Crumbling political support for Tahoe Resources in Guatemala

Article written in collaboration with MiningWatch Canada and the Maritimes-Guatemala Breaking the Silence Network. 

If the militarized security strategy that Tahoe Resources has used to put its Escobal silver mine into operation isn’t enough to raise questions about the ethics of the company’s operations in Guatemala, the recent resignation of Guatemalan President Otto Pérez Molina should be. Pérez Molina stepped down on September 2 after Congress voted to strip him of his political immunity. A week later, he was indicted on charges of illicit association, customs fraud, and bribery for his involvement in a customs network that robbed tens of millions of dollars of taxpayer money.

Rewind to July 2013, when former President Otto Pérez Molina made a personal site visit to the Escobal mine located in San Rafael las Flores in the department of Santa Rosa. The visit took place just a few months after Tahoe’s head of security was arrested for his role in the shooting of seven peaceful protesters and a subsequent month-long military state of siege was imposed on four municipalities in the area. While at the mine, Pérez Molina mingled with workers and filmed a national television address affirming support for the project. 

Former President Otto Pérez Molina poses with Escobal mine
workers. Photo: Tahoe Resources

Today, Pérez Molina is accused of heading “La Linea” customs network that is said to have benefited transnational companies by offering lower tariffs in exchange for handsome pay-offs to politicians. Vice-president Roxana Baldetti has also been indicted on the same charges and over a dozen cabinet ministers potentially implicated in the fraud scandal have resigned, including Minister of Energy and Mines, Erik Archila. Archila approved Tahoe’s exploitation license in April 2013 without taking into consideration over 250 individual complaints filed against the license for potential impacts on water and health of the local population.

While it is unclear if Tahoe or other North American mining companies benefited from the fraud ring, the company’s cozy relationship with Otto Pérez Molina's scandal-ridden government has been well documented. During his administration, state-sponsored repression plagued communities in resistance to Tahoe and has facilitated the imposition of the Escobal mine against the will of the local population. 

It is too soon to know how the recent general election results may change this arrangement, but cracks have already started to show at the local level where Tahoe has also relied on close political relationships. 

Cracks in Tahoe’s privileged political support

During the past four years, Tahoe has relied on the mayor of San Rafael Las Flores to prevent local communities from holding a referendum about whether or not they want mining in their municipality. While the six municipalities surrounding the Escobal mine held referenda overwhelmingly rejecting mining, residents of San Rafael las Flores were denied this important opportunity. Instead, nine villages within the municipality organized their own referenda, in which the majority overwhelmingly rejected the Escobal mine. 

Results from Guatemala's general elections held September 6 indicate an important shift in support for Tahoe Resources in San Rafael las Flores, as well as in the surrounding areas. In San Rafael Las Flores, Roberto Pivaral, member of the Committee in Defense of Life and Peace who was an early victim of Tahoe's strategy to criminalize opponents, won enough support in rural areas of the municipality to win the mayoral race on a pro-referendum platform. 

Municipalities surrounding Tahoe’s Escobal project vote against mining

In the neighboring municipality of Mataquescuintla, where 96% of voters opposed mining in a 2012 referendum, Hugo Loy was re-elected as mayor. Loy has openly opposed Tahoe’s presence in the region and has fought hard to uphold the results of the 2012 vote by opposing the construction of an electrical line between Mataquescuintla and the Escobal mine. Opponents to mining in Mataquescuintla have faced severe threats and violence, including the 2014 attack in which 16-year old Topacio Reynoso was murdered and her father Alex was seriously injured. 

Rejection of Tahoe Resources also came through loud and clear in two other municipalities close to the Escobal mine. In Santa Rosa de Lima, residents ousted the candidate who had accepted royalty payments from the company, and instead, elected community leader and pro-referendum candidate, Llan Carlos Dávila. In Nueva Santa Rosa, voters re-elected the current mayor who, due to community pressure, has so far upheld the results of the consultation and refused to accept mining royalties. 

Tahoe Resources' selective amnesia

In a press release issued following President Pérez Molina’s resignation, Tahoe Resources asserted that all is calm in Guatemala and that business will continue as usual. Tahoe expressed support for acting President Alejandro Maldonado Aguirre, who became Vice President after the resignation of Roxana Baldetti. Tahoe stated Maldonado has been "the force of calm in the country" and that "his leadership has been viewed within Guatemala as very positive." 

However, Tahoe fails to mention that Maldonado, a former Constitutional Court judge is also a founding member of the now non-existent National Liberation Movement party (MLN in Spanish), an extreme right-wing political party known for its connection to death squads in the 1960s. The company also doesn't say that during his time in the Constitutional Court, Maldonado voted to annul the historic 2013 genocide sentence and one year later, voted for the early removal of respected Attorney General Claudia Paz y Paz. 

Finally, Tahoe assures investors that, “The embassies of Canada and the United States are heavily involved in assisting and supporting the Guatemalan government’s efforts to maintain order and peace and assure stability during these difficult times." But, far from deserving congratulatory remarks for their role, serious questions should be raised about what North American Embassies in Guatemala might have known about rampant corruption in the Otto Pérez Molina administration, and be challenged for their willingness to demonstrate support for such a repressive regime in order to protect Canadian and U.S. economic interests in the country. Rather than providing staunch support to ensure the interests of mining companies, such as Tahoe Resources, Goldcorp, Kappes, Cassidy & Associates and others, they should order investigations as to whether these companies were at all benefiting from the customs fraud ring and make a commitment not to provide any support for mining activities where communities have not given their consent.

Something big was missing from Goldcorp and Tahoe Resources' shareholder meetings: the voices of communities impacted by their mines

On April 30th and May 8th respectively, Goldcorp and Tahoe Resources held their Annual General Meetings (AGM) in Canada to discuss their FY2014 accomplishments and future expansion plans at their mine sites in Guatemala.

What was missing, however, were the many voices of those impacted by Goldcorp and Tahoe's operations around the world - voices of communities whose water sources are becoming increasingly contaminated and drying up; voices of community leaders who are being criminalized for speaking out against the mining companies, and the voices of peaceful Guatemalans who are witnessing the military occupy their communities once more in order to protect private corporate interests.

Members of the Maritimes-Guatemala Breaking the Silence
Network (BTS), the Mining Injustice Solidarity Network (MISN)
and other allies demonstrate in front of Goldcorp's office.
Photo credit: NISGUA

Organizers, activists and others in solidarity with mining-impacted communities gathered on April 30th outside Goldcorp's Toronto office to commemorate the life of 16-year-old Topacio Reynoso. Topacio was the Youth Coordinator of the Resistance in Mataquescuintla, near the Escobal mine, and was shot and killed in April 2014. Although the Escobal mine is owned by Tahoe Resources, Goldcorp retains a 29% controlling share in the company. 

"Rest in Power, Topacio!" Photo credit: NISGUA

Those present laid red carnations on the steps of Goldcorp's office in an act of solidarity with Topacio's family and friends as well as with communities who continue to face violence from mining operations. The flowers also symbolize the ongoing resistance to the Escobal project. In 2011, communities from San Rafael las Flores - which borders the Escobal mine - marched to the company's headquarters in Guatemala City and to the Canadian embassy to leave red carnations in an act of protest against the mining project.

Photo credit: NISGUA

Activists marched down Toronto's financial district to Goldcorp's shareholder AGM, carrying banners to denounce the violence suffered around the Marlin mine during its ten years of operation in Guatemala.

Photo credit: NISGUA

Photo credit: NISGUA

Community voices aren't being heard where the decisions are being made, and so demonstrators wheat-pasted some of the messages impacted communities wanted to tell investors outside Goldcorp's office and around Toronto's financial district.

Photo credit: Sarita Galvez

In a similar action on May 8th, members of the Mining Justice Alliance and Amnesty International gathered to bring some of these same messages to Tahoe Resources' shareholder AGM in Vancouver, Canada.

U.S. and Canadian-owned mining companies like Tahoe Resources and Goldcorp operate without the free, prior and informed consent of those most impacted by their operations. Instead of listening to the concerns of community members, these companies engage in practices of criminalization of local leaders, while promoting the implementation of militarized security strategies at their mine sites in an attempt to quell local opposition. 

Despite this violence, communities continue to stand up and say: "We're still here. We're still in resistance." 

To see more messages from those impacted by Tahoe's Escobal mine, click here. 

Asesinato de joven de 16 años – Continúa la violencia vinculada a mina canadiense; urgen al Fondo de Pensiones de Canadá desinvertir en Tahoe Resources

El 13 de abril del 2014 Topacio Reynoso, una joven guatemalteca de 16 años, fue asesinada cerca de su comunidad de Mataquescuintla, Guatemala, donde organizaba un grupo de jóvenes en contra de la minería. Su padre, que había liderado la organización de una consulta municipal sobre la mina, fue herido de bala en el mismo incidente y permanece hospitalizado en estado de gravedad. Este es el ejemplo más reciente de la violencia y represión asociadas con la empresa Tahoe Resources que cotiza en la bolsa canadiense.

El día de hoy, la organización Alerta Minera Canadá se comunica por escrito* con el Consejo de Inversiones del Fondo de Pensiones de Canadá (Canada Pension Plan Investment Board – CPPIB), urgiendo su desinversión en Tahoe Resources. Alerta Minera sostiene que la inversión es una apuesta peligrosa e inaceptable.

La carta indica que Tahoe no ha revelado que decenas de miles de personas en cinco municipios cercanos al proyecto argentífero Escobal de Tahoe votaron de manera abrumadora en contra de la minería en sus comunidades. Por ejemplo, en el municipio de Mataquescuintla, de donde era oriunda Topacio Reynoso, más de la mitad de la población con derecho al voto participó en la consulta y un 96% - alrededor de 10,000 personas – votó en contra de la minería.

“La oposición a la mina Tahoe en los municipios aledaños es tan elevada que Tahoe le presentó una demanda al gobierno de Guatemala, exigiéndole a este último cumplir un rol más activo en la protección de la mina”, indicó Shin Imai, abogado en el Proyecto Justicia y Responsabilidad Empresarial (Justice and Corporate Accountability Project) de la Facultad de Derecho Osgoode Hall. “Si bien la Corte desestimó la demanda, dos meses más tarde, el gobierno declaró el estado de sitio en los municipios en que se había votado en contra de la minería y se emitieron más de una decena de órdenes de captura a nombre de personas cuya oposición a la mina era conocida”. 

Mientras que, del 2012 al 2013, hubo un aumento en la violencia y represión en contra de quienes se oponen a la mina, el CPPIB triplicó sus inversiones en Tahoe.

Pese a la amplia oposición al proyecto, Tahoe se precipitó para ponerlo en producción.

La carta indica que las afirmaciones de Tahoe en relación al depósito mineral en el proyecto argentífero Escobal no están respaldadas por un estudio de viabilidad, que es la norma para establecer mayor certidumbre en relación a los minerales que se puedan hallar. En julio del 2013, la Comisión de Valores de la Columbia Británica catalogó a Tahoe en su “Listado de emisores en mora” por no haber cumplido con los requisitos pertinentes de divulgación de información. La Comisión Nacional del Mercado de Valores de Estados Unidos también interpeló a Tahoe en relación a sus afirmaciones. Como resultado, Tahoe se vio obligada a corregir su Evaluación Preliminar Económica con objeto de clarificar que no se había realizado un estudio de viabilidad y reconocer que los proyectos carecientes de este estudio corren un “riesgo mucho más elevado de fracasar a nivel económico y técnico”. 

“Dada la amenaza que este proyecto supone para las comunidades en Guatemala, y en estos tiempos en que a la población canadiense le preocupa la capacidad del Fondo de Pensiones de Canadá de satisfacer sus necesidades futuras, esta inversión es sencillamente irresponsable”, observa Jen Moore, Coordinadora del Programa de Latinoamérica de Alerta Minera Canadá.

Moore agrega que el antiguo jefe de seguridad de Tahoe, Alberto Rotondo, está detenido a la espera de juicio por una agresión con armas de fuego en abril del 2013 contra manifestantes pacíficos que dejó seis heridos. “Es muy probable que aumente la violencia y el CPPIB debería evitar su involucramiento en esto”, concluye.

Contactos: 

• Jen Moore, Coordinadora del Programa de Latinoamérica, Alerta Minera Canadá, (613) 569-3439, jen(arroba)miningwatch.ca
• Shin Imai, Proyecto Justicia y Responsabilidad Empresarial (Justice and Corporate Accountability Project - JCAP), Facultad de Derecho Osgoode Hall, York University, (416) 736-5274, simai(arroba)justice-project.org 

*Las fuentes que acompañan a la carta dirigida al Consejo de Inversiones del Fondo de Pensiones de Canadá

Sixteen-year old girl murdered in continued violence associated with Tahoe Resources' mine, Canada Pension Plan urged to divest

(Ottawa/Toronto) A sixteen year old Guatemalan girl, Topacio Reynoso, was murdered on April 13, 2014 near her home town of Mataquescuintla, Guatemala where she was head of a youth movement against mining. Her father, a leader in organizing a municipal vote on the mine, was shot in the same incident and is in hospital in critical condition. This is the latest example of violence and repression associated with the Canadian-listed mining company Tahoe Resources' Escobal project.

Today, MiningWatch is sending a letter* to the Canada Pension Plan Investment Board calling on the fund to divest from Tahoe Resources. MiningWatch argues that the investment is a dangerous and unacceptable gamble.

The letter says that Tahoe has failed to disclose that tens of thousands of people in five municipalities closest to Tahoe’s Escobal silver project have voted overwhelmingly against mining in their communities. For example, in the municipality of Mataquescuintla, home of Topacio Reynoso, over half of the eligible voters participated in a vote in which 96% - or some 10,000 people - voted against mining.  

“Opposition to the Tahoe mine in the surrounding municipalities is so great that Tahoe actually sued the Guatemalan government, demanding that the government do more to protect the mine,” remarks Shin Imai, lawyer for the Justice and Corporate Accountability Project at Osgoode Hall Law School. “Although the Court dismissed the suit, two months later, the government declared a state of siege in municipalities where people had voted against mining and issued arrest warrants for more than a dozen people known to oppose the mine.”

As violence and repression against mine opponents grew from 2012 to 2013, the Canada Pension Plan Investment Board tripled its holdings in Tahoe.  

Despite broad opposition to its project, Tahoe rushed to put it into production.

The letter points out that Tahoe’s claims about the mineral deposit at its Escobal silver project are not backed by a feasibility study, which is normally used to establish the economic viability of exploiting a mineral deposit. In July 2013, the British Columbia Securities Commission put Tahoe on its ‘Issuers in Default List’ because the company did not comply with related disclosure requirements. The United States Securities Exchange Commission also questioned Tahoe about its claims. As a result, Tahoe was forced to amend its Preliminary Economic Assessment (PEA) to clarify that no feasibility study had been done and to acknowledge that projects lacking such a study “have a much higher risk of economic and technical failure.”

“Given the threat this project poses to Guatemalan communities, and at a time when Canadians are concerned about the ability of the Canada Pension Plan to meet future needs, this investment is simply irresponsible,” remarks Jen Moore, Latin America Program Coordinator for MiningWatch Canada.

Moore adds that Tahoe’s former head of security, Alberto Rotondo, is under arrest awaiting trial for an April 2013 shooting against peaceful protesters, which injured six. “The violence is bound to worsen and the CPPIB should want no part in this,” she concludes.

Contacts:

• Jen Moore, Latin America Program Coordinator, MiningWatch Canada, (613) 569-3439, jen(at)miningwatch.ca
• Shin Imai, Justice and Corporate Accountability Project, Osgoode Hall Law School, York University,  (416) 736-5274, simai(at)justice-project.org

*Sources for the MiningWatch letter to the Canadian Pension Plan Investment Board