Canadian mining company in Costa Rican legal storm

Published by MAC on 2012-11-01
Source: Embassy Magazine

Canadian mining company in Costa Rican legal storm

Observers raise concerns over academic freedom, but company says this shouldn't be used to hurt the reputation of businesses.

Ally Foster

Embassy Magazine

24 October 2012

Calgary-based extractive company Infinito Gold Ltd. has been involved in a legal storm in Costa Rica, launching lawsuits against two university professors in a move it has told a media outlet is necessary to keep its reputation intact.

While trying to convince Universidad de Costa Rica to block one of its biology professors, Jorge Lobo, from teaching a course centred around its open-pit mining project, the company's wholly-owned subsidiary, Industrias Infinito S.A., brought a court case against Mr. Lobo and asked for $1 million in compensation - a case it lost on Oct. 19.

But Yokebec Soto, a spokesperson for Industrias Infinito S.A., told the Costa Rican newspaper La Nación that the company would appeal the decision, and that individuals cannot use academic freedom or freedom of expression in order to hurt a company's reputation.

The company has consistently maintained that the mine would provide many jobs for locals, and that Infinito would be very active in sustainable clean-up and reforestation after extraction. On its website describing its mining project called Las Crucitas, last updated in 2008, Infinito says the company has "strong local support" amongst communities in the mine area.

However, the company has suggested it may take legal action against the university over Mr. Lobo's course, called "The case of Crucitas in the history of Costa Rica: Summary of events and lessons learned" when translated to English.

Mr. Lobo said the court dispute Infinito lost on Oct. 19 was a criminal defamation case against him, for what he said were comments he made about his environmental concerns related to the company's activities, featured in a Spanish-language documentary movie titled Fool's Gold.

Nicolas Boeglin, a law professor at the university who also spoke in the film, is facing a court battle with the company as well. He told Embassy by email that he is facing a charge of criminal defamation (in Costa Rica, defamation cases can be criminal), paired with a civil suit, both stemming from Infinito's accusations of injury to its reputation from his comments in the film.

Both cases against Mr. Boeglin will be tried at court on Oct. 31. If found guilty, he wrote that he would be ordered to pay damages decided by the judge.

In a separate issue, Infinito is hoping to regain its right to operate Las Crucitas, situated in the north of the country near the border with Nicaragua. Infinito was granted a mining concession by former Costa Rican president Oscar Arias Sánchez, but in 2010 the Costa Rican Supreme Court ruled the contract invalid, and cited incomplete environmental studies, making the previous concession illegal.

The office of Industrias Infinito SA in Costa Rica referred questions about the cases to Infinito Gold Ltd. in Calgary.

Repeated attempts to contact and interview Infinito Gold CEO John R. Morgan were unsuccessful, and the company's acting chief financial officer in Calgary, Brian Orgnero, said company policy prevented him from answering any questions about projects and ongoing court cases.

According to Caitlin Workman, a spokesperson at the Department of Foreign Affairs and International Trade, the Canadian Embassy in Costa Rica is aware of the situation, and has been monitoring it-but has not been sought out by either party to get involved.

Debate over environmental impact

The company's website notes "social and community development and training programs" at the mine, including organic agriculture, dressmaking and textile courses, and computer training. The company also states that it has done numerous reports including "socio-economic studies, social profiles, public opinion studies," and studies on forestry, mammals and reptiles.

It also states that it had an environmental management plan which included policies in forestry, wildlife habitat, wastewater treatment, erosion control and that the company would pay for "periodic independent Environmental Audits"

Even so, some Canadian observers are up in arms. Jennifer Moore, Latin America co-ordinator for MiningWatch Canada, said the company's behaviour is "absolutely inappropriate."

Although Infinito says it would be active in clean-up and reforestation after extraction, during email correspondence with Embassy, Mr. Lobo wrote in Spanish that the comments he made in the documentary warned that the mining project could possibly cause "tailing dam failures" which can lead to water contamination and landslides.

Mr. Lobo wrote that the company cleared 80 hectares of forest and secondary vegetation, causing considerable damage to tropical ecosystems, before stopping its operations in 2010.

According to the Costa Rican news agency El País, the judge, Saylin Ballestero, ruled that Mr. Lobo's comments were not untrue and that he was within his right to speak under freedom of expression.

The company is also on the hook for the equivalent of about $100,000 for Mr. Lobo's court fees, according to various media reports.

Letter warns university

In a letter obtained by Embassy, typed on Industrias Infinito SA letterhead and addressed to Bernal Herrera Montero, vice chancellor for teaching at the university, the company states that it has concerns with the biology course.

The letter is signed by Ciro Casas, CEO of Industrias Infinito SA, and makes several requests, including receiving information on the total expense paid by the university to offer the course, the topics and methodologies planned to be used to teach the material, as well as how the students will be evaluated.

The letter also asks that Mr. Lobo not be allowed to teach the course, as it states that he has been involved in a legal dispute with the company and is biased.

The letter then warns the university about including material that would continue misconceptions about the company, or repeating criticisms of the company that are not backed by scientific facts. It also reminds the university that it reserves the right to use legal action to claim damages if the company's reputation is injured by the course.

So far, the university has let the course continue as planned and supports Mr. Lobo.

The rector at the university, Henning Jensen Pennington, replied in a letter to Mr. Casas that the university values its right to academic freedom and would not be influenced by a corporation.

James Turk, executive director of the CAUT, called it "a deeply concerning situation" and told Embassy that, in his view, it does appear to threaten academic freedom.

"Academic freedom prevents any insertion of the concerns of special-interest groups, politicians, the church, private corporations...from shaping academic decisions," he said.

Shortly after speaking to Embassy, CAUT released a public letter addressed to Mr. Morgan and Mr. Casas, the heads of Infinito's Canadian and Costa Rican branches, which calls on them to "cease your inappropriate attempts to interfere in academic activities at the University of Costa Rica."

The letter then goes on to say that CAUT is "appalled to see such acts of intimidation against academics carried out by a Canadian-based company and concerned about the message it sends internationally regarding Canadians' commitment to academic freedom, intellectual inquiry, free expression, and critical debate."

Lastly, the letter asks the company to drop all legal charges against Mr. Lobo and Mr. Boeglin.

Ms. Moore, of MiningWatch Canada, said that her group has been monitoring the activities of Infinito in Costa Rica for quite some time.

"It's certainly behaviour on the part of the company that is absolutely inappropriate, and so of course it's something that has caught our attention," she said.

Rick Arnold, a former co-ordinator of Common Frontiers Canada, an organization that studies social, environmental, and economic effects of economic pursuits and investment in the Americas, also said he has been following Infinito's track record in Costa Rica very closely.

Mr. Arnold said it's not just Infinito's reputation at stake; Canada as a country is also taking a hit from the flurry of legal activity.

"This is one more slot in a fairly widening picture in Latin America, which is not favourable to Canada," he said.

"The mining companies are seen as proxies for Canada."