Ascendant Copper Risks Losing Mining Project in Ecuador

Written by Cyril Mychalejko for UpsideDownWorld

Thursday, 27 September 2007

The Ecuadorian government ordered Canada’s Ascendant Copper to suspend all activities at its controversial Junin project on Tuesday for violating the country’s mining laws. "We will see how the facts evolve, but eventually this could lead to a revocation," said Minister of Oil and Mines Galo Chiriboga at a press conference. "For those concessions that have violated legal and constitutional regulations...we will apply the law and that will be our mining industry policy." Ascendant wants to build an open pit copper mine in the Tropical Andes of Ecuador, which according to Conservation International is one of the most ecologically diverse areas in the world. A preliminary environmental study by a Japanese mining company that tried, and because of lack of local support failed, to open a mine in the 1990’s found that mining in the area would cause massive deforestation, climate change, poison water supplies, threaten rare and endangered species and would forcibly relocate hundreds of families. Carlos Zorrilla, executive director of Defensa y Conservación Ecológica de Intag (DECOIN), a grassroots environmental organization, said that the ministry’s action could eventually lead to the "final end" for Ascendant’s Junin Project. But he admits Ecuador’s government is probably under considerable pressure from international investors. "It's a fine political balancing act Chiriboga is involved in," said Zorrilla. "I see it as an attempt to close down Ascendant's operations in Intag while at the same time trying hard not provoke the powers-that-be in the international financing institutional world, not to mention the wrath of the Canadian government." But Ecuador’s forthcoming constituent assembly to re-write the country’s constitution could possibly ban open pit mining (which is the type Ascendant would use), as well as all large-scale mining projects. This would take the pressure off government officials as any change in mining laws would be a result of a completely democratic process—something that would be very difficult for foreign companies and governments to argue against. In response to the ministry’s press conference, Ascendant immediately issued a press release denying that they had violated any laws. "We know of no reason why the concessions of Junin would be in any jeopardy. We routinely evaluate the status of all of our concessions in Ecuador and firmly believe that we are in compliance across the board," said Ascendant’s CEO and President Gary E. Davis. "Indeed, no one in the government has contacted us to suggest that Ascendant is other than in full compliance with the Law." Ascendant even brazenly suggested that Chiriboga didn’t know what he was talking about when he mentioned Ascendant violated Article 11 of the country’s mining law. The article requires companies to gain authorization to proceed with mining activities—something the municipal government of Cotacachi (where the Junin project is located) has refused to do. In fact, Auki Tituaña, the popular indigenous mayor of Cotacachi made his position very clear at an anti-mining protest in Quito in July 2006. "My role as mayor and as an individual is to keep defending our communities, natural resources and to say ‘no’ to the mine," said Tituaña. Glen David Kuecker, Associate Professor of History at DePauw University, has been researching and writing on the mining struggle in Intag for several years. He said he isn’t surprised by the behavior of Davis and the company. "The press conference further indicates that Ascendant Copper has never followed the rule of law in Ecuador. The ministry has now been forced by the company's extreme misconduct to issue the fourth stop work order since last December," said Kuecker. "The credibility of anything that comes from Gary Davis is directly measured by the market's confidence in Ascendant Copper stock. I think it measured in at 17 cents a share today. It is obvious that nobody takes any statement issued by Ascendant Copper with any degree of seriousness. " Lucia Ruiz, the Ministry’s Subsecretary of Environmental Protection, who also spoke at Tuesday’s press conference, raised concerns about the violence associated with the project linked to the "parallel armies" (paramilitaries) in Intag. Last December paramilitaries working for a company subcontracted by Ascendant attacked unarmed community members opposed to the mining project (some of this was captured on video). As a result, the Comisión Ecuménica de los Derechos Humanos (CEDHU), a respected human rights organization in Ecuador, issued a public denouncement of Ascendant Copper and the violent tactics the company employed. DECOIN’s Zorrilla, a long-time vocal opponent of mining in the region, has also been a victim of violence because of his human rights and environmental work. Zorrilla had his home stormed by about 20 heavily armed policemen, some wearing ski masks. He subsequently was forced to go into hiding for several months. This led the United Nations to investigate Zorrilla’s case to determine whether pro-mining factions orchestrated the event to silence Ascendant’s opposition in the region. A report written in March by the UN’s Special Representative of the Secretary-General on the situation of human rights defenders features Zorrilla’s case. In addition, Amnesty International issued an action alert in July for ongoing death threats and attacks against mining opponents. This type of violence is not surprising given Ascendant’s history of calling mining opponents "eco-terrorists" and "extremists", despite the company’s latest disingenuous press release suggesting that they have welcomed dialogue and consulted with local communities. Kuecker, who is also a member of the Intag Solidarity Network, a grassroots organization which started a human rights observer program in Intag, said that Ascendant’s behavior in Intag has made a mockery of the UN Global Compact (which Ascendant is a member of), a voluntary initiative developed by the UN to streamline the human rights into practices of global corporations. He also believes that it will take years for the communities of Intag to recover from this ongoing conflict. "While Ascendant Copper's ability to conduct business in Ecuador is now on life-support, the unfortunate and sad reality is that their ghost will linger in Intag region for a long, long time," said Kuecker. "They have created such an ugly ‘Frankenstein’ of community conflict that it will take years of difficult post-conflict work to recover form the poison they have spread." Cyril Mychalejko is an editor at www.UpsideDownWorld.org and a Master's Candidate in Public Policy and International Affairs at William Paterson University.