Conflict Dogs Canadian Mining Abroad

1/8 A mural outside the town hall in Magdalena Ocotlán, across the highway from San José del Progreso, highlights the town's mining and agricultural histories. For more images from San José del Progreso, click for slideshow. (All photos Liam Barrington-Bush and Jen Wilton.)

2/8 A blue moto-taxi, used only by residents who are against mining, passes in front of the San José del Progreso town hall. Mine supporters ride in red or white moto-taxis.

3/8 The Municipal President of San José del Progreso, Alberto Mauro Sánchez, answers The Tyee's questions in June 2013. Mauro is pro-mine: "At the state level, there are very few projects of this magnitude, where jobs are generated, where it stimulates a strong economy. It's a shame that these are foreign companies that come here, but when all is said and done it's good that they come and give us employment."

4/8 Melesio Méndez Méndez, home builder and community leader from Magdalena Ocotlán, with his goats in front of the home he shares with his wife. Of his reasons for opposing the mine, he said: "Unfortunately we ourselves have to defend what will happen here in the long run, because [the mine] has 50 years left. We're thinking of our children, of our children's children, of our great-grandchildren. We'll be gone. We are protecting the next generation, which is something that the government does not see."

5/8 Environmental authorities suspended permits to operate the Natividad mine, outside of Capulálpam de Méndez, in 2009, after it was determined to have poisoned local water supplies with lead and arsenic. The mine's water consumption had also led to the depletion of 13 springs.

6/8 An anti-mining moto-taxi driver stands by his vehicle, across from the town hall in San José del Progreso.

7/8 Father Martin Ortiz in his new office in Oaxaca's state capital. The priest says he was assaulted and kidnapped for speaking out against the mine in San José del Progreso: "We began to have informational forums with people in our parish about what mining is; mining laws in Mexico; and what mining means with respect to water, because that's the most alarming part. All we did was to provide information."

8/8 Paulina Agripina Vásquez Sánchez, mother of murdered CPUVO leader, Bernardo Vásquez Sánchez.

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[Editor's note: Why does violence seem to dog so many Canadian mining companies abroad? Violent attacks ranging from assault to murder have been reported from scores of communities near Canadian-operated mines in Latin America, Africa, Europe and elsewhere. Company spokesmen typically blame such events on murky 'pre-existing' conflicts. Thanks to the generosity of donors to the Tyee Fellowship Fund, journalists Liam Barrington-Bush and Jen Wilton were able to put that explanation under scrutiny in one place where it's been offered: a Canadian-owned silver and gold mine in the southern Mexican state of Oaxaca. This is the second of their four reports.]

It's a well-used refrain.

When Dan McInnis, CEO of B.C.-based MAG Silver (TSX listing: MAG), was questioned about his company's possible involvement in the Nov. 2012, murder of two activists opposed to its Cinco de Mayo mining operation in the Northern Mexican state of Chihuahua, he replied that MAG had been "broadsided by a long-standing community dispute."

After three separate murders of mine opponents near Pacific Rim Mining Corp's (TSX listing: PMU) proposed El Cabañas gold mine in El Salvador in 2009, the Vancouver-based company's CEO, Thomas Shrake, waived off any connection with its operations, saying that "activist groups and opposition groups make things up," and the violence was the result of a long-standing family feud.

So when Jorge Ganoza, Peru-based CEO of Vancouver's Fortuna Silver Mines (TSX listing: FVI), deflected reports of the murder of an anti-mining activist near Fortuna's Cuzcatlán mine in Oaxaca, Mexico, in 2012, as the unrelated result of "a long-standing political struggle for local power," his account fit neatly into a well established narrative in which B.C.'s extractive industry is an innocent bystander to violent foreign cultures.

When a second activist died, and several others were wounded, in a violent ambush in March of 2012, Ganoza again told CTV News that his company had no role in the violence; rather, "there is a long historic struggle in Oaxaca that is sometimes difficult to comprehend."

Speaking to The Tyee, Ganoza again reaffirmed this view. "If it wasn't for our presence there," he told us, "this would be another nameless, faceless conflict in the... Mexican social political landscape."

A different story locally

But there are problems with this routine invocation of conflicts simmering among "nameless, faceless" peoples predisposed to violence. Not least their potential implications for investors.

If these conflicts were long-standing, it would seem that they should have been brought to the attention of Fortuna's investors, along with other potential 'risks and uncertainties' associated with doing business in the region, and identified in company prospectus filings with Canadian securities regulators.

In management discussions in the weeks just after Fortuna's Nov. 2005, acquisition of its property near the town of San José del Progreso, however, the closest reference to local conflict in the company's filings, available through Canadian regulators' shared public investor-access site, is a generic warning that "emerging nations" may be associated with higher risks.

Not until four years later, in 2009, after conflicts at other Canadian mines, did company filings begin to include the slightly more specific statement that: "The State of Oaxaca has a history of social conflicts and political agitation which can lead to public demonstrations and blockades that can from time to time affect the Company's operations." But the regulatory disclosure made no reference to the local family feud that Ganoza was later to place at the heart of the violence.

If Ganoza's assessment is an accurate one, Fortuna apparently viewed the conflict as inconsequential to the continuation of mining operations in the town, and as a risk factor to potential investors.

Alternatively, there may have been no "pre-existing" conflict to identify at the mine's conception. Certainly, depictions of a town rife with chronic violence don't mesh with the accounts of individuals who knew San José before the company arrived.

"Before the problems with the mine, it was a very quiet town," said Melesio Méndez, a house builder and community leader from Magdalena Octolán, the town directly across the highway from San José del Progreso. "Everyone lived well together and was peaceful; the town was one. Every time there was a celebration we would go, but now we don't because there is a lot of conflict."

"So a change can be noted since the mine arrived," Méndez affirms. "That was when division in the community began. It was a change."

Paulina Agripina Vásquez Sánchez, a campesina (peasant farmer) from San José del Progreso, similarly described her town as one of the most tranquil in the valley before the arrival of the mine. She has felt its change viscerally. The March 2012, ambush claimed the life of her son, Bernardo Vásquez Sánchez.

Bernardo had been a coordinator with the Committee of the United Peoples of the Ocotlán Valley (CPUVO by its Spanish initials), opposing the mine and other megaprojects in the region. The group's members believe that community and environmental well-being must be at the core of their region's development, and reject industrial projects that jeopardize its long term ecological sustainability. Posters around town bear Bernardo's image, and link his death to the presence of Fortuna's Cuzcatlán mine.

'Very radical people'

Even the town's pro-mining municipal president, Alberto Mauro Sánchez, acknowledges that conflict in the town is mining related.

Mauro agreed to meet with The Tyee in Oaxaca's state capital in early June. The heavy-set, middle-aged man drives a shiny black Honda pick-up without licence plates (as is customary for Mexican government vehicles), and commands an imposing authority when he enters the room. While he blames the town's violence squarely on mine opponents, describing them as "very radical people who come to destroy everything that lies in their path," he also acknowledges that the violence has emerged since Fortuna became active in the region.

According to Mauro, San José's equivalent of a mayor, the murdered CPUVO leader "was an opponent of everything." Mauro characterized Vásquez's opposition to industrial development, (grounded, other CPUVO members say, in the desire to maintain local culture and the natural environment) as evidence of questionable character.

Further distancing his municipal administration from the murder, Mauro noted that, "that guy [Vásquez] didn't die in my town. He died outside of town, something that we have nothing to do with."

CPUVO supporters dispute that. Indeed, some accuse Mauro himself, along with a Mexican charitable organization of which Mauro was a former member, 'San José Defending Our Rights,' of being behind the attacks against them. We were shown photos (some of which were published online, here) in which men alleged to be members of San José Defending Our Rights were brandishing weapons at mining opponents.

We were also told of a video in which the organization's secretary, Angel Arango, is seen making threats against Bernardo Vásquez and two Catholic priests, one of whom, Father Martin Ortiz, had informed local residents about the environmental risks associated with mining. In June 2010, hours after Mauro's predecessor was murdered (and Mauro wounded) in an attack by unconfirmed assailants, Arango and other members of his organization assaulted and seized Ortiz, accusing the priest of orchestrating the death of then-municipal president, Óscar Venancio Martínez Rivera.

Death of a president

We met Father Ortiz in Oaxaca in April, at his current office with the Commission for Peace and Justice and the Defence of Human Rights. Ortiz told us that he was held for three days during the 2010 incident, first by Arango in his home, then by state police, and denied treatment for injuries suffered in the assault, before he was released and all charges against him dropped.

Ortiz left San José in early 2011, fearing for his safety. Soon after the move, though, he saw members of San José Defending Our Rights standing on the corner near his apartment in the state capital, apparently making their presence known. "They carried out their threat to Bernardo Vásquez," Ortiz told The Tyee, "but the two of us -- Father Wilfredo Mayrén and I -- are still on the list as well."

"[San José] Defending Our Rights emerged after the death of the [previous] municipal president," Mauro claims. "The community was left without a government, was left without authority. That was why this organization formed. In fact, we left that group to be able to form this current authority," he continued, highlighting his own membership and the organization's close relationship with his administration.

While much remains murky about the murder of Mauro's predecessor (also a strong supporter of the mine), San José Defending Our Rights was registered as a civil association in July 2009, 11 months before the murder. And according to some reports, the group had been active as early as 2008, not long before the first violence visited the deeply-divided community.

Fortuna CEO Jorge Ganoza confirmed his company's active association with the group. "We have channelled a lot of the social programmes we implement through the members of [San José Defending Our Rights]," he told The Tyee during a phone interview in June. "Because they were the group that was open to talk with us."

Ganoza, a Peruvian national whose company -- like many nominally Canadian mining firms -- has no operations within Canada, is keen to highlight Fortuna's efforts to win over the community. The company has given residents hundreds of dry toilets and household rain water collectors, meant to allay community concerns about the mine's water usage. It has also offered many families ecological stoves that have lower health risks than the unventilated indoor wood fires that are still the norm in most households in the town.

In Ganoza's view, the group of residents who oppose the mine, "uses mining, our presence there, as a banner for their opposition, for their political opposition [to the local administration]. So in our view, the opposition is not against Fortuna's presence in Oaxaca or in San José. The opposition is against the local elected authorities."

Highlighting the jobs brought to the town and the efforts the company has made to build bridges with community groups, Ganoza is unequivocal: "I believe that we are a positive force in Oaxaca."

Even the taxis are pro- and anti-mine

In San José del Progreso, however, the fear of violence separates the community. Deep-seated mistrust has divided families. The conflict even determines which kind of moto-taxi you can take -- mine supporters in red or white, mine opponents in blue.

More seriously, members of CPUVO claim they have been refused medical treatment in the town's health centre, where in some cases approval is required by the municipality. "We have a clinic, but... they almost never attend to us here," said CPUVO member Rosalinda Dionicio, who was shot in March 2012 during the same incident that took her cousin Bernardo's life.

"One of the first impacts of mining," Jen Moore, Latin America program coordinator at MiningWatch Canada, observes, "is the loss of peace within communities. [Mining] companies go in and make pacts with local authorities to see that their interests are protected above and beyond the rights of local people. [That is] often at the root of the kind of conflicts that then are created."

What protections Fortuna enjoys in San José del Progreso are a matter of conjecture. Municipal authorities have refused to make public the terms of their agreement with the company, ignoring at least three Mexican access to information requests (including one from The Tyee), despite multiple promises to send the documents to reporters and civil organizations.

"One question that comes to mind around San José del Progreso," Moore offers, "is, 'Were people being killed before?'"

The answer from all sides is a definitive 'no.' Even Fortuna's Ganoza, when challenged by the Tyee on the lack of evidence of 'pre-existing' violence before the company's arrival, admits, "I guess there was nothing to fight about [before]. Perhaps we became a catalyst."

But while Fortuna, and other mining firms based in Vancouver or elsewhere in Canada, continue to cast themselves as blameless in violence surrounding their ventures abroad, Moore sees a recurring pattern of conflict: "The pattern is very common, both in other cases in Mexico, as well as throughout Central America."

Or, as the Canadian NGO Rights Action concluded after investigating violence surrounding the activity in neighboring Guatemala of another B.C. company, Tahoe Resources: "Global mining companies, and a long list of private and public investors, are knowingly doing business in a profoundly undemocratic country [where] violence and repression are not a crisis; they are predictable."

"A responsible operator confronted with a situation of violence would at least take a pause, to allow things to cool off – to wait until the threats have subsided," argued Moore's colleague, Jamie Kneen.

The Prospectors and Developers Association of Canada (PDAC), a leading membership body for exploration companies, echoes Kneen's sentiment. PDAC's Social Responsibility in Exploration toolkit states that "if the situation has the potential to result in the explorer's complicity in gross violations of human rights or actions that have significant negative social or environmental consequences, then explorers need to reconsiders their presence in that jurisdiction."

For a company keen to keep its mine working however, it is clearly tempting instead to portray violence as the endemic, "pre-existing" state of nature in the remote foreign culture where it operates -- neither within its control, nor its responsibility.

With translation support from Joel Zurita and Lindsey Bryan.