Following the announcement from Canadian gold-mining company Pacific Rim that it was suspending its efforts to develop a gold mine in El Salvador, the website MineWeb published an article with a long discussion with Pacific Rim's president, Tom Shrake:
Pacific Rim has put up with destruction of property, threats on the lives of its employees, and frightened witnesses who refuse to testify against the perpetrators. Ironically, the environmental quality of the project isn't a serious point of contention. An Inco process will oxidize and destroy any cyanide used in the operation. A water treatment plant will treat all water discharge from the operations. Water quality is so optimal at the site that a tailings pond can eventually safely serve as a reservoir for local communities. And, Shrake noted that there is no acid generation potential at El Dorado.Obviously Mr. Shrake has an enormous vested interest, and his comments must be taken with a healthy dose of skepticism. But I am also very willing to admit that I am not an expert on gold mining and its environmental consequences. I am also pretty sure that many people who are speaking out against gold mining in El Salvador are also not experts on the latest technologies available for this mine. Who reading this blog knows what an "Inco process" is and whether it can "oxidize and destroy" cyanide?
Shrake does not even suggest that El Salvador's Government is in any way corrupt or incompetent. Nevertheless, he asserted that rural people living outside urban areas have no political or even media clout. He cited as an example a recent protest by 500 rural El Salvadorans begging for help to save their jobs with Pacific Rim Mining. The event garnered little press or political attention.
In an article published last month, reporter Mary Anastasia O'Grady of the Wall Street Journal noted that during a February visit to the project, the company had spent a year designing the mine, "in a process that included more than 20 public meetings with the local community. It says that final design exceeds in international standards. The government of President Tony Saca acknowledges this by telling the company that there is no technical problem with the mine, only political ones." ...
"Pacific Rim and its predecessors have invested approximately $77 million on gold exploration and development in El Salvador with exceptional results," Shrake said in a news release Thursday. "We have provided the Government of El Salvador with an environmental study and mine design for El Dorado that exceeds both El Salvadoran and international standards and provides a very high environmental benchmark for future development."
"Our exploration team has unraveled the complex volcanic geology of the region resulting in discovery of several previously unknown epithermal gold systems. This exploration success has the potential to spawn a modern, clean mining industry in El Salvador that will create thousands of well-paying jobs alleviating the extreme poverty of the northern half of the country.
"We have built our ‘social license' and enjoy excellent local support in Cabanas and majority national support," Shrake asserted. "Pacific Rim entered El Salvador cautiously and prudently and was encouraged every step of the way by the highest levels of government. Unfortunately, the Government of El Salvador is now stalling the process without regard to the company's rights deriving from its substantial investment in the country."
"While we would vastly prefer the negotiated solution we seek, we are being forced to consider all options in order to pursue our rights under El Salvadoran law and international treaties, specifically CAFTA," Shrake said. "It saddens me to be forced to reduce our workforce and investment level in Cabanas, where local employment opportunities are almost non-existent. ...These are hard-working people that deserve this opportunity to work and feed their families."
This raises important questions about process and how decisions should be made. As I think about these issues, here are some questions with which to grapple:
1. Pacific Rim has apparently provided (I have not seen it) an environmental impact assessment which it believes shows that the environmental risks will be minimal. Shouldn't Pacific Rim be allowed a fair hearing on that environmental impact statement? If it has not been given that fair hearing, why not? If it has not had a fair hearing, what is the message which El Salvador is sending to those who might want to invest in the country in the future?
2. How do we define what is a fair hearing? How is the hearing also made fair to the citizens who may be impacted positively and negatively by the mining operations? Who should decide the final outcome of Pacific Rim's application? Environmental experts in El Salvador's Ministry of Natural Resources? The National Assembly? The winner of the 2009 elections? An international arbitration under CAFTA?
3. What does El Salvador have a right to request from Pacific Rim as a condition of permitting a gold mine for the extraction of the precious metal under the country's soil? What level of financial guaranty is required for cleaning up environmental consequences and the eventual closing of the mine? What level of tax levy should be imposed? What commitments should be required of Pacific Rim with respect to use of local contractors and investment in local infrastructure?
4. How does El Salvador balance economic development versus environmental risks? How do you balance a hundred or a thousand jobs in a country with desperate under-employment against the potential environmental contamination in a country where significant amounts of surface water are already polluted?
The end result may, or may not, be that gold mining, a non-sustainable extractive industry, is allowed in El Salvador. But the process needs to follow the rules, needs to be based on good science, and needs to consider the entire range of issues. If the process is not fair and transparent, El Salvador will be worse off, whatever the final decision.