New Donkin Mine Owner Linked to Human Rights Abuses in Colombia

New Donkin Mine Owner Linked to Human Rights Abuses in Colombia

by Garry Leech / ARSN (ATlantic Regional Solidarity Network), Canada

1st March 2006

In December 2005, Nova Scotia's provincial government announced that Australia's AustirXstrata Coal, a subsidiary of the Swiss-based mining company Xstrata, had been awarded the rights to the Donkin Mine in Cape Breton. The province's decision to hand the rights to the Donkin Mine to a foreign company instead of either of the Cape Breton bidders-Donkin Resources and Cape Breton Coal Energy-means that Nova Scotia has now become further enmeshed in human rights abuses being perpetrated in Colombia.

Since the closing of Cape Breton's last two coalmines five years ago,Nova Scotia Power (NSP) has turned to Colombia for the coal it needs to fuel its power plants. Colombia's Cerrejón Mine, which supplies coal to NSP, is responsible for human rights abuses committed against communities located near the mine. In February 2006, the Donkin Mine's new owner, Xstrata, purchased a one-third share of the Cerrejón Mine.

In order to understand Xstrata's connection to human rights abuses in Colombia, we first need to comprehend the incestuous structures so commonly found in multinational companies-and behind which they so often hide. Swiss-based multinational Glencore controls 40 percent of Xstrata-it owns 16 percent of Xstrata outright and voting rights for another 24 percent stake held by Credit Suisse. Glencore owned a one-third share of the Cerrejón Mine in Colombia, the world's largest open-pit coalmine, when the mine forcibly displaced the Afro-Colombian village of Tabaco in early 2002 to allow for the mine's expansion. [* Please see MAC editorial comment below].

Villagers who insisted on collectively negotiating the relocation of Tabaco were forcibly displaced from their homes by 200 Colombian soldiers, police and members of the mine's private security force. Many villagers received no remuneration following their displacement and have continued to demand that the mine's owners resettle their community. In February 2006, Glencore sold its one-third share in the Cerrejón Mine to Xstrata, a company it partly owns-BHP Billiton and Anglo American own the remaining two-thirds of the mine.

Meanwhile, the Cerrejón Mine has announced that it intends to increase its annual coal production to 32 million metric tons from 26 million tons. In all likelihood, some of that increased production will be coal from the land upon which the village of Tabaco used to sit. Furthermore, some of this coal will inevitably end up being shipped to Nova Scotia Power's electricity generating plants.

Glencore's human rights abuses are not limited to the displacement of impoverished Colombian villagers. The company's wholly-owned Colombian subsidiary Prodeco has violated labor rights by actively seeking to bust its employees' union. Glencore purchased Prodeco in 1996 and following a strike by workers in 1999, fired 21 union members who had participated in the work stoppage. In the ensuing years, the company forced many unionized workers into early retirement and replaced them with new employees who were prohibited from joining the union.

In September 1999, union leader Henry Ayala Gualdron was detained by the Colombian National Police and imprisoned for 15 days without any charges being filed. Another labour leader from Prodeco's mine was abducted, beaten and questioned about his union activities by right-wing paramilitaries engaged in a dirty war against those sectors of civil society struggling for social justice. In 1999, 188 of Prodeco's workers belonged to the union. According to the union, the company's tactics had reduced the number of unionized employees to 25 by 2004 from 188 five years earlier.

Xstrata has also been crititicized by its unions in Australia. The company's Australian subsidiary and three of its managers were found guilty in the 1996 deaths of four workers at Gretley Colliery. In 2005, Xstrata responded to the convictions by seeking to change Australian law so that employer's are protected against criminal prosecution for workplace deaths. The company's Australian union has threatened to shut down the mining industry in the province of New South Wales if Xstrata succeeds in its landmark challenge. As one union leader noted, "People shouldn't be required to work under safety laws that are unenforceable."

Given Glencore-Xstrata's history of violating the human rights of people living in mining regions and anti-union activities, Nova Scotians should be concerned with the province's decision to award the Donkin Mine to Xstrata. Not only has this decision further linked Nova Scotia to human rights abuses in Colombia, it has also placed mine workers and communities in Cape Breton on a collision course with a mining company that has proven itself to be ruthless in its pursuit of profit.

[* MAC editorial comment: At the time of the destruction of Tabaco (mostly completed in August 2001 and finally finished off in January 2002), Glencore owned one-sixth El Cerrejon, through the consortium of which it was a part.The other half of El Cerrejon was owned by the mine's operator, Intercor - a 100% subsidiary of Exxon.]