Blood of Extraction

by Todd Gordon

  CONCLUSION

  “I was recently in Canada and was very clear with people there that the problem is not Canadian society,” Morales García told us when we spoke to him in San Rafael Las Flores about his involvement in the resistance to Tahoe Resources and Goldcorp:

  The problem is that these people, these companies, these players come to set up shop here. I don’t have any problem with Canadian society.…On the contrary, we’re friendly and we are peaceful. Our problem has a first and last name and that is Tahoe Resources and it is Goldcorp.467

  These sentiments capture a generalized pattern of the way in which indigenous communities in Guatemala have been drawn into a series of unsolicited confrontations with Canadian mining capital, all of which are occurring within a wider panorama of expanding extractive industrial activity under the guise of multinational corporations.

  This chapter has sought to contextualize Canadian mining expansion against the historical backdrop of Guatemala’s civil war, peace accords, and transition to a new model of accumulation and violence during the neoliberal period. At the same time, it has sought to emphasize the agency of rural indigenous social movements, fighting on the frontlines against the depredation of their communities proceeding rapidly in the interest of those extracting vast quantities of bullion for the few. These communities defy easy parables of passive victims, even if their movements are up against very real and structurally powerful external and domestic opponents—opponents clearly willing, as we have illustrated, to employ their asymmetrical strengths in military and paramilitary terms to win the day. After having mapped out the key pieces of Honduras and Guatemala in the story of Canadian imperialism and the popular resistance it is generating in the Central American corridor, the next chapter will tie up the final Central American threads through a close examination of the patterns of Canadian capital and popular struggle in the rest of the isthmus.

  CHAPTER 4

  DISPOSSESSION AND SECURITY IN CENTRAL AMERICA

  While the cases of Honduras and Guatemala, explored at length in previous chapters, are perhaps on the harshest pole of Canadian imperialist intervention in Central America in recent years, the basic patterns established in those countries are nonetheless observable in their essential parameters more broadly through the rest of the region. In this chapter, we systematically document the record of Canadian economic interests and diplomatic efforts in El Salvador, Costa Rica, Nicaragua, and Panama over the neoliberal period, while situating this involvement against the backdrop of each country’s historical development and the rhythms of resistance that encounter Canadian imperialism at every step. After the interrogation of these four cases, we sketch out the content and logic of Canada’s security strategy in Central America as a whole, showing how it flows immediately from the material interests of Canadian capital, as well as being connected to the medium- and long-term geopolitical strategies of the Canadian state in the region.

  EL SALVADOR

  El Salvador’s twelve-year civil war came to a close in 1992 through a negotiated peace settlement, borne in part out of a military stalemate between the anti-communist, authoritarian regime and the mass guerrilla movement of the Frente Farabundo Martí para la Liberación Nacional (Farabundo Martí National Liberation Front, FMLN). The FMLN was transformed into an electoral political party and the Right found its principal expression in the Alianza Republicana Nacionalista (Nationalist Republican Party, ARENA), which was originally formed in 1981. The source of guerrilla insurgency can be located in the fact that a landed oligarchy rooted in coffee and sugar exports—the infamous “fourteen families”—controlled the bulk of the country for much of the twentieth century, both economically and politically. The poor were exploited or marginalized, and when they refused to bow their heads any longer and organized popular movements at different moments in the country’s modern history, the oligarchy responded by unleashing the military forces of the state in waves of terrific violence. The FMLN’s eventual call-to-arms, and the considerable support it received from layers of the peasant and urban working class population, were indicators of the unbearable character of that scenario.468

  Unfortunately, the transition to peace did not witness a simultaneous break with neoliberal economics—indeed neoliberal policies were intensified—and economic inequality and social exclusion persist to this day on a grand scale. Authoritarian legacies have likewise lived on in the form of human rights violations by the Policía Nacional Civil (National Civil Police, PNC), which replaced the militarized security forces. In the years since the peace accords, the PNC has been linked to crime syndicates, torture rings that brutalize detainees, enduring death squads that have targeted vulnerable urban youth in “social cleansing” campaigns orchestrated under a veneer of a war against gangs, and a mano dura (iron fist) approach to fighting crime on the part of the state—all of this in a context of heightened generalized violence across society, making post-war El Salvador one of the most violent places in Latin America and the Caribbean.469

  Part of the intensification of neoliberalism is explained by the shifting fates of different sectors of the Salvadoran capitalist class over the course of the civil war, and their attendant effects on the political inclinations of these sectors. The civil war had the effect over time of damaging national economic output and precipitating capital flight. The traditional agro-export sector began to decline in importance. Partly in response to this decline in traditional sectors, neoliberal reforms of trade liberalization and privatization of state-owned enterprises beginning in the late 1980s and early 1990s attempted to shift the model of accumulation toward non-traditional agricultural exports, and new commercial and service sector activities. As a consequence, novel domestic “economic power groups” emerged in alliance with foreign capital, which had been attracted through privatization initiatives.470

  When it became obvious that the armed forces could not defeat the FMLN militarily, and that attracting further investment from transnational corporations was being impeded by the instability of prolonged warfare, these emergent sectors of the capitalist class sought to use ARENA as a medium through which to build a conservative coalition, led by business forces that would be able to forge a transition to peace on capital’s terms. The establishment of the ARENA government of Alfredo Cristiani (1989–1994) expressed the success of this new orientation on the part of rising business sectors and allowed the peace process to move ahead and reach its close in 1992. ARENA, governing a political system that sociologist Sonja Wolf has called “electoral authoritarianism,”471 managed to secure victories in the 1994, 1999, and 2004 presidential elections, setting in place the administrations of Armando Calderón Sol (1994–1999), Francisco Flores Pérez (1999–2004), and Antonio Saca (2004–2009). Under the ARENA regimes, the neoliberal process of privatization and liberalization accelerated, with the new emergent business sectors consolidating their recently acquired power, at the same time as some of the traditional oligarchic families reproduced their economic weight by shifting strategically from agro-exports into commerce, construction, and some service sectors, all in alliance with a growing presence of foreign investment by transnational giants.472 During the Flores Pérez administration, the U.S.-Central American Free Trade Agreement (U.S.–CAFTA) was signed, concretizing a secure investment environment for foreign capital in the country, despite fierce opposition from popular movements such as the Movimiento Popular de Resistencia-12 de octubre (Popular Movement of Resistance – October 12) and the Red Sinti Techán (Sinti Techán Network).473

  As part of the externally-influenced trend in Central America to create better conditions for foreign investors, a new mining law was written in El Salvador in 1995 to replace the previous one, which had been in force since 1922. The new law included a low royalty rate of 3 percent of net profits. Coming out of the civil war and facing the harsh realites of the neoliberal global order, the Salvadoran government cited the need to be competitive with its nei
ghbours to justify such a low rate, which in turn led Guatemala to reduce its rate from 6 to 1 percent as the countries drove down demands on foreign capital. In response to Guatemala’s reduction, and the Honduran mining law passed following Hurricane Mitch, which replaced royalties with a 1 percent tax, El Salvador reformed its 1995 law in 2001. After heated debate in its legislature, a new 2 percent rate was adopted—though as we discuss below, mining policy would soon become a focus of national debate as Canadian companies made their move on the tiny country.474

  Total Canadian FDI into El Salvador is not publicly disclosed, but it is oriented towards mining and banking. Of the active multinational mining companies in El Salvador in the early twenty-first century, the three most important were Canadian: Intrepid Minerals, Aura Silver Resources, and Pacific Rim Mining (Pacific Rim was sold to an Australian company in 2013). Scotiabank bought Banco de Comercio in 2007 for US$170 million and is one of the largest banks in the country.475 There is also a small maquila presence and the recent entry of Bell and Telus in the telecommunications sector. El Salvador was a part of Canada’s FTA negotiations with the so-called Central American Four (CA4), but, as discussed in the previous chapter, those negotiations stalled and Canada successfully singled out Honduras after the coup with the hopes that the remaining three countries would feel pressure to push ahead on Canada’s preferred terms now that their neighbour had done so.

  As elsewhere in Central America, however, community resistance has posed a significant challenge to Canadian capital’s ambitions in the country. The potential damage to the country’s limited fresh water supply from large-scale mining has inspired a broad opposition to mining in general and Canadian companies in particular, including protests targeting the Canadian embassy, which express a clear link in the minds of protesters between Canadian companies and the Canadian government.476 Canadian mining activity has been linked repeatedly to devastating environmental fallout in the country.477

  Far and away the most notorious Canadian company in El Salvador in the early 2000s was Pacific Rim, which owned three exploration properties in the country. Pacific Rim established an American subsidiary in 2007 in order to take advantage of the U.S. trade agreement with El Salvador, the U.S.-Central American Free Trade Agreement (U.S.-CAFTA, including also Guatemala, Honduras, Nicaragua and the Dominican Republic). It bought the El Dorado property, a gold and silver deposit located one hundred kilometres from the capital in the village of San Isidro, Cabañas in 2002. Considered Pacific Rim’s flasghip operation, initial studies by the company suggested the mine, which is part of a fifty-kilometre-long gold seam that snakes through Guatemala, El Salvador, and Nicaragua could be worth as much as US$3.3 billion. The company was granted an exploration permit in 2005.478 After exploration commenced, representatives of the company began a campaign to get local farmers to sell or lease their land. Local residents report that the company even claimed in community meetings that cyanide is perfectly safe in drinking water. One resident notes that, “the company thought we’re just ignorant farmers with big hats who don’t what we’re doing.”479

  But Pacific Rim faced opposition to its project almost immediately, including from communities in Cabañas, environmental NGOs, and the Catholic Church. The deposit is situated close to the Río Lempa, a crucial source of water to Cabañas and San Salvador. Residents are concerned about the potential contamination of a vital water supply from mercury, cyanide, arsenic, and zinc, heightened by the fact that there has been no independent assessment of the environmental impact of El Dorado—all while Pacific Rim, under the extant mining policy, would have paid a mere 2 percent in royalties per ounce of gold mined.480 The mine would also consume, according to one scientific study, between 75 and 110 litres of water per second from the nearby San Francisco river, in a country that already is facing considerable shortages and is, according to a Human Development Report for Latin America, the third most unequal country in the region with respect to access to potable water.481

  Facing an election, pressure was felt by conservative National Republican Alliance (ARENA) president, Elías Saca González, as opposition to both El Dorado and large-scale mining grew, including among ranchers, who traditionally support the right-wing party, when the springs they rely on began drying up as Pacific Rim conducted exploratory drilling. Saca publicly raised concerns about the mine in early 2009 and declared that no new permits would be granted to Pacific Rim, despite his party generally being supportive of foreign mining. Twenty-four mining concessions, including El Dorado, had also been suspended by the government as an updated mining law, nominally introduced in response to environmental concerns about large-scale mining, was debated in the Congress.482

  Like most other Canadian mining companies, Pacific Rim deployed a CSR campaign in an effort to win over sections of local communities. It has sponsored a number of “social responsibility” initiatives in Cabañas as part of its “green mining” campaign. However, it was unable to successfully buy off the local communities, and some activists accused it of giving the CSR money to selected local mayors more inclined to support it as a way of pushing El Dorado forward. As one activist working with a community radio station observed, “it is a way for the company to control the mayors.”483

  But behind the CSR dollars and platitudes was a campaign of terror waged against anti-mining activists.484 This campaign included possibly five assassinations between June 2009 and July 2011, as well as shootings, assaults, kidnapping, and death threats.485 For example, in June 2009, an anti-mining activist and FMLN militant, Marcelo Rivera, was kidnapped, tortured, and strangled to death in San Isidro, his body later found at the base of a well. Police offered the easy and familiar suggestion that the culprits were gang bangers. In July of that year, another movement activist, Father Luis Quintanilla, was threatened by men wearing ski masks after having received death threats over the phone. A couple of weeks later, Ramiro Rivera, a key organizer in anti-mining road blockades received eight gun shots in the back and legs.486 Yet another collective target was a local community radio station, Radio Victoria, which has given voice to the anti-mining movement. Several staff at the radio station were threatened with murder.487 “We’ve had to move people from their houses in the middle of the night,” reports Óscar Beltrán, a journalist with Radio Victoria. “I believe that they haven’t succeeded in carrying out an attack yet because we’ve acted before they could do it. If we hadn’t acted quickly, I think we would be mourning at least five colleagues by now.”488

  Pacific Rim insists it bears no responsibility for what is clearly a concerted and organized terror campaign, and that it has been unfairly subject to “false accusations made by certain anti-mining groups.”489 The company and Salvadoran police even went so far as to suggest these were incidents of a non-political nature unrelated to mining (in one case a drunken brawl that got out of hand, for example); however, the fact that the victims’ bodies showed signs of torture, and that there were possibly five anti-mining activists murdered within the region in a two-and-a-half year span, stretches the credulity of claims that this is mere coincidence. Some local organizers accuse the ARENA mayors who presided over the Pacific-Rim-financed CSR fiefdom of ordering or giving the okay for the assassinations and raids on their organizations, and according to reports from community activists one of the persons identified in the shooting of a mining opponent is an associate of ARENA mayors in the region and worked as a paid promoter for the company.490 But even if Pacific Rim cannot be directly linked to the terror campaign, it is clear that its opponents are being systematically targeted, and at the very least it must bear some responsibility as the violence is a result of its controversial and strongly contested presence.

  Systematic repression has not been the only threat against local Salvadoran communities. The violence has been matched by a legal assault on the country; one that has been difficult to take lightly given El Salvador’s status as one of the poorer states in Latin America and the Carib
bean. As noted above, in the face of widespread opposition, the Salvadoran government did not grant the company further exploration or exploitation licenses. In response, Pacific Rim initiated arbitration proceedings against the government in 2010 at the International Centre for Settlement of Investment Disputes (ICSID) at the World Bank for more than US$100 million in damages, including for the loss of future profits, arguing that the government breached the terms of the CAFTA and its own investment laws.491 The World Bank, it should be noted, as part of its development objectives offers financing to mining projects, and so can hardly be called a neutral arbiter. While ICSID declared that the lawsuit could not proceed under the CAFTA because the company “does not have substantial activities in the U.S.A.,” it did permit it to proceed under El Salvador’s investment laws.492 Pursuing this course in 2013 before ultimately being purchased by an Australian company, the company had arrived at a massively higher figure of US$315 million, which they claim is owed to them by the Salvadoran government.493 Ángel Ibarra, of Unidad Ecológica Salvadoreña (Salvadoran Ecological Unity, UES), called the company’s actions “extortion.” For Ibarra, “it’s false that the company promoted development in Cabañas and El Salvador. They acted in the same style as a criminal organization, robbing and looting the people.”494

  The problems Pacific Rim faced in advancing its investments in El Salvador are emblematic of the precarious state of foreign mining investment in the country. Community mobilizing—and the extreme violence activists have faced—has forced the human rights and environmental consequences of large-scale industrial mining onto the national political stage. Nor are Salvadorans ignorant of the controversies of Canadian companies elsewhere in the region, as they begin to organize with their Honduran and Guatemalan counterparts to challenge the destructive impacts of Canadian mining in the isthmus. Indeed, social movements against mining have been sharing information and consolidating alliances across borders. One indication of such a trend was the establishment of a Salvadoran branch of the Movimiento Mesoamericano Contra la Minería Metálica (Mesoamerican Movement against Metallic Mining, M4).495 As a result of this and other initiatives by social movement opposition, mining has stalled. In addition, the right-wing ARENA has, at least in 2009, shown itself to be a fairweather ally of the industry, and Saca’s presidential successor, Mauricio Funes, of the leftist Frente Farabundo Martí de Liberación Nacional (Farabundo Martí National Liberation Front, FMLN), also failed to live up to Canadian expecations for pliability from a Third World leader.