The Week's Essay: Putting BHP at the heart of Ecuadorian destruction

Published by MAC on 2020-03-02
Source: The Ecologist

BHP's divide and conquer

Liz Downes

The Ecologist

21st February 2020

BHP is putting pressure on vulnerable ecosystems and communities in a mega-biodiverse region of Ecuador despite flaunting its commitment to environmental sustainability.

Ecuador is the last place anyone with any sense should put an open cut copper mine.

The world’s biggest mining company is publicly committing to a clean, green transition: promising to shift from one of the world’s biggest carbon polluters to a top provider of resources for the renewable energy sector.

Andrew McKenzie, BHP’s CEO, proudly unveiled the company’s new climate investment program in July 2019: a US $400 million commitment to reduce Scope 1, 2 and 3 emissions. Shareholders at their 2019 London and Sydney AGMs were regaled with reports of how well BHP is sticking to its coal reduction targets, and with its investment plans in copper to meet the world’s growing demand for renewables.

What BHP left out of these reports is where all this copper is going to come from, and how the mining of it will impact on some of the world’s most vulnerable ecosystems and communities.

Illegal

BHP is currently reliant on production from the world’s largest copper mine, Escondida in Chile, and from other big projects including Australia’s Olympic Dam. But it is also interested in ‘greenfields’ explorations in one of the world’s emerging copper hotspots, Ecuador.

This small country is one of the world’s most biodiverse. The Andes runs like a spine down the middle, creating a diversity of altitudes, rainfall patterns and temperatures where endemism is unparalleled. These mountains are the primary source of water for the Amazon and Pacific Coast river systems. They are actively volcanic, high-rainfall and prone to frequent earthquakes.

Ecuador is the last place anyone with any sense should put an open cut copper mine.

Unfortunately, over 2 million hectares of the country are plastered with mining concessions, predominantly owned by transnational companies. This land covers protected forests in the megadiverse Tropical Andes Biological Hotspot and almost a million hectares of indigenous territories.

Concessions were sold by the Ecuadorian government in 2016-2018 with zero public consultation, in a bid to save the country’s stalled economy following an irreparable downturn in crude oil investments and diminishing reserves.

Now companies are beginning to explore the country’s mineral assets. But they are meeting organised resistance from communities who are not only angry about the violation of their constitutional rights to consultation, but concerned about forced relocation, impacts on food production, water contamination, environmental damage and increased threats of illegal mining and organised crime.

Rock samples

In the northwest of the country, tensions are escalating as BHP’s subsidiary Cerro Quebrado aggressively pushes into the long-embattled rural region of Intag, in efforts to begin copper exploration on schedule.

BHP owns five concessions in these parts: Santa Teresa 1 and 2, and slightly west, Sabaleta 1, 2 and 3. These cover agricultural communities, headwaters systems, and the last remnants of the megadiverse Chocó Andean cloud forest belt. The Sabaleta blocks take in part of two protected forest reserves, Los Cedros and Cebu, while the Santa Teresa concessions cover sections of the Toisán mountain range. In the region’s forests, 279 species of animals in danger of extinction have been reported.

Ken MacKenzie, the chairman, was questioned at the AGMs about their activities in Intag - given the region’s extreme ecological and social vulnerability. He assured shareholders that explorations were in early, low-impact stages in Ecuador and that the company was following the law and due diligence with regard to community consultation and environmental risk.

In August 2018, BHP shut down the website and social media pages of local activist Carlos Zorrilla. He accused the company of taking part in activities in Intag which were not properly or fully explained to shareholders through the Canadian Stock Exchange. The company denies Zorrilla's allegation.

In October that year, two unmarked cars were seen driving into the community of Puranquí. When pulled up by locals, the occupants of the car said they worked for Cerro Quebrado and were there to take rock samples. They said they had spoken to the community president. This was denied by the staunchly anti-mining president.

Threatened

In the same community, one year later, a signed letter from BHP’s Ecuador operations manager, Benjamin Mace, was delivered at a closed-door meeting. Most of the community, including the president, were not invited. Only a few pro-mining residents even knew about the meeting. The letter indicated that a license had been granted by the State Water Secretariat approving the commencement of explorations in the area. Under Ecuadorian law, a water license requires no environmental impact assessment.

In September 2019, a regional assembly of 1,500 people unanimously rejected mining in the area. In December, despite the assembly’s outcome, BHP attempted to hold a closed-door meeting in the community of Cazarpamba. Some concerned residents of nearby communities found out about it and attended. On seeing the visitors, the BHP representatives promptly packed up and left.

In mid-January, community residents of Cazarpamba and Irubí, both situated in BHP’s Santa Teresa 2 concession, got fed up with unauthorised night-time access by BHP vehicles and installed a chain across access roads into the communities. They prevented the entry of three BHP employees who arrived unannounced in the company of thirty police. The blockade remains in place, and police have vowed to return with reinforcements.

At a regional assembly on 18th January, representatives from the six communities in BHP’s Santa Teresa 2 concession drafted a formal document of resolutions. This declares the Intag zone free of mining, demands the immediate exit of mining companies and their representatives, and requests support for development of local economies such as ecotourism and sustainable agriculture in place of mining.

A couple of days after these resolutions were passed, the Ecuadorian Vice Minister of Mines, Enrique Gallegos-Anda, invited the Apuela Parish government council to Quito to discuss the mining situation. During this meeting the Vice Minister allegedly threatened to take the Apuela and Cazarpamba presidents, Nelson Vetancourt,and Christian Gomez respectively, to court for ‘opposing the development of the nation’.

Embattled

Residents have vowed to continue blockading roads against BHP until their voices are heard and all resolutions are addressed. But there are fears that militarisation of the region may be inevitable, as the government arms up to force mining companies in.

People in Intag know what it’s like to live in a militarized zone. The region has a 25-year history of opposing mega-mining projects. Their peaceful resistance is possibly the longest in Latin America. In 1997 they kicked out Japan’s Bishimetals, and in 2010, Canadian Copper Mesa had to quit, stopping what would have been Ecuador's first open pit mine. But more companies kept coming.

Local leaders such as Carlos Zorrilla, who helped found the grassroots environmental organisation DECOIN, have lived through times where death threats and attacks on activists and their property were a regular occurrence. They anticipate the same things happening again as the mining crisis escalates.

“It’s a David versus Goliath-on-steroids situation,” Zorrilla says.

In the next couple of years, a major copper mine, Llurimagua, is set to open for business in the embattled area of Junín, unless it is stopped. Llurimagua is jointly operated by state company ENAMI and Chilean copper giant Codelco. The project’s history is riddled with conflict.

Money

In 2014, the companies began exploring in Junín, in forests where locals were running a successful ecotourism project and had resisted mining for fifteen years. They were escorted to the mining concession by hundreds of special police units and military personnel. Ecuador's government imposed a de-facto state of emergency on the entire Intag region.

Over the next several years, communities denounced violations of permits, licenses and the environmental impact study, and presented evidence of serious human rights violations, contamination of the Junín river, illegal logging, unauthorized land-use, and impacts to the community tourism business. Authorities, with their hands in corporate pockets, rejected or ignored the denunciations.

In early 2019, an investigation by the National Ombudsman produced a damning report of the project. It found deficiencies in regulation and control of the mining operations by government entities, resulting in serious long-term environmental consequences. Using this evidence, locals are now preparing for a legal battle against Codelco, based on violations of constitutional laws around prior consultation and the rights of Nature.

With all this going on, it is not surprising that communities are resisting newcomers like BHP.

BHP could learn from Llurimagua’s history and the impending legal showdown if it really wanted to. A failure to ‘socialise’ resistant communities isn’t the company’s only problem in Intag. It could repeat Codelco’s mistakes in Junín, if it decides to follow the money rather than be accountable to its own environmental policy.

Forest

All five of BHP’s concessions lie within the Cotacachi-Capayas Ecological Reserve Buffer Zone as identified in Ecuador’s national 2007-2017 Management Plan for National Parks. But due to weakened environmental laws, the Ecuadorian Government does not explicitly prohibit mining in these parts or in any other concession that covers protected areas.

BHP should though. The company’s environmental policy states that it will not explore or extract resources within or adjacent to the boundaries of International Union for Conservation of Nature (IUCN) Protected Areas. That is, unless a substantive plan is implemented “that meets regulatory requirements, takes into account stakeholder expectations and contributes to the values for which the protected area is listed.”

In other words, if they can work around the laws, they will. But accountability still applies: if anything goes wrong in a protected area, such as a contaminated waterway or a species extinction, they are not only required by law to tell their shareholders, but are exposed to litigation based on Ecuadorian constitutional laws.

BHP also declares it will “not operate where there is a risk of direct impacts to ecosystems that could result in the extinction of an IUCN Red List Threatened Species in the wild.” In spite of this promise, the company is at risk of demonstrating just how easy it is to eliminate a species in Ecuador.

In 2018, a new frog was discovered in Intag: the Manduriacu glass frog. Its only known habitat is a few square kilometres in the Río Manduriacu river catchment, a piece of remnant cloud forest close to the biologically intense Los Cedros Protected Forest, and Cotacachi-Cayapas National Park. BHP’s Sabaleta 1 and 2 concessions overlap this area, and rock sampling is already taking place there. Citing the mining risk, scientists recommended the frog be IUCN-listed as critically endangered.

Collateral

The area is the only home for another critically endangered amphibian, the Tandayapa Andean Toad. To highlight the area’s extreme vulnerability, in the nearby Llurimagua concessions, two other endemic frogs were recently discovered. One of these, the Longnose Harlequin Frog, was deemed extinct until its unexpected rediscovery. The other, the Confusing Rocket Frog, is so rare the IUCN does not even list it. Even preliminary mining exploration activities have been found to pose serious risks to species with such limited range.

At the 2019 AGM in Sydney, members of the Rainforest Action Group spoke to a BHP board member about the perilous situation of the two amphibians living near the Sabaleta 1 and 2 concessions. The board member admitted that BHP can’t always easily access this kind of information from the ground.

The problem with this statement is that information about both species is easily accessed through published scientists’ reports, and in the case of the toad, a glance at the IUCN Red List. It is not hard to seek information if a company is truly concerned about its accountability.

The same criticism applies to BHP’s socialisation process in Intag. The OECD’s corporate guidelines lay out best practice standards for multinational corporations with regard to community consultation. If a company is only able to enter under the protection of military police, this indicates that consultation process has failed to follow best practice protocols.

When it comes to mining, local communities and environments are stakeholders; they should not be collateral damage in the race for profits. BHP needs to not just tell its investors it is doing the right thing by people, climate and the environment; it needs to prove it.

About this author

Liz Downes is a member of the Rainforest Action Group who is running a campaign investigating Australian mining companies’ involvement in social conflicts and environmental damage in Ecuador. The Ecologist contacted BHP for comment at 9am on Thursday, 20 February 2020 but there has not been a response as yet.