Call It What It Is:
Corporate Social Responsibility: Only So Far As Its Good Business
How Canadian mining companies behave in Latin America: Pascua-Lama (Chile) Vs. Marlin Mine
(Guatemala): The role of business, state and civil society in Canadian-Latin American mining.
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“(I)f China becomes the factory of the world and India its services
provider, what is left for Latin America, except the export of natural
resources?” - Blouin (2008, p. 2)
This question in a report published by the Canadian International
Council on Foreign Policy in the Americas feels like an updated version of
William Blake’s ‘Europe supported by Africa and America’ engraving. The engraving
features a fair skinned woman (Europe) propped up by two women; one with a
dark complexion (Africa) and one warm (America). Created in 1796, Blake’s
engraving portrays the colonial relationship wherein the privilege of an
imperialist power is perpetuated by services rendered by adjacent figures.
Their intertwined arms create an infinity symbol, suggesting that there is
reciprocal relationship between all three actors; however, the adjacent
figures are clearly cast as actors in this dynamic whose position ultimately
benefits ‘Europe’ most out of the three (Blake 1796). Almost 220 years
later, Bloudin’s question offers a sobering and stark perspective
reminiscent of Blake on the place of Latin America in the current globalised
economic network.
The narrative of Latin America being cast in this adjacent position is
not new. Extraction of natural resources in the region has been a central
theme in Latin American development since Conquest (Bazo & Studnicki-Gizbert
2013, p. 73). Applying the imagery of Blake’s engraving to Latin American
history since Conquest, the name of the imperialist power changes. The name
reflects the relevance of the rise and fall of empires. ‘Europe,’ as the
imperialist power in Blake’s engraving, was relevant to the time it was
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created. It could have also alluded to a specific European power such as the
United Kingdom or the Spanish Empire. Over time, the imperialist power
occupying this space would have been the United States of America in
addition to Europe. Most recently, the northern neighbour of the United
States has been thought of as a highly relevant imperial power in
international relations literature (Gordon & Webber 2008, p. 64).
Canada’s Strategy for Engagement with the Americas was “renewed” in 2012 “with a
vision of a more prosperous, secure and democratic” relationship with Latin
and Central America (International.gc.ca 2014). This idea easily translates
to the proclamation that the Canadian state will actively seek a prosperous
economic engagement, increased business security, and amenable governments
in the region. I posit actively over aggressively since the actions of an
imperial power like Canada do not need to reflect actual invasions, forced
settlements or territorial conquests of Latin America. Rather, the
historical influence of the extractive industry over the region since
independence from the Spanish in the early 1900s has made modern Latin
American states highly amenable to the influences of imperial powers.
The parallel drawn from Blake’s work to the current climate of
extractive industry concerning Latin America is as follows: Latin America
has been cast as essential to the success of an imperialist power through
its own disempowerment. This refers to orchestrating the relationship
between the countries of Latin America and the ‘imperial’ power of the time
in a way that never truly allows for the former to maneuver out of the
‘supporting role’ position. This relationship will be supported not only by
the imperialist state power, but by powerful economic actors who hold the
favour of the state. Returning to the theme of natural resource extraction,
when conceiving Canada as a relevant imperialist power, we should note that
the Canadian mining companies addressed in this paper have certainly
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received legal and financial backing from their home governments and
legislators (Heidrich Blundell 2013 p. 3).
What makes a current study of the extractive industry in Latin America
interesting is the dynamic between mining companies, their home supporters
and modern Latin American state institutions. The Latin American nations
discussed in this paper are not new to foreign bodies willing to invest in
mineral extraction; rather, the strength of the individual modern state
apparatus is noticeably different in each subsequent case. The state
apparatus consists of the three arms of government of the Latin American
Republic we are concerned with, the executive, legislative and judicial.
Evidently, these arms serve to reinforce the legitimacy of the government as
well as acting an avenue for upcoming and local civil society concerns. In
the coming analysis, the tension between Latin American civil society
actors, Canadian mining companies, and the state apparatus of all actors
concerned will illustrate the complex relationship between this version of
Blake’s engraving.
The relative strength of modern Latin American states as compared to
Canadian mining companies and the Canadian state supports of the extractive
industry will be a crucial factor in determining the makeup of the power
dynamics in each scenario (Gordon & Webber 2008, p. 64). This connection
suggests that the dynamic between Canadian mining companies and
weaker/stronger Latin American states will translate into palpable
differences in the behaviour of said businesses. Differences will be seen in
the details of the economic, legal, and social relationship between the
aforementioned actors. The capacity for resource wealth management in the
Latin American state will be a framing mechanism for this relationship.
Resource wealth management includes several areas such as the implementation
of taxation schemes and reinvestment of royalties and taxes into selective
programs and areas. Tax rates outlined in legal agreements are
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straightforward to discuss; however, reinvestment schemes are another area
that merits analysis.
An integral part of this analysis will be the extent and reasoning
behind ‘socially responsible’ investment on behalf of Canadian mining
companies. This kind of investment is either done in partnership and
conjunction with Latin American state resources or simply with its blessing.
Corporate Social Responsibility or CSR refers to the idea that businesses
should invest in areas outside direct corporate concerns to foster a
cooperative social environment from which to continue business, which in
this case is mineral extraction (North, Patroni & Clark 2006, p. 3). There
are many criticisms to this approach, and the instances where we see CSR
investment on behalf of mining companies will illustrate an underlying
desire to fundamentally further business initiatives (Weinstein 1997, p.
84).
Pitting powerful imperialist economic actors in conjunction with the
Canadian state against any Latin American state ultimately leads to the same
narrative with the latter playing a supporting role. Developing the state’s
strength has the capacity to challenge such roles; however, post Cold-War
neoliberal economic theory and the legislative agreements that enshrine it
weaken the capacity of the Latin American state overall (North, Patroni &
Clark 2006, p. 6). The ultimate goal of extractive industry investors is to
foster an environment conducive to the reproduction and perpetuation of
invested capital (North, Patroni & Clark 2006, p. 6). In neo-liberal
economic terms this is simply ‘good business.’ An important part of this can
be conducting business in a way that sidesteps strengthening the host state.
Mining companies may invest in social development areas, but they avoid
state capacity building projects. For example, constructing infrastructure
projects, such as schools and bridges, and providing high paying albeit
temporary employment while avoiding proportionally fair taxes, or creating
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enclave economies serve to bypass and ultimately weaken the state (Jamasmie
2012; CBC 2012; Heidrich & Blundell 2013, p. 1). The benefit of a weakened
or complacent host state is the weakening of the formal apparatus that has
the mandate to regulate and critique the behaviour extractive industry
investors. The primary directive of these investors is to maintain an
economically viable project. To what extent this includes CSR initiatives
remains to be seen.
Let’s call extractive industry behaviour what it is, and what it
always has been: investments whose purpose is to ensure the continuation of
business. Latin American state strength is stronger than in the 19th
century; however it is the interest of the extractive industry to only
encourage that growth so far. When faced with states of different strengths,
the approach of industry actors must be tailored accordingly. Comparing the
extractive industry relationships of different Latin American states will
illustrate is that at the turn of the century mining companies must
negotiate with these states and civil societies in ways that were not
necessary before.
The Latin American states in this analysis are the Republics of Chile
and Guatemala. The mining operations examined here are firstly, the Barrick
Gold Corporation also known as ‘Barrick’ owned Pascua-Lama operation on the
border of Chile & Argentina; and the notorious Marlin Mine owned by GoldCorp
Incorporation. Chile and Guatemala differ on state and institutional
strength, since both modern states inherit a comparable (however not
transferable) experience with state building projects and extractive
industry influence. Presently, the Chilean state holds certain state
apparatus and extractive industry relationship strengths over Guatemala.
This suggests that the Chilean state may be better equipped than the
Guatemalan state to negotiate better terms with regards to Canadian mining
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companies. Also, the tax and royalty rates on mining differ significantly
between the two Republics. Furthermore, Chile enjoys a better defined
economic relationship with Canada than Guatemala. This also suggests that
the Canadian-Chilean state relationship has more potential to lead to
reinvestment in compliance with Chilean state-defined national interest;
even if it is not directly in sync with the business interests of mining
companies (Jamasmie 2013f). Interestingly, the judicial arms of both
Republics have illustrated inconsistencies with the endeavours of the
extractive industry and their respective constitutions (Gonzalez 2006;
Maheandiran, DiFederico, Aguilera 2010, p. 6; Dougherty 2011, p. 404). Even
more interesting is that both mining companies maintained their permits to
operate despite these irregularities. Both countries have also experienced
recent positive changes in mining tax and royalty schemes (GoldCorp Inc
2012; PriceWaterhouseCoopers 2012, p. 21). Consequently, we can see that
while both states are stronger contenders than in previous centuries, the
structure of the power dynamic does not fundamentally change from one
portrayed in Blake’s engraving.
We begin this analysis by outlining the social and economic impact of
extractive industry behaviour from the early 19th century until now. From
this research comes an understanding of how and why Latin American states
appear to be so amenable to foreign mining investment. Next, we will examine
the current position of the Canadian state in relation to mining companies
including an analysis of Bill C-300. This bill would have served as a legal
foundation from which cases could be brought against Canadian mining
companies in Canadian courts for negligence and unsafe practices in overseas
mines (Keenan 2013, p. 112). The emergence of legal action against Canadian
mining companies despite the defeat of bill C-300 indicates the aptitude of
Latin American and Canadian civil society actors and the respective
legislative and judicial arms to bring such cases to light (Marotte 2013).
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This serves as a springboard to examine the legal frameworks that surround
Canadian mining in both Chile and Guatemala. It will include a comparison
between established legal frameworks as well as recent taxation changes
implemented by the Chilean and Guatemalan State. Finally, we will discuss
the reasoning and impact of CSR activities on behalf of mining companies in
Chile and Guatemala.
Amenable Neighbours
Modern Latin American states have inherited a history that makes them
quite amenable to the influences of foreign extractive industry actors. An
integral part of maintaining this influence resides in ensuring that the
Latin American state never gains the strength to rival that of the foreign-
owned extractive industry power (Weinstein 1997, p. 94). However, to claim
that Latin American state institutions are hapless in the face of foreign
business initiatives would be to give too little credit to any modern Latin
American Republic. Instead, we should see the scenario as clearly crafted
and heavily nuanced. The history of the extractive industry in Latin America
has promoted the underdevelopment of the state (Frank 1967). Hence, the
modern Latin American state is left with few alternatives other than to make
deep concessions to extractive industry investors. The primary directive of
these investors has always been to maintain an economically viable project
(Veltmeyer 2013, p. 86).
Advocates of the extractive industry would argue for the potential
financial gains of development projects in the host countries (Woodside
2009, p. 5). However, such projects depend on the strength of the state;
subsequently, extractive industries do not traditionally aid in
strengthening the state apparatus (North 2006, p. 6; Bazo & Studnicki-
Gizbert 2013, p. 73). Until recently, there has been little rhetoric
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regarding foreign investors aiding and strengthening Latin America state
institutions (Randall 2010, p. 38; Blouin 2008, p. 8).The narrative is very
clear on being highly conditional in aiding Latin American state
institutions in a way that will continue to include foreign owned extractive
industries (Government of Canada 2009, p. 3). Looking at the Latin American
narrative, we see an essentially linear relationship of the Latin America in
a Blakean supporting role from Conquest to interaction with modern
‘imperialist’ states. This narrative sets the stage for modern Latin
American states to be amenable to foreign investment.
The composition of newly independent Latin American states in the 19th
century serve as a backdrop for the ease of which they serve a Blakean
supporting role in the modern global economic network. At this time, newly
independent states were cast into this role by extractive industry actors
under supporting development of the state. In the 19th century was
exemplified through extractive companies being well-placed within the
executive infrastructure of burgeoning states; and hence implementing
systems that ultimately benefit their investment above other actors (Salas
2009, p. 207). A poignant example of this is the setup of enclave economies.
Extractive operations in 19th century Latin America:
“contributed little to national economic development because, for the
most part, they were organized in "enclaves" isolated from the
functioning of the national economies: the operations were almost
always owned by foreigners ...who repatriated profits to their home
countries and investors. Because the activities were technologically
sophisticated and capital-intensive, the relatively few workers hired
could scarcely generate enough demand for goods to spur the growth of
national markets, especially when they were required to buy
necessities from corporate-owned commissaries” (North 2006, p. 3).
Enclave economies serve to promote the underdevelopment of the state by
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providing services that employees and surrounding communities of extractive
projects consume while bypassing the reinvestment of strength into the host
state apparatus. As nation-building projects were steadily under
construction, extractive companies were still able to maintain important
influence in the region (Salas 2009, p. 207). Nation-building projects were
taking place all over the region during this time, and by the end of the
20th century differences in the strength of the state apparatus between
countries could be observed.
At the beginning of the 20th century we see the first signs of
comparable state strength. Maintaining that extractive companies continued
to exert considerable influence over the region, Chile was one of the
countries whose state apparatus was able to reinvest "in infrastructure and
public services useful for industrialization and social advancement". By
contrast, in countries where "the state did not intervene to tax and
otherwise regulate mining operations, the contribution of mining to national
economic development could be practically nil” (North 2006, p. 4). By the
mid-20th century, both Chilean and Guatemalan governments sought to
implement land reforms that would have threatened foreign-owned extractive
operations (Miller 2011; Salas 2009, p. 206). Both governments were
ultimately removed from power by coups backed by the Central Intelligence
Agency in the mid 20th century (Miller 2011; Cia.gov 2000). These
dictatorships served to literally capture the state and further manipulate
it to bend to the will of extractive industry exploiters. The trajectory of
the political turmoil of this time in both countries served to mold the
strength of their modern states.
In Chile, the Pinochet regime served to bolster the relative strength
of the modern Chilean state. General Pinochet ruled from 1973 to 1990 and in
those years implemented neoliberal economic reforms which served to aid
business interests in investing in the country (Gordon & Webber 2008, p.
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73). The consecutive democratic governments of the left-leaning coalition La
Concertación (and the one right wing Renovación Nacional term) have maintained yet
(moderately) modified these economic reforms (Gordon & Webber 2008, p. 73;
Jamasmie 2013f; Woods 2012). Today, Chile has emerged as the Latin American
country with the most neoliberal economic climate of the region. Chile has
the most Free Trade Agreements (FTA) of any Latin American country
(Department of Foreign Affairs Trade and Development 2013, p. 1).
Guatemalan intervention in the second half of the 20th century also
revolved around economic concerns of the United States’ extractive industry
(Miller 2011; Imani, Maheandiran, Crystal 2012, p. 5). However the
Guatemalan experience has created a less fortified state than Chile (Silva
2002, p. 132). An integral part of this difference is due to Guatemalan
Civil War (GCW), which lasted from 1960 to 1996 (Silva 2002, p. 132). The
GCW was a tumultuous time that served to weaken the state through seeing
numerous heads of state rise and fall from executive power as well as
massive human rights violations (Miller 2011). When comparing the Chilean
and Guatemalan experience during this time, we see that the capture of the
state in Chile started later, did not last as long, and was more a tightly-
controlled project than in Guatemala. Peace accords were ratified in
Guatemala in 1996, in conjunction with the end of the GCW and the return to
democracy (Miller 2011). Presently, Guatemala has become the “second largest
trading partner [for Canada] in the Central America region” (Government of
Canada 2014a). In conjunction with the Canada-Chile FTA signed in 1997, the
related treaties from both countries serve as international legal and
economic tools that successfully envelope these states in a Blakean
supporting role. Hence we see that at the turn of the 21st century, both
states are important to Canadian interests in Latin America.
In the early 21st century, Latin American states have an inherited a
history of interventions by foreign powers who desire natural resources.
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This is coupled with state institutions who have always had powerful
extractive industry actors in their ear and a firm guiding arm around their
shoulders. However, what we see in the 21th century is the natural
progression of this dynamic: with a stronger state apparatus than before and
a civil society to match, extractive industries have had to take the
concerns of such actors into consideration more seriously in order to
continue business relationships.
While recalling the literature promoting the positive impact of the
extractive industry through taxation and job creation, it is important to
note where Latin America stands at the beginning of the 21st century in
regards to these and more supposed benefits. The results have been
underwhelming. “Latin America's ratio of debt to gross domestic product
(GDP) stood exactly where it was” before the Cold War and during dictatorial
rule of the 70s and 80s (North 2006, p. 6). “Even by their own stated goals,
liberalization and export orientation proved to be failures” (North 2006,
p. 6). This suggests that the extractive industry did not bring important
benefits to Latin American states over the centuries as supporters of the
industry would say (CBC 2012). What modern Latin American states can do is
try to derive benefits as realistically as possible. Hence, extractive
industry actors must accept certain conditions imposed by Latin American
states in order to continue business relations. One way to do this is under
better taxation and royalty schemes (Forest 2010; Ernst & Young 2012;
GoldCorp Inc. 2012). It is through such schemes that modern states and civil
society actors can both benefit.
Civil society has always been an important player in the relationship
between extractive companies and Latin American states. While the
dictatorships of the late 20th century did serve to weaken civil society to
a degree (in Chile more so than Guatemala); the “constituent power” of civil
society has asserted itself and its need to be recognised (Cameron 2008, p.
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24; Urkidi 2011, p. 692). Protests in Chile led the state and extractive
companies to implement better labour laws in the early 20th century (North
2006, p. 4). In the 21st century, both Chilean and Guatemalan indigenous
groups have enacted their constituent power as civil society actors and
exerted considerable amounts of pressure on Canadian mining companies
(Jamasmie 2013b; Jamasmie 2013b).
The renewed strength of the Latin American state and the pressure
exerted by civil society on extractive industries has created a unique
dynamic for the latest wave of relationship between these actors.
Nonetheless, this dynamic still entails a relationship that is defined with
colonial, imperialist undertones (Gordon & Webber 2008; Veltmeyer 2013). The
modern dynamic between stronger Latin American states, civil society, and
foreign extractive industry actors is dubbed a “new extravisim” (Veltmeyer
2013, p. 82). This system is identified through the importance of the Latin
American extractive industry to the globalised world (ultimately supporting
an imperial power), and the relevance of the foreign capital investors on
which it depends (the investment capital of the imperial power). Hence,
modern Latin American states are concerned with:
foreign direct investment in the natural resource sector and the
export of natural resources in primary commodity form. What is new
about this strategic shift is that it is based on a new policy regime,
designed to ensure a more equitable sharing of the resource wealth
through the collection by the government of resource rents or that the
resources themselves in some cases ….are nationalised and managed in a
sustainable way. What this means in practice is a new regulatory
regime designed to regulate foreign investments in resource extraction
and the operations of the mining companies in order to ensure a more
positive economic development outcome and to mitigate or protect the
society and the economy, as well as the environment, from the all-too-
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well-documented negative consequences of natural resource development
(Veltmeyer 2013, p. 82).
This is a new form of resource management that is a direct result of the
current dynamic between modern Latin American states, civil society and the
relevant ‘imperial’ power addressed in this paper, the Canadian state and
its legal and rhetorical supports of the extractive industry. The Blakean
supporting role is still not fundamentally altered, but the relationship
does grow more complex and reciprocal. Amazingly, the words “colonial
mentality” are still relevant for critics of the amenability and willingness
of modern Latin American governments regarding extractive industry investors
(Jamasmie 2013a). Environmental integrity and territorial sovereignty are
two areas of concern to critics; while proponents of the industry try to
frame these problems as solvable through proper project management (Jamasmie
2013a). The latter once again maintains Blakean proportions.
Presently and moving forward, Canadian extractive industry investors
must avoid previous presumptions about how to most efficiently interact with
modern Latin American states (Cameron & Hecht 2008, p. 24). Not only do
industry actors need to conduct business in way that advances their own
financial goals; but must do so in a way that also supports “democratic
developments” of the Latin American state (Cameron & Hecht 2008, p. 24).The
major presumption that has defined previous waves of the relationship
between Latin American state and foreign extractive industry actors is that
“economic and political reforms are [always] mutually reinforcing” (Cameron
& Hecht 2008, p. 24). In other words, maintaining a political climate
conducive to the advancement of the extractive industry will inevitably
bring rewards to those involved in the advancement of the industry. This
presumably includes all actors and members of civil society.
The fundamental problem with this presumption is that such “political
and economic reforms” have served to weaken the state as a critical actor in
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that relationship (Cameron & Hecht 2008, p. 24). The trajectory of the
extractive industry as outlined above has created an environment where the
private sector is assigned “the responsibility that most international
development theorists ...assign to the state or the public sector”. It
refers to the responsibility of ensuring “economic growth is socially
inclusive”, that policies are simultaneously “pro-growth” [and] “pro-poor”
(Veltmeyer 2013, p. 86). Assuming that the private sector is willing or
capable of fulfilling such a narrative is highly problematic because,
according to academics in the field, this logic is fundamentally flawed. The
idea that “a capitalist institution, the mining corporation, whose sole
duciary responsibility is to generate pro ts for its shareholders” could fi fi
“act as an agent of socially inclusive development” is irreconcilable for
some (Veltmeyer 2013, p. 86). While Gordon & Webber (2008) echo this by
pointing out the insatiable and self-perpetuating nature of capital;
Veltmeyer (2013) talks about this reality as the new resource wealth
management scheme. Here we are reminded again of Blake’s engraving. The
current system is an update of the old. It is not a break from the system,
just a rehashing of the details of the same one.
The expansion of the extractive industry over the centuries
subordinates all actors involved to the “whims of capital” (Gordon & Webber
2008, p. 65). Extractive industry investors have the means to input capital
into a project and collect benefits to redistribute or reinvest as it sees
fit (much like a the traditional definition of the state). Hence, in our
modern context extractive companies have the potential to act as “quasi-
diplomatic envoys on behalf of the Canadian government” (Sagebien et al
2008, p. 120). What follows from this is a conviction that private industry
actors can recognise having public sector responsibilities (Government of
Canada 2014b). In light of this climate of highly amenable Latin American
states, “social and environmental concerns are increasingly addressed
through voluntary codes and corporate social responsibility (CSR) programs
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favoured by the Canadian and other governments” (North & Young 2013, p. 96).
With what reasoning and to what extent such programs are implemented will
highlight the criteria of the necessity of those programs according to
extractive industry investors.
Corporate Social Responsibility
The modern legal framework surrounding Canadian and Chilean/Guatemalan
relations is a product of the history of extractive industry influence over
the region. The modern neoliberal economic climate is characterised by Latin
American states whose relationship has been heavily crafted to be highly
amenable to foreign extractive industry actors. In light of this economic
and political era, such aforementioned actors and investors are faced with
an ideological shift which explicitly addresses something that was not so in
previous eras of the extractive industry in Latin America. This is the idea
of Corporate Social Responsibility (CSR); the concept that (in this case,
Canadian) businesses operating in other areas of the world should strive to
behave in an “economic, social and environmentally sustainable manner”
(Government of Canada 2014b). For a business to operate in such a way that
addresses these areas is to recognise that certain public sector concerns
are being encouraged to be addressed by the private sector (Sagebien et. al
2008, p. 120).
CSR practices are defined as “voluntary activities” wherein businesses
conduct themselves ways that acknowledge and address social, economic and
environmental concerns within specific operations as well as surrounding
communities (Government of Canada 2014b). Keeping this shift in dynamic in
mind, mining companies step into a more present and complex relationship
than in previous times. However, companies are sure to voluntarily address such
issues only as far as business sense dictates (Bazo & Studnicki-Gizberta
2013, p. 72). Nevertheless, the push for businesses to behave responsibly
and address such areas is part of the present dynamic between modern Latin
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American states and foreign extractive industry investors. The firm guiding
arm of extractive industry influence now needs to move in conjunction with
the Latin American state, and not simply dictate to it.
The criticisms of businesses embracing CSR practices in a realistic,
practical sense echo the same concerns of previous eras. Echoing the
concerns of Cameron & Hecht (2008), the presumption is that “not only [are]
corporate and community interests ...compatible but also that the
differences between them are strictly quantitative (that is, a question of
dollars and cents) rather than qualitative (that is, based on completely
different visions of development)” (North 2006, p. 3). There is much room
for concern wherein companies taking on responsibilities due to a sense of
duty is not only unrealistic, but CSR actions undertaken by companies are
themselves temporary and unsustainable (much like the business nature of
extractive industries) (CBC 2012). Barrick Inc & GoldCorp Inc both have CSR
guidelines prominently featured on their websites. These guidelines address
human rights, environmental standards, occupational safety, security, and
ethical concerns of their extractive operations (Barrick 2014; GoldCorp Inc.
2014b). We will examine the practical impact of such policies in later
sections. The writing of CSR practices into the portfolios of extractive
businesses “reinforces the retreat of the state”, despite the “rhetoric”
that CSR practices can successfully bridge (or fill) “governance gaps” of
the countries in which they operate (North 2006, p. 8; Sagebien 2008, p.
112; Gordon & Webber 2008, p. 72).
Canadian Legal Framework - Bill C-300: Implications of defeat
In Canada, the pressure for mining companies to comply with CSR
practices and guidelines led to Bill C-300 (An Act respecting Corporate
Accountability for the Activities of Mining, Oil and Gas in Developing
Countries). Its narrow defeat in 2010 indicates of a number of things. One,
it is indicative of the influence mining companies have over the Canadian
17
government. Also, it is indicative of how businesses undertaking CSR
activities is likely to remain highly conditional and voluntary for the near
future (Simons & Macklin 2010).
Bill C-300 contained “prescriptive CSR (corporate social
responsibility) guidelines that would be binding on Canadian mining
companies operating in developing countries” (Dagenais 2010). It would have
assigned responsibility to the Minister of Foreign Affairs and Minister of
International Trade “to issue [these] guidelines”; furthermore, submit an
annual report to “both Houses of Parliament”on the “corporate accountability
standards for mining, oil or gas activities” of companies receiving
government funding (Openparliament.ca). These CSR guidelines would be based
on “World Bank Performance Standards, the Voluntary Principles on Security
and Human Rights and international human rights law” (Studnicki-Gizbert &
Bazo 2013, p. 76). Canadian mining companies receiving “political and
financial support” from Canadian federal bodies such as DFATD (Department of
Foreign Affairs Trade and Development), EDC (Export Development Canada) and
CCP (Canada Pension Plan) would be required to “demonstrate compliance with
these standards in order to receive” such support (Keenan 2013, p. 112).
Ergo, these agencies would also be “obliged to withdraw their support and to
condition future support on demonstrated compliance” with these standards
(Studnicki-Gizbert & Bazo 2013, p. 76).
The resistance on behalf of Canadian mining companies and by extension
the Canadian government to be legally being bound to comply with CSR
practices clashes with the push from local governments and Canadian and
Latin American civil societies to see such practices implemented. Critics of
the bill argue that implementing such policies would “negatively impact
Canada's competitiveness” in global mining. Some argue that Bill C-300’s
funding criteria and “complaints mechanism” “would have created a strong
incentive for Canadian companies operating in the developing world to
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relocate outside Canada or avoid financing” from government agencies (Keenan
2013, p. 111; Dagenais 2010). However, this is also a presumption that is
based on the unwillingness of extractive companies to invest beyond what is
strictly necessary for business purposes. While academics of the field are
highly critical of companies voluntarily behaving in such a way, other
research concludes that CSR practices can impact positively on a company’s
profit margin (Robins 2011). The problem therein lies that CSR duties can be
vague and hence difficult to measure (Tsoutsoura 2004). Bill C-300 could
have acted as an initial stepping stone in rectifying this vagueness.
Simons & Macklin call the defeat of C-300 “a missed opportunity” for
the extractive industry and Canadian government “to take leadership roles in
promoting ethical corporate conduct” abroad (2010). “The bill would have
helped to rehabilitate the industry's global reputation by showing that
Canada stands behind responsible corporate behaviour” (Simons and Macklin,
2010). Passing and enacting the bill could have been “a matter of good
public policy”; maintaining that Canadian extractive industry actors “be
held to the same human rights and environmental standards wherever they
operate” (Simons and Macklin, 2010).
Research conducted by Maheandiran et al (2010) and Tsoutsoura (2004)
respond directly to Dagenais’ (2010) claim that the bill would have
adversely affected Canada’s global competitiveness. Their research claims
the exact opposite of Dagenais; that CSR duties may drive up operational
costs so much so that mining companies abandon Canada. These contradictory
claims are based in ideology as much as data. Socially responsible practices
can produce sustainability and longevity of mining operations, and doing so
may drive up operational costs and diminish immediate profit margins.
Dagenais is from a school of thought that prioritises repatriating profits
from overseas extractive operations and sees the temporary lifespan of
mining projects and effects on the surrounding community as part of the
19
territory. Maheandiran et al. and Tsoutsoura take a critical approach to the
same issue; they understand the landscape of CSR duties differently and
rearranging those priorities.
Canadian Extractive Industry Legal-Judicial Tension
Despite the defeat of bill C-300, Canadian and Latin American civil
society have nevertheless used avenues within the state apparatus in the
continuing effort to hold Canadian mining companies accountable for
irresponsible behaviour overseas. In the face of the vastly “silent” voice
of Canadian corporate and government responsibility; a space opens in the
judicial arm of the Canadian government for civil society actors to push for
greater corporate accountability (Collenette 2013).
Recently there has been an increasing spotlight on HudBay Minerals
Inc. and a case of alleged human rights abuses in Guatemala. The plaintiffs
claim that they were subjected to physical and sexual violence at the hands
of security personnel “at a Guatemalan mine owned by a subsidiary” of HudBay
Minerals Inc. (Marotte 2013). While “similar accusations against Canadian
mining firms” have increased of late, “no similar lawsuit has made it past
the preliminary stages” (Gray 2013). In July 2013, Ontario Superior Court
Justice Carole Brown ruled that HudBay Minerals Inc. can be held liable in
Canada for the case (Marotte 2013). This ruling is as much a “precedent-
setting” case as it is a law changing one. This ruling comes up against the
“well-established corporate law principle that parent companies are not
liable for the actions of their subsidiaries” (Gray 2013). Co-counsel for
the plaintiffs, Cory Wanless stated that:
“It is the first time that a Canadian court has ruled that a claim can
be made against a Canadian parent corporation for negligently failing
to prevent human rights abuses at its foreign mining project. We fully
expect that more claims like this one will be brought against Canadian
20
mining companies until these kinds of abuses stop.” (Marotte, 2013)
Since the ruling, the plaintiffs of this case have been subject to
intimidation and manipulation in attempts to get them to drop charges
(Fletcher 2013). HudBay Minerals Inc has decided not to appeal the ruling,
so the case will eventually go to court (Posadzki 2013). This situation is
illustrative of the push for accountability of mining companies from civil
society actors. Pressure from this sector of society arises when these
concerns are not directly addressed by governments or industry decision
makers.
Canada-Latin American Legal Framework and Relationships
In Latin America, civil society actors have responded with similar
critiques of Canadian mining companies. The judicial arms of both Latin
American Republics are increasingly important actors in the push for
Canadian mining corporate accountability. We have already seen that certain
academics find the pursuit of socially responsible behaviour on behalf of
mining companies problematic. Undertaking such behaviour can be considered
the antithesis of the primary directive of any “capitalist institution” such
as a mining company (Veltmeyer 2013, p. 86). Others conclude that it is the
way of the future for mining (Robins 2011; Tsoutsoura 2004). Either way,
socially responsible behaviours are only seen from mining companies in Latin
America when deemed necessary to ensure that business relationships
continue. Interestingly, academics site inconsistencies with respect to the
dynamic of extractive operations and the respective constitutions of both
Chile and Guatemala (Gonzalez 2006; Maheandiran, DiFederico, Aguilera 2010,
p. 6; Dougherty 2011, p. 404). An analysis of both Republics’ relationships
with the Canadian extractive industry will highlight noticeable gaps and
differences between the two.
A report by the North-South Institute (2013) gives us some insight
21
into the different relationships between Canadian mining companies and Chile
and Guatemala respectively. In 2011, Canadian mining companies in Chile
employed 11,622 people and 2,030 people in Guatemala (Heidrich & Blundell
2013, p. 2). GoldCorp’s website currently cites 3,270 jobs at Marlin alone
(GoldCorp Inc. 2014b). Guatemala is particularly amenable to investment,
hence the increase in employment during a few short years (Dougherty 2011,
p. 404). The North-South Institute report also stipulates that Chile has
some of the best mining schools in the region, while Guatemala has none
(Heidrich & Blundell 2013, p. 3). With regards differences in tax rates, a
report by PriceWaterhouseCoopers (PWC) (2012) cites the highest level of
Chilean Corporate Income Tax at 17%, and ore and minerals at between 0-14%
(Ernst & Young 2012; Woods 2012). Canadian tax rates are noticeably higher;
with combined provincial and federal Corporate Income tax rate topping 31%.
At a provincial level, ore and mineral tax rates in Quebec, British Columbia
and Ontario vary from 16%, 2-13% and 5-10% respectively (PWC 2012). The
Guatemalan mining tax rate is 1%. This royalty is to be shared between the
national and municipal levels (Centre for Excellence in CSR 2014; GoldCorp
Inc. 2012). GoldCorp and the Guatemalan government agreed upon an increase
of the tax royalty rate to 4% at the beginning of 2012 (GoldCorp Inc. 2012).
The Canada-Chile judicial and legislative dynamic frames extractive industry
tension in the region, specifically surrounding the Pascua-Lama project.
Chilean Legal Framework - Judicial-Legislative Tension, Pascua Lama
In Chile, there exists tension regarding the constitutionality of
extractive projects. Specifically, concerns surround territorial sovereignty
and environmental integrity. Lets start at the turn of the 21st century. In
order for mining companies (such as Barrick) to operate in Chile; both Chile
and Argentina signed and later ratified the Mining and Complementation
Treaty in 1997. This treaty concerned natural resources that cross the
borders of Chile and Argentina; wherein both countries agreed cede certain
22
territorial powers in order to allow exploration and exploitation of
resources in the area (Bilaterals.org 2007). The Barrick owned Pascua-Lama
mine site is one such project. It exists on the border of Chile and
Argentina, with 75 percent of raw mineral on the Chilean side of the border.
The Treaty complements the Canada-Chile Free Trade Agreement (CCFTA) that
was also signed in 1997; and sets the legal stage for mining exploitation
(Gonzalez 2006).Barrick Inc operations rely on both the Treaty and CCFTA to
conduct business, and was heavily involved in “lobbying” for the Treaty to
come about (Bilaterals.org 2007).
However, inconsistencies exist with the provision of Canadian mining
permits and interpretations of the Chilean constitution. The legal framework
for such permits was molded in the time of transition out of dictatorial
rule of General Pinochet to the democratic government of Eduardo Frei
(Gonzalez 2006; Bilaterals.org 2007). According to critics, the Mining and
Complementation Treaty clashes with the Chilean constitution, which “clearly
states that absolutely no mining concessions shall be granted for any
deposit situated in border zones” (Gonzalez 2006). Furthermore, “the
concession-approval mechanisms, permits for services (road construction and
other infrastructure works) and even the very procedure through which the
treaty was ratified have all been criticised as unconstitutional” (Gonzalez
2006). According to critics, the Mining and Complementation Treaty should
have been treated an “organic constitutional law” instead of a “basic law”.
The former requires “the approval of two-thirds of Congress” while the
former only requires a simple majority (Gonzalez 2006).
Apart from the bilateral trade agreements between Chile and Argentina,
the CCFTA sets out provisions as to how Canadian mining companies are to
operate in Chile. The CCFTA sets out trade, environmental and labour
provisions that Canadian companies are expected to adhere to (Department of
Foreign Affairs Trade and Development 2013). The CCFTA is “the most
23
economically-significant trade agreement since the North America Free Trade
Agreement (NAFTA)”. For Chile, it was the first comprehensive free trade
agreement concluded with a leading industrialised country (Department of
Foreign Affairs Trade and Development 2013). Barrick has been sanctioned for
failing to meet environmental standards at the Pascua-Lama project. Despite
these concerns, extractive projects continue. However, where CCFTA
provisions, Chilean environmental standards investigation bodies and a
ruling by the highest judicial court of the Republic meet is where we find a
tenable boundary which Barrick cannot ignore.
In 2012 a Chilean court accepted an injunction on behalf of indigenous
communities concerned that the project threatens local water supply and the
integrity of nearby glaciers (Jamasmie 2013b; Jamasmie 2013c). Since then,
the Supreme Court of Chile cast a ruling demanding that Barrick comply with
environmental permit conditions (Barrick 2013). Barrick has been ordered to
cease operations at the mine site and also pay a hefty US $16 million fine
(Jamasmie 2013e). A revision of the order now demands that Barrick be
charged separately for each of the 23 operation permit infringements found
by the Chilean Superintendency of the Environment (Superintendencia del
Medio Ambiente or SMA). So far Barrick has been charged with 23
infringements, 22 of which the company acknowledges. (Jamasmie 2014). It
remains the responsibility of Barrick to address these irregularities before
mining operations can re-commence (Mineria Chilena 2014; Barrick 2013).
Barrick predicts that this may be by mid-2016; as opposed to previous plans
of mid-2014 (Barrick 2013).
In this case, Barrick initially failed to uphold certain environmental
standards concerning the Pascua-Lama mine site. It was through the concerns
of civil society actors with the recognition of such concerns by the
judicial arm of the Republic of Chile that such significant pressure was
able to be exerted on Barrick. Barrick has had to delay this project
24
approximately two year and has incurred significant financial and legal
repercussions.
In retrospect, it seems curious to assume that Barrick was
sufficiently careless in their management of this project; so much as to
allow the potential for such mismanagement to occur. Barrick not only is the
“world’s biggest gold mining company”, but the US$8.5 billion project “was
set to become one of the top gold and silver mines in Chile” (Business in
Canada 2013; Jamasmie 2014). It seems more likely that the management team
of the project was well read in the legislative regulations for the mine
site; however still chose to construct a project with such irregularities
that had the potential to incur such penalties.
Ultimately neither the concerns about territorial sovereignty nor
environmental sanctuary were upheld by the Supreme Court ruling. Barrick
will still be privy to operation permits, only so far as it complies with
environmental provisions that are in place to minimize environmental damage.
To eliminate the potential for such damage, mining permits would need to be
revoked. Chilean governments in the 21st century have not seriously
considered this alternative. Nor have extractive industry actors considered
it a possibility. Underlying reasons for this can be as colonial as they are
Blakean.
Barrick knowingly and purposefully tested the boundaries of
responsible behaviour at Pascua-Lama. Only when confronted with concerned
civil society actors and the responsiveness of the highest judicial court of
the Republic did Barrick reach an explicit boundary. The number of
irregularities found by SMA at this project is embarrassing and offensive.
In this scenario Barrick failed to comply with its CSR duties. The true
voluntary nature of CSR duties (which include environmental provisions as
stated by CCFTA and the Chilean government) is highlighted here as it will
be in the coming Guatemalan case. A company as large as Barrick has only one
25
excuse for not rectifying its lack of CSR duties before having the case
brought to the highest judicial court of the Republic. That excuse is
mandate. Barrick only agreed to rectify the situation when faced with a
ruling from the Supreme Court of Chile. The company’s statmate on the ruling
cites it as pleasing and stands behind its commitment “to operating at the
highest environmental standards at all of its operations around the world,
including at Pascua-Lama” (Barrick 2013). Pleasantries aside, here we see
real Canada-Chile legislative-judicial tension that represents the
bolstering of a Blakean adjacent accessory state to relevant imperialist
power. Based on this case, the relationship between the imperial and
accessory power may be going in two directions. Either, the chains of the
bond between the two are slowly breaking down, or they are simply getting
better defined in their eternal position.
These judicial, legal and financial issues that have all been cast
upon Barrick Gold in this case are quite noteworthy. These issues started
with concerned Chilean civil society actors, subsequently they were
acknowledged by the appropriate Chilean judicial arm and co-incided with
CCFTA provisions. This case of judicial-legislative tension stands as a
testament to the potential for Chilean civil society actors and Chilean and
Canadian state actors to bring about fundamental changes in how Canadian
mining companies operate. This case works because of the strong Chilean
state mechanisms responding to civil society concerns. In Guatemala, we will
see a comparable story with differences in state strength, state
responsiveness to civil concerns, and the logistics of bringing Canadian
mining company behaviour into question when warranted.
Guatemalan Legal Framework - Judicial-Legislative Tension, Marlin
We have seen various examples of clashes between Canadian mining
companies and the Canadian and Latin American judicial systems. In Canada,
26
we see the tension between HudBay Minerals Incorporated and the Canadian
judicial system. When this high profile case goes to court, it will call
into question the extent of responsibility the company holds for human
rights abuses that take place overseas at a mine owned by a subsidiary. This
case will have the potential to clash heavily with the established legal
principle that companies cannot be held liable in such cases (Gray 2013). In
Chile, “the world’s biggest mining company” Barrick Gold has incurred
considerable financial and logistical problems due to constitutional and
civil concerns raised by indigenous groups (Business in Canada 2013; Barrick
2013). The Supreme Court of Chile upheld the operational permit of Barrick
while temporarily suspending it until the company complies with
environmental regulations (Barrick 2013).
In Guatemala, GoldCorp has recently faced similar issues. In this
case, concerns surround the place of Canadian mining companies and
constitutionally protected indigenous and environmental rights (Maheandiran,
DiFederico, Aguilera 2010). The conflict between Goldcorp Inc. and the
Constitutional Court of Guatemala addresses the extent to which Goldcorp’s
activities recognise the legitimacy of these claims and the willingness of
the Guatemalan judicial system in responding to such claims (Dougherty 2011,
p. 404). The manner in which the executive arm of the Guatemalan state
apparatus responds to this tension is furthermore telling of how “lenient”
the state can be in responding to Canadian extractive companies (Dougherty
2011, p. 404). An analysis of the legal and taxation framework applicable to
Canadian mining companies in Guatemala as compared to the Chilean
relationship will show certain differences between the two. One observation
may suggest that the Guatemalan state has not yet achieved the same playing
power that the Chilean state has. This may be understandable, given the
different state and institutional strengths of Chile compared to Guatemala
(Section 2). However, another observation is that Guatemalan civil society
is visibly more active in protesting the behaviour of mining companies than
27
the Chilean (Urkidi 2011, p. 692; Jamasmie 2013d). The modern Guatemalan
state and civil society hence does have avenues of “redress”; and Canadian
mining companies must once again be more critically aware of the needs and
demands of the Guatemalan state and civil society in order to continue
business relationships (Dougherty 2011, p. 404).
The Marlin mine owned by a subsidiary of GoldCorp (Montana
Exploradora) has been the focus of much scrutiny and serves as an example of
the power dynamic between civil society, different arms of the Guatemalan
government, and the mining company itself. The Marlin mine began operating
in 2005. It is located “in the indigenous Western Highlands of the
Department of San Marcos” and deposits span both the Municipalities of San
Miguel Ixtahuacán and Sipacapa (Dougherty & Olsen 2014, p. 421).
Interestingly, there has been more local discontent from indigenous groups
at Marlin than other Goldcorp mines, such as the smaller and more recent
Cerro Blanco mine (Dougherty & Olsen 2014, p. 427). GoldCorp Inc has not
released an updated monitoring report on Marlin Mine since 2009. It has
however provided reports on its Human Rights Assessment cases starting in
2009 (GoldCorp Inc. 2014c)
In 2010 Marlin was ordered to close on advice from the Inter-American
Commission on Human Rights (IACHR), citing environmental and human rights
violations (Mittelstaedt 2010). The Commission is part of the Organisation
of American States (OAS) and considers its rulings binding wherein dignitary
states agree to adhere to such rulings (Mittelstaedt 2010). Around a year
and a half later, IACHR reversed its decision on Marlin. A central player in
this reversal was the Presidential Commission on Human Rights, a body
created and executed “on behalf of” the Guatemalan government (GoldCorp Inc.
2011). The Commission petitioned IACHR claiming that there is “no proof”
that “operations at the Marlin mine” presented “serious or imminent” threats
to health and environmental integrity (GoldCorp Inc. 2011). IACHR did press
28
that the Guatemalan government to “ensure the quality of water sources” for
the numerous surrounding communities (GoldCorp Inc. 2011). To state that the
Commission was created and executed “on behalf of” the Guatemalan government
is to say that it was done with the support of main actors in (at least) the
executive and legislative arm. The initial decision and its subsequent
overturning by the same body speaks volumes about the power the extractive
industry has on the Guatemalan state apparatus.
The judicial arm of the Guatemalan government has been critical about
the constitutionality of extractive industries; however, not on the right
for the state to make decisions regarding mining (Maheandiran, DiFederico,
Aguilera 2010, p. 6). The Constitutional Court of Guatemala ruled in 2009
that “several sections of the Mining Act were unconstitutional as they
contravened the environmental protection sections of the Guatemalan
Constitution” (Maheandiran, DiFederico, Aguilera 2010, p. 6). Concerns
surrounding Marlin revolve around the lack of consultation and consent
obtained (or not) from indigenous communities and the effect on their way of
life and livelihoods. FREDEMI (Frente de Migüelense contra la
Minería/Miguelense Front against Mining), a Guatemalan NGO concluded that
Goldcorp:
“violated the right to free, prior and informed consent of the
indigenous community, has structurally damaged houses in the village,
thereby violating the right to property of the home owners, and
contaminating the water, violating the right to health of the
campesinos” (Maheandiran, DiFederico, Aguilera 2010, p. 10).
Data from the Canadian Institute for Mining, Metallurgy and Petroleum (CIM)
tells us that based on these conclusions, the Guatemalan government “failed
to abide by the terms” international treaties ratified during the 1996 peace
accords, which facilitated the end of the Guatemalan Civil War and the
transition to democracy in Guatemala (Centre for Excellence in CSR 2014).
29
The failure to properly consult surrounding communities breaches the
International Labour Organisation’s “Convention 169 on Indigenous and Tribal
Peoples” (Centre for Excellence in CSR 2014). Since this ruling, President
Colom has issued a suspension on “issuing of any further licenses” (Centre
for Excellence in CSR 2014). However, companies such as Goldcorp, whose
licences were issued before this ruling maintain their licenced right “to
engage in resource exploration and extraction-related activities” (Centre
for Excellence in CSR 2014). Hence, despite these constitutional concerns,
Goldcorp maintains the right to keep Marlin operational due to the recent
ruling of IACHR.
In effect, this ruling is not quite different from the Chilean case.
In both cases, the judicial arms of both Republics cited inconsistencies
with the behaviour of Canadian mining companies and their respective
constitutions. Ultimately, both mining companies kept their operational
permits, with both companies being cited for clean water supply concerns in
the communities surrounding the mine. The main difference being that IACHR
declared that it was the responsibility of the Guatemalan government to
ensure environmental measures were taken care of. In Chile, it remained the
responsibility of Barrick Gold Corp. Operations at Marlin never ceased while
operations at Pascua-Lama have (Goldcorp.com 2011; Hill 2013).
This case also speaks similarly to the Pascua-Lama case in regards to
a Canadian company being expected to uphold its CSR duties. Concerned
Guatemalan civil society actors brought this case before the highest
judicial arm of the Republic to bring injustices to light. These injustices
concerned constitutionally protected environmental and indigenous rights.
Behaving in a manner that recognises and respects those rights would be
behaving in ways that uphold CSR duties. Considering that Marlin currently
remains operational and never incurred fines or a temporary suspension of
operational permits furthermore suggests that upholding CSR duties remains
30
truly voluntary. It should not seem that Goldcorp learnt nothing from the
ruling; however, revisions to Guatemala’s mining law are currently underway.
“The revisions aim to tighten regulations surrounding environmental
protection and address issues such as royalties paid by foreign companies,
regulations on mine closings, and the consultation process with affected
communities” (Centre for Excellence in CSR 2014).
Following this, Goldcorp and the Guatemalan government have recently
agreed on a mining tax royalty increase. This “voluntary” increase coincides
nicely with the tone of CSR duties and a renewed sense of Goldcorp
recognising it must do more to maintain conducive business relations with
Guatemala. While this is a positive move that increases revenue for the
Guatemalan state and institutions, when we compare the tax rate between
Chile and Guatemala, we see a considerable difference. The Guatemalan tax
rate had been only 1%, to be divided 50/50 between the municipal and
national levels. GoldCorp’s statement stipulates that the tax rate will be
raised to 4% to split between both levels. Additionally, the company has
agreed to pay an additional 1% “voluntary” royalty to be split 80/20 between
the surrounding Municipalities and developing the “institutional capacity”
of the national Ministries of mining and natural resources (GoldCorp Inc.
2012).
Despite the rhetoric of a “voluntary” royalty increase, in comparable
terms Goldcorp can get away with operating at significantly lower royalty
and tax rates than Chile (and obviously Canada). This translates to a
weakened national and municipal state power in the face of Canadian mining
company power. The investments made in state institutional power by Canadian
mining companies such as Goldcorp and Barrick are clearly motivated to
cultivate an environment that will remain conducive to extractive industry
endeavours. Furthermore, the executive arms of the Republics remain amenable
to such investment. In essence, the Blakean structure never changed. The
31
infinity symbol made by the arms of the imperial and adjacent powers remains
perpetual. Modern Latin American states that are the adjacent powers have
been able to put pressure on the relationship at hand. However, this
pressure has only served to better define it. The difference in extractive
industry tax rates and consequences of poor management on Canadian mining
companies between both Republics clearly defines their subordinate
relationship with the imperial power. The integral dynamic of resource
exploitation of Latin America is perpetuated nonetheless.
Conclusion
It would be highly disappointing to conclude that independent Latin
American states do not have a place in the globalised economic network that
serves their own development purposes above others. Equally as disenchanting
would be that appropriate actors in the state apparatus of Latin American
states have been convinced that the dynamic does serve development purposes,
however tangible examples and data contradict that proposition. Latin
America has always been important on the global stage. The region is rich in
natural resources, the birthplace of marvels of modern literature and the
land of tirelessly proud and brave heroes of liberation. The power struggle
over who reaps the benefits of the extractive industry has been an important
theme in Latin American history. This struggle is what has earned the region
its most blatant and aggressive tales of foreign intervention since
Conquest. Cortez used Spanish troops, the United States used political
fortitude, and Canada has used economic relationships to furthermore bind
Latin America in a supporting role to its imperialist benefits.
We have seen examples of struggles between modern Latin American
states and extractive powers who have had to modify their corporate
behaviours to continue such relations. The state apparatus of both
Republics has proven able to confront and punish Canadian mining companies
32
for illegal and unsafe practices; however both have also served to
ultimately aid extractive companies to continue mining projects. In Chile,
Barrick has suffered considerable financial and logistical setbacks for not
meeting environmental standards at the Pascua-Lama project. A Guatemalan
presidential commission lobbied for a suspension order on GoldCorp’s Marlin
Mine to be reversed, and it was. The highest judicial courts of both
Republics cited inconsistencies with operational permits of Canadian mining
companies and their respective constitutions. Concerned civil society
members brought these inconsistencies to light through well reasoned
arguments that the courts could not ignore. Civil society members have been
more outspoken in protest of mining companies in Guatemala than Chile. Taxes
and royalties on mining in Chile are more than three times the amount in
Guatemala. The political turmoil of the mid-20th century serves to
highlight this and other differences in the Canada-Chile/-Guatemala
relationship. In Canada, the state apparatus has also aided Canadian mining
companies to reap benefits from the extractive industry insofar as shielding
them from certain sanctions. Bill C-300 would have seen CSR guidelines
enshrined in law much like the Chile-Canada FTA and trading laws with
Guatemala. Despite the defeat of bill C-300, Canadian courts will soon hear
a case concerning the responsibility of a Canadian mining company in
protecting human rights at mining operations in Latin America.
The narrative that appears here is that the power dynamic depicted in
Blake’s engraving remains as relevant as ever. The name of the imperial
power changes with the relevant rise and fall of empires, however the
struggle to extract resources while simultaneously supporting development
projects of the state only so far as the state remains amenable to foreign
capital providers has never truly broken. The infinity symbol created by the
intertwined arms of the three women is made of chains. While not featured in
33
Blake’s engraving, they exist in maintaining the integral structure examined
in this paper.
Looking to the future, there seems to be no palpable alternative to
this Blakean dynamic. There have been Latin American leaders come to power
who dream of a reality where these chains may be truly broken, however they
are branded dangerous by the imperial power and therefore merit being
removed by the same forces. Salvador Allende and Jacobo Arbenz were the
Chilean and Guatemalan presidents who dreamed such a dream in the mid 20th
century and suffered for it. Today figures such as Fidel Castro and the late
Hugo Chavez still inspire this dream and their images have also been cast in
the same light. The difference lies in the manner in which the legitimacy of
these dangerous dreamers is attempted to be tarnished by the imperial power.
The new legitimacy of imperial power subordinating modern Latin American
development projects is not done through the barrel of a gun and the fear of
political paranoia like during the Cold War. Instead it is done through the
naturalisation of neoliberal economic theory that has underdelivered on all
fronts the imperial power promised.
The amenability of the state apparatus is a project that is developing
still, and is key to altering this Blakean dynamic. Latin American
governments that challenge the imperial power too much don’t survive as long
as the ones who play the part assigned. But hope remains in considering that
the name of the imperialist power has changed over time. Latin America is a
comparatively stable region of the world endowed with goods that foreign
capital actively seeks. To be actively sought after for resources is to hold
immense bargaining power. Nationalist, socialist and populist governments
such as that of Allende and Arbenz recognise this and imperial powers have
actively sought to undermine them. Such narratives held tremendous sway in
Latin America, as the forced removal of Allende and Arbenz demonstrate.
34
Modern Latin American civil society actors still hold issue with foreign
extractive bodies not conducting themselves in a way that recognises the
needs of the region. Unless this is done more effectively than in the cases
examined above, the risk is run that such ‘dangerous’ nationalist, socialist
and populist ideas will find popular legitimacy again, even in the most
neoliberalised Latin American Republic.
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