When push comes to shovels: Fast-growing Goldcorp says it takes corporate social responsibility seriously, but words don’t always line up with actions

http://corporateknights.com/article/when-push-comes-shovels?page=show

When push comes to shovels
3 December, 2012
Fast-growing Goldcorp says it takes corporate social responsibility seriously, but words don’t always line up with actions
Written by Stephanie Boyd, Contributor

Illustration Paul Roger

Last year, Vancouver-based Goldcorp was removed from the Dow Jones Sustainability Index as accusations swirled of human rights abuses and environmental contamination at several of the company’s Latin American gold mines. This past September, the company was put back on the North American list, a cause for celebration in the executive boardroom.

Goldcorp has spent heavily on improving its corporate social responsibility image. The company has partnerships with high-profile non-profits, like WWF, and has won safety awards from the governments of Canada and Mexico. It’s also signed a landmark agreement with a Cree community in northern Canada to partner in the development and operation of a gold mine currently under exploration.

David Deisley, Goldcorp’s executive vice-president, sounds as if he works for a non-profit organization when he speaks about being a “catalyst for social change” and “stimulating agricultural production and creation of markets.” He’s especially proud of the company’s logo, created in a corporate brainstorming session: “Together, creating sustainable value.”

Our interview takes place in a swank meeting room overlooking the Pacific Ocean on the 34th floor of one of Vancouver’s most exclusive skyscrapers. At a time when many mining companies are downsizing, Goldcorp has expanded from a little junior into one of the fastest growing, low-cost producers in the Americas region.

Six years ago, Goldcorp forged several lucrative mergers with companies like Placer Dome, Glamis Gold and Wheaton River. Now, it’s a self-defined “senior” company with a growth profile of 4 million ounces. And it’s the second-largest mining company in the world in terms of market capitalization. “We take mineralization that is in the ground and has no value and extract it in such a way that it has value – and not just for our shareholders but also for the local communities,” says Deisley.

But behind Goldcorp’s slick publicity material and fancy jargon, the company faces heavy opposition from local communities living near its mines operating in Latin America.

In July, farmers affected by Goldcorp mines in Guatemala, Honduras and Mexico held an International Peoples’ Health Tribunal. A panel of international judges heard testimony and reviewed scientific evidence about the company’s impact. The judges found Goldcorp guilty of contaminating the environment, damaging human health and violating the local peoples’ right to self-determination. When I mention the tribunal to Deisley, a cloud passes over his face. “It wasn’t a tribunal under any objective means,” he says, accusing organizers of selecting witnesses and judges biased against the company.

Further south, conflict is also raging at the Alumbrera copper-gold mine in Argentina, where Goldcorp and Canada’s Yamana Gold hold a 50 per cent stake. Since February, locals from the province of Catamarca have held numerous blockades of the mine’s vehicles to protest an expansion plan. They accuse the mine of contaminating water resources and demand that the company shelve plans to build a new mine in the neighbouring Agua Rica area.

But the conflict that has most tarnished Goldcorp’s image involves one of its largest holdings, the Marlin Mine in Guatemala. Indigenous Mayan leaders living near the mine accuse the company of environmental contamination and human rights abuses, including violations of International Labour Organization regulations on the rights of indigenous people.

“My daughter is losing her hair, and my neighbours have skin rashes,” says Salomon Bamaca. “Most of the people living near the mine have health problems that didn’t exist before the mine,” he adds.

The well-spoken Mayan used to work for Goldcorp in community relations and security, until he realized the mine was damaging the ecosystem and human health. Bamaca says he also found out the company was digging tunnels underneath private property in cases where owners refused to sell their land.

His fears about the mine’s impacts were echoed by dozens of people I interviewed in May while visiting communities near the mine.

Locals accuse the mine of tricking or coercing people to sell their land. Once the mine started operations in 2005, they say their wells began running dry, animals died after drinking water from local rivers and men, women and children began developing skin rashes and respiratory problems. People cite an unusual increase in miscarriages, birth defects, hearing loss, nervous system disorders and other health conditions. Sturdy adobe brick homes close to the mine started developing cracks, blamed on vibrations from the mine’s daily explosions. Leaders who stand up to the mine are harassed, threatened and beat up, and one elderly woman lost her eye after being shot.

Goldcorp denies all these accusations. In a published statement, the company says it adheres to national and international environmental standards. It blames the skin rashes and infections on “inadequate prevention and sanitary conditions” common to people living in the “developing world.” Likewise, the cracked homes were the cause of “ambient conditions and/or construction methods.”

Although Goldcorp won’t admit responsibility for local health problems, the company kindly threw in $2.8 million to help build a new clinic where people can seek treatment for their skin rashes and other diseases.

“But only the miners can afford to buy the medicine prescribed by the doctors,” says Crisanta Perez, who lives next door to the mine. She shows me a severe rash on her two-year-old daughter’s arm. Perez’s own heart-shaped face is obscured by a large blotch and her other children also suffer from rashes. The money she makes selling fruit in the local market isn’t enough to cover these new medical expenses for her seven children.

Perez is one of the “resistance leaders,” the local term for people who want the mine to close. There are also people in favour of the mine, most of them miners or people who earn money from service industries for the mine.

Then there are the self-described “neutral” citizens, like Alvaro Perez, a restaurant owner and member of the municipal environment commission in San Miguel. (The Marlin Mine sits between two districts: San Miguel and Sipakapa.)

Alvaro Perez started his municipal post in January and is appalled by the lack of independent environmental monitoring. He says the Association of Community Environmental Monitoring (AMAC), a local group, carries out water testing but is controlled by the mine so its results are suspect. When I ask about government monitoring, he laughs bitterly. “The Ministry of Energy and Mines doesn’t even have enough money to put gas in their motorcycles,” he says, “let alone conduct proper water tests.”

“Guatemala doesn’t have the resources for a laboratory to carry out this kind of environmental monitoring. They haven’t made it a priority,” he adds. Goldcorp cites the government and AMAC monitoring results as proof the mine isn’t causing contamination. But I heard widespread criticism of both entities during my stay in San Miguel. People are especially suspicious of the national government. Guatemala’s new president, ex-general Otto Perez Molina, has been accused of human rights abuses during the country’s 36-year civil war in which an estimated 200,000 people died.

The president is a close friend of the mining industry and has already lifted the previous government’s moratorium on the approval of new concessions.

Goldcorp’s cozy relationship with the Guatemalan government is no secret. In August, Goldcorp brought four Canadian members of Parliament and one senator to Guatemala to meet with the government’s Committee on Energy and Mines.

The company’s Guatemalan subsidiary denied allegations that Goldcorp was trying to influence the country’s mining legislation, currently under review. In a published statement, the company insisted the trip was simply a “goodwill visit” and had “no hidden agenda.” Goldcorp, a private corporation, nonetheless picked up the tab for this high-level social visit between foreign ministers.

Goldcorp seems to have friends in many high places. Two years ago, the Inter-American Commission on Human Rights ordered the Guatemalan government to suspend Goldcorp’s operating licence “to prevent irreparable harm to the life, physical integrity and environment” of indigenous peoples living near the mine.

Guatemala refused to comply with the ruling and instead petitioned the commission to alter the sentence, insisting there was no evidence of contamination from the mine.

The commission reversed the suspension order in December 2011, but the government is still required to follow “precautionary” measures. These include providing adequate potable water supplies to the 16 communities near the mine … a provision that has not yet been met, although Goldcorp says it is “working with the government” on this issue.

Meanwhile, local tensions continue to mount. Marlin’s open pit has been fully mined and Goldcorp plans to close it by the end of 2012 to concentrate on mining underground reserves and develop expansion plans. An independent study by American engineers estimated the mine’s closure costs at $49 million. Goldcorp came up with a more conservative estimate of $27 million. Either way, the company initially put aside only $1 million for the mine’s closure. (Under Guatemalan law, companies aren’t required to provide a remuneration bond to cover mine closure fees.)

At the company’s annual general meeting in April, an independent shareholder resolution supported by Amnesty International and other North American activist groups, like MiningWatch and Oxfam, called on Goldcorp to put aside enough money to close the mine properly and to make public its closure plan. The resolution wasn’t passed, but the company has now agreed to put aside $27 million.

But North American activist groups worry that Goldcorp is underestimating closure expenses. “No one knows how they came up with this figure,” says Jen Moore of MiningWatch, a Canadian-based non-profit. “The amount should respond to independent analysis that is based on full access to the company’s plans for closure and post closure. The post-closure plan is important because there’s real concern about the possibility of acid mine drainage. That’s where the costs post-life of a mine start to double and quadruple.” Moore says Goldcorp still hasn’t disclosed its closure plan and is negotiating with the Guatemalan government “behind closed doors,” without involving the local communities.

Goldcorp acquired the Marlin mine, and the conflict, from its merger with Glamis Gold in 2006. But Moore says Goldcorp can’t use the legacy argument as a defence. “Mining companies are very aware of the role that junior corporations play,” she says. “Goldcorp bought into the mine knowing the problems that existed.” Moore believes that senior mining companies often use juniors to do the upfront dirty work. Once the larger company takes over, “they rid themselves of the ties that would bond them to any responsibility, taking advantage of the corporate structure that allows them to have impunity.”

Moore cites Goldcorp’s expansion plans as evidence that the company still doesn’t respect the rights of local indigenous populations. Although Marlin is closing, Goldcorp is set to explore a hotly contested deposit in the neighbouring community of Sipakapa.

Seven years ago, when the Sipakapa concession was held by Glamis Gold, the community held a referendum and 98 per cent of voters rejected mining as a form of economic development. Although the referendum wasn’t legally binding, the company realized the situation was too conflictive and put the Sipakapa project on hold.

Once Goldcorp merged with Glamis, it offered to provide the community with funds for development projects. Sipakapa’s local mayor was a key supporter of the anti-mine campaign and refused the funds until last year, when an amazing transformation took place. The mayor and his local government made an abrupt turnaround and began accepting the funds and supporting Goldcorp’s expansion project.

Juan Mejia, one of the mayor’s local councillors, starred in a documentary about the referendum called Sipakapa is Not for Sale, using his popular radio show to promote the anti-mining campaign. He squirms uncomfortably when I ask him to explain his change of opinion. “The mine is coming and we can’t stop it,” he says. “We want to learn from San Miguel’s mistakes with the Marlin Mine and negotiate with the company, and do it well.”

Sipakapa’s grassroots leaders are suspicious of this sudden pragmatism. They accuse Mejia and the mayor of being “bought off” by Goldcorp. Timoteo Vasquez, head of the Catholic Church environmental commission in Sipakapa, says the majority of the population still opposes mining in Sipakapa. And they want another referendum to prove it.

“The company must respect the results of the vote,” he says, adding that the entire community has the right to decide if they want a mine, and not just a few leaders.

Goldcorp’s executive vice-president says there are no plans to hold a referendum. Deisley insists that the mayor and his local council’s approval is enough. Indeed, he holds up the mayor’s flip turn as a major victory for the company’s corporate social responsibility program.

But activist groups say it’s ridiculous to talk about corporate social responsibility if companies don’t first obtain a social licence to operate. The International Labour Organization’s convention on the rights of indigenous people states that local communities must give “free, prior and informed consent” before foreign companies begin operations on their land.

Although Guatemala has signed the convention, the country’s mining laws don’t include provisions for consulting indigenous populations. This hasn’t stopped communities from holding their own referendums. To date, at least 62 municipalities have held consultations on mining and other extractive industries and 99.5 per cent of voters have rejected these industries as a form of economic development.

If Goldcorp insists on moving ahead with plans in Sipakapa without obtaining consent from the entire community, it’s likely to detonate yet another social conflict. That’s bad news for private investors, who could see a fall in share prices. And bad news for the Canada Pension Plan Investment Board, which has public funds tied up in Goldcorp stocks.

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