Ascendant Copper Loses Mining Concessions in Ecuador

Written by Cyril Mychalejko

UpsideDownWorld, Tuesday, 29 January 2008

Ecuador’s government announced on Friday that it was revoking Ascendant Copper’s mining concessions for the controversial Junin Project.

Mining and Petroleum Minister Galo Chiriboga told reporters that the government decided to revoke a total of 587 mining concessions for reasons that include companies’ failure to pay proper fees on concessions.

“As an Intag resident, I am ecstatic to be rid of a source of conflict that was tearing our communities apart,” said Carlos Zorrilla, executive director of Defensa y Conservación Ecológica de Intag (DECOIN), a local grassroots environmental organization. “In our particular case, it is a clear triumph of community-based resistance over the destructive power of transnational corporations.”

Ascendant Copper accused the government of leftist President Rafael Correa of bowing to pressure from environmental groups. John Haigh, Ascendant's investor relations chief, said that the Ecuadorian government’s actions were “astounding”, “absolute bologna” and that the decision was “rushed.”

“We feel that there is no validity in this at all…we are going to protect those concessions with every legal alternative open to us,” said Haigh.

The company also denies any wrongdoing. "According to Ascendant Copper's records, all concession payments regarding each of its projects have been made, on time, as stated by Ecuadorian law," the company stated. "The company has complied with all government requests, abided by all Ecuadorian mining regulations and remains in compliance with all laws."

Heads in The Sand, Hands in Violence

But the decision shouldn’t have come as a surprise to Ascendant. Just four months earlier the government ordered the company to suspend all activities at its Junin project for violating the country’s mining laws. The government also warned at the time that the company’s concessions could eventually be revoked.

"We will see how the facts evolve, but eventually this could lead to a revocation," Minister Chiriboga said at a press conference in September of 2007. "For those concessions that have violated legal and constitutional regulations...we will apply the law and that will be our mining industry policy."

Using the same tactic as they did this year, Ascendant immediately responded with a press release denying any wrong-doing. This suggests that either company officials are running their business with their heads in the sand, or more likely, that they are attempting to deliberatly mislead not only the Ecuadorian government and the public, but their own investors as well.

The mining project, which would cause massive deforestation, climate change, and contamination of the local water supply in a part of Ecuador considered by scientists as a “global center of biodiversity,” has met resistance since the time the company bought the concessions. Human Rights lawyers representing people affected by the project in Intag filed lawsuits claiming that Ascendant’s purchase of the concessions were illegal because the government failed to consult with local communities as mandated by Article 88 of Ecuador’s constitution.

In addition, the company’s activities have caused social discord with local communities in the area and have been tainted by human rights abuses. In December of 2005, some residents upset over the government’s inability (or refusal) to protect their rights and interests, burnt down a building owned by the company (nobody was injured), mirroring actions taken a decade earlier against a Japanese company which left only after their camp was burnt down.

Then their have been local protests, marches in the capital and public decrees issued by local government officials demanding the company leave. But rather than respect the wishes of a majority of the local public, Ascendant chose to continue the battle, a decision which would eventually lead to violence.

In December, the Ecumenical Human Rights Commission (CEDHU) (a human rights organization based in Ecuador) denounced violent actions by “paramilitaries” reportedly linked to the company. The paramilitaries wore camouflaged uniforms, were armed with machine guns and handguns, and used tear gas and fired shots at unarmed community members from Junin (some of which was captured on video).

That same month the United Nations decided to investigate whether pro-mining factions had framed DECOIN member Carlos Zorrilla for an alleged robbery and assault in order to silence mining opposition in the region. Zorrilla, who was found innocent of the charges, went into hiding minutes before his home was invaded by local police, some wearing ski masks and heavily armed. He remained in hiding for several months.

Then in July 2007, Amnesty International issued an action alert for ongoing death threats and attacks against mining opponents. These are just a few examples of high profile cases.

Changes Urgently Needed

With the government in the midst of re-writing the country's constitution through a popular assembly, more changes to mining laws can be expected.

“Large-scale mining needs to have clear rules, but the big question remains if we really want open-pit mining," said Alberto Acosta, head of the government-controlled assembly.

He suggested that other changes, in addition to banning open pit mining which what Ascendant wanted to use in Junin, would include prohibiting mining in nature reserves and requiring community consent for any mining project.

This departure from Ecuador’s previous subservience to transnational capital has the international business community seething. Luke Penseney, CEO of Ontario-based Markets Intelligence, that the government’s actions are dangerous. "You risk becoming a pariah, which is what Ecuador's in danger of becoming," said Penseney.

But Karyn Keenan, Program Officer at the Halifax Initiative, a Canadian Coalition working to create a global economy that prioritizes human rights, labor rights and environmental sustainability over narrow corporate interests, believes Ecuador’s recent actions should motivate the Canadian government to make changes to reign in the often irresponsible behavior of Canadian companies in the extractive industries abroad. She said that one thing which could be done is the adoption of recommendations made by the Canadian Roundtables on the Extractive Industries (something the government has thus far refused to do), a multi-stakeholder group that brought representatives of civil society and the business community together.

“The Ecuadorian example illustrates why it’s such a disappointment it hasn’t happened and why it’s so urgently needed,” said Keenan. “It’s a call for the Canadian government to make some policy changes.” In the meantime, Ecuadorians have more work to do.

“Until the government declares areas like the Toisan Range here in Intag, and the Condor Range in the south of the country as permanently free of mining, we will continue our struggle,” said Zorrilla. “Our main focus now is to support the national push to declare all of Ecuador free of large and medium scale metallic mining.”

Cyril Mychalejko is an editor at www.UpsideDownWorld.org. He can be reached at Cyril(at)upsidedownworld.org.