World Bank Report Describes Mining Problems in Guatemala

Posted: 23 September 2005

Local indigenous people not adequately consulted in advance of $254 million project.

Recent complaints about violence, lack of consultation with indigenous people, and environmental impact prompted the International Finance Corporation, the World Bank division that loans money to private companies, to investigate the Marlin mine in Guatemala through its independent Compliance Advisor/Ombudsman office.

The CAO report, released on September 8, says that documents submitted to the leaders of indigenous communities near the mine “did not at the time have sufficient information to allow for an informed view of the likely adverse impacts of the project,” casting doubt on the appropriateness of the consultation with the community of Sipacapa in particular.

“This report raises serious questions about how diligent the IFC was in assessing the social impact of the mine, and whether there is broad community support for the project,” said Keith Slack, Senior Policy Advisor for Oxfam America in Washington DC.

The IFC loaned Glamis Gold Ltd. of Canada $45 million to exploit gold deposits in San Miguel Ixtahuacan, 90 miles northwest of Guatemala City in the western highlands of San Marcos. Since the loan was approved in 2004, Glamis began preparing the mine site for operations. In early 2005, local people protested the establishment of the mine and blocked roads to prevent transportation of equipment through Solola and other towns on the way to the site. The military broke up the protests; 11 people were injured, one was killed.

Indigenous communities in nearby areas affected by the mine--and in other areas being explored for possible expansion of the mine--object to the Marlin mine project on the grounds they were not adequately consulted in accordance with national law and international agreements. They have also voiced concerns that mining operations will harm their natural resources, and violate their religious and cultural rights.

Indigenous people comprise more than 75 percent of the 12 million people in Guatemala. The Maya people hold the earth sacred. They consider large-scale mining projects that affect it to be disrespectful to the earth and their religion.

Direct criticism of the IFC, Glamis, and government agencies contained in the CAO report casts doubt on the likelihood that the Marlin mine will contribute significantly to development, which is an essential function of World Bank funding.

It also raises concerns about whether the project is consistent with the IFC’s stated Environmental and Social Safeguard Policies that require projects to be “environmentally and socially sound and sustainable,” as well as Glamis Gold's "Marlin Project Indigenous Peoples' Development Plan" that includes "informed public consultation and participation" as one of its five core elements.

While the CAO report indicates that Sipacapa, 10 miles from the Marlin mine site, will not suffer serious damage to its water sources, this same analysis should not be applied to all other communities that could be affected by the mine.

The report also says that the IFC and Glamis did not adequately disclose project impacts and other crucial information required for the free, prior, and informed consent of indigenous communities. This level of consultation is required by the International Labor Organization’s Convention Concerning Indigenous and Tribal Peoples in Independent Countries, known as ILO Convention 169, which Guatemala ratified in 1996.

“CAO found no record of analysis of company capacity nor of government capacity to supervise or regulate the project,” the report says. “Given the magnitude and broader developmental impacts associated with this development, and the Mayan cultural view of natural resource development, an analysis of Mayan customary perspectives and traditional decision-making norms as they may relate to mining would significantly enhance the consultation process.”

Mining in Guatemala Increasing

Mining in Guatemala comprises a mere 0.19 percent of GDP, but there are an increasing number of mines being established in the western and northeastern region of the country, where most of the indigenous people in the country live. Mining concessions now cover 10 percent of the country. There are over 550 concessions for mining in Guatemala. Almost 20 percent of these are for open-pit mining of minerals like gold, silver, nickel, and copper.

Mining is emerging as the primary concern of the indigenous people of Guatemala.

Oxfam America does not take a position for or against mining generally, but seeks to ensure that projects respect the rights of the poor and contribute to the long-term reduction of poverty. We also believe that to protect and help their poorest citizens, countries should pursue environmentally and socially responsible forms of development.

Oxfam is monitoring mining projects in Guatemala, and has the following recommendations:

Mines should only operate with the free, prior and informed consent of affected populations.
Mining companies should respect all internationally recognized human rights standards, and allow independent and participatory assessments and monitoring of their compliance.
Mining companies should fully disclose all information about the potential and actual social and environmental impacts of their projects in a timely and culturally appropriate manner, and should facilitate access by communities to participatory and independent technical reviews of this information.