Author: MRAG

SolGold joins Rinehart with trouble in Ecuador

SolGold joins Rinehart with trouble in Ecuador

August 6, 2019

SolGold joins Gina Rinehart’s Hancock Prospecting as the latest Aussie company to face challenges on their Ecuadorian mining concessions. Illegal miners who were evicted from Rinehart’s concession at Buenos Aires in July, have been active on SolGold concessions in the Imbabura and Carchi provinces, while ongoing community resistance is thwarting SolGold’s plans to develop mining operations in the country. Despite PR announcements to the contrary, SolGold is facing a wave of resistance from locals who want the company and its subsidiaries out of their parishes.

The biggest headache for SolGold in Ecuador centres around ambiguities over the legal status of many of its concessions (including at least half of its "priority projects") due to concerns over Indigenous land, Protected Forests and a constitutional requirement for consultation with local communities. Widespread resistance from local communities to industrial scale mining, and rampant illegal mining (often with ties to international criminal cartels), seem likely to further derail hopes the company has of launching a successful mining operation in the country.

Rainforest Action Group map showing SolGold concessions (yellow outlined in red), Protected Forests (purple) and Indigenous territory (green) with areas of community unrest (yellow pins).

Community unrest

The province of Loja has been a hotbed of unrest for years. A successful court case against Chinese mining company Junefield shut down operations at their Rio Blanco mine in August 2018. In latest news, residents of Gualel who are surrounded by three SolGold concessions (El Cisne 2A/2B/2C), plan to radicalise protests if mining concessions are not withdrawn. They propose to march with residents from the Azuay, Loja, El Oro and Zamora Chinchipe provinces, stating on 30 July that if they are not heard they will go on a hunger strike.

More meetings are expected to take place in the first weeks of August in parishes and cantons in Zamora Chinchipe that are threatened by mining activity.

Popular consultations against mining

Numerous local parishes and cantons have been voting on mining across the country in recent months. These popular votes could form a significant legal challenge for the government and impede the development of mining projects across the country.

After a massive event involving 140 delegates from the provinces of Esmeraldas, Carchi, Imbabura and Sucumbíos, the Awá announced on 25 July the total rejection of mining in the territory. This was the fourth time they had passed a mandate to ban mining in their territory. SolGold holds 3 concessions that overlap Awá territory, while one is held by Hanrine Ecuadorian Exploration and Mining SA (HEEM) – a Rinehart-owned subsidiary.

“This resolution prohibits mining intervention in Awá territory and megaprojects that are not in line with the needs of our people. Our territory must be respected,” said Jairo Cantincus, president of the Awá.

Further south, communities and social organizations in the Bolivar province announced they want SolGold subsidiary Valle Rico mining out of the region, with a declaration on 28 July 2019 declaring the parish free of mining and calling for a permanent mobilisation to defend its territory of the mining company Valle Rico resources.

On the 30th July, a protection action was presented in the Yantzaza canton in the Zamora Chinchipe province to reject mining in Alto Nangaritza, where SolGold holds six concessions. This was due to this area being part of the Cerro Plateado biological reserve and declared Protected Forest by ministerial agreement.

SolGold stocks took a battering in May after media reports of a potential referendum on mining in Imbabura, where Cascabel is located. The case by Wilmer Meneses Ibarra hinged around the lack of community consultation. However, the Constitutional Court ended up throwing it out because applicant failed to adhere to the procedural requirements for launching such a case. The core concerns of the community regarding consultation were not addressed.

This point was largely overlooked in international media, with Reuters claiming on July 31 that: “the Constitutional Court ruled against a request to require community consultations over the Cascabel mine”. Such a ruling would potentially contravene SolGold’s UN and OPEC obligations in which foreign companies must ensure the support of Indigenous and local groups before proceeding with such an enterprise.

Provinces of Ecuador – Reference Map. Copyright not owned by Rainforest Action Group

There have been at least five similar cases where the application was competently presented which proved successful, showing that courts do generally support communities’ claims about the lack of consultation. Three landmark cases over the past year involving the communities of the Waorani, the A’I Cofán and the Rio Blanco mine in Cuenca were won because the government had not informed communities their territories were being opened up for oil or mineral exploitation.

Indigenous Kichwa Prefect Yaku Perez, an environmental and human rights lawyer, has been assisting parishes within the Azuay province to vote on mining in order to establish a proper consultation process.

Pérez presented a petition to the Constitutional Court to ban mining in the Azuay province on July 22 after his call for popular consultation in the Provincial Chamber of Azuay passed with a simple majority, but did not achieve the three-fourths majority that would allow it to be immediately executed. The Constitutional Court has twenty days to make a decision.

If the Constitutional Court agrees to a popular consultation, mining companies may be able to sue the Ecuadorian government before an international tribunal for reneging on its commitments. Such a case could put mining interests on hold for years.

Voters in the Girón canton in Azuay voted overwhelmingly to ban mining on March 24, with 86.79 per cent of the canton’s 15,000 voters rejecting mining in the area. SolGold has two priority projects in Azuay: 'Cisne Loja' and 'Sharug'. Sharug entirely covers a Protected Forest, while Cisne Loja – comprised of two concessions – has approximately 90 per cent of one concession within a Protected Forest, while about 15 per cent of the other is within Protected Forest.

On top of this, there is near unanimous community opposition in the region. Illegal mining raids by the Ecuadorian Army in Azuay on the 31st of July were also only 30 kilometres away from these projects.

Illegal mining

Illegal mining is becoming the poster child for chaos for mining investors, with the Ecudorian Army being sent into the provinces of Carchi and Imbabura in July to attempt to secure the area after illegal miners were found prospecting there. SolGold holds nine concessions in the region under the subsidiary Carnegie Ridge Resources S.A.

This is in the wake of military evictions at the illegal mining operation at Buenos Aires, on concessions owned by Gina Rinehart in July, when more than 5000 local and international miners were evicted. Buenos Aires had up to 10,000 miners descend on the region at the height of its activity. Mining operations were purportedly run by various militia groups – with Colombian, Venezuelan and Mexican crime cartels vying for control.

These illegal miners are now exploring other prospective sites in the country using mining company reports to scour for likely locations.

Rainforest Action Group summary

The Rainforest Action Group is a research and advocacy group investigating Australian mining companies and their operations, particularly in Ecuador. Rainforest Action Group spokesperson Martin Daley says it is clear that despite government claims to the contrary, mining in Ecuador is not wanted.

“We are very concerned that Australian mining companies such as SolGold are continuing to push forward with plans to mine in the area, despite Indigenous and local communities clearly being resistant to these plans,” Martin says.

“Copper is being greenwashed as a sustainable resource to fuel the growing electric car market, however it comes at a great cost to the Andean and Amazonian biospheres, which include some of the last virgin tropical rainforests in the world, and the world's most biodiverse ecosystems.”

“Recent studies show that planting 3 trillion trees might be the most effective way of combatting climate change. We believe that protecting and extending the rich ecosystems that are already in place is a far more sustainable outcome, as is supporting local people to build economies that are not dependent on fossil fuels or mining. Global development just cannot continue at the rate it has been.”

With thousands expected to join protests planned in Melbourne in October to oppose the International Mining and Resources Conference (IMARC) and protest government inaction on climate change, it is apparent that resistance to mining is growing globally.

SolGold holds 75 mineral concessions in Ecuador through four subsidiaries. Financial Times states that: “Year on year SolGold plc's net income fell 341.77% from a loss of 4.42m to a larger loss of 19.52m despite flat revenues”.

A flyover of Ecuador here shows SolGold concessions, overlaps with Protected Forests and Indigenous territories, and community conflicts. Maps by Rainforest Action Group and Forest Network.

Contact details and  full media release with appendices here.

 

Cornerstone and ENAMI violating court ruling?

CORNERSTONE AND ENAMI ACTING ILLEGALLY, ECUADORIAN ORGANISATION SAYS

ENAMI and Cornerstone employees continue to be active at the Los Cedros Biological Reserve, cutting trees and damaging forest OMASNE says, despite the Provincial Court of Imbabura ruling on June 19th that the mining project was in violation of the right of Environmental Consultation. Environmental permits were revoked and all mining activity in the area prohibited.

Cornerstone CEO, Brooke Macdonald. Video still

This blatant violation of the law is in keeping with statements by Cornerstone Capital Resources CEO Brooke Macdonald when he stated at the recent shareholder meeting in Toronto, Canada on June 25th: "We will follow the law, but this decision of this lower court in Imbabura is subject to appeal, and we believe that the lower court erred in law and is incorrect… If we lose the appeal then we'll be out of there." [emphasis added]

Ecuadorian organsisation Observatorio Minero Ambiental & Social del Norte de Ecuador (OMASNE) denounced the activities on 10th July, saying the mining companies have “failed to comply with judicial rulings” and that they now “continue to conduct mining exploration illegally in the area of ​​influence of Los Cedros Protective Forest”. [full denunciation by OMASNE below]

OMASNE go on to say that Cornerstone Resources continues to sign agreements with landowners to conduct their exploration efforts in the Los Cedros Protected Forest, and insists that Cornerstone withdraw their activities from the area in accordance with the court's ruling.

MiningWatch Canada states: “This most recent decision is yet another example of the sovereign decisions that communities and courts are making in the country, falling on the deaf ears of the company.”

The judges in the provincial court of Imbabura ruled on June 19 that there had been a violation of mining-impacted communities' right to be consulted, and revoked the previous sentence of November 2018 in which the Action of Protection was discarded. They also forced the Ministry of Environment and Water to publicise the ruling and formally apologise to the impacted communities.

Los Cedros was established in 1988 as a biological and scientific reserve with the help of the Rainforest Information Centre. It consists of 17,000 acres of incredibly rare, premontane wet tropical forest and cloud forest, and numerous critically endangered and vulnerable species, including puma, jaguar and the rare Brown-Headed Spider Monkey.

OMASNE’s statement (translated by Roo Vandergrift, Marrow of the Mountain) follows:

permission_to_explore_magdalena_july_2019_1

[OMASNE DENUNCIATION] #JusticiaLosCedros

The mining companies #Cornerstone and # ENAMI-EP continue to conduct mining exploration ILLEGALLY in the area of ​​influence of Los Cedros Protective Forest.

Cornerstone and ENAMI-EP attempt to gloss over the violation of the right to environmental consultation, which has already been determined in the ruling by the Provincial Court of Justice of Imbabura on June 19 of this year.

But, at the hands of the Ecuadorian state, for more than a decade mining companies have been deploying an invasive propaganda of "Legal, Responsible Mining"; however, once again mining companies have VIOLATED THE RIGHTS OF THE ECUADORIANS and failed to comply with judicial rulings favorable to the defense of the Water, biodiversity, and the rights of humans and nature in different territories of the country.

The Provincial Court of Justice of Imbabura, in the sentence issued in numerals 2 and 4, clearly indicates the violation of the right of the Environmental Consultation to the communities of the area of ​​influence of the mining project and also that it resolved to withdraw the environmental license to the mining companies for operate:

2.- Declare the violation of the right to participation, established in Article 61, paragraph 4, of the Ecuadorian Constitution, in the guarantee of the environmental consultation established in article 398 ibidem, which should have been carried out to the peoples located in the area of influence of the Magdalena River Mining project, conformed by the Magdalena River 01 concessions (Code: 40000339) and Magdalena River 02 (Code: 40000340), located within the Protected Forest "Los Cedros", Llurimagua sector, García Moreno parish, Cotacachi canton, province of Imbabura.

4.- As a measure of reparation is available, leave without effect the act administrative dispute, consisting of Resolution No. 225741, dated December 12, 2017, in which the Ministry of Environment and Water, granted the environmental registration in favor of the National Mining Company ENAMI EP, to perform the initial exploration phase of the Magdalena River Mining Project, conformed by the Rio Magdalena 01 concessions (Code: 40000339) and Magdalena River 02 (Code: 40000340), located within the Protected Forest "Los Cedros", sector Llurimagua, García Moreno parish, Cotacachi canton, province of Imbabura

What does the Ecuadorian Ministry of the Environment expect? Them to comply with the judgment of the Court?

Where are the state institutions that must regulate the mining activity to bring order and prioritize the Court's decision in which the right of Ecuadorians is given priority?

Are the local and provincial authorities going to pronounce themselves in this respect and govern in favor of the people of Imbabura?

 

Note: This piece was edited to correct Cornerstone's CEO and where the shareholder meeting took place.

Legal problems cast doubt on BHP’s future in Ecuador

A series of legal cases based on constitutional law have created doubts over BHP's operations in Ecuador. These court cases highlight the risks for international mining companies who fail to familiarise themselves with their legal obligations under Ecuador's constitution.

Jose DeCoux, administrator of Los Cedros. Image credit: La Hora

Martin Daley, Rainforest Action Group (Melbourne) stated, “It is the fifth time in just over one year that judges in Ecuador have ruled against extractive industry in protected areas based on lack of community consultation.”

A legal case¹ launched to protect the Los Cedros Reserve in the Intag region of Cotacachi province succeeded in stop work order against Ecuadorean state mining company work on the Rio Magdalena mining project.² BHP owns and has been exploring concessions (Sabaleta 1, 2 & 3) adjacent to the Rio Magdalena project, and the corner of BHP concession Sabaleta 3 also partially overlaps the Los Cedros Reserve. Read more about the Los Cedros win here.

“Last week's court judgement withdrawing registration of concessions was based on Enami's failure to adequately consult with local communities prior to commencement of the project as is required by the Ecuadorean constitution.”

"All of BHP's concessions can be contested if BHP fails to obtain the free, prior and informed consent from local communities," continued Mr Daley.

Ecuador's Ministry of Environment and Water was ordered by the court to publish an apology³ to communities affected by the mining activities which stated, "Therefore, (the Ministry) offers public apologies for said violation and recognises its duty to respect and protect the rights of the environment and nature."

“In 2017, one of the plaintiffs from the recent case, the former mayor of Santa Ana de Cotacachi, Jomar Cevallos Moreno, wrote to BHP CEO Andrew Mackenzie requesting that BHP withdraw its concessions in the region”, said Mr Daley.4

“BHP may find themselves involved in a similar case if they attempt to build a mine in the area.”

For further media information email us at media@rainforestactiongroup.org or refer to press release to talk to a Rainforest Group representative.

1.[Spanish] ‘Bosque Protector Los Cedros le gana la batalla a la minería’, La Hora, 20 June 2019, https://www.lahora.com.ec/imbabura/noticia/1102252117/bosque-protector-los-cedros-le-gana-la-batalla-a-la-mineria-

2. The same team who won the Los Cedros case have just announced they will now be launching a similar case on the Llurimagua project at Junin which is another Enami project leas than 10 km from Los Cedros.

3. [Spanish] ‘En Junín tomarán nuevas acciones para evitar la minería’, La Hora, 27 June 2019, https://www.lahora.com.ec/imbabura/noticia/1102253731/en-junin-tomaran-nuevas-acciones-para-evitar-la-mineria-

Download media release here. Download letter to BHP from the Mayor of Cotacachi here here.

4. See letter from Jomar Cevallos Moreno to BHP CEO Andrew Mackenzie attached with this media release - in the Los Cedros case, Mr Moreno worked alongside an international team of biological scientists and Ecuadorean constitutional law specialists to ensure this globally significant region for biological diversity was not impacted by mining activities.

 

Los Cedros court win

COURT WIN FOR LOS CEDROS BIOLOGICAL RESERVE

On June 19th, judges in the Imbabura province ruled in favour to protect Los Cedros, the iconic cloud forest reserve in Ecuador's Western Andes, which is under concession for copper and gold mining to Canadian company Cornerstone and Australian BHP.

The judges in the provincial court of Imbabura ruled that there had been a violation of mining-impacted communities' right to be consulted, and revoked the previous sentence of November 2018 in which the Action of Protection was discarded. They also forced the Ministry of Environment and Water to publicise the ruling and formally apologise to the impacted communities.

Most importantly, the environmental license for ENAMI/Cornerstone and BHP to conduct explorations has been revoked, which means they can no longer legally trespass on the area.

This win throws into disarray the future of mining companies in this highly biodiverse water-source part of Ecuador. It is the fifth time in just over one year that judges in Ecuador have ruled against extractive industries in protected areas based on the lack of community consultation.

Brown-headed Spider Monkey. Photo: David Ni Castro

Los Cedros was established in 1988 as a biological and scientific reserve with the help of the Rainforest Information Centre. It consists of 17,000 acres of incredibly rare, premontane wet tropical forest and cloud forest, and numerous critically endangered and vulnerable species, including puma, jaguar and the rare Brown-Headed Spider Monkey.

The judges travelled to Los Cedros in April to see the reserve for themselves, and to interview locals about the operations of the mining companies in the area.

The ruling has helped to set a precedent for protection of Protected Forests at a national level. The requirement that immediate reparation is made makes the ruling historical as well.

The Ministries of Environment and Water must also offer public apologies to the communities affected, with apologies to be published in a national newspaper as well as on the front page of its website, for a period of three months.

Jose DeCoux, administrator of Los Cedros. Image credit: La Hora

José DeCoux, administrator of Los Cedros, celebrated the decision, saying "We are glad that the Court has taken into account our complaint, which spoke of the lack of a consultative process... It is not the first time that we have faced a mining company here in the reserve, and we have left with conservation leading. It is a historical failure [for the mining companies]."

José believes those in governance need to obey the rule of the Constitution. "They must learn that the correct steps must be followed before they issue a mining concession. They must seek approval from the people who will be affected by such a concession."

He says that a recent ruling in Quito, by the Constitutional Court, that denied the request for consultation in the sector of Cascabel, in Imbabura, Carchi, was for procedural reasons.

"The popular consultation request was badly prepared. We think that we can develop a good one, with lawyers that are experts in constitutional law," José says.

However, the battle is far from over. The court’s ruling on mining in Los Cedros was primarily on the grounds that communities in the region were not properly consulted about the environmental license given to the National Mining Company for initial explorations.

Other defenses, which included references to Constitutional Law around the rights of Pachamama, human rights to clean water, and the forbidding of metals mining in protected forests, were not included in the final ruling. This means the other 41 mega-diverse protected forests covered by mining concessions are still at risk.

Ecuador, meanwhile, is pushing brazenly ahead with its plans to become a ‘mining country’. Last month, a Presidential Decree was introduced changing the national mining laws to dramatically weaken legal requirements for prior and informed consultation. While Ecuador’s constitution remains a safe harbour for activists, with its strong focus on human and nature rights, the real battles from now on are going to be at the level of local and regional courts, where proceedings are routinely corrupted by pro-mining interests.

On this basis, the Rainforest Action Group’s focus is currently on establishing a Legal Fund to help those on the frontline get hearings at the constitutional level, and to obtain expert representation in court. Other donations will go to resource production and distribution, and community mobilisations and actions both in Australia and Ecuador.

Click here to donate to the Ecuador Endangered Crowdfund. For tax deductibility, donate here.

Mafia gunfight over Rinehart concession

MAFIA BATTLE FOR CONTROL OF ILLEGAL MINING OPERATION

A twelve-hour gunfight near Buenos Aires in the north of Ecuador injured 19 people with an unknown number of deaths during the early hours of Sunday 23 June. The illegal mining operation is on a concession owned by Australian mining magnate Gina Rinehart.

At least 19 people were injured in a twelve-hour shoot-out between rival organised crime gangs in Hanrine's lucrative gold mining concession in northwestern Ecuador. The gunfight near Buenos Aires killed an unknown number of people, with bodies reportedly hastily buried or dumped down mine shafts where the confrontation took place. A truck transporting local residents and some of the wounded from the area also overturned, injuring 15.

The gunfight took place on Imba 2, a mining concession owned by Hanrine, a subsidiary of Gina Rinehart's Hancock Prospecting, where an illegal mining enterprise has been operating since December 2017.

Thousands of miners from Ecuador, Colombia, Venezuela and other countries descended on the site when gold was discovered in late 2017. As many as ten thousand people have since moved into the area to mine for gold.

Rival mafia gangs have been vying for control of the lucrative trade since early 2019. Tens of millions of dollars in gold has left the site to be processed in the south of the country, with onground sources suggesting that police officers have simply watched truck drivers pay approximately $50,000 in bribes to move each load of gold material.

The newcomers have caused serious problems for the residents of Buenos Aires, with reports of violence, drugs and prostitution in the town. In May, local residents blockaded the main road into the mine after locals were threatened by armed men.

The illegal operation and resulting violence are damaging the hopes of Australian companies that Ecuador would prove to be a safe mining haven. Solgold, operating in the country since 2011, is hoping to construct Cascabel, one of the largest copper mines in the world, only 15km north of the recent violence. Australian miners Newcrest and BHP have a 25% share of Solgold.

Local newspapers have reported that local mafia are using the mining base near Buenos Aires as a launching place to establish new illegal mines in the region. Two such illegal operations with hundreds of miners, have been shut down in the past few months by Ecuadorian authorities. One of these was on another Solgold concession.

The Ecuadorian Government has effectively lost control of the Imba 2 concession. This loss represents a major embarrassment to the Government who are trying to attract mining investment into the country. If this dispute remains unresolved it could mean that mining concession owners such as Hanrine may have to take legal action against the Ecuadorian Government, or leave the country entirely. It would appear that the north of the country is too volatile to establish mining operations.

The Rainforest Action Group has been monitoring and researching miners in Ecuador for over a year, and we know that this news is frightening investors. We need to keep the pressure on these companies and remind investors that there is no way to regulate their activities in such fragile, socially disadvantaged and mega-biodiverse areas. Where there is mining, there will be violence, human rights atrocities and ecocide.

New mining policy

NEW MINING POLICY IN ECUADOR COULD OPEN 33% OF THE COUNTRY TO EXTRACTION

The Ecuadorian government has just implemented a new state mining policy to relax regulations for mining, oil and hydroelectricity, and provide new economic incentives to attract mining investments. This policy will severely weaken the right to prior and informed consultation for affected communities.

"This constitutes a deepening of extractive policy in Ecuador and a violation of individual and collective civil rights, especially the right to previous consultation, as communities have not been consulted regarding the award of concessions in favour of mining companies. The consolidation of the extractivist model will contribute to increased violence towards affected communities, evidencing the continuity of mechanisms aimed at prosecuting, criminalizing and prosecuting people, leaders and social organizations who have been resisting for many years." says a report by CEDHU (Ecuador’s National Human Rights Commission). Read the report here (in Spanish).

The new regulations will result in more protests and resistance by communities, and repression on the part of the government; not to mention widespread and permanent environmental degradation. According to environmental activist Carlos Zorilla, these changes mean "the government will try to severely limit the scope and reach of FPIC for indigenous peoples and environmental consultation for everyone else, by trying to illegitimately regulate it to death".

Over 200 species facing extinction would be impacted if even one gold or copper mine is allowed to go ahead in Intag. These policies would be particularly concerning in areas where communities are already battling mines such as Intag's Llurimagua project, which this year received recent damning reports from the Comptroller’s investigation and the National Ombudsman’s Office; and the Loma Larga mine, another embattled area close to several large Australian concessions.

The government plans to survey up to 33% of the country for mining

Already 15% of the country has been sold in mining concessions, with 7.5% already having some form of mining activity.

Fernando Benalcázar, Vice Minister of Mining, says that one of the important points of the new mining action base is the promotion of research and development, especially to determine the real potential of 33% of the national territory, where large deposits can be seen that can be exploited in the future. "You can not become a mining power like Canada or Australia without studying and investigating the possibilities that we have. That does not mean that the entire 33% of the territory will be exploited in the future," Benalcázar said.

"In the previous government, basic guidelines were developed for the period 2016-2020, under the context that Ecuador was considered a potential investment destination. But since 2018, we went from potential to consolidation as a formal investment destination. Now the large mining companies worldwide are already investing in the country and it is important to have a consistent policy," he said.

Ecuador's new loan with the International Monetary Fund (IMF) has been a key impetus behind changes to the mining policy.

On April 24, 2019, President Lenín Moreno ordered the issuing of a new State Mining Policy through Executive Decree 722, which has six axes: sectoral planning, investments, prior and popular consultation, efficient and sustainable management, combat to illegal mining and tax benefits. These axes fundamentally seek greater articulation among Ministries, foreign investors and sectors of civil society, while increasing investment with tax benefits such as tax exemptions and elimination of others, making the rules for granting of permits and environmental licenses more flexible, and regulating free, prior and informed consent. The Government has also included the Fruta del Norte and Mirador mining projects, located in Zamora Chinchipe and Loma Larga in Azuay respectively, in its mining investments plan that forms part of the new International Monetary Fund (IMF) Agreement.

This new Executive Decree is part of changes at a level of law known as 'organic law' (código orgánico), one step higher than common law and one step lower than constitutional law. Such laws cannot over-ride the constitutional laws regarding previous consultation, environmental protection, citizen rights, or the rights of nature. So if a case reaches the constitutional court, the Ecuadorian Government has a high chance of losing. The government may be hedging its bets on the premise that most grassroots land protection cases will lose and run out of funds for appeals long before they ever get to the Supreme Court level.

CEDHU states that "the new announcement to regulate the consultations by decree is illegal; because it aims to regulate a constitutional right, violating the principle of reservation of law, and because it is a clear contradiction to judicial decisions and voices of regional populations who have demanded an end to extractive activities".

"According to research conducted by Martín Zorrilla et al (2018), our country has the greatest biodiversity in the world. The threat of extinction for part of this biodiversity has increased dramatically since April 2016, when the Government opened around 13% of the country to mining exploration, with many concessions covering previously protected forests. Given that more than 30% of the total area designated as Protected Forests (Bosques Protectores) is included in the new exploratory mining concessions, forest area will be significantly reduced if exploration or exploitation occurs. Most concessions are located in the hyper-diverse zone of forests and water sources."
CEDHU press release, May 2019

What can we do?

Taking cases to the constitutional courts, either singly or as a class action, will be a key part of this resistance. International activists can support the grassroots fight in Ecuador through an ongoing legal fund for Ecuadorian front line communities.

The Rainforest Action Group is working to create and support this legal fund. At present, we are continuing to take donations via the Rainforest Information Centre’s Ecuador Endangered crowdfund, which has sent around $20,000 to Ecuador since the campaign was started in 2017.

DONATE TO THE LEGAL FUND HERE

Amazon community denied protection against Chinese Copper mine

Latest court ruling casts renewed doubts on Ecuador’s upholding of its constitutional process amid fresh protests of human rights violations at the country’s largest open-pit copper mine, Mirador.

Carlos Dávila Mirador Tundayme. Image credit: La Republica
Judge Carlos Dávila. Image credit: La Republica

The Amazonian Social Action Community Cordillera del Cóndor Mirador (Cascomi) brought the case against the Ecuador Ministry of Mining, Ministry of the Environment, Ministry of the Interior, the Regulation and Mining Control Agency (ARCOM) and mining company Ecuacorriente SA in 2018, over concerns that the Chinese-owned Mirador mine did not meet the constitutional requirements for prior consultation, among other serious human rights violations, including three enforced displacements.

Judge Carlos Dávila denied the case for protection of the area on Tuesday 15 January, saying that the open-pit copper mine in the Cordillera del Cóndor did not affect the ancestral territory of the Amazonian community.

The case rested on the mishandling of three enforced evictions, as well as community concerns over violations of their right to prior, free and informed consultation in the execution of the Mirador mining project, as well as indigenous rights violations. Concerns about evictions were not addressed by the court.

Cascomi’s vice-president Luis Sánchez said, “We will continue in the struggle until our rights are respected.” Coscomi community plans to appeal the sentence once they have received the written notification of the ruling.

The ruling comes in the wake of two court wins by indigenous communities in 2018 where judges ruled that the constitutional rights of indigenous communities to free and informed consultation had either not been upheld, or had been directly violated. These included the nullification of 52 concessions on A’i Kofan land, and the permanent closure of another Chinese-owned mine – Rio Blanco in the buffer zone of the El Cajas National Park.

“Subsequent court cases on violations of free and informed consultation have been lost amid claims of judicial corruption. We are concerned that the Ecuadorian government is attempting to qualify ancestral and indigenous ownership so that it does not have to meet its constitutional mandates,” says Liz Downes, member of the Melbourne Rainforest Action Group.

The judicial ruling is just the latest in the series of challenges to the Mirador mine, which has been under fire since 2014 over general mismanagement. Three forced evictions occurred in September and December 2015, and February 2016 were considered "the strongest and most violent that have occurred" according to Luis Sánchez. This statement was verified by the Ombudsman's Office.

These and previous evictions have resulted in huge community resistance and a spiralling of violent incidents in the area over recent years, including the murder in December 2014 of a Shuar indigenous leader known to be opposed to Mirador operations.  Relocated communities have demanded reparation for unsatisfactory living conditions under their constitutional right to decent housing and access to clean water.

Local people have had to continually prove their relationship and link to the land, with Judge Carlos Alfonso Dávila ordering an anthropological survey on 6 June, 2018 to verify the existence of an indigenous population in the Tundayme area before issuing the reopening of the mine. On 1 August, 2018, he ordered EcuaCorriente S.A. to temporarily refrain from carrying out intimidating actions and order any act of eviction against the inhabitants of the Cascomi indigenous community.

Ecuacorrientes has also failed to comply with approved environmental management plans since 2015, amounting to $US 77,000 in fines and repeated mine closures, according to the Ministry of the Environment. Of 31 observations, the company was still working to correct 14 in 2018, including unplanned opening of roads, the inadequate management and operation of the sedimentation pools, and the bad management of debris.  In December 2018, two workers died on a Mirador platform due to failures to implement adequate occupational health and safety protocols.

Mirador, in the heart of the Zamora Chinchipe district in Tundayme, Ecuador, is owned by Chinese companies Tongling Nonferrrous Investment Co. Ltd. (TNMC) and China Railway Construction Corporation Limited (CRCC), which make up the company Ecuacorrientes S.A. (ECSA).

If Coscomi wins the appeal, ramifications for investors and concession holders are likely to be significant. Fourteen percent of the country has been opened up to mining since 2017. Approximately 40% of the concessions are on indigenous (mainly Shuar) territory, and the rest are in globally significant biodiversity zones. This includes concessions held by Canadian Lundin Gold, Aussie heavy-weights BHP and Newcrest, as well as FMG, Hanrine (subsidiary of Hancock Prospecting) and SolGold, who announced in Jan 2019 expectations that their concessions, including Porvenir and Cascabel, could be the richest deposits of copper and gold ever discovered.

Revenue from mining is hoped to pay off Ecuador’s massive international debts, mainly to China.  As of mid 2018, Ecuador owed China $US6.5 billion in debt – just over 6% of the country’s total GDP.

Illegal mining in Imbabura

A DIRTY JOB FOR THE PRICE OF GOLD

by Wilson Chamorro R.

They have ruined my tranquility, damaged my farm and I am still living in poverty."

Primitivo Andrade, Owner of 60 hectares invaded by miners

First published in LA HORA, 26 March 2018

The risk of an epidemic in the mountain known as El Lomón, El Triunfo community, Buenos Aires parish, Urcuquí canton, is high. The lives of the miners are essentially held by a thread, not dissimilar to that formed by the tiny splinters of gold that appear in the test basket, before merchants pay $US20 for a sack of the material.

Image credit: La Hora, The dirty price of gold

Since December last year, groups of three, five or ten men, with or without experience, have been arriving in this territory. Their dialect identifies to which region of the country they belong. They declare themselves as good people and assure me that faith moves them to help them reach this mountain about 2,300 meters above sea level.

"Our life is more important than the mine, so we take care of ourselves and try to avoid selfishness, envy and greed for gold that could cause acts of violence," said one of the "inhabitants" of this new town formed of plastic tents.

Those with the most expertise in mining are from Portovelo, Zaruma (El Oro). They have used from a tradition of artisanal mining, long before the Spaniards arrived at the Yellow River in 1549.

The adverse conditions on the site end any illusions with the same promptness with which they arrive. Some families who arrive with their young children leave that afternoon or the next day.

LA HORA mining for gold in Buenos Aires Ecuador

The Residence

The fatigue from the trip, the cold nights in Buenos Aires (Urcuquí), the scarcity of food, the discomfort of sleeping in spaces that previously served as hallways, corridors and rustic rooms that have been abandoned, shapes the character in ways it did not previously.

Professionals, transporters or merchants who came to the province previously paid $10-$15 per month for a room. With the discovery of the gold mine, the costs have increased to $5 -10 dollars for 24 hours.

The chatter of strange visitors outside on the street corners and in tents does not stop all the night. On the other side of a wall built from adobe or wooden planks, insomnia overcomes fatigue. I get up from the floor that served as bed and start walking the streets. I stop a few minutes to listen to the endless conversations that reflect the economic situation. It is at least, novel to hear the simple man of the town discussing his mode of investments, profits, losses, transportation, food, tools, the price of gold, the situation of his family, as well as the convenience of continuing on or saying goodbye forever.

Image credit: La Hora dirty work for gold

To the mine!

As soon as dawn begins, and before undertaking their pilgrimage, miners must pay the owner of the house the agreed value. They hurry out to the small square surrounded by improvised tents that house products for sale. A column of four-wheel-drive trucks, mostly new, also occupies the small streets of the parish.

Rubber boots, a water poncho, a pick, a shovel, a lever, a bar, a sledgehammer, an iron point, a kitchenette, gallons of fuel and a sack of provisions, are part of the equipment that allows these miners to survive in unknown territory.

The driver's scream alerts travellers, as they fill the double cabin and the tray with 15 passengers. The miners leave the town and take a road fraught with adverse conditions. In an hour and a half of travel, avoiding narrow stretches, quagmires, gorges and bridges, the truck arrives at the last stop.

"We're here!" warns the assistant. Immediately a man of unwavering stubbornness approaches: "To pass sir, you have to pay a toll of $2 and if you want to return with cargo, you must wait in turn with 40 vans," he warns. The driver pays without problem: "Right now there is enough for everyone," he says smiling. His daily profit is up to $200. The majority return with loads of 40 60-pound sacks. The cost of passage is $2 dollars per sack, plus passengers. The persistent rain, the slippery path, dangers, are nothing in the face of gain.

Image credit: La Hora Miners living in black plastic tents

Market on the hill

Already hemmed in by mountains, in an open field are about 200 structures made from black plastic secured onto a frame of timber in the shape of an archaic house. A quagmire of mud covers the street where the dealers of one of the most expensive metals in the world - gold - stroll.

It is common to see hands carrying wads of $100 bills that seduce small miners. On either side of the street are thousands of jute sacks filled with rocks or 'betas', as they call the material, from which four or five grams of gold are extracted after processing. When bargaining with a show of cautious words, I notice that in this place there is no trust, everything is is calculated and paid for in cash.

Image credit: La Hora, the dirty price for gold

Pilgrimage to the mountain

People buying in for the first time have to work out how to find the destination. Nobody is willing to waste time to go into details. With an initial greeting they say: "Look at the end, there are miners digging the holes. You have to walk two or three hours."

The first stretch of the trial extends for about two kilometers of muddy road, and shows the toughness, dexterity and strength needed to walk one step after the other. The strength of one person is not enough to recover boots soaked in mud. The help of other pilgrims also starts the beginning of dialogue and respect between unknown Ecuadorians.

Clambering up a second knoll converted into another transfer post where hundreds of workers have erected 150 black plastic tents, takes you to prison camps with prisoners doing forced labor. In this royal scene, the heroes are the carriers who, with dirty clothes and injured shoulders, carrying hundreds of sacks from one pulley to another.

As organized as forest ants, they barely have time to raise their heads and answer: "Before, between December and January, we earned up to four dollars per sack; today we do the same job for one dollar. There are plenty of people here who pray for this hard work."

"So that no one takes away our holes, someone from our group has to sleep in the worst conditions."

Juan C., Excavation expert

The steel pulleys

On each pulley there is a command post controlled by hardy, suspicious, distrustful people who watch out the corner of their eyes. They believe that police or military intelligence agents have infiltrated amidst the strangers. "We are careful in giving information, pictures, photographs or videos. We know that they are investigating, because we recognize that it is illegal work, but they must understand that nature has given work to 6,000 people, behind each of whom is a family. President Moreno offered 300,000 jobs per year, but 10 months into his term, unemployment is equal to or worse than before," says a miner as he places the material on the pulley.

The raw gold material that is moved night and day, in about 70 pulleys, winches or cables; the black plastic tents that house the sacks; food businesses in which a rice with chicken costs $3-4 dollars, depending on the cut desired by the client, are all part of this ghost town that survives on greed, amid selfishness and ambitions.

"There is no law here, only God for those who believe. The strength of stupid or good people is regulated by the need to live together," says a mulatto from Tumaco.

Image credit: La Hora. Dirty job for the rpice of gold

The voices that warn

The testimony of those who prefer not to identify themselves confirms that this is a parish with high rates of poverty and unmet needs. They profess an end of conflict with the institutions responsible for security and public order who would act after a situational review.

"We lived on milk products, cheese, naranjilla and tree tomato, products that intermediaries bought at low prices. To have an idea: a large cheese was worth 1.50 and a liter of milk 0.25 cents, at farm level," he says.

There is no signal from the telephone operators. To communicate with their families, miners must queue at one of the few booths that provide this service at the parish head.

Image credit: La Hora, a dirty price for gold

Invasion and holes

The mountain El Lomón is losing its quietness, the aroma of the native trees of guayacán, chonta ... the small springs of pure water, the delicate and natural trill of the birds, the oxygen accumulated for millions of years. The contamination has already started. They do not have septic tanks, people do their business in the middle of the native plants. The aroma of the wild trees is disappearing. In only two months, one smells the stink at a safe distance. This is a health issue that no one knows how to remedy.

The invasion came at an unexpected time. "Before Christmas I went to the village. At the end of the week when I returned hundreds of people had broken the fence of some 60 hectares of cattle pastures. There were so many that I could hardly complain. They told me they were going to pay, but only some have given me 50 cents when it occurred to them, " said Primitivo Andrade, a 75-year-old man whose face and clothes reflects his poverty.

The first day they discovered the mines, the miners knocked down dozens of trees with chainsaws, axes and machetes, and created an opening about two kilometers across to enter the mines.

Groups of five to ten men erected their plastic tents in the same place as the excavations, from where they extract the rocks with splinters of gold. At only three meters deep they found the 'betas'. That day, cries of overflowing happiness were heard that shook the mountain.

Since then, thousands of people, including businessmen, carriers, sellers, merchants, businessmen, among others, arrived in that corner of Urcuquí.

Those from Portovelo and Zaruma are more numberous and have the most experience. They help guide others whose ambition for gold has made them reckless. With a bar, sledgehammer, an iron point and a lever, they make holes wherever they want, without the slightest precaution to avoid a landslide that could bury everyone.

The miners say in the beginning shippers earned up to $800 per week to move the material 100 meters from the mine to where pulleys of air transport were placed. A pack of cigarettes cost between $4-5 until competition came and now prices have gone down, according to a Venezuelan migrant who walks among the trees accompanied by a nice and slender woman.

In the air you can see about 80 cables that carry the sacks of rock to the market. The route is about five kilometers by air. The freight is $11-12 dollars per package. A sack in the mine costs $20, and when it leaves Buenos Aires it is calculated at $38 dollars.

The noise of the small engines that drag the pulleys back and forth starts at dawn and sometimes stops at 2am , for a few hours.

The gold material is transported in trucks to Zamora Chinchipe, Zaruma and Portovelo for refinement with appropriate machinery.

Image credit: La Hora, The dirty price of Gold

Concession

The State signed an exploration and exploitation agreement with the Australian international company Hancock Prospecting. "They have committed an important investment." The costs are not known, nor the amount of gold that exists, the profits the parties will gain, and what is also important: the repair of the rights of nature and pollution.

Control and detentions

In the last year, more than 45 miners have been arrested including merchants, intermediaries, drivers, workers and up to three soldiers who were carrying around 250 sacks of gold material in an armored truck.

The cases are in the Prosecutor's Office and in the courts. So far, only one person has been sentenced, the rest of the trials remain to be heard. Meanwhile, the miners ask the government to help them by legalising the mines for Ecuadorian families who do not have a job.

The invasion, artisanal mining, pollution, trade and transport continue every day. Nobody knows how and where they continue to evade controls to reach the provinces of El Oro, Loja and Zamora, among others.

Take note

Legalisation, labor security and health care are, for now, the demands of the Ecuadorian State.

Gina Rinehart’s Mining Concession Problems in Ecuador

Hanrine Ecuadorian Exploration and Mining (HEEM), a subsidiary of Gina Rinehart's Hancock Prospecting has been involved in a political minefield in Ecuador for the past year. In mid December 2018, hundreds of members of the Ecuadorian Military were trucked into the town of Buenos Aires, in the northern Imbabura Province in an attempt to curtail illegal mining activities. The military and police have been active in the region over the past year.

Informal miners from HEEM concession meeting September 2018, Buenos Aires, Ecuador. Image credit: prensaminera.org
Informal miners from HEEM concession meeting September 2018, Buenos Aires, Ecuador. Image credit: prensaminera.org

In late 2017, thousands of illegal miners descended into the region after the discovery of gold, with local reports stating up to 12,000 miners from as many as 10 countries rapidly mobilised into the area.

Much of the activity of the “informal” miners has centred around a community now known as El Triunfo (the Triumph), which is located 3km inside in a mining concession, controlled by HEEM.

The concession was granted by the Ecuadorian Government in early 2018, but local miners dispute the way the concession was processed and handled and are contesting its legality. Some are claiming that the concession process was flawed and that the concessions should have been granted to Ecuadorians, rather than an overseas Australian mining company.

There now appears to be a power struggle emerging between the miners on how to manage a situation which is increasingly becoming fraught. Negotiations between HEEM and the miners appear to be polarising mining groups against each other, only adding to the tensions.

There were two murders on the gold fields during the year, and hundreds of miners have been arrested. Prostitution and drug trafficking are becoming established in local towns. Truckloads of mining materials were also been confiscated. Other concerns regarding illegal mining can include: human trafficking, money laundering, arms trafficking, explosives trafficking, blackmail and influence peddling.

El Triunfo, is located only a few kilometres south of the highly anticipated Cascabel project, overseen by another Australian company - Solgold.

“In effect, any concession holders within the country could suffer outcome to that of El Triunfo,” says member of the Rainforest Action Group, Anthony Amis. “If gold is discovered by prospectors, literally thousands of desperate miners could descend on the concession in a very short amount of time. The gold rush at El Triunfo was spread electronically and through social media in a matter of weeks”.

“We are concerned how these situations will be managed by Australian companies, who control hundreds of thousands of hectares of land in mining concessions throughout Ecuador” Mr Amis said. “Many questions remain regarding how Hanrine have managed and dealt with the problems of thousands of informal miners inside their concession. Most of the informal miners are very poor and have come to the region to work, many are honest and desperate.” Mr Amis concluded.

FOR MORE INFORMATION, CONTACT ANTHONY AMIS on 0425 841 564

The neoliberal agenda in Ecuador

LENIN MORENO AND THE RETURN OF THE LAISSE-FAIRE TAX

Originally published in Spanish at Continado.net

"According to CDES estimates, only 17% of what the country loses through the use of these mechanisms is due to corruption, the remaining 83% is due to tax evasion and avoidance; tricks that by their costs and complexities can only be funded by the economic elites."

Lenín Moreno. Image credit: Alberto Romo/Asamblea Nacional

The richest and most powerful in Ecuador do not like to pay taxes. That is why now, after 10 years, the elites have a new ally: Lenín Moreno. His submission to the pressures of big capital has meant that in one year of management he has moved away from the role for which he was elected, instead promoting the return to laissez-faire tax with a new bill.

This has been achieved with the support of mass media and questionable political alliances, and speeches on the fight against anti-corruption. However, the "cirugía mayor" (major surgery) to the State has ignored one of the major problems affecting the country: tax avoidance and evasion.

Of the tax debt to the Ecuadorian State totalling 4,379 million dollars, 51% ($2,228 million) belongs to the 170 most powerful economic groups in the country, with the 25 main groups owing a total of $2,005 million. These groups represent less than 1% of taxpayers.

Due to 512 ghost companies, which reported sales of $2,129 million dollars, the State has lost 655 million between 2010 and 2016 through methods such as false invoicing or contraband.

As Juan Paz and Miño Cepeda explain in their book on the History of Taxation in Ecuador, this is nothing new and goes back to the creation of the State in the 19th century. "The concentrating social layers of economic power have always led resistance to state intervention in the economy and its leading and regulatory role in taxes," they point out. The objective is always clear: to not pay taxes.

"We were used to ten years of a public policy that was elusive to the productive sector," said Richard Martinez in 2017, as president of the Ecuadorian Business Committee (CEE); now the new Minister of Economy and Finance. But what Martínez implied is that the government of the Citizens' Revolution got the business sector used to paying only just enough.

With one of the most progressive tax systems in the region, tax collection tripled from 4,600 million dollars in 2006 to 14,000 million in 2016. In the same period, indirect taxes went from 65% of the total collected to 53%, with a fiscal pressure that bordered on the average of the region.

Now they hope to benefit from a remission scheme of tax debts announced by the government that will end up benefiting the richest. Pablo Iturralde, Director of the Center for Economic Rights (CDES), explains that around 90% of the tax expense, arising from other types of tax exemption, is aimed at 10% of the highest decile.

It is a principle that starts from an elitist conception which becomes neoliberal, fusing together concepts of privileges and rights. Anti-national and anti-populist elites believe they should be treated in a privileged way with better benefits, to the detriment of the rest of society.

According to a study by the Pichincha College of Economists between 2000 and 2016, a tax avoidance of 28% was registered, that is, approximately 4.5 billion dollars that did not enter the State coffers. An amount that could have made two hydroelectric projects similar to Coca-Codo Sinclair, 1000 schools 'del Milenio' or 22 hospitals of the Ecuadorian Institute of Social Security (IESS) of a similar size to 'Los Ceibos'.

But no, this money ended up in the pocket of those who own more yet do not want to contribute. So, if corruption is the act of corrupting and transgressing the laws in pursuit of one's own benefit, isn't tax evasion an act of corruption, especially when this money needs to be hidden somewhere?

Tax haunts, euphemistically called paradises, are territories where these elites and transnationals hide their money to avoid paying taxes in their own countries. Between 2014 and 2016, Ecuadorian companies sent more than 4.700 million dollars to these dens.

According to CDES estimates, only 17% of what the country loses through the use of these mechanisms is due to corruption; the remaining 83% is due to tax evasion and avoidance; tricks that by their costs and complexities can only be funded by the economic elites.

"So, really there is a very perverse game of businessmen, political leaders and media, all evading taxes through shell companies," says Pedro Brieger, journalist and director of the news agency of Latin America and the Caribbean (Nodal).

As of 2014, 59 economic groups in Ecuador owned 174 companies in tax shelters, information that was removed from the official SRI website on May 22, 2018, as reported by the Observatory of Economy and Labor.

Laissez_faire. Image credit: Confirmado.net

Even more regrettable is the fact that until 2016, Ecuador was a world leader against these corrupt mechanisms. The Correa government put forward a proposal for the creation of an international UN agency that would provide "clear, democratic and fair rules" to end these havens. In addition, they hoped to democratically approve a Popular Consultation that would prohibit public officials from having capital in these territories.

Since then, none of the anti-corruption figures have mentioned continuing this fight. Instead, now it is these elites that promote the discourse of the alleged anti-corruption, and in turn make up the groups of 'notables' who dictate national ethics. That is one of the results of Moreno's first year.

In turn, the current president has filled his ministerial cabinet and advisors with said representatives of economic elites and the chambers of commerce to guide this process.

Some of these include Minister of Foreign Trade, Pablo Campana, son-in-law of Isabel Noboa, and executive president of the Nobis Consortium; Carlos Andretta, general director of the National Customs Service of Ecuador, former director of corporate affairs at Cervecería Nacional; Raúl Ledesma, Minister of Labor, a part of the Chamber of Tourism of Guayas; Eva García, Minister of Industry and Production, who was in the Chamber of Commerce of Guayaquil and the World Trade Organization (WTO); and Carlos Pérez, Minister of Hydrocarbons, from Halliburton. But the jewel in the crown is the new Minister of Economy and Finance.

Martinez, a member of the Ecuadorian Business Committee (CEE), represents the interests of the largest companies in Ecuador (30% of GDP). His position in this entity was neoliberal, advocating less taxes, less State and less regulation; what he summarises as: "less is more". Now he will direct Ecuador's economic policy and will have the means to do so.

In a grand finale for the business elites, on May 24 the draft Organic Law for Productive Development, Attraction of Investments, Employment Generation and Stability and Fiscal Equilibrium was presented.

"Like its ideological parents, the Trole 3 Law modifies laws that address Tributes, Public-Private Partnerships, Monetary Code, Social Security of the Police, Labor Rights, Public Finances, Oil Contracts, Public Companies, Territorial Organization, Special Development Zones, Municipal Cadastres, Closed Bank Debt, Reactivation Law, among others", explain economists and analysts of the Observatory of Dollarization.

The legal body in tax aspects, proposes the elimination of income tax rises, waiving of income tax for eight to ten years for entrepreneurs who invest in the country, the gradual elimination from 2019, of the tax on removing foreign currency from Ecuador, and waiving of income tax for three years for new microenterprises. That is: tax benefits for the richest.

Thus, in one year of misgovernment and manipulation, Ecuador again morphs into a society where rights do not prevail, except for those who own more. The economic and tax policies of Moreno and the economic elites will not progress towards a path of equity, but on the contrary: towards a renewed laissez-faire tax.