Greetings and Good Morning,
This is our team’s take on the weekly newsletter of the Strategic Management course of 2021. We believe that this activity is a prime example of how our courses can keep us updated and aware of the environment/conditions that exist in the corporate world of which we will soon be a part of!
We want to shed light on a huge sustainability problem and a prime example of how companies don’t comply with sustainable business practices and completely disregard the environmental impact these could have in the long run. The topic we have chosen is Mining Corporations in Latin American countries. We will expose the following points:
Mining in LATAM and the detriment towards the environment.
Examples of how each country is affected both politically, sociologically and environmentally.
Some of the companies and their “sustainability” cover-ups.
In addition, we will share some resources (podcasts, videos, books, etc.) in case some of you are interested in the topic and want to look for further information.
We hope you enjoy our take in the Strategic Management and Sustainability newsletter and feel free to contact us if you have any questions!
Julia Girela Rueda, Daniela Marie Fernández Saucedo, Stijn Koelemaij and Elena Córdoba Fernández.
Students at University of Carlos III de Madrid.
Today’s newsletter is 2059 words, an 8-minute read.
Mining in LATAM and the detriment towards the environment.
The conflicts between Latin Americans and big mining companies (mostly Canadian and from the USA) date back to the 1980’s where the government of Mexico and Chile gave the first concessions of land towards this economic sector. They promised prosperity, job creation, sustainability and an economic boost for the citizens of these countries. This was just the beginning- land concessions toward these types of companies just increased with the passing of time and the amount of land increased while the “sustainability” claims decreased and Latin Americans started to realize that this “open pit” mining practice is detrimental for human life as well as the environment.
“Open-pit” mining is the most prevalent type of mining that is operational in Latin American countries. It is a style of mining that is inherently harmful to the environment. Surface mining activities, particularly large-scale operations, inevitably modify and disrupt the Earth's surface, even if "successful" mitigation measures are used and the site is returned to a condition that "reaches" or "mimics" its original form. This disruption, in fact, has a variety of immediate, secondary, short- and long-term potentially negative impacts on the ecosystem and surrounding human population. What they don't inform you about within news articles or Environmental Impact Studies are all of the mining's drawbacks, notably long-term environmental devastation that lasts decades or centuries.
Among the various harms caused by mining, which are rarely highlighted to the populations living near the operations, two stand out:
Serious environmental changes, such as the digging of an open-pit mine on a mountain or the filling of a valley with mining waste.
Contamination of sources of water, such as acidification and the discharge of hazardous metals into rivers, streams, and other bodies of water, or a rise in nitrates and ammonia produced from explosives. Promoters of major mining projects in Latin America frequently fail to see that the long-term costs of these mega-projects far exceed the benefits and continue far beyond the mine's active life cycle.
Open-pit mines require ongoing care after they have been closed and abandoned to reduce the risk of collapse (which never disappears). To avoid hazardous contamination, water sources must be continually checked and disinfected.
This is why there has been a big rejection from the people towards this economic sector.
Examples of how each country is affected both politically, sociologically and environmentally.
Panama: In Panama there was a peaceful protest conducted by the Ngabe Bugle indigenous community in 2013 to stop the law reform that would lead to open-pit mining in their communities. The event ended up being 5 days long and causing 20 injured, 5 deaths and many in jail- luckily they were able to back down the president from going through with the law reform, but unfortunately, that didn’t phase the new president who has conceded 1.991,12km² of land to mining companies, when looking at this number we have to keep in mind that Panama is a country that only has 75.517km² and 12.837,8km² of land are still pending to be conceded to the mining industry. A great portion of this territory that will be exploited goes through waterways and communities that will suffer irreversible damage. Panama is also known for its rainy weather, especially in forest areas- which is exactly where extraction will take place, something very uncommon since open-pit mining is only done in desertic areas, this leaves the Panamanian ecosystem and its inhabitants at risk of suffering many spills, damages and a loss of access to clean water.
Chile: One of the main cases that represent the existing problem in mining is the State Copper exploitation in Codelco, Valparaíso. Since 1960 several thermoelectric plants and a copper foundry have been placed in the Quintero Bay leading the area to a long history of pollution cases. The damage these companies are causing in the environment and local people is tremendous. The Government has found high levels of arsenic and mercury in seafood from that coast.
Governmental negligence in controlling the situation has been incessant for a long time. By 1992, a decontamination plan was implemented in an attempt to look for accountability. Even so, the Government continued approving new industry installations. The Environmental Ministry did manage to implement a new decontamination plan by 2016, but it did not fulfill the minimum standards to improve the area, instead, it raised the emissions standards, permitting industries to contaminate even more.
Representatives of different environmental associations have been reporting the Chilean State about the abusive system in the area, but no response seems to be taken.
Peru: Cerro de Pasco is the biggest mining operation area of the whole country. It has been exploited since silver was discovered in 1630. Nowadays, the heavy metals contamination in the city is so unsustainable that it has led to a public health crisis. Public documents have shown more than three thousand cases of people affected by metals such as mercury, arsenic, and lead in their blood. More than 2670 children between 0 and 11 years old were affected by those toxic metals by 2018. Minors of the area are known as “niños con plomo”, children with lead.
Mining company Volcan has an open-pit zinc, silver and lead exploitation, which contaminates Cerro de Pasco running waters, making the zone population in a dead-end path to health issues. This company has been the most punished company in terms of violating different environmental requirements, but the State continues adapting environmental standards and lobby politics to benefit corporate interests.
Families saw a little bit of light when, in 2020, Switzerland decided to make a national referendum to condemn industries based on the country as liable for human rights violations and environmental damages. If Switzerland voted in favour, families could have the opportunity of bringing the case to Swiss courts. Nevertheless, the initiative did not succeed, and the only solution proposed to the affected population by now has been to move from the area.
Some of the companies and their “sustainability” cover-ups
Grupo México (México): “At grupo México, we’re more than the copper we produce, we are also an organization that has a proven track record of generating value for our stakeholders”. The three main concepts they focus in their sustainability statement are: grow- create and share value for today and the generations to come; promote- foster individual wellbeing and safety; protect- preserve, renew and care for the environment. Back in 2014, Grupo México was the main character of one of the worst environmental disasters in the mining industry. The company was responsible for the leak of 40 million liters of copper sulphate to the rivers Bacanuchi and Sonora in the north part of the country. After this disaster that affected more than 22.000 people, the company promised that they would install water treatment plants, but never did.
Barrick Gold corporation: “Our corporate vision clearly sets out what sustainability means to us and what we want to achieve. It is rooted in a belief that to operate successfully we must deliver long term value to all our stakeholders; and manage our impacts on the wider environment. That is why we invest in community-led development in order to create thriving local economies and apply international best practice when it comes to protecting people and the environment. We live this vision every day.” This extract is taken from the sustainability page of Barrick Gold Corporation. In reality, Barrick Co has been one of the clear examples where Canadian mining companies have not complied with the agreement 169, for example using an extremely high percentage of the accessible running water. Therefore, mining companies should obey the business and environmental laws not only of the country where the mines are located, but of their country of origin.
Possible solutions
It is critical to find new solutions in the matter to balance the situation between Latin American communities, their environment and industries. The ideal situation, of course, would be that these companies exit the territory, but as we know, economic benefit is way too powerful for this to happen. Therefore, we present some measures that could be taken to reduce this harmful impact in the Latin American communities.
One of the solutions we suggest is applying a tax to each of the companies operating in the affected areas. This amount could be destined to perform research studies in new technologies and processes to develop cleaner energies to use, studying new ways of extracting materials without damaging the environment and looking for substitute substances.
Regarding the legal framework, companies should not only be affected by the legislation of the country they operate in, but also under the country of origin’s laws. As we have analysed, most of the countries where these industries are located have a big influence on the local Governments - this “Corporatocracy” must be controlled from the outside, as they only care about economic benefits.
Another measure that should be taken in the short run is to give subsidies to affected communities so that they can get out of the area and get to a place with normal living conditions. It is not ethical to expel local people from their territories, but at this point, their surroundings are so polluted that life cannot be sustainable any more.
In terms of helping nature conditions to improve and propertly clean polluted areas, we think it should be crucial to apply policies that control the amount of emissions permitted to companies. Decontamination plans proposed by Governments should be revised so that they are really meant to manage the damages. Regular and compulsory analysis on toxic substances in each area should also be practised.
Suggestions:
📽️Video: Impacts of mining - African Coalition for Corporate Accountability.
The objective of this multi-year project is to build a multimedia toolkit that educates, empowers, and connects communities impacted by extractive industries. The toolkit aims to stop human rights abuses before they occur and to put communities in a strong position to protect their rights and fight for justice.
📽️Video: The Heart of Our Earth: Community Resistance to Mining in Latin America - LAB Latin America Bureau
LAB wanted to amplify the voices of hundreds of affected communities all over Latin America who are fighting to protect their land, water supplies and culture against the destruction caused by mining, in a printed book and website including photos and videos.
🎙️Podcast: The Aftermath: Open-pit Mining in South America.
In this episode of The Aftermath, host Côme Cabrère is joined by McGill Professor Daviken Studnicki-Gizbert, to talk about Montagne D’or, expand on the broader theme of resource extraction in Latin America, as well as the potential long-term consequences.
📚Book: A History of Mining in Latin America - From the Colonial Era to the Present - By Kendall Brown.
New World bullion stimulated the formation of the first world economy but at the same time it had profound consequences for labor, as mine operators and refiners resorted to extreme forms of coercion to secure workers. In many cases the environment also suffered devastating harm. All of this occurred in the name of wealth for individual entrepreneurs, companies, and the ruling states. Yet the question remains of how much economic development mining managed to produce in Latin America and what were its social and ecological consequences.
Links used:
Codelco's sustainability report
Veragold Group > Our Environment
GrupoMéxico Sustainable Development
Las empresas mineras canadienses en Chile "utilizan todo el agua que los agricultores necesitan"
La tragedia minera de Pasta de Conchos en México
Frenar el modelo extractivista, un gran reto para López Obrador en México
Estudio advierte que la minería afecta al 31% del territorio indígena en la Amazonía
La minería de América Latina en 300 conflictos
Tiroteo entre mineros e indígenas brasileños deja tres muertes
La voracidad minera asfixia a los indígenas venezolanos
La minería amenaza el centro sagrado del mundo
El legado «tóxico» de Canadá en América Latina
Mercurio y plomo amenazan población en América Latina
Panamá inicia la negociación de controversial contrato con minera canadiense
Riesgos ambientales y escasez de recursos desafían la minería en América Latina
Protestas sociales ayudan a control de megaminería en Argentina
Minería en América Latina: no hay desarrollo sin sostenibilidad
La minería metálica contra el desarrollo humano sostenible
MiAMBIENTE abre proceso administrativo por derrame en Minera Cobre Panamá
Panamá ha otorgado 199,112 hectáreas en concesiones mineras
Panamá: minería arrasa con bosques del Corredor Biológico Mesoamericano
Business Panamá Group - Mining
Understanding the true costs of mining in Latin America
Canadian Mining Companies Are Destroying Latin America
Resource Extraction and Conflict in Latin America - Universidad de los Andes