Good morning. Thank you very much, Mr. Chair and the members of the committee. I appreciate the opportunity to share some of the research we've been doing at McGill with the committee this morning.
The statement I am going to present is based on the collective work of a research group that I coordinate at McGill. It's called MICLA. It examines the different projects across Latin America that are organized by Canadian mining companies. The testimony I'm giving is also based on my personal experience in the particular case of Cerro de San Pedro, which is a mining town on the outskirts of San Luis Potosi, in Mexico.
The issue of proof and documentation has come up a number of times in this committee, so I should say here that our research is based on a broad range of sources. These are documents released by the mining companies, technical reports from engineering firms, press files, legal documents, as well as reports filed by NGOs, international organizations, and national governments. These documents have been supplemented by field interviews with people living near a Canadian mining project, and interviews with community delegations that have come to Canada over the years, and with mining executives, NGOs, and scientists.
My comments today focus on Mexico. Mexico is the host of the largest number of Canadian mining projects in Latin America, and it's the country where the data is the most complete.
I'd like to focus on three points. The first is that Canadian mining in Mexico is a high-risk form of economic activity. The second is that while conflicts have arisen between Mexican communities and Canadian mining companies, these are surprisingly few. And third, the Canadian government, especially as represented by its consular staff, appears ill-equipped to address the growing public backlash against our companies in that country.
I believe it is important to get a better understanding of the context in which our companies currently operate. If you consolidate project data with data on the environments and communities around them, you quickly get a profile of a high-risk industry. It combines a form of operation that has a high impact on its surroundings with the presence from one end of Mexico to the other of a densely populated area characterized by multiple uses, complex land tenure and significant social strife.
Canadian mining companies first entered the Mexican mining sector in the 1990s. They brought with them billions of dollars in equity. Because our companies dominated the sector, they currently own approximately three-quarters of the projects. They have arguably been the main driving force for the recovery of the mining industry in Mexico. Investment aside, they cleared the way for significant modernization of mining techniques. The biggest change is probably “large tonnage, low grade” mines, which are usually open pit.
Most of the projects carried out by our companies are gold, silver and copper mines. The majority of those mines are open pit. I do not want to praise nor do I want to criticize this type of mining, but first off, it is new; second, it has significant long-term impact on the land and water around it; third, there are contamination risks; and fourth, it requires huge investments. We are talking an average of a hundred million dollars for every project. These rural communities, many of which are very poor, are literally awash with money.
There are currently 519 mining projects developed by companies registered in Canada. They hold large concessions of many hundreds to thousands of hectares each--the average is about 15,000 hectares--and when you put this together we get a significant portion of Mexico's national territory.
I put this out because I want to talk about the actual social geography in which these companies operate. It's a social geography that's very different from that of mining in Canada. Mining projects are situated in areas where the average population density is about 49 inhabitants per square kilometre. To give you a reference for that, it's about equivalent to the area around Chelsea, so fairly densely populated but quite rural. The people who live there are predominantly small-hold farmers, which means that they depend on land and water for their livelihoods. In areas like Guerrero, Oaxaca, and Chiapas, many of these farmers are indigenous, which means that they have special rights to consultation under ILO 169, to which Mexico is a signatory. But it also means that they have special liabilities, which means that those rights are often ignored. The majority of the projects that we've surveyed, close to three-quarters, overlap with what are known as ejido lands. This is a collective form of land tenure accorded to rural communities after the Mexican revolution, and the laws regulating ejido lands are very strict. They make ceding land, changing land use, or even renting land very difficult, and this can trigger conflicts within as well as between communities.
Finally, in a general way, the Mexican countryside is currently facing its most serious crisis in generations. The violence surrounding the drug trade is on the rise. There's been an upswing in guerrilla activity and in the militarization of the hinterland. The number of cases of alleged corruption at the local and state level is also growing. So this is the context: a large number of projects that will impact heavily on the resources needed by local communities, competing claims on land use that are legally complex but which must be resolved in the context of deepening violence and recourse to extra-legal means of “getting things done”. And this is what I mean by high-risk enterprise.
Public debates over mining have tended to turn around conflicts that emerge between mining companies and local communities. An important line of our research has therefore been to better understand the factors and dynamics that lead to these conflicts. Surprisingly, in recent years only 13 projects operated by 11 Canadian mining companies have been embroiled in open conflict. We need to compare this with the over 500 projects in development across Mexico. The Mexican pattern generally holds across Latin America as a whole. For some 1,300 Canadian mining projects ongoing across the region, we count around 50 with attendant conflicts.
These 13 cases in Mexico depict a range of trajectories. We have seen communities put up blockades to stop mining operations and force the company to negotiate. In some cases, negotiations was successful in resolving the dispute. In others, the company called in the police to take down the blockades and arrest the organizers, often with excessive violence.
The violence has sometimes taken the form of attacks. These attacks have been perpetrated by people linked to the company against people opposed to the mine. We are talking about assault and, in two cases, murder. The latest one just happened. Last Saturday, November 27, Mariano Abarca Roblero, a manager from the community of Chicomuselo in the state of Chiapas, was gunned down in front of his house by two assailants.
A few days before he died, he requested state protection because he had been publicly threatened. The threats were allegedly made by two representatives of Blackfire, a company registered here in Canada. Before he was murdered, Mr. Abarca organized several public consultations in communities near the Blackfire project. After the communities rejected the mine, Mr. Abarca coordinated a number of blockades. That was in June and July past. He died because he wanted to protect his community.
What is the significance of these findings? I find three.
First of all, while Canadian mining in Mexico is a high-risk enterprise, the numbers show that the Canadian companies are so far capable of managing this risk. I've personally met with people from Mexican communities who recognize the good faith in negotiations of Canadian mining managers and are happy to work with the company. In this respect, the government's existing CSR strategy can only help our companies improve their track record on community relations and environmental impacts. This is the kind of preventive work that absolutely needs to be done if companies and communities are to interact in a healthy and peaceful way.
I find that there's been a false dichotomy that's crept into the debates in this committee, one that pits Bill C-300 against the government's existing CSR strategy. We obviously need both of these things, and they need to work together.
Second, this committee has heard concerns that Bill C-300 would expose the Canadian mining industry as a whole to hounding by communities and their allies seeking redress, that the number of complaints would overwhelm DFAIT's capacity to address them in a satisfactory manner, that the CPPIB would not be able to maximize earnings for pensioners, that the TSX would lose a significant percentage of its equity, that the Canadian industry would lose its reputation and its competitive advantage.
Each of these arguments assumes that Bill C-300 will somehow open the floodgates of woe and complaint. With over 500 projects, Mexico represents a major chunk of the Canadian mining industry's overseas activities. Thirteen cases over the last five years is hardly a flood of problems. I think the industry and the TSX can breathe more easily.
More importantly, Mexicans are pragmatic. If they can find satisfaction through successful negotiations with a company or through appeal to the Mexican courts, they will do so and they have done so. So even though there were 13 cases, most of them are resolved locally, without appeal even to government authorities in Mexico.
Third, there are on occasion serious problems that arise from the activities of Canadian mining companies in Mexico. This needs to be made absolutely clear. We have to stop pretending that every single project and company is beyond reproach, that NGOs are making up vexatious and fraudulent claims in order to save their jobs.
Yes, the conflicts that arise are complex in their origins and in their unfolding. Yes, there are many sides to the story. But there are also certain incontestable and documented facts. People have been killed; people have been physically aggressed; people have suffered damage to their property, their lands, and their water without adequate compensation or redress. People have been dispossessed of their rights.
I would like to lay out in more detail one such case.
