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Sunday's
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Digging
Up Canadian Dirt in Colombia
Mining
village
By
Chris Arsenault
Up
a flight of stairs, behind double-enforced bulletproof glass and
a large, silent bodyguard sits the office of Francisco Ramírez,
a mining-policy researcher and president of Sintraminercol, Colombia’s
state mineworkers’ union. Mining policy really isn’t
sexy stuff and researching it usually isn’t a dangerous
occupation, but some of Mr. Ramírez’s conclusions
can mean life or death, both literally and figuratively. “Once
they tried to kill me right here in this office,” said the
researcher, who has survived seven assassination attempts.
In
Colombia’s mineral-rich underworld, often demarcated by
the full-scale destruction of towns near mining sites, environmental
contamination, paramilitary attacks and assassinations against
those who stand up to mining interests, Canadian hands are dirtier
than those of a coal miner coming up from the pit. “We had
a five-year, $11-million project in Colombia, which ran from 1997
to 2002,” said a senior official with the Canadian International
Development Agency (CIDA), who spoke on condition of anonymity.
“Basically, it was to help Colombia strengthen its institutional
capacity in both the Ministry of Mines and Energy and the Ministry
of the Environment and the regulatory agencies these agencies
worked with,” said the CIDA official in a phone interview.
CIDA
is supposed to be building schools, providing food aid and doing
other touchy-feely “development” in poor countries.
So many Canadians will be surprised to learn that the governmental
agency, with a $3.74-billion international assistance budget in
2004-05, spearheaded some controversial meddling in Colombia’s
domestic mining legislation, which, according to Mr. Ramírez,
helped “further under-develop Colombia, creating more poverty
and decreasing tax revenue for public investment.”
In
2001 and 2002, CIDA’s Colombia branch teamed up with the
Canadian Energy Research Institute (CERI), a think tank with thirty
staffers funded by various government departments and the mining
industry and based at the University of Calgary. The two organizations
worked together to “streamline the country’s mining
and petroleum regulations,” said the Calgary Herald.
According
to Ramírez, this “streamlining” had some nasty
effects on average Colombians. “Environmental regulations
were ‘flexibilized.’ Labour guarantees for workers
were diminished and the property of indigenous and Afro-Colombian
people was opened to exploitation,” said the researcher
during an evening interview in Bogotá.
One
of the most controversial changes to mining regulation concerns
the amount of royalties paid to the Colombian government by foreign
companies extracting non-renewable resources. After reviewing
the new code with a lawyer in Bogotá, Ramírez’s
allegations of a Canadian royalty robbery glistened like elicit
gold.
Prior
to August 2001, royalties were set at a minimum of ten percent
for coal exports above three million tons per year and a minimum
of five percent for exports below three million tons. After the
code was “streamlined,” with the help of CIDA, CERI
and their Colombian legal team, the royalty rate for private sector
owners of Colombian subsoil was reduced to 0.4 per cent, regardless
of the amount of material extracted. The new code also increased
the length of mining concessions from 25 years to thirty years,
with the possibility that concessions can be tripled to 90 years.
It’s
difficult to determine exactly how much money the Colombian people
lost because of these changes to royalty rates. One thing is clear:
In a country where an estimated eighty children die per day from
hunger and curable diseases, and where 64 per cent of the population
lives in poverty (earning less than $3 per day), the extra royalties
pocketed by mining companies could do more than increase stock
dividends.
In
2001, the final year of new code’s development and the beginning
of its implementation, 1,667 homicides were committed in Colombia’s
mining regions, twice the average rate of previous years, according
to Mr. Ramírez’s calculations.
The
process by which CIDA helped alter Colombia’s mining code
has been called “Canadianization,” but that isn’t
quite accurate. “Do as we say, not as we do,” would
be more appropriate. “Canadian royalty rates vary, but they
tend to be more like three to four per cent,” said Jamie
Kneen, communications coordinator for Mining Watch Canada, a union-funded
research and advocacy group. Moreover, payroll taxes and provincial
taxes are generally higher in Canada, bringing increased revenue
to support programs like decent public health care necessities
not granted to average Colombians.
It’s
worth noting that, under Colombia’s post-CIDA mining code,
the 0.4-per-cent royalty rate is not ubiquitous. “This notion
of 0.4 per cent as the royalty rate is absurd, you should check
your sources better,” said Edgar Sarmineto, director of
land acquisition for the Cerrejón Mine, the world’s
largest open-pit mine, which supplies coal to power plants in
eastern Canada and the northeastern United States. “Our
mine has paid more in royalty taxes every year for the last five
years. Today, in royalty taxes alone, we’re paying around
$300 million a year,” said the senior mine official as he
brought up pie charts on his computer screen.
The
aberration in the Cerrejón’s royalty rates stems
from Colombia’s earliest mining code proclaimed in 1886.
It was based on a French/Spanish model where subsoil resources
are the property of the state, as opposed to the Anglo-Saxon model
of full private ownership. The Cerrejón Mine, which is
owned by a consortium of multinational mining companies—BHP
Billiton, Anglo American and Xstrata—is a useful example
because of its size and political importance. Hernan Martinez
Torres, recently appointed Minister of Mines and Energy by Colombian
President Alvaro Uribe, worked at the Cerrejón Mine for
seventeen years.
The
Cerrejón is divided into three main zones: north, central
and south. The pre-CIDA royalties are in place for the north and
south zones, because the subsoil is still owned by the state.
Thus, as high oil prices push up demand for coal and extraction
rapidly increases, the mine ends up paying more royalties. In
the central zone, however, the 0.4 percent royalty rate is in
full effect.
“The
real issue here isn’t the royalty tax, but the regular [income]
taxes that all businesses pay. That’s where most government
money in the mining sector comes from,” said a mid-level
official from Colombia’s Mining and Energy Planning Ministry
(UPME), the bureaucracy responsible for administering the new
code, who spoke on the condition of anonymity.
Article
229 of the post-2001 code states that, “The obligation to
pay royalties on the exploitation of non-renewable natural resources
is incompatible with the establishment of national, departmental
and municipal taxes on the same activity, of whatever denomination,
method and characteristics.” Legalese aside, this means
that, if a company is paying royalties, other levels of government
are impotent to impose other taxes. If my UPME source is correct
that regular taxes are the key component for government mining
earnings, then Article 229 essentially decapitates the state’s
ability to garner public good from the exploitation of non-renewable
resources.
Because
of the constant public-education efforts by people like Francisco
Ramírez and institutions like Mining Watch and the North-South
Institute, senior CIDA officials seem to realize they have some
explaining to do when it comes to changing Colombia’s mining
and energy legislation.
Half
an hour and a couple of tough questions into the interview with
the senior CIDA official, my source was getting irritated. “The
mining code in Colombia was developed by Colombian government
officials. We had almost negligible involvement in developing
the code. They asked us to make one or two comments on specific
areas,” he said.
While
discussions of royalty rates weren’t appreciated by CIDA
sources, they were happy to discuss peace-building initiatives
and conflict-resolution schemes in Colombia with which the organization
is currently involved. “With the Ministry of Mines and Energy
and the Ministry of the Environment, we provided training and
information on how to conduct community consultations and conflict
resolution,” said the senior CIDA official.
These
“consultations” ring hollow for 700 former residents
of Tabaco, a farming town in Colombia’s northwestern La
Guajira Peninsula, which was reduced to rubble by the Cerrejón
Mine’s company bulldozers in 2001. “There were 300
soldiers and police in anti-riot gear. There were also representatives
from the mine, the mayor and a priest. They smashed the houses
with large machines.
They
took our farms,” said Jose Julio Pérez, the former
Tabaco residents’ elected leader, when discussing the “community
consultations” the Cerrejón Mine conducted before
displacing the farmers. “Mistakes have been made in the
past. We are working to be better community partners,” said
Edgar Sarmineto, a senior Cerrejón Mine official. Apparently,
CIDA’s information on how to conduct community consultations
wasn’t useful.
Tabaco
was but one of several villages destroyed by this particular mine,
and three more Chancleta, Patilla and Roche are on the chopping
block. “People from the mine have been threatening me to
leave and they’re stealing my cattle,” said Tomas
Ustatie, a farmer in Roche who milks his cows during our interview.
Two men on horseback who don’t live in the community watch
our conversation closely. Ustatie says they are goons paid by
the mine to eavesdrop on community members and create problems.
At
the Cerrejón Mine, Sarmineto admits the mine hires private
citizens (i.e. vigilantes, to watch property and garner information).
“This is a very large site and there is a lot going on here
with the guerrillas and other problems. We need to keep informed,”
says Mr. Sarmineto. Along with irregular forces and paramilitaries
who often guard mine sites, gather information and sometimes harass
local residents, there is no debate that the military works closely
with the Cerrejón and other mines.
Most
residents in towns near the mine site are indigenous or Afro-Colombian.
Under international law—International Labour Organization
(ILO) Convention 169, ratified in Colombia in 1991—indigenous
persons must be consulted on issues that affect their land and
any agreements affecting them must come through negotiations.
By
the admissions of Edgar Sarmineto at the Cerrejón Mine,
the company never conducted serious negotiations with the people
of Tabaco before smashing their village. To circumvent pesky international
protocols and domestic legislation, the Cerrejón Mine hired
an anthropologist who claimed there was only one Afro-Colombian
in Tabaco. “It’s not enough to deny them land. Now
the company is denying who they are as a people,” countered
one international
observer. In fact, any indigenous groups on the Guajira Peninsula
and beyond say they were never consulted when the mining code
was altered in 2001. The CIDA-backed legislation, then, likely
violates ILO 169.
The
trajectory of dispossession, privatization and government impotence
CIDA’s code helped spawn is being accelerated by Colombia’s
right-wing Harvard-educated president, Alvro Uribe. On July 25,
the Colombian government announced it was privatizing 20 percent
of Ecopetrol, the state oil company, a ludicrous move considering
the profitable firm puts large amounts of money into the public
purse and will only continue doing so as oil prices remain high.
President
Uribe was re-elected over the summer with a strong mandate. Questing
for peace in Colombia, Uribe made a deal with the devil, providing
amnesty to some 30,000 members of right-wing paramilitary groups,
many of who have been implicated in massacres and other crimes.
Thus far, the devil has delivered. While tenuous peace may become
part of Mr. Uribe’s legacy, justice most certainly will
not. The country’s vast natural wealth has been siphoned
off by well-connected government functionaries and sold away to
foreigners at bargain-basement prices.
Back
in Ottawa, CIDA’s nefarious tampering with Colombia’s
mining code is but one example of the organization’s abusive
foreign affairs. Yves Engler and Anthony Fenton note in their
book, Canada in Haiti, how Philippe Vixamar, former justice minister
of Haiti’s un-elected government, received his salary directly
from CIDA while presiding over a ministry responsible for holding
hundreds of political prisoners. Does “international development”
include direct payment to ministers in governments without the
faintest shred of electoral legitimacy, especially after the Canadian
military helped oust the democratic government?
As
the Make Poverty History crowd whines about the need for more
aid to float those poor Third World folks, progressive movements
need to take a hard look at current policies. While journalists
and activists in Canada need to win the “net war”
when it comes to CIDA and mining, Colombians like Francisco Ramírez
are in the midst of a real war fought with bullets, not talking
points. Ramírez says he has lasted this long “because
I believe in God and run very fast.” Colombians need more
than crucifixes and cross-trainers to deal with the current theft
of resources. They need our support not because we’re nice
people, but because we have caused many of their problems.
Chris
Arsenault
is an independent journalist based in Halifax, Nova Scotia, Canada.
A different version of this article was previously published in
the November/December 2006 issue of Canadian Dimension. Its views
are not necessarily those of PETROLEUMWORLD.
Editor's
Note: The preceding article was first published the colombiajournal.org,
on November 6, 2006. A different version of this article was previously
published in the November/December 2006 issue of Canadian Dimension.
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Petroleumworld
News 11/12/06
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