Blood of Extraction

by Todd Gordon

  Las Crucitas is a massive open-pit project containing an estimated 1.24 million ounces of gold, which has courted controversy for nearly two decades. The mine is located 105 kilometres north of San José close to Río San Juan, near the Nicaraguan border. The usual concerns that attend massive open-pit mines, of poisoning and destruction of local rivers and ecosystems, have been raised by nearby residents, and many Costa Ricans throughout the country.517 Canadian company Placer Dome (subsequently taken over by Barrick) dropped plans to develop the mine in 1997 due to widespread opposition. Vannessa Ventures took over the project in 2000 and was granted an exploitation permit in 2002. That same year, the government of Abel Pacheco issued a moratorium on open-pit mining, but Las Crucitas was grandfathered because it had already received its permit.518 However, opponents of the mine won an injunction against it and in 2004 the Constitutional Court annulled the exploitation permit.519

  Vannessa Ventures/Infinito Gold never stood alone in Costa Rica in defence of its interests. Outside the public eye, “the embassy,” in the words of a brief co-written by embassy and FAIT officials in the Latin American and Caribbean section, “has supported the company and has repeatedly conveyed these messages to the senior decision makers of the country.”520 The election of Óscar Arias in 2006 proved useful to Canadian interests. Despite both public and judicial concerns about the mine, in 2008 (the year Vannessa Ventures changed its name to Infinito Gold) Arias lifted the moratorium on open-pit mining, Las Crucitas was granted new environmental and mining permits, and Arias declared the mine to be in the country’s national interest.521 But Arias’ prostration before Canadian demands galvanized opposition to the mine.

  Canadian mining interests and their allies in the embassy were duly concerned that they had lost a loyal friend when Arias left office in 2010. Aware of the possible support of a moratorium on open-pit mining by president-elect Laura Chinchilla, embassy and FAIT officials in Ottawa discussed the potential impact on Canadian interests, while Kent was dispatched to meet with several of her key new cabinet ministers shortly after her inauguration.522 Chinchilla did issue a ban on all new open-pit mining, which was approved by the National Assembly in November 2010, but the ban did not touch Crucitas because it had already received its exploitation permits to begin construction.523 In one expression of the anti-mining movement’s discontent with the exclusion of Crucitas from the mining moratorium, protesters carried out a 170 kilometre march from the presidential palace in San José to the open-pit mine in July 2010.524 In one later indication of the anti-mining movement’s ability to squeeze the Chinchilla administration, 2012 witnessed the resignation of her Vice-Minister of the Environment, Andrei Bourrouet, after environmentalists accused him of having had ties to Infinito in the past.525

  As public pressure mounted on Chinchilla to stop the project—with the sharp growth of the opposition a subject of commentary in a FAIT briefing526—in late summer 2010 the Tribunal Contencioso Administrativo (Administrative Disputes Tribunal, TCA) declared that it would allow an appeal by an environmental organization, challenging the right for the Crucitas mine to proceed as per the decrees of the Arias government. The rising tide of opposition, and the TCA’s decision, prompted an angry public outburst from the Canadian ambassador, Neil Reeder. Reeder demanded that Costa Rica respect the law and permit Infinito Gold to continue with its plans for Las Crucitas, and warned the Costa Rican government of the potentially bad international image it would develop if it violated Infinito’s rights. In his last public comments as ambassador to Costa Rica before his promotion to Director General for Latin America and the Caribbean in FAIT, Neil Reeder defended the company, declaring that “they (Infinito) have respected all the rules of the game.” He added a few words for the court, warning that it has “sent a very uncertain message to the international investment community at a time when Costa Rica is actively looking for more foreign investment.”527 Infinito’s troubles also apparently caught the attention of the Privy Council Office in Ottawa which later that fall requested updates from FAIT on Las Crucitas.528 Perhaps not coincidentally, Infinito’s largest controlling shareholder, billionaire Ron Mannix, is based out of Calgary, ground zero for Harper’s Conservative Party. While no hard evidence is available linking Mannix to the Harper government on this specific matter, it is nonetheless worth mentioning that in the thousands of pages of Access to Information and Privacy files we have dissected in conducting research for this book, never have we encountered such a request for updates from FAIT.

  The opposition to Las Crucitas and open-pit mining remained, for the Canadian state and capital, stubbornly resilient, and on November 24, 2010 the TCA annulled Infinito’s permit, due to what it said were multiple irregularities in how the permit was obtained from the Arias government, precipitating a 60 percent drop in the company’s shares.529 The tribunal also raised the possibility that corruption on the part of Arias and his Minister of the Environment and Energy, Roberto Dobles, played a role in his government’s support for the project. The TCA’s decision was vindicated in the First Hall of the Supreme Court in 2012.530 The court had been asked to annul the TCA’s decision by Infinito’s lawyers. Not only did the court reiterate the validity of the TCA decision, but it also reissued the call for a formal investigation into the actions of Arias and his functionaries that granted the permits to the Canadian company in the first instance.531 For prominent anti-mining lawyer Edgardo Araya, the Supreme Court’s ruling “was a historic sentence…a big lesson the small community of northern Costa Rica are giving to the rest of Latin America on how to get rid of these mining companies that try to undermine the bases of our institutional systems.”532

  Perhaps it is not surprising that in the midst of a major demonstration against mining in November 2011, protesters chanting in the streets of San José accused Arias of being little more than the political arm of Infinito Gold.533 And this was hardly the first time Óscar Arias or his family had exercised their political influence for questionable ends or personal gain. From a wealthy family, the ex-president has been an institution in Costa Rican political and economic life for decades, and has been aligned with Canadian ambitions in the region as an ally of Canadian mining, and as a key part of the effort to find a negotiated solution to Honduras’ political crisis following the 2009 coup that would hold President Manuel Zelaya in check. Óscar’s brother and adviser, Rodrigo, successfully led the legal effort to change the law prohibiting multiple presidential terms, to which Canada said nothing despite being quick to criticize the likes of Zelaya or Hugo Chávez with threadbare accusations of attempting to thwart established democratic norms in their countries and concentrate power in their hands. Accusations of influence peddling swirled around Rodgrio in 2005 regarding a sole-source landfill contract with the city of San José, awarded to a Canadian company, EBI. According to a cable from the U.S. embassy, when EBI’s initial efforts to win the contract were thwarted twice by the Costa Rican Comptroller because the sole-source was not properly justified, the company engaged Rodrigo’s law firm, and the brother allegedly made one call to the Comptroller and the contract was approved. Calls for Rodrigo to step down as campaign manager for his brother when the accusations became public were ignored by Óscar.534 The full story behind Óscar Arias’s solid support for Infinito has yet to be told, but in 2008 Mannix offered to donate US$250,000 to the Arias foundation, and made the offer directly in the office of the foundation’s executive director, Arias himself. He insists that he did not accept the money.535

  Canada, not surprisingly, has remained quiet on the corruption allegations, as Arias is an ally and Mannix a friend of and donor to the Conservatives.536 In fact, Infinito—together with B2—financed the Canada Day celebrations at the embassy in San José in 2011, despite the controversy and anger it has engendered in Costa Rica.537 For its part, Infinito has tried to publicly discredit scientific studies criticizing the project as “merely speculative” or “poorly executed,” yet company representativ
es have frequently ducked out on national debates with opponents of open-pit mining.538 After sending representatives for the two previous years, in 2010 and 2011, company representatives of Infinito, as well as lawyers and functionaries from the Ministry of the Environment, Energy, and Telecommunications refused an invitation to participate in the annual debate on the theme of mining hosted by United Nations University for Peace in San José.539 In one debate in 2010 at the Catholic University in the capital city, in which Infinito did participate, the corporation’s representative Juan Carlos Obando’s rhetorical recipe was one part corporate social responsibility and one part veiled threats of legal action against anyone defaming the company’s reputation. Obando emphasized the environmentally-friendly character of Infinito’s projects in Costa Rica and stressed the corporation’s generous openness to public debate and access to information to those interested. He then suggested, more ominously, that the kind of cynical statements made by his opponents in the debate could lead to legal action against them on the part of Infinito.540

  Indeed, the corporation has repeatedly threatened various mine opponents with lawsuits for defamation for public comments they made criticizing the company and its relations to Costa Rican authorities, including criticisms that were actually made first by the TCA. Two academics, a lawyer, and two Congressional legislators have been targeted, some for as much as US$1 million, drawing further criticism from anti-Inifinito activists for trying to criminalize the opposition.541 Edgardo Araya spoke for many of the targeted activists when he said, “they want us to shut up, but this is not going to happen, and I’m going to continue saying what needs to be said.”542 Infinito’s harassment of opponents and efforts to challenge the TCA’s decision also inspired a day of protests and mass marches in November 2012 in San José, which called for the government to expel the company.543 It was not long after, with public opposition still strong, and questions of corruption swirling around Arias and Infinito, that the First Hall of the Supreme Court rejected Infinito’s request for it to annul the TCA’s decision to halt development of Las Crucitas.544

  NICARAGUA

  The Sandinista Revolution (1979–1990), under the leadership of the Frente Sandinista de Liberación Nacional (Sandinista National Liberation Front, FSLN), was a beacon of inspiration for much of the international Left through the darkest moments of the Reagan-Thatcher era. While never transitioning beyond a mixed capitalist economy, the Sandinistas achieved important gains in poverty alleviation, literacy, education, and health care coverage for Nicaragua’s tiny population of roughly 3 million. All of this was made more extraordinary by the fact that the social gains of the revolution were carried out without an authoritarian concentration of power, in spite of the sustained assault of a counterinsurgency campaign led by the U.S.-financed Contras.545 Besieged from outside, and exhausted from years of civil war, the revolution’s end was ultimately marked by the electoral victory of the Contra-backed candidate of the Unión Nacional Opositora (United National Opposition), Violeta Chamorro, in the 1990 presidential elections. Ruling the country until 1997, Chamorro initiated a dramatic neoliberal economic restructuring of the socio-economic life of Nicaragua, a turn reinforced by her presidential successors Arnoldo Alemán (1997–2002) and Enrique Bolaños (2002–2007), both of the Partido Liberal Constitucionalista (Constitutionalist Liberal Party).

  Meanwhile, Daniel Ortega was overseeing a sixteen-year restructuring of the FSLN, one that witnessed a consolidation of power within the party in the hands of Ortega and a few other loyal figures, as well as a concerted shift to the Right, away from the movement’s foundational, revolutionary ideals. This trajectory involved a split in the FSLN in 1995, with the formation of a dissident Sandinista grouping, the Movimiento Renovador Sandinista (Sandinista Renovation Movement, MRS). The MRS left the FSLN in opposition to declining internal party democracy and the accompanying shift to the Right in the party’s social and economic orientation under Ortega’s leadership.546

  The remaining FSLN entered into a series of pacts with an array of Conservative forces in an effort to secure electoral success, beginning in 2001 when Ortega forged an alliance with ex-President, and former Somoza official, Arnoldo Alemán in the lead up to the presidential elections that year. This was followed in 2006 by Ortega’s extraordinary pact with Cardinal Miguel Obando y Bravo, an emblematic figure of counterrevolutionary Catholicism in the years of the Contras. This opportunistic alliance was solidified through Ortega’s conversion to the faith, and his related coordination of total FSLN congressional support for legislation enacted during the 2006 presidential campaign period banning abortion in Nicaragua—the extremity of the ban is revealed in the fact that the law is deemed in effect even when a pregnant woman’s life is in danger. Finally, in the same spirit, Ortega chose former Contra leader Jaime Morales as his vice-presidential running mate in 2006. Even with these concessions to the Right, however, Ortega achieved a desultory 37.9 percent of the popular vote, enough to finally put him in the presidency, but on a fragile basis.547

  It is perhaps unsurprising, then, to see the governmental discordance since Ortega’s initial victory in 2006, and re-election in 2010, between “traditional anti-imperialist and working-class discourse” and “policies and actions” that “often appear to contradict its words,” including “adherence to the Central American Free Trade Agreement (CAFTA) and the …maintenance of a dollarized economy in El Salvador,” among other neoliberal continuities.548 Financial Times reporter Adam Thomson notes how U.S. officials have praised Ortega’s performance in the so-called “war on drugs,” and that local business leaders have described their relationship with the government as “constructive and fluid.” “Under Mr. Ortega’s brand of socialism,” Thomson highlights in a 2011 article, “foreign trade and foreign direct investment have more than doubled in the past five years. During the first half of the year, the economy showed a growth rate of more than 5 percent—one of the highest in Latin America.”549 Nonetheless, Ortega has simultaneously run into conflict with some of the most powerful countries in the world, due to the fact that his foreign policy initiatives have included alliances with Venezuela, Cuba, Bolivia, and Ecuador, under the rubric of the Alianza Bolivariana para los Pueblos de Nuestra América (Bolivarian Alliance for the Peoples of Our America, ALBA). In a similar vein, Ortega has incurred the diplomatic wrath of the American government most recently for offering asylum to U.S. whistleblower Edward Snowden.550

  These are some of the complex facets at the heart of recent political developments in Nicaragua, during a time in which the country has become an important destination for Canadian capital, particularly in the sectors of finance, energy, telecommunications, and mining. Canada was the largest foreign investor nation in 2010 with US$1.3 billion invested, and again in 2011 by a wide margin. Canadian companies were part of major hydroelectricity infrastructure project announcements in 2011, and as of August 2012 all fifteen active mining properties were owned by Canadian companies.551

  A leading mining industry periodical comments that Ortega has “been consistent in broadly promoting an investor-friendly environment.”552 While mining tax and royalty rates have not been as low as they are in neighbouring countries, under Ortega they were also not completely out of proportion with the region’s generally low rates. Ortega has also supported the industry in helping to contain labour struggle. During a 2009 strike against one of the larger mining operations in the country, owned by Canadian company B2Gold, the periodical notes that “the government supported B2Gold—labelling the strike ‘illegal’.”553

  As another signal of the government’s commitment to enabling foreign direct investment in the country’s mining sector, in March 2013 Ortega sent a large delegation to one of the most important annual mining conferences in the world, hosted by the Prospectors and Developers Association of Canada (PDAC) in Toronto. In attendance were Francisco Campbell, the Nicaraguan ambassador to the U.S. and Canada; Álvaro Baltodano, the pres
idential delegate for investment; Carlos Zarruk, Director General of mines in the Ortega administration; and Sergio Ríos, President of the Mining Chamber of Nicaragua. According to a press release from the Agencia de Promoción de Inversiones de Nicaragua (Agency for the Promotion of Investment in Nicaragua, ProNicaragua), the seminar which the delegation led at the conference—“Nicaragua, Discover the Opportunities in Mining”—stressed the country’s pro-mining juridical framework, the alliance between the government and the private sector, and the vast opportunities for future investment in mining exploration and exploitation.554

  In late November 2010, president and executive director of B2Gold visited Nicaragua to announce that his company would be investing US$7 million in Nicaragua in the following year for gold mining exploration in the municipalities of La Libertad, in the department of Chontales, and El Limón, in the department of León. Mining exploitation would see a further US$27 million invested by B2Gold for the same year. “The country has a good system of legislation,” Johnson remarked, “and also has a very just tax system, demonstrating that it wants investment from international corporations to create employment.”555 In spite of the fall in gold and other commodity prices in the first half of 2013, Pablo Venturo, B2Gold’s manager in Nicaragua, suggested in an interview in May that the company’s medium-term investment plans would not be changing. “It is not the case that the sector is losing power, but rather we’ve entered a new situation, which is characterized by the recent fall in the international prices of gold,” Venturo noted. The drop in prices was “an external variable that is not controllable by companies, but the rate of production and projects will continue advancing in the entire sector in general.” In the interview, Venturo stated that by 2017 B2Gold expects to have invested US$344 million in the country, in the La Libertad and El Limón mines alone.556