Mining Capitalism and the State of Extractivism

A review of “Mining Capitalism: The Relationship Between Corporations and Their Critics”
                        – by Stuart Kirsch, published by the University of California Press, 2014.

Jennifer Moore
Latin America Program Coordinator
Mining Watch CanadA

 

            The mining industry uses anthropology to help it engineer social acceptance for its projects regardless of the implications for affected communities and peoples. In contrast, anthropologist Stuart Kirsch has set out to sharpen strategies to help stop destructive mines before they start. Looking back over thirty years of mining justice activism, Mining Capitalism finds that the exploitative mining model can only be derailed by supporting community resistance, standing up for Indigenous self-determination, and strengthening movement.

            Mining Capitalism takes a critical look at the political and economic model that allowed Australia’s BHP Billiton, over a period of decades, to inundate Yonggom indigenous communities living downstream of the Ok Tedi mine in Papua New Guinea with toxic mine waste.

            While author Stuart Kirsch describes how resistance to this slow motion disaster started too late to substantially alter its course, he extracts valuable insight from the nature of the predatory mining model. His analysis provides helpful reflection for mining justice activism today, which is exemplified by the transnational campaign and precedent setting lawsuits that it sparked.

            An ‘engaged anthropologist’ by his own description, Kirsch shuns the usual practice of his peers: “in contrast to the anthropological tradition of suspending one’s disbelief when conducting ethnographic work, I have declined to give the mining industry the benefit of the doubt: its track record demands a higher standard of proof.”1

            This is not a position that Kirsch arrived at sitting idly at his desk.

            As a professor of anthropology at the University of Michigan, Kirsch has been engaged, for nearly three decades, in research and activism in solidarity with mining-affected indigenous communities, and as he puts it, “against the excesses of the mining industry.”[2] His fieldwork began in 1987 when he did his doctoral research with the Yonggom indigenous people. Operated by the Australian company BHP (now BHP Billiton) until 2002, the Ok Tedi open pit gold and copper mine started operations in 1986. For thirty years it has dumped some 80,000 tonnes of mine waste into the Fly River daily, destroying approximately 2,500 km2 of forest and the sustainable livelihoods of Yonggom communities and other indigenous peoples living downstream from the mine. After living for two years with Yonggom communities, Kirsch continued to accompany their struggle, contributing to the international campaign against BHP and supporting lawsuits against the company in Australia.

            While Kirsch’s reflections are focused on experiences in the Asia-Pacific region, the depth of analysis and the context he provides regarding global mining trends and mining justice networks in which he has participated makes Mining Capitalism relevant to local struggles and transnational mining justice activism in diverse corners of the globe.

‘The microeconomics of the resource curse’

            The ‘resource curse’ is usually understood as the macroeconomic pitfall of dependence on non-renewable resource extraction, or the way that such dependency tends to undermine economic development on a national scale. The curse entails vulnerability of a national economy to the boom and bust cycles of mineral prices on the global market. This includes the overvaluation of local currency when mineral prices are high, which can negatively impact other sectors of a national economy, also known as the “Dutch Disease.” Dependence on non-renewable resources also tends to foster corruption and misspending during boom periods, and overall diminished attention to more sustainable economic sectors. Kirsch argues that there is also a local side to such dependency, which he describes as “the microeconomics of the resource curse,” or the incomplete accounting of the social and environmental costs of mining projects at the local level “that might shift their value from the positive to the negative side of the ledger.”3

            In the case of the Yonggom people, Kirsch writes,

not only has mining destroyed the commons, but it has also made formerly sustainable communities dependent on resource rents. Unlike ordinary resource rents, they do not receive these payments in return for consumption of their resources by other parties, but rather for the destruction of the productive capacity of their land as in the indirect consequence of activities carried out elsewhere. Local landscapes are no longer a site of productivity, but scenes of loss. They no longer provide people with security but confront them with new, indecipherable risks.4

            The creation of local sacrifice zones such as this has been perpetually repeated around the world. In Canada, mining justice activists have worked hard to bring attention to how Canadian mining companies are at the forefront of generating such disasters wherever they go, and how the official responses from local governments, mining companies, and the Canadian government ignore and actively deny the interests, well-being, and rights of affected communities––Indigenous and non-indigenous alike.

            Just one company, in one region, can provide several examples.

            Independent films and media reports have documented the high cost that Maya Mam indigenous communities continue to pay after ten years of operation at Goldcorp’s Marlin mine in the western highlands of Guatemala.

            Speaking tours and photo essays have disseminated concerns about the emergence of an environmental and public health emergency in Honduras’ Siria Valley after a mere seven years of operation at Goldcorp’s open-pit gold San Martín mine.

            An International Health Tribunal helped shed light on Goldcorp’s Los Filos cyanide heap-leach open-pit gold mine in Guerrero, Mexico, that has given rise to increased risk of premature births, deformations among newborns, and widespread respiratory and eye problems in the local population. The mine has also prematurely destroyed most of Carrizalillo’s agricultural land that is buried under tons of ore from which the company extracted 272,900 million ounces of gold in 2015. In Guerrero, however, the resource curse­­­­­­­—also known as the paradox of plenty—has been devastating in other ways: mining rents have become an attraction for organized crime, often operating in collusion with state authorities and with impunity. The battle between criminal gangs for control of the plaza in Carrizalillo has made the community unliveable for many, and in April 2015, Mexican press reported that about half of the community’s residents had fled their homes. Meanwhile, the Los Filos mine continues operating uninterrupted.

            The Yonggom and other Indigenous communities affected by the mine started organizing in order to shame BHP into doing something about the tailings that was slowly destroying their wellbeing, this was about a decade and a half before the effects of Goldcorp’s operations in Mesoamerica helped fuel transnational mining justice activism in Canada and around the world. Their experiences offer useful insight as Canadian activists today try to find new strategies to pressure “our” mining companies into respecting community demands.

The Politics of Space: Transnational mining justice activism

            As long as their struggle remained local, states Kirsch, it was not possible for the Yonggom people to put enough pressure on BHP to halt the dumping of mine wastes in the river––euphemistically called “riverine tailings disposal”–– at the Ok Tedi mine. It was hoped that by building transnational alliances and action—the ‘politics of space’— enough leverage could be created to bring about significant change. Transnational organizing did lead to some compensation for affected communities, and brought public attention to the environmental destruction being caused by the global mining industry, but it ultimately proved inadequate to stop the daily dumping of mine waste. The global mining industry is simply too profitable.

            Kirsch credits the Indigenous communities’ struggle with giving rise to new non-governmental organizations and broader efforts to build global networks when he states, “in contrast to the popular assumption that indigenous protests are instigated and orchestrated by outside NGOs, the campaign against the Ok Tedi mine was a catalyst for the development of new international NGOs focused on mining,” such as Australia’s Mineral Policy Institute.5

            Together with their new partners, the Yonggom participated in international meetings, at which they shared their testimonies and expressed their demands, including public demonstrations at other BHP mine sites around the world. They also undertook ground-breaking attempts to sue the company in its country of origin.

            In 1994, local villagers from Papua New Guinea sued BHP for the first time in Australia. In response, they faced tremendous backlash from the company and the PNG government, which connived to try to impede the case’s progress. Notoriously, the company and the government jointly drafted legislation that laid out a settlement for downstream communities based on an amount that the company could afford, while criminalizing participation in the international legal process. This included hefty fines or up to 5 years in jail for participating in the lawsuit, as well as prohibiting any constitutional challenge to the law that enacted these repressive measures. When it came to light that BHP had a hand in drafting the legislation, the company was found in contempt of court in Australia. But the PNG government persisted, re-enacting two laws. The first made compensation for damages suffered conditional on non-participation in the lawsuit. The second reinstated criminal penalties for participation in the suit, although it was never enforced.

            Despite the obstacles, the case ended in a historic settlement value two years later. Valued at roughly $500 million dollars, the settlement included compensation to downstream communities for over $100 million and funds to build a tailings dam. The decision, however, proved insufficient to make BHP actually build the dam, and in 2000, villagers returned to court in Australia. This time, they were unable to prove to the court’s satisfaction that the company had broken its commitment.

            Nonetheless, the lawsuits did bring pressure to bear on BHP. In the middle of a merger with Billiton at the time, BHP wanted to wash its hands of the public relations nightmare. But rather than build a tailings dam, it set up a trust fund called the PNG Sustainable Development Company Ltd. in Singapore in 2002, and walked away from the mine project. The trust fund became the owner of the mine in a joint venture with the PNG government until 2014, when the state government expropriated ownership of the mine and began a legal struggle to gain control over the trust fund, thus far without success.  

            The local communities faced a terrible Catch-22 when BHP walked away and set up the trust fund. The joint venture proposed compensation packages called ‘Community Mine Continuance Agreements’ (CMCA) that were billed as an opportunity for the local population to decide whether the mine would continue. Kirsch reflects: “the language of political choice, however, can be used to mask dilemmas in which people lack desirable options. In this case, the people affected by the Ok Tedi mine were being asked to choose between being poisoned and being poor.”6 To sign for the compensation package also meant discontinuing participation in the court case against BHP. In the end, while some villagers obtained compensation for their devastating losses, the lawsuits failed to alter or halt the dumping of tailings in the river, and social divisions were created between those who signed for compensation and those who had not.

            The outcomes of the transnational campaign and these ground-breaking lawsuits lead Kirsch to some sober reflections about the constant tug of war between corporations and their critics, leading him to the conclusion that there are considerable limits to what can be achieved through efforts to confront this ruthless industry head on, particularly once a mine project is already underway.

The ‘dialectical’ tug of war between mining companies and their critics

            Helpfully, Kirsch breaks down corporations’ responses to their critics into three, not necessarily sequential, stages that depend on how significantly critics succeed in putting a company’s or industry’s economic interests at risk.

            The first stage is to deny that there is a problem in an attempt to deflect critics’ concerns. This stage could involve public relations campaigns to suggest that a mine will not lead to negative impacts on water or land, or corporate science to create doubt about critics’ concerns. Kirsch notes that corporate science was a skill forged most deftly by the tobacco industry in the 1980s, when smoking was being challenged as a serious health problem. He points out that there is nothing like a well-placed academic who is willing to publish a report that challenges or undermines the environmental or health claims of a community or NGO.

            The second stage emerges when it becomes impossible for a company to continue denying that there is a problem, at which point it may be possible to achieve minor accommodations or compensation. This is the Corporate Social Responsibility stage, which represents a battle to establish voluntary standards and avoid actual regulation, a battle still being waged globally. Kirsch recalls how transnational campaigning against BHP and other transnational mining companies led the industry to set up the Global Mining Initiative in the late 1990s, ultimately giving birth to the International Council on Mining and Metals (ICMM), along with a series of relatively objective reports that could not deny the problem, but that nevertheless promoted industry-led audits and voluntary standard setting as solutions.

            Without pronouncing definitively on whether initiatives such as ICMM will entirely fail to improve practices within the mining industry, Kirsch expresses serious skepticism about such efforts, and comes down hard on industry’s willingness to “engage in meaningless acts of audit culture, signifying much but accomplishing little or nothing.”7 Ultimately, he considers that even the most carefully crafted voluntary efforts will inevitably be limited by the “drive to reduce operating costs and remain competitive with free riders,” who do not care to implement these programs and who are not obliged to do so.8

            This second stage may also be accompanied by corporate attempts to co-opt or delegitimize critics. This may involve corporate partnerships with NGOs, as well as efforts to marginalize voices that are painted as ‘too radical.’ Kirsch considers how large conservation organizations were among the first to partner with mining companies through the 1990s and early 2000s. Today, we see this trend continuing in the Canadian context with the emergence of the Devonshire Initiative, which forged partnerships between major mining companies and international development NGOs. This joint industry-NGO lobby has now succeeded in shifting federal government policy to tie Canadian aid contributions to the willingness of NGOs to enter into partnerships with mining companies, or to otherwise focus their programs on efforts designed to lay the conditions for local communities to accept mining. Meanwhile, NGOs critical of federal policy have been defunded or subjected to exhausting financial audits.

            Stage three arises when a company risks bankruptcy or project failure as a result of criticisms of its operations, forcing the company to engage its critics and potentially leading to new regulation. At this stage, corporations may get involved in the regulatory process in an effort to contain the potential for radical change, and help determine ‘a new status quo’ for their industry. Depending on the regulation-setting process, such a new status quo could still continue to offload a significant portion of responsibility onto consumers or the public.

            In the case of the mining industry, however, aside from individual mine projects where campaigns have made the situation untenable for particular companies, Kirsch observes that the mining industry has not yet reached stage three. In the case of BHP Billiton, the company ultimately offloaded the problem of the environmental destruction that riverine tailings disposal was causing to a third party: the trust fund. This protected the company against future environmental liabilities from the Ok Tedi mine, though the problem has persisted for the Yonggom and other downstream communities. Meanwhile, the long-lasting destruction that modern mining creates has not yet become a crisis for the industry and is still borne by local communities and the public purse, to the extent that disasters are addressed at all.

‘The Politics of Time’: Preventing harm before it happens

            In the face of the massive ecological and human destruction and dislocation that industrial mining brings, and the near impossibility of stopping it once a mine is already underway, Kirsch concludes that “given the huge capital [mines] entail and the economic resources they provide to the state and other parties,” preventative strategies should be a priority.9  These are ‘the politics of time.’

            Kirsch highlights three efforts that have sought to get ahead of the mining curve. These include international mining justice networks intended to “accelerate the learning curve” of mining-affected communities; efforts to expand recognition of indigenous rights in international conventions, agreements, and protocols, including the right to say ‘no’ to unwanted mining projects; and the ever-expanding number of local plebiscites and other related initiatives, especially in Latin America, in which mining-affected communities are asserting their rights to self-determination and to live in a safe environment, well before significant investment has been made in mining projects on their lands or in their territories.

            With regard to these local plebiscites, Tambogrande in Peru is credited with beginning the trend in 2002 when the majority of the community came out to vote against Manhattan Minerals’ open-pit gold mine project, which would have displaced half of their community and most of its water supply. Since that time, from Argentina to Mexico there have been a series of such initiatives. Local community consultations have been particularly prolific in Guatemala, where the negative impacts of Goldcorp’s Marlin mine have inspired dozens of communities to organize based on their rights in international conventions, such as the International Labour Organization’s Convention 169, as well as the Guatemalan municipal code. In Mexico, where nearly 200 Canadian companies are operating, the Mexican Network of Mining-Affected Communities (REMA, from its initials in Spanish) estimates that some 2,000 communities have declared themselves territories free of mining through community assembly processes based in agrarian law.

            But even the politics of time has its limitations. Depending on how one defines victory, Kirsch notes, “it is almost as difficult to identify a successful campaign against the mining industry as it is to find a mining project that operates according to the standards of best practice.”8 Victory tends to be measured in terms of buying time and winning battles against a particular company. Once mineral reserves have been identified, someone will always want to dig them up. In the case of Tambogrande, for example, even though Manhattan Minerals walked away from their project. In recent years, other companies have appeared with mining concessions in the area, trying to get a foot in the door. “No campaign against mining is ever permanently victorious, as capital is nothing if not relentless in its pursuit of economic opportunity,” concludes Kirsch.11

Can mining capitalism be beat?

            In Canada, which is pretty much the belly of the beast for the mining industry today––with some 1,200 companies listing on Canadian stock exchanges––demands for mining justice have gradually grown over the years through diverse efforts, including campaigns against particular mining projects, attempts at legislative reform, and efforts to sue Canadian mining companies in provincial courts. With its look back at three decades of global mining justice activism and analysis of the push and pull between mining corporations and their critics, Mining Capitalism suggests what can be anticipated from these efforts and where greater attention could be focused.

            For example, civil suits are perhaps one of the most hopeful avenues for change currently in Canada. Kirsch agrees that holding companies accountable at home—by suing them for damages and compensation—can play a role in modifying corporate behaviour by imposing reputational costs, and has the potential to contribute to industry reform as expectations rise for this sort of accountability. He cautions, however, that the dialectical relationship still applies; even as there are gains made, steps will be taken to limit the utility of the law. In the US, for instance, where the Alien Tort Claims Act gained traction as a useful tool with which to sue companies for human rights violations abroad, the 2013 Kiobel decision in the suit against Rio Tinto barred extraterritorial application of the ATA in this case, effectively ending the use of this statute in holding transnational corporations accountable for their negative social and environmental impacts. Further, reflecting on the limited outcomes that suing BHP had for the Yonggom Indigenous communities, Kirsch considers that “suing after the damage is done ultimately reinforces the politics of resignation.”12

            For Kirsch, greater energy would be better spent on the politics of time, which he considers “a more hopeful strategy given its potential to prevent harm from occurring.”13 The politics of time are essential, he believes, to leverage the sort of changes needed to really raise the bar in the mining industry, a change from voluntary to mandatory regulations would considerably improve mining practices while respecting the right of communities to say ‘no.’

            While significant change in the mining industry has yet to be achieved, Kirsch credits indigenous movements with having “raised the profile of an industry that had long been successful in avoiding the public gaze. The mining industry can no longer assume that the state is its only negotiating partner or that rural or indigenous communities lack the resources or capacity to challenge their operations.”14 He also sees the ground shifting in terms of broader recognition of inherent Indigenous rights, even while the battle over voluntary versus mandatory standards for the mining industry is raging.

            By better understanding the dialectical relationship involved in these struggles, Kirsch proposes that these struggles for change can be strengthened. He is modest in his outlook, however, stating that “the fundamental dilemmas of contemporary capitalism cannot be resolved; they are part of the dialectical relationship between corporations and their critics that inevitably leads to new forms of contestation on both sides,” defining both limitations and possibilities in the fight for change.15

            In this regard, while it is certainly true that struggles for mining justice have not galvanized nearly enough momentum to beat mining capitalism––nor upset the super-exploitative mining model aggressively promoted by the World Bank, rich governments such as the Canadian government, and industry associations. Further investigation is warranted of what opportunities open up in places where some of the most destructive mining methods have been outlawed and where communities have declared territories free of mining.

            Overall, Kirsch’s evaluation coincides with much of the analysis that many activists and affected communities have been arriving at, particularly in Latin America. Increasingly, they are explicitly prioritizing resistance to a destructive mining model in which companies resist meaningful change at every turn, while continually expanding the physical and social space they occupy. The role of state has also significantly shifted, in the context of corporate globalization, away from a social contract and regulation in the public interest, and towards increasingly undisguised and violent support for corporate interests.

            However, while local acts of resistance may be limited in terms of the pressure they assert globally, further exploration would be valuable as to how these serve to stave off the encroachment of mining capitalism and to create space at the local level to protect, preserve, and construct social relationships, and political and economic models of development outside of the capitalist system.

Endnotes

Stuart, Kirsh. Mining Capitalism: The Relationship between Corporations and Their Critics. (Oakland: University of California Press, 2014)  232
Ibid.
Ibid. 33
Ibid. 41
Ibid. 79
Ibid. 115
Ibid. 172
Ibid.
Ibid. 226
10 Ibid. 233
11 Ibid.
12 Ibid. 221
13 Ibid.
14 Ibid. 232
15 Ibid. 233-234