directors of Hydrocarbons and of Mining and a ministerial advisor.369 Undoubtedly, a priority for the embassy would be the somewhat precarious state of mining in the country since the 2006 moratorium, though the full extent of this is hard to discern fully as communications between the embassy and MEM received through Access to Information are heavily redacted. As one embassy report notes, however, a planned meeting with a MEM official was to discuss “the priorities of the section [of MEM] under his responsibility, and also to talk about his attendance to PDAC [Annual meeting of the Prospectors and Developers Association of Canada] in 2008.”370 Attendance at PDAC, encouraged and fully financed by Canada, is a regular priority for the embassy in Guatemala, as it is in many countries in the region (and elsewhere in the Global South). Members of MEM are routinely invited to PDAC to meet with Canadian officials and mining representatives. In 2010, for example, five high level officials with the MEM, as well as a political advisor to the President, were brought by the embassy to Canada for a four-day tour starting in Ottawa. There they met with a series of FAIT representatives, including the Assistant Deputy Minister for Latin America and the Caribbean, as well as representatives from Indian and Northern Affairs Canada, before heading to PDAC in Toronto, where they met separately with the head of PDAC, Goldcorp and representatives from Natural Resources Canada.371

  The embassy has also analyzed, in relation to the needs of mining interests and the spin-off opportunities for Canadian capital stemming from it, the development of Guatemala’s electricity sector, noting that with its “vast expertise and experience, our industry could play an important role in the development of the electricity sector,” and that “several Canadian companies are already present in the region…which could place Canada in a preferential position to develop Guatemala’s electricity sector…as well as put Canada’s foot in the door of the Puebla Panama projects.”372 Montreal-based Dessau-Soprin had in fact already won a contract to supe
rvise construction of the region’s first power grid, which spans from Guatemala to Panama, when the embassy was discussing other opportunities for Canadian capital opened up by the mining industry.

  Goldcorp: Marlin

  The flagship project of Canadian capital in Guatemala, and the Canadian project most emblematic to Guatemalans for the violent and ecologically-devastating impact of foreign investment, is Goldcorp’s Marlin mine. Receiving C$63 million from Canada Pension Plan investments and located in the highlands 130 kilometres northwest of Guatemala City, Marlin was a controversial investment long before it became operational in 2005, but the opposition has intensified since that point, with two people associated with the resistance having been killed as a result.

  Marlin is one of the first major mining developments since the official end of Guatemala’s bloody civil war in 1996, and has been viewed as a test case for foreign companies looking to enter Guatemala to access its natural resources. As noted above, much of the bloodshed (over two hundred thousand people killed), caused by paramilitary death squads backed by the United States, was directed against Maya-Kiché indigenous people in the department of San Marcos, where Marlin is located, and so the foreign intrusion and security surrounding it have been unwelcome by most of the local inhabitants. There are eighteen Maya Mam and Sipakense indigenous communities directly affected by the mine, and in the years since the Marlin mine was developed Goldcorp has obtained large parcels of land in the region through fraudulent means and by exploiting the poverty and vulnerability of the Mayan communities.373