Mining War in Ecuador

In May 1997, after repeated attempts to meet with government officials to express their opposition to the project, about 200 residents from 8 communities surrounding the mining area occupied the company’s mining camp. When mining and government authorities failed to appear for the meeting requested by residents, protestors burned the camp’s wooden structure as an expression of the community’s rejection of the mining project. Prior to lighting the match to the gasoline-soaked building, furniture, utensils, etc. were inventoried and stored in the community center. Several weeks later, the items were transported by mule to the parish seat three hours away where they were delivered to municipal authorities. Three peasants were charged with terrorism, subversion, and destruction of private property. Members of the Organization for the Defense and Conservation of Intag (DECOIN) and Accion Ecologica, an environmental organization in Quito, were named as unindicted co-conspirators, though neither organization was involved in the mining camp incident. Mitsubishi pulled out of the project shortly afterwards. 

Alternatives to Mining 

R ealizing that it would only be a matter of time before another company came along to exploit Junin’s copper, local residents worked to develop sustainable development alternatives to the boom and bust economy of extractive resource exploitation. With its primary forests, waterfalls and biodiversity, the area has great ecotourism potential. With help from U.S. and European environmental groups, Carlos Zorrilla, president of DECOIN, raised funds so that the community was able to buy about 5,000 acres of land and set up an environmental preserve. There is also a “fair trade” coffee-growers’ association that markets shade-grown organic coffee in fair trade venues in the United States, Japan, and Europe. Association members receive more than double the price paid by local buyers for their coffee. In September 2000 the Cotacachi Municipal government approved the declaration making the county the first Ecological County in Ecuador.      

The ordinance provides for the municipal government to “prioritize and encourage sustainable economic activities over all others, declares the conservation of native forests and biodiversity a priority, and prohibits the establishment of industries that contaminate the environment with toxic substances, such as heavy metals.” 

Mining Conflict: Round Two 

A ll this did not discourage Ascendant Holdings from acquiring the Junin property in July 2004. Ascendant is not a mining company; it is a mine promotion company. They speculate on new mining properties, do feasibility studies, and then sell the property to a large mining company for a hefty profit. With China’s recent industrial expansion, Chinese corporations are on a mineral acquisition binge and are willing to pay premium prices for a reliable supply of copper. Ascendant is registered in Canada and listed on the Bermuda Stock Exchange. The company is working on a public offering on the Toronto Stock Exchange, according to CEO Chris Werner of Sheboygan, Wisconsin. The firm’s president, Paul Grist, has an office in Quito. 

In contrast to the recent past, most mining companies have recognized that controversial mining projects cannot proceed without the informed consent of the local community, or a “social license to operate.” Not Ascendant. Without informing the local government, the company set up a camp less than a mile from Junin’s community reserve. DECOIN has objected to the company’s invasion as a violation of the local consent provision of the Ecuadorian Constitution as well as the municipal ordinance that declares Cotacachi an Ecological County. It appears that company personnel aim to reestablish the camp at the old Mitsubishi site. This area is wholly within the community reserve. Furthermore, local residents have reported that mining company officials are trying to create divisions in the community by collecting signatures asking for the removal of families in the Junin area that oppose the mine.

Paul Grist has responded to criticism of his company by saying that roughly 75 percent of local inhabitants throughout the region are supporting them. However, at an August meeting, representatives from five communities surrounding the Junin mining concession met in Barcelona, one of the potentially affected communities, and reaffirmed their decision to reject the presence of Ascendant in their communities by signing the Barcelona Declaration. The declaration rejects the actions, intimidation and threats aimed at their communities and local opposition leaders. It also reaffirms their desire to seek more sustainable and less destructive projects which do not cause divisions within their communities nor the resettlement of their communities and neighbors. 

The mayor of Cotacachi, Auki Tituana, a Kichwa Indian, has asked for an injunction from the Constitutional Tribunal to invalidate the Junin mining concession, which he believes was illegally granted by the federal government. At a July 2004 rally organized and paid for by Ascendant, the company’s representative, General Cesar Villacis, publicly accused the mayor of hiring a community leader to kill him. 

Organizers are Slapped 

A scendant responded to this outpouring of local resistance by suing the Intag monthly community newspaper for libel. INTAG is the main source of information about the consequences of mining. The company claims that damages suffered at the hands of the newspaper amount to a million dollars. The company is also suing for their legal fees and court costs. The article the company found offensive was the report of a community meeting on the proposed mine where various government officials and locals pressed their views. “We’re proud of our contribution for the past four years to the creation of a community with the information necessary to distinguish between truth and lies, and thus able to make decisions based on facts...we will not allow the miners to silence the voices of those protagonists,” said Mary Ellen Fieweger, editor of the paper. 

In the U.S., this kind of bullying tactic is called a Strategic Lawsuit against Public Participation or a SLAPP suit. The aim is to intimidate and silence those community members who dare to raise legitimate questions and concerns about the local community impact of various corporate-sponsored projects. The lawsuits are rarely, if ever, successful because they are blatant attempts to stifle free speech and dissent, rights guaranteed by the Constitutions of both Ecuador and Canada. They do, however, drain the opposition of energy and resources, which is why they are so popular with transnational corp- orations. 

DECOIN has organized a letter writing campaign to protest Ascendant’s SLAPP suit and has been offered pro-bono legal assistance from the Center for Economic and Social Rights (CDES) based in Quito. CDES is also taking the case to a special Ecuadorian court to challenge the legality of the mining concession. 

Fraud Investigation 

S upporters of DECOIN have asked the Toronto Stock Exchange and the Ontario Securities Commission (OSC) to investigate a possible case of fraud involving Ascendant’s claim that the Junin deposit is “one of the largest undeveloped copper-molybdenum deposits in the world” at 1.36 billion tons. This figure exceeds Mitsubishi’s earlier estimate of 318 million tons by such a large margin as to raise serious questions of misleading and inaccurate information being sent to potential shareholders. While market conditions frequently result in upwardly revised estimates of economically recoverable ore, the magnitude of this discrepancy stretches credibility. The earlier estimate was based upon diamond drilling; the upwardly revised estimate is based upon Ascendant’s in-house reevaluation.

Resisting Colonialism 

T he time when resource corporations could ride roughshod over the rights of resource-rich communities in Latin America is long since past. The centralizing and anti-democratic tendencies of neoliberal reforms advanced by the World Bank and the IMF have generated decentralized and democratic tendencies among indigenous people, peasants and workers. In 2002, popular protests halted the Bechtel Corporation’s privatization of Cochabamba’s water system and several mining ventures in Bolivia. The following year, President Gonzalo Sanchez de Lozada tried to push through a controversial deal to export Bolivia’s natural gas through Chile to the U.S. The move provoked mass protests and he was forced to resign. His successor, President Carlos Mesa, offered a referendum to give Bolivians a voice in the government’s plans for the gas industry. 

In neighboring Peru, the Manhattan Mineral Corporation, a Canadian company, had mistakenly assumed that because they had acquired a concession from President Fujimori to develop the Tambo Grande copper-zinc deposit, they could construct a mine. In June 2002, residents conducted a referendum on the question of whether the mine should go forward. Over 93 percent of those participating voted “No.” Manhattan Minerals’ stock price fell approximately 30 percent in the following days. In 2003 the Peruvian government terminated the company’s option on Tambo Grande. Canada’s Northern Miner, a mining industry newspaper, editorialized (12/3/04) about the lessons of Manhattan Minerals, which was forced to write off a $60 million investment for a penny on the dollar. “It wasn’t legal uncertainty that killed the Tambo Grande project. The development met with sustained resistance from both local landowners and First World activist groups, who raised the public’s consciousness with a tendentious advertising campaign against Manhattan Minerals.”