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Ecuador and the Making of World-class Environmental Disasters

Carlos Zorrilla

The text puts forward the argument that a certain combination of social, political and environmental factors can make large-scale mining especially destructive to countries, and often lead to serious human rights violations. Lax environmental regulations, kleptocratic leaders, rampant corruption, weak regulatory agencies, and no real independence of powers are some of the factors discussed. Geological and ecological risks also weigh heavily in creating World-Class environmental and social disasters. These include steepness of the topography, the ore’s composition, earthquake risks, and high rainfall. The implications of developing mining projects in such scenarios are likewise discussed.

Intag, Ecuador, where I live and work,is presented as a real-case scenario where all these factors converge

Every country has its own set of conditions that go in the making of environmental disasters. These range from lax environmental regulations, kleptocratic leaders, rampant corruption, weak regulatory agencies, to having no real independence of powers, to mention some of the more important sociopolitical factors. In the case of mining, which is what this text analyses, geological and ecological risks also weigh heavily. These include, the steepness of the topography, the ore’s composition, earthquake risks, and high rainfall. Put these together, and the scenario is set for a perfect storm of unimaginable consequences. Intag, Ecuador, where I live and work, and where three transnational mining companies and ten different governments have tried to develop a large-scale copper mine, all these disastrous ingredients come together; and then some.

For some countries, a major factor in determining the scale of the destruction could be lax regulations that allow, or even encourage, extractive industries to cut operating costs and pass on environmental liabilities to local, state and national governments, and future generations. As in the case of fiscal incentives discussed below, these de-regulatory measures can be a result of rules laid down by International lending institutions, such as the World Bank, the IMF, or state-control lending entities, such as Export-Import Banks. It is also not unusual for large mining corporations to dictate to governments what they expect to see in mining legislation before they invest; a task often aided and abetted by embassies from the company’s home country. Changes in the law or basic policies often follow these kinds of thug strategies. For a close-to-home example, for decades, mining was prohibited in Ecuador’s network of Protective Forests (Bosques Protectores). However, in the last three years, over forty of these legally protected areas have been opened up for mining. In addition, hundreds of mining concessions are also within buffer areas of national parks and wilderness areas, putting them at risk of land invasions, and worse.

Favorable fiscal legislation to the mining industry can be an important drive for fueling human rights abuses and environmental degradation. This refers to, among other things, economic and fiscal incentives meant to attract mining companies- regardless of their record- to invest in a country. The incentives can be so generous to corporations that they often lead to mining not only not economically benefiting the country, but also encouraging the opening of mines where they otherwise would be economically not viable. By receiving all kinds of tax breaks, for example, a marginal mine in a very socially or environmentally difficult environment could all of a sudden become viable. On the other hand, by restricting a mining company’s responsibility in things like shouldering the costs of mine closure and rehabilitation, companies are able to legally pass on these very costly activities to local and national governments. In such cases, local communities are the ones that end up paying the costs in terms of health impacts, which can last for generations. Similarly, if regulations are lax enough, it becomes much cheaper for companies to pay symbolic fines for violating regulations rather than invest in fixing expensive problems.

The noxious mix of lax regulations sprinkled with corruption calls to mind the horrible tragedy that wiped out the town of Bento Rodriguez in Brazil in 2015. In what Brazil has called its greatest environmental disaster, in November of that year, the wall of a tailings dam containing 40 billions of liters of semi-liquid toxic mining waste ruptured, sending a tsunami of poison almost three meters high, wiping out the town and snuffing the lives of 19 of its inhabitants. The effluent eventually reached the Atlantic Ocean hundreds of kilometers away, affecting the drinking water supplies of hundreds of thousands of Brazilians in towns along the river’s course. The tragedy could have been prevented had the country had tougher regulations and enforced them. The other factor that comes up over and over again in these kinds of tragedies is the company’s zeal in prioritizing profit over the lives of people and the environment. It is worth noting that one of the companies involved in the disaster, BHP, is one of the world’s largest, and considered by the industry to be environmentally responsible.

Institutional (In)Capacity

For other nations institutional incapacity to regulate and control mining industries plays a key role in the making of extractive nightmares. A government could be so hell-bent on collecting rents from mining and other extractive industries, that it will drastically and purposely cut funding to its regulatory institutions. The other powerful source of pressure to deregulate comes from big business. Regardless the source of the pressure, the lack of regulatory capacity will make environmental and human-rights catastrophes all the more likely. This de-regulatory mania was a main objective of some of the world’s international financing institutions a couple of decades ago, especially the World Bank. The stated goal of the World Bank back then was to promote development. Its real intent was to benefit transnational mining interests and the economies of powerful nations. The end result? Cheap resources for northern economies. The Bank implemented such a program here in Ecuador in the early 2000s called PRODEMINCA. One of the areas funded was the overhaul of the country’s mining legislation in order to make it “more competitive”. Two of the most successful results of the modifications to the law was doing away with royalties the resource tax companies pay nations, plus eliminating most environmental controls.

How deregulation works is fairly straight forward: The less regulations and oversight, the cheaper and easier it is for extractive industries to exploit resources, thus more attractive to invest the country and more profitable for shareholders. Cheap resources means cheaper end-products, which fuels the economies of countries that are able to transform the commodities into finished products; such as China. The Asian giant consumes approximately 50% of the many of the world’s metals.

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On the Coattails of the Big Ones

It is not only the large corporations that benefit from lax regulations and other similar dysfunctional policies and human behavior. These also allow small-scale and artisanal mining to get away with terrible environmental and human-rights crimes. The world is tragically full of these cases, such as widespread deforestation, violent land invasions, mercury-laden rivers, and murder of activists. Many of these impacts are affecting indigenous as well as non-indigenous people all over the world, usually in places far from the public’s eye and where few journalists visit.

Corruption and Impunity

Endemic corruption is another key ingredient empowering devastation. Corrupt officials facilitate quicker licensing and demand much less compliance which, for companies, means cheaper operation costs. For a few thousand dollars, for example, regulators can approve deficient studies that are meant to identify mitigate or avoid impacts of the proposed mining operations on people and nature. In the mining project close to home, I’ve seen how deeply deficient Environmental Impact Studies have been approved by government agencies in spite of lacking the most elemental information necessary to take informed decisions on how to avoid impacts by the proposed mining activities. For example, climatic information was used from a completely different ecosystems than from where the mining project is located. Nor did the Study have nearly enough information about on annual and distribution of rainfall, nor of ecological water flow of rivers. Omission also is part and parcel of these “purchased” licenses. These vary wildly, but can include omitting the presence of species facing extinction, not reporting on the acid mine drainage generating potential of the ore, skipping reporting on known earthquake faults, and so forth. Importantly, corruption also helps corporations green-wash their image when regulators issue clean bill-of-health reports for obviously dirty, or dubiously illegal operations. This is especially important for companies to calm the fears of investors and pacify possible local resistance.

Closely tied to corruption is a climate of impunity. In essence, impunity reflects a lack of respect for the rule of law, which though not as visible as other factors, is a powerful force in giving birth to some of the world’s greatest environmental disasters and human rights violations. It should, therefore come as no surprise to discover a strong correlation between the murders of human-rights and environmental-rights activists and high rates of impunity, as in the case of Mexico, Colombia and Brazil; countries with shamefully high murder rates of activists).

Trading One’s Way to Environmental Hell

Another little known factor supporting environmental disasters are international, regional or bi-lateral free-trade and investment protection treaties; agreements countries sign to promote “free trade” and protect and foster foreign investments. These, often, are extremely onerous to developing countries, who often sign them under pressure from International Financing Institutions in order to attract foreign investments. Noncompliance with any part of the agreements- especially the Bilateral Investment Agreements, can trigger multi-million or even billion dollars lawsuits by corporations against a signatory country. It is not uncommon, therefore, for countries to take no action to protect its citizens or its environment for fear of ending up in one of several international tribunals facing a multinational corporations, whose revenues may exceed a nation’s annual fiscal budget.

In the case of Ecuador, for example, its 2017 budget was 32.3 billion dollars. The revenues for the same year for BHP, one of the world’s largest miner with a notable foothold in the Andean Nation, was 38.27 billion dollars. The pressure to comply with free trade and bi-lateral agreements can be so intense, that they can force nations to change their legislation. Because of these instruments, a country is often powerless to apply its own legislation to remedy or prevent environmental crimes, or protect its citizens.

An example of the consequences of these investment treaties is that of Copper Mesa versus Ecuador; a case very close to home, and in which I participated as a witness against the company. The Canadian Junior miner, in spite of many illegalities committed in Intag, recently won a 20 million dollar award from Ecuador. They won in spite of the fact the tribunal recognized the company violated Ecuadorian criminal law by using paramilitaries to shoot at defenseless individuals. Instead of throwing out their claim against Ecuador, the UNCITRAL tribunal only fined Copper Mesa 30% of the initial award. Compared to several other cases where hundreds of millions have been awarded to corporations, the 20 million is loose change.

Ecological Considerations

Political and social considerations aside, there are a number of other factors which, taken together, contribute significantly to the making of environmental and human-rights disasters. These geological and ecological aspects are numerous, but include a site’s annual rainfall, the steepness of the terrain, the amount subsurface water present, the type of vegetation covering the mining area, and the number of species threatened with extinction. No less important is the composition of the ore and depth of where it is located. Other factors like a site’s seismic risks also could play a very important role.

Depth of Damage

Most people don’t realize that most of the world’s metals come from ore deposits that are hundreds of meters deep. The deposits close to the surface were mined decades ago. Companies, thus, have to dig deeper and deeper to access and extract the ore. And the deeper these massive craters are, the more forest cover, topsoil and subsoil need to be blasted, removed and discarded in order to access the ore. Hundreds of millions tons of rocks and subsoil can thus end up in toxic waste dumps this way. The material is toxic because the subsoil in mining sites is anything but “sterile”. The discarded subsoil (called overburden) usually contains heavy metals, including lead, arsenic, mercury and cadmium, and other toxic substances in quantities not economically viable to process. It is not uncommon for waste rock from mines to contain iron pyrite, a compound, responsible for generating Acid Mine Drainage (AMD), which exponentially increases a mine’s contaminating potential.

The impacts of Acid Mine Drainage are difficult to grasp. There are mines in Europe still hemorrhaging contaminated acid waters, such as the Río Tinto mines in Spain, which were opened centuries before the Roman era. It’s a problem still plaguing mining operations today, and one that all the technology in the world cannot correctly predict, nor fully control. Some mines in the U.S. for example, are predicted to require remediation in perpetuity. The contaminating potential of AMD is specially troublesome in high-rainfall areas, where most of Ecuador’s proposed mining sites sit.

A Lethal Mix

Besides the presence of iron, other minerals are key in determining a site’s environmental impacts. Most copper ore in western South America, for example- where most of the world’s copper originates- contains arsenic, in addition to other heavy metals, including lead and/or mercury. These poisons will end up in local ecosystems and beyond once it is removed from the rocks by the acid water, and transported by surface waterways as well as by underground aquifers far from a mine’s location. Indeed, a mine’s upland location can be the cause drinking water contamination kilometers away from a mine, and can contaminate crops irrigated by the poisoned water. And, as all rivers eventually discharge into the oceans, the heavy metals flowing out from mines can also end up in coastal ecosystems, wreaking havoc on shell-fish collectors, aquaculture businesses and others who depend on healthy marine ecosystems for survival.

The Perfect Storm

Unfortunately for Ecuador, it is single-mindlessly pursuing mining development at a point in time the country embodies almost all of the above factors, guaranteeing that it will be home to more than a few world-class environmental disasters. In the last three years, for example, Ecuador severely gutted its environmental regulations, while approving a long list of generous tax break and other fiscal incentives in order to attract mining investment. That, in itself, would be plenty to fuel environmental crimes, but Ecuador is also one of the world’s most corrupt countries! The small Andean nation is also no light weight when it comes to kleptocractic leaders. Ex president Rafael Correa and several others in his administration are being investigated in relation to a series of corruption scandals, which has already landed his ex-vice president in jail.

Alas, the woes don’t end there. The country’s institutional capacity to control mining is deplorably inadequate. The lack of control has given rise to numerous illegal mining operations that, while being reported on national media, the government is incapable of shutting down. In the meantime, they are trashing the environment and inflicting cultural havoc in indigenous peoples and campesino communities. In fact, most human rights, environmental and indigenous organizations in Ecuador firmly hold that not a single mining concession in the country is legal- including those awarded to large corporations- because they were granted in violation of the community’s Constitutional right to be consulted prior to permitting mining to go ahead. The lack of prior consultation is gearing up to be the major issue confronting the government’s mining initiative.

Another important, but little talked-about, factor in the making of extractive disasters, is the lack of separation of powers. It can become a very important litmus test in determining how devastating economic activities like mining can be. Until very recently, there was no independence of powers to speak of in Ecuador, thus affected populations felt they had no legal recourse to defend their rights, lands or livelihoods from powerful corporations or illegal small miners. Even today, after some very positive changes under the country’s new president, Lenin Moreno, many communities distrust the country’s courts.

Environmental Components

As is the case for the sociopolitical factors, the environmental factors contributing to mining nightmares are all in place in Ecuador. To cite a project I am familiar with, the Llurimagua mining concession in Intag’s biodiverse Toisan Range, the copper found under the primary cloud forest is mixed with arsenic, lead, cadmium and chromium (the project is in the advanced exploration phase and operated by Chilean-owned Codelco). Given that the percentage of copper in the ore is only 0.5%, it means that 99.5% of the hundreds of millions of tons of the ore will end up as mine waste. Crucially, because of very high-rainfall conditions and acid-generating pyrites, the ore and subsoil will generate Acid Mine Drainage for centuries to come. Greatly compounding the problem was that the ore was discovered laying several hundreds of meters deep.

Extreme Biodiversity

Although lying outside the Amazon basin, the Llurimagua mining project, as well as most of Ecuador’s mining concessions, lies within the Tropical Andes Biodiversity Hotspot; the most biodiverse region of our planet. To have a better idea of this area’s biological importance, the mining concessions in this part of Ecuador overlay forests that are the home to hundreds -not “merely” dozens- of animal species facing extinction; including several in critical danger. The forests withing the Llurimagua concession’s forest is the habitat of a species of frog that, until 2016, was thought extinct, and found nowhere else. These same mountain forests are used by communities for ecological tourism, and protect dozens of pristine rivers and streams. If that wasn’t enough, the site where the copper was discovered in Intag is located in a seismically active zone, and the topography is ridiculously steep. It also gets between three and four meters of rain yearly. In short, there are very few sites in the world that, given all these factors, would be as environmentally destructive as this one, if exploitation is allowed to proceed.

Yes, But…

There are no lack of individuals who would argue something along the line of: “we need metals for our well-being”. Undoubtedly, but we also need a lot more than metals in order to live well. Starting with a balanced climate, clean air and water, and healthy rivers and oceans; not to mention natural places to re-create ourselves. Just as one would never dream of tearing down the Notre Dames of the world or turn places like the Gran Canyon into open pit mines to satisfy the hunger for metals, so too, there are many places on the planet that would constitute environmental and cultural crimes to trash in order to feed the unquenchable thirst of industry. Ecuador is full of such places. Consider this also: most metals go into gadgets and luxury items humans can live without, and which often end being tossed after a couple of years use. On the other hand, one has to wonder how many individuals from the developing world will be able to afford consumer goods like electric vehicles, that will take millions of tons of copper, nickel, cobalt and other rare metals to build. The inconvenient truth is that most metals are consumed by the citizens of a handful of rich nations, while the environmental, social and cultural consequences are assumed by citizens of the poorer nations where the metals are mined.

Foundations

One could look at the constructing of a world-class environmental disaster in the same way as the building of a mega high riser. For the building not to collapse and cause loss of lives, it has to have, among other things: high-quality material, perfect plans, efficient and impartial oversight, and tough regulations from start to finish. It’s specially important that it has strong foundations. In the case of mining in general, and the problem is applicable to most of mankind’s economic activities, if the foundation is flawed, it puts the whole operation at risk. The flaw in the foundations has to do with the value that most members of our species put on economic development and growth-for-growth’s-sake over everything else; including Life Itself. It is in the enactment of this flawed human perspective that politicians find their inspiration and psychological support to approve mining projects that will undoubtedly violate human rights, impact ancestral tribes, destroy the habitat of hundreds of species facing extinction, contaminate the air and land with heavy metals, and make it profitable for companies to contaminate rivers for hundreds of years.

This same upside down value system has severely undermined the planet’s climate control and taken it to the brink of global collapse. And yet, government officials keep approving mining and other destructive economic activities in indigenous lands, pristine areas, native forests and other highly fragile ecosystems. And here’s the crazy(er) thing; those of us who are trying to fix the flawed foundations are accused of everything from being anti-growth, infantile environmentalist, to outright ecoterrorists. The failing life-support systems, however, tells us that we are right.

Hope

It is easy to lose hope when confronting the scenario described above. However, the response by Ecuador’s civil society to the threat posed by the nation’s mining policy has been heartening. In the past three years, for example, human-rights, environmental and indigenous organizations in Ecuador have joined together like never before to oppose what they see as an outdated model of development. A model based based on extractivism and on valuing more what is under the ground than what is above it. One of the more successful, and diverse, groups in Ecuador focused on resisting the path of extractivism is the collective called Caminantes. Our objective is to try to stop mining from destroying the country’s real wealth: its unequal biological diversity, its rivers, forests, paramos and other fragile ecosystems, as well as its fertile land and, most of all, its people and cultures. In essence, it is about securing a sustainable, safe and balanced system of life for our, and future generations.

Although some large-scale mines are very close to starting, to date, Ecuador is the only Andean nation free of large-scale open-pit metal mines. We believe there is still hope, especially since the two recent court victories by indigenous groups, based on the government´s violation of their Constitutional right to prior consultation. Disappointingly, but perhaps not surprising, the rulings are being aggressively appealed by the Executive Branch- including the Ministry of the Environment.

A lot is riding on these, and other similar cases communities are preparing to present. If the courts can once again reclaim their independence- as there is some indication they are doing- and if other key factors can be addressed, such as clamping down on corruption and strengthening the country’s regulatory institutions, then Ecuador stands a good chance of avoiding being the home to world-class environmental disasters and, at the same time, guaranteeing a sustainable future for its citizens.

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