Blood of Extraction

by Todd Gordon

  The FMLN spent most of the post-war period wrought by internecine struggles between a leftist current in favour of a commitment to the original revolutionary principles of the organization, the ortodoxos, and a rightist current in favour of moving away from those commitments and shifting the party to the centre, the renovadores. Between 1994 and 2009, the party made electoral gains in the Congress and took the mayoralities of several municipalities, but the ortodoxo candidates for the presidency were unsuccessful. The winning ticket of Funes signalled the departure from this pattern.496 According to two close observers of Salvadoran politics and sympathizers of the renovated FMLN, Héctor Perla Jr. and Héctor Cruz-Feliciano, the FMLN

  took power through elections, running a presidential candidate who was not even a party militant but had significant electoral appeal among centrist and middleclass voters. As a result, the journalist Mauricio Funes assumed executive office without a commitment to the Farabundistas’ revolutionary ideals, and his administration is a mixed bag of progressive social policies, occasional confrontation with the FMLN, significant compromise with local elites, and appeasement of the United States.497

  Some argue that these compromises extend to a failure on the part of the FMLN government to take sufficiently seriously the problem of violence being regularly meted out against anti-mining activists.498 For example, one left-wing journalist reporting on the intimidation and repression faced by Salvadoran activists squaring off with Pacific Rim notes that Funes “has done little to ratchet down on perpetrators of violence in Cabañas.”499

  Nonetheless, alarm bells went off in the industry after the mining press warned early in Funes’ mandate that he wanted to implement a total ban on mining, and that he had appointed a former director of an environmental NGO, Herman Rosa Chávez, as Minister of the Environment. “One of the most difficult issues in his portfolio,” the geographer Anthony Bebbington reports,

  was to collaborate with the Ministry of Economy and Commerce in a process that had to culminate in a new national policy on mining in a context in which a number of social movements and movement organizations were demanding an outright ban on mining while parts of the business elite wanted to grow the sector.500

  In fact, Funes never staked out such a sharp position (despite one poll showing that two-thirds of Salvadorans would support a ban on precious metals mining), and instead pledged only not to permit new mining exploitation projects during his tenure. A reaffirmation of this position came after the fifth assassination of an anti-Pacific Rim activist in the summer of 2011.501 Funes and the Congress then proactively supported Strategic Environmental Assessment, in order to delay the process and to shift the discussion from political to technical terrain—this process will likely lead to the establishment of a new mining law, which is a double-edged sword for Canada. A new law that is still favourable to foreign investors is of course a step forward for Canadian capital, but given the strong opposition to Canadian companies such an outcome is far from guaranteed; and indeed one proposal calls for a complete ban all metallic mining.

  Extra-parliamentary pressure on the FMLN government for a ban on hard rock mining is coming from a number of social movement organizations, the most important of which is the Mesa Nacional frente a la Minería Metálica de El Salvador (National Roundtable Against Metallic Mining in El Salvador, La Mesa). Standing before the Salvadoran parliament in July 2013, Carlos Flores, a leading member of La Mesa, made this position clear, explaining that “we come before the assembly to present a piece of correspondence in which we reiterate our demand of the last six years—that the legislative assembly discuss and approve the Law Prohibiting Hard Rock Mining in El Salvador.” Flores went on to emphasize how, from La Mesa’s perspective, “we have to take concrete and incisive actions prohibiting hard rock mining, the first stage of which is having the assembly prohibit this type of mining in law.” With the prohibition in place in El Salvador, a related communiqué from La Mesa explains, “it would give more legitimacy and moral force to the Salvadoran government to demand that Guatemala and Honduras suspend mining projects along our shared borders.”502

  “The number of jobs that mining produces becomes irrelevant when considered against the negative impact on health and the environment,” the communiqué continues. The document recalls the case of mining activity in San Sebastián, in the east of the country, which it says left the adjacent community without water and with rampant health problems among residents:

  This scenario of breaking the social web of the community, of destruction and pollution, is being repeated in the entired region where communities are being displaced and obliged to emigrate because of the activation of mega mining projects; and the communities are repressed when they mount any opposition.503

  La Mesa’s demand has also been taken up by the office of the Procuraduría para la Defensa de Derecho Humanos (Attorney General for the Defence of Human Rights) in El Salvador. Óscar Luna, head of the office, addressed the legislative assembly in October 2012, “We know that this type of development generates human rights impacts, such as those of life, health, and adequate nutrition, the environment, water, and many other that have to do with the environment.” Ángel Ibarra of UES echoed Luna’s sentiments, criticizing the FMLN government for refusing to adequately respond to La Mesa’s proposals.504

  In the midst of the controversy surrounding Pacific Rim, the Canadian ambassador, Marianick Tremblay, and embassy officials nevertheless advocated for the mining industry after the (in the words of one mining representative) “illegal”505 moratorium and the debate on a new law were initiated. Permitting Salvadorans to make an independent decision about the future of mining in their country was simply never an option; Canada would always have to have a say lest El Salvador make the wrong decision. The embassy’s role included a strategy session with representatives of the Mining Association of El Salvador in 2011 that included discussion of how the embassy could advocate for Canadian companies, though it was tempered with a caution from the embassy about the need for both the embassy and industry to proceed carefully in their public advocacy for mining in the wake of the assassinations.

  Tempering the push for mining was merely a PR measure, however, as one embassy communication to Ottawa in early 2011 notes that despite the difficulties the industry has faced, “the political debate on mining activities in El Salvador is far from over,” and that certain “positive steps”—including the Ministry of the Economy hiring an environmental consulting firm to study the environmental feasibility of mining in the country in 2011, and the firm’s willingness to seek input from Canadian companies—“indicate that [redacted] the Salvadoran authorities might be getting ready to consider the subject [redacted].” “The Embassy,” the communication adds, “will remain attentive to the concerns of the Canadian companies” and will look into the possibility of bringing a “Canadian expert to El Salvador to discuss mining” with Salvadoran officials and the consulting firm.506 The embassy’s optimism was bolstered further shortly after, following an offer from a mining analyst in the Salvadoran National Assembly—in another tentative opening offered to Canadians to shape the discussion on mining’s future in the country—to discuss mining policies with ambassador Tremblay, which an embassy official notes is another “excellent opportunity to offer some expert advice to the Salvadoran government.”507

  As is a common theme in the Canadian diplomatic strategy to defend the mining industry from the criticism of social movements and leery governments, the Canadians also used the annual PDAC conference to build support for Canadian capital among reluctant Salvadoran officials. In early 2011, for example, representatives from the embassy, FAIT, and Natural Resources Canada (NRCan) discussed bringing Salvadorans to Ottawa to meet with mining experts and representatives from various Canadian ministeries and the Mining Association of Canada so that “they begin to appreciate that mining can lead to development.” A FAIT representative adds in an exchange with the em
bassy that “PDAC offers a unique opportunity to foreign delegations because within the space of a few days they have access to the whole of Canada and things mining.”508

  The goal here is clearly to influence the policy-making of well-placed members of the Salvadoran state despite (or in fact because of) the strong public opposition to Canadian mining. Neither the Canadian state nor companies can convince the mass of Salvadorans to accept Canadian investment, but they can target and pressure more influential Salvadorans—some of whom are clearly open to being convinced—and push them towards political decisions the poor majority are against. Talk of how mining is good for development from Canadian “experts” may be insinuated into the discussions at PDAC, but we need to remember the conference is organized, financed, and attended by the Canadian mining industry and its supporters within the Canadian state, who, given their collective track record around the world, including in Canada, can hardly be considered honest or neutral sources of expertise on the potential of meaningful sustainable development achieved through mining.

  COSTA RICA

  While the myth of a classless society of yeomen farmers in Costa Rica for much of the twentieth century is a profound exaggeration, it is nonetheless true that the country—folded uneasily into the geopolitical embrace of the anti-communist American empire during the Cold War—exhibited a certain degree of egalitarian exceptionality in development patterns relative to its neighbours in Central America and the rest of Latin America and the Caribbean. Following the resolution of its short-lived Civil War in 1948, Costa Rica entered into a social democratic period of mixed economy, liberal democracy, and extensive social programs, which lasted well into the 1980s. The banking system was nationalized, providing state managers an unusual degree of leverage in guiding growth and development policy. Membership in the Central American Common Market (CACM) by 1962 offered both stimulus to and protection for a degree of industrial sector growth, even while foreign exchange was still acquired in the main through traditional agricultural exports: coffee, beef, bananas, and rice. Public coverage of health care, education, and social security was unusually generous in comparative regional terms.509 Class inequalities, in short, were markedly less extreme than, say, Guatemala, Honduras, El Salvador, or Nicaragua.

  However, Latin America’s lost decade of the 1980s did not bypass Costa Rica, and declining rates of growth and terms of trade, as well as escalating levels of debt, meant first stagnation, and then crisis. In the midst of it all, CACM collapsed. While Costa Rica had long been beholden to the political whims of U.S. imperialism, in the 1980s and 1990s the economic face of empire assumed centre stage. The key channels for the translation of external pressures were a range of international financial institutions (IFIs), the IMF, World Bank, and USAID among the most important. Under the auspices of new structural adjustment agreements between these IFIs and the Costa Rican state, the social democratic order of the post-1948 period gave way to a neoliberal model rooted in extreme austerity, trade liberalization, and financial deregulation, all with the aim of shifting accumulation toward export-led development; the expansion of maquiladora production utilizing cheap labour; the extension of non-traditional agricultural exports and tourism; and the export of migrant labour to the United States, such that remittances would become more important than ever to the country’s political economy.510

  The ostensibly Centre-Left administration of Luis Alberto Monge (1982–1986), of Costa Rica’s long-standing social democratic Partido Liberación Nacional (National Liberation Party, PLN), set the ball rolling with regard to neoliberal economic restructuring. Óscar Arias, during his first administration (1986–1990), pushed these efforts further still, consolidating the PLN as a neoliberal party. The direction and momentum of neoliberalism has not altered in its broad parameters since, under the respective presidencies of Rafael Ángel Calderón Fournier (1990–1994) of the conservative Partido Unidad Social Cristiana (Social Christian Unity Party, PUSC), José Figueres Olsen (1994–1998) of the PLN, Miguel Rodríguez Echeverría (1998–2002) and Abel Pacheco de la Espriella (2002–2006) of the PUSC, and Óscar Arias (2006–2010) and Laura Chinchilla (2010–2014) of the PLN.

  Costa Rican domestic capital experienced processes of rapid concentration around the country’s largest firms, and these developed tighter linkages with major regional capitalists from the rest of Central America and Mexico, as well as big foreign capital from North America and parts of Asia. The area of finance is one example. Between 1986 and 1997, the privatization of the banking sector witnessed an early explosion of private financial institutions from twenty-five to forty-two. But this was quickly reversed as a few private banks concentrated their grip. Since 1997, “the share of the three largest private banks in total assets went from 30.8 percent,” notes economist Diego Sánchez Ancochea,

  to 48.8 percent in May 2003. In 2003 the ten largest private banks controlled more than 80 per cent of total assets and 70 per cent of net worth in the private financial sector.…In 2003 public banks had only 1.6 times more assets than private banks, compared to 5.1 in 1989 and 3.3 in 1993.511

  The reduction of social programs and the decline in trade union and peasant power vis-à-vis the ruling class precipitated a heightening of social stratification well beyond anything the country had experienced since the early decades of the twentieth century.

  The willed disintegration of Costa Rica’s social democracy on the part of the country’s elites and international financial institutions was met with fierce, if ultimately unsuccessful, resistance. According to the detailed analysis of collective actions reported in major Costa Rican newspaper outlets, the sociologist Sindy Mora Solano shows that between 1995 and 2004 there was a total of 3,904 protest events. The intensity of resistance spikes in 1994, 2000, and 2004, with 450, 613, and 648 collective actions across these respective years.512 In 1995, the spike in activity turned around a national teachers strike. The intensity of 2000 has to do with the fact that, early that year, Costa Rica witnessed a campaign against the privatization of electrical power and telecommunications that represented one of the largest mass mobilizations in the country’s recent political history.513 The struggle against Costa Rica’s participation in CAFTA was another quintessential social battle against the new model of accumulation, taking the form of major and repeated national demonstrations across the country. This acceleration of protest accounts for the apogee of extra-parliamentary struggle in 2004. Once Arias resumed office in 2006, the negotiation of the CAFTA treaty was such an intensely contested political issue that he was forced to put the treaty’s ratification to a binding referendum on October 7, 2007. In the event, the pro-CAFTA camp scraped out a victory with 52 percent to the no campaigners’ 48. “That ratification was ever in doubt, however,” sociologist Eduardo Frajman observes,

  and that the referendum took place at all when the treaty enjoyed the support of two successive presidents and their cabinets, a sufficient majority of legislators, strong financial capital, the country’s major media conglomerates, and the United States, is testimony to the effectiveness of the opposition through five years of intense struggle.514

  As in the other cases of Central America we have examined, the neoliberal transition was essential to Canadian capital’s entry into Costa Rica’s market. Specifically, the generalized orientation toward trade liberalization and export-oriented growth across Costa Rican governments of every stripe provided the basis for the establishment of a free trade agreement between Canada and the Central American country in 2002. Since that time, Canadian FDI has grown considerably in Costa Rica, and is estimated by FAIT to be at close to C$1 billion today. Against the backdrop of the privatization of the banking industry mentioned earlier, this overall uptick in Canadian FDI in Costa Rica includes Scotiabank’s takeover of two banks since 2001, including the largest private bank in the country, Interfin, as well as Groupe EBI, which runs three major waste disposal facilities in the country.515 As elsewhere in Central A
merica, mining features prominently in Canadian investment patterns, and has been at the centre of contentious political developents within Costa Rica.

  In 1997, the efforts of Montreal-based corporation Lyon Lake, and its Costa Rican subsidiary Novontar S.A., to establish open-pit gold mines on their Beta Vargas and Guaitilar properties, near the communities of Puntarena and Lourdes de Abangares, respectively, were successfully defeated by local environmental and community groups.516 As of 2013, there are two active mining properties, both owned by Canadian companies. B2 Gold’s Bellavista property was a producing mine until it was shut down due to serious structural problems centred on a shifting heap-leach pad built on the side of a hill. B2’s efforts to reopen the mine have been criticized by environmentalists. But Infinito Gold’s Las Crucitas has drawn the most critical attention in the country, and has been the subject of a popular national opposition movement. Indeed, in the wake of the defeat of the anti-CAFTA struggles, popular movements against mining have gradually assumed the preeminent position in the wider array of resistance to the neoliberal status quo.