Guatemala: Government and Montana - a glittering alliance

Guatemala: Government and Montana - a glittering alliance

By Crosby Girón, Inforpress Centroamericana

15th April 2005

• Dubious relationship between government officials and Montana
• Large-scale mining projects to go ahead irrespective of communities' wishes
• Former mayor accused of accepting economic favors from Montana

There has been much speculation about possible family connections between officials and stakeholders in the mining company Montana Exploradora and the President and Vice-president of Guatemala. Some of the names that have emerged help explain the significant backing that the Berger government has given to the mining effort in general and to Montana in particular. Possible bribes and vote buying to garner support for the mining projects have also come to light. Although local communities are consulted about their needs and desires, the vice minister of Energy and Mines, Jorge García, categorically maintains that the consultancies will not ultimately decide whether or not the project will continue.

Untying the Knots

Transnational firms regularly court government leaders in the countries in which they have invested, and in many cases it is in the personal interest of the leaders to support them. Montana Explorada Ltd, subsidiary of Glamis Gold (Canada), is the most recent example of this type of company/government courtship. The company operates its Marlin gold mine in San Miguel Ixtahuacán and Sipacapa, San Marcos. Family links between Montana officials and the nation's Executive have begun to arouse suspicions.

The general manager of Montana, Milton Saravia, has a long running relationship with the Berger family. In 1993, he was appointed to the executive secretariat of the National Commission for Protected Areas (CONAP), a post he reportedly received as a result of pressure from María Novella Wyld de Berger, wife of Francois Berger Dorión, cousin of the President Óscar Berger.

According to Roberto Arias, columnist for the evening paper La Hora, Mrs. Wyld de Berger, better known as Nini de Berger, was one of the main financial supporters of the Serrano Elias campaign (La Hora 01/29/05). This position won her influence in that government, during which Saravia was named Presidential Commissioner on the Environment: "She was the one in charge", declared Arias.

In 1993, Arias published an article in Prensa Libre (04/ 17/93-04/18/93) in which he alleged that Saravia was unqualified to carry out the obligations of Presidential Commissioner. According to the columnist, the fallout from his story caused Saravia to leave CONAP.

Later, Saravia became consultant to and coordinator of the Administrative Unit for Environmental Control and representative of the Nuclear Energy Directorate, both under the Ministry of Energy and Mines (MEM). Also in 1993, the University Students Environmental Commission (CEUMA-AEU) accused Saravia of illegally trafficking precious hardwoods in Petén (CAR, XXXII, 5).

In the case of Berger Dorión, he made his way into Serrano Elias' Specific Council. He and his wife currently work in the Tropical Forest Foundation, and she is the owner of the "Auto Safari Chapin" safari park.

Similarly, the Sierra Madre Foundation, created by Glamis Gold and Montana Exploradora to develop social support programs in mining areas, is controlled by Arturo Melville. Melville has a history in the private sector, as a supporter of small and medium sized businesses, specifically in the Bolivar Program.

Melville is also the step-brother of Eduardo Stein, the vice president. Melville confirmed this information to CAR but said the matter was a private affair.

These relationships shed light on the marked government interest in the continuation of the Marlin mining project (CAR, XXXII, 1). A recent rumor also has it that one of Berger's sons, Óscar Berger Widmann, is a stockholder in Montana (CAR, XXXII, 5).

Analysts also noted that the president's brother-in-law may be a partner in one of the companies interested in operating in San Marcos, Totonicapán, and Sololá (FUNDADESC, Informe Guatemala. Análisis de situación, pp. 1,2 see citation 3, Boletín no. 13.16, Feb. 2005). "This link between public servants and mining personnel is suspicious", Arias told CAR.

For political analyst Carlos Hoffman, "widely demonstrated interest by the government in Montana makes you think that they may have something to gain. Often, transnationals seek to corrupt the highest echelons of the government to make it easier to assure their profits".

Clearing the Way

The World Bank (WB) considered financing the Marlin project on two separate occasions. Eventually, the International Finance Corporation (IFC), the private sector arm of the WB, granted US$45 million for the project. The IFC and Glamis Gold contracted the Citizens Development Corps (CDC) to create the Sierra Madre Foundation, currently headed by Melville.

Melville told CAR that the Foundation has invested more than US$1 million in activities including sewing and bread making workshops, a free health fair and a prenatal clinic.

The Bank Information Center, an organization that lobbies international financial institutions (IFIs) to take responsibility for projects they finance, published a report (Bulletin No. 1, 3/22/05, www.bicusa.org) in which it said "participants must bring their own sewing machines, pay for thread, flour, yeast, and firewood...moreover, they never determined whether or not there was actually a market for these products".

"We don't want to be paternalistic and go around handing out things. What we are looking for is to be able to empower the communities", explained Melville. Mining has a promising future in Guatemala, according to the MEM. 395 licenses have been granted: two for inspection, 126 for exploration, and 262 for mining various minerals. Of these, 33 licenses were granted for the extraction of metallic minerals (see box). (Note: let me know if you want the chart. It was too big to send to the list--todd)

The Situation on the Ground

The national press has put aside the mining issue to focus their attention on the Free Trade Agreement with the US (CAFTA) and the approval of the Concessions Law. Meanwhile, Montana has made progress with a number of different strategies, one of them the Sierra Madre Foundation. Communities with few employment opportunities and low national involvement see mining as a salve for their economic woes.

A second strategy involves winning over the support of local authorities and community leaders.

According to Mario Tema, program co-ordinator for the Guatemala Mayan Languages Academy (ALMG), "the foundation is just camouflage so they can say they're doing something for the communities when, in reality, they are deceiving them".

Tema told CAR that there are many indicators that Montana has bought the favor of both local government and community leaders. "An official in the previous administration sold Montana a plot of land belonging to the municipality and they took the municipal council in a helicopter to Honduras to show them the other mine that they have there", he said.

Tema commented that a survey was currently underway in the communities. "They gave all the municipal employees cell phones, which delegitimizes the process. The same vice minister (Jorge García) came (on Thursday, 7 April) and told us that the survey was in no way linked to whether or not the mining company would continue operations".

"The Foundation carried out an activity on December 17 at which they sold clothing, snacks, and sweets. The organization said 'progress in Sipacapa has now begun' just because they sold a basket of bread and some candies. That is taking advantage of the poverty and ignorance of the population", he added.

Other indicators include the fact that the ex-mayor of Sipacapa, Sergio González, who, prior to becoming mayor, was a school teacher, currently has a construction company, a late model car, and, according to Tema, a house in Puerto Madero, Tapachula (on the other side of the Guatemala/Mexico border). Moreover, one of González' brothers works as a publicist for Montana.