Tag Archives: development ethics

How did the DFC Handle Human Rights Concerns about Alto Maipo? A FOIA Request

1 Reply

An aerial view of the Alto Maipo Hydroelectric Project

Before the Trump years, few Americans had heard of Chilean mining giant Antofagasta plc or the powerful Luksic family who control it. Today, Antofagasta’s controversial plan to mine copper and nickel on the edge of the Boundary Waters and the scandals associated with it are not exactly common knowledge, but at least better known. Congressional hearings, activism, and investigative reporting helped bring the previous administration’s reckless, clumsy, and corrupt handling of Antofagasta’s permits into focus. (Maybe some of the records I obtained through the Freedom of Information Act helped, too.) But despite steps taken by the Biden administration to set right some of what the Trump administration did wrong in this case, the Antofagasta file is far from closed. The lobbying for reversals and permits continues apace* and important aspects of the story are still obscure.

A FOIA request I made on June 3, 2021 promises to shed some light on one aspect of the story, maybe nothing more than a minor detail, involving the Development Finance Corporation. The first set of records arrived last Friday. Nothing much so far, just some innocuous looking office email correspondence, but I’ve posted the records on documentcloud and will continue to put them up as they arrive. Here, I just want to set these records in context.

The story takes us back to 2013, the first year of Obama’s second term. That’s when Twin Metals Minnesota filed its mineral lease renewal application at the center of the current Boundary Waters controversy, and it’s also when the Overseas Private Investment Corporation, or OPIC, made a $250 million investment in the Alto Maipo Hydroelectric Project in Chile. At the time, the Luksic Group, owners of Antofagasta plc, held a 40 percent share in the mega-project.

This looks like nothing more than a coincidence. Antofagasta would not formally acquire Twin Metals until 2015; and the company would decide to get out of Alto Maipo in 2016 (though it took until 2020 to divest fully from the project). At most, the OPIC deal might have helped persuade Antofagasta that the Obama administration would look favorably on its North American plans.

In 2018, the Development Finance Corporation, or DFC, took over the OPIC portfolio of projects, investments that aim to alleviate poverty, combat corruption, and promote sustainable as well as low-carbon and no-carbon development. DFC also shares OPIC’s stated commitment to “respect the environment, human rights, and workers rights.” Its Environmental and Social Policy and Procedures document, produced in July 2020, shows remarkably little sign of the crude transactionalism that dominated foreign affairs, including foreign aid and investment, during the Trump administration.

Just one month later, on August 18, 2020, DFC’s statements of principle would be put to the test. The DFC was informed of serious human rights challenges at Alto Maipo Hydroelectric Project. Five UN Special Rapporteurs on Human Rights sent a five page letter to Adam Boehler, Jared Kushner’s friend and college roommate and the Trump-appointed CEO of the Development Finance Corporation, warning of possible human rights violations at Alto Maipo.

The letter is included as an Annex in written comments for the June 9, 2021 meeting of the DFC.

The UN Rapporteurs express concern that the Alto Maipo project hoards water for mining interests, hurts local communities, and is proceeding without adequate concern for human rights and the environment. The letter says the mega-project would reduce “the availability of water for human consumption and domestic use, in contexts already characterized by climate change and water scarcity.” The shortages could also affect subsistence agriculture, “resulting in violations of the right to food and other rights related to the right to an adequate standard of living.” The project appears to be proceeding without participation of the affected communities and with significant damage to biodiversity and the environment, and “multiple human rights violations” are likely to result.

Unable to find Boehler’s response to these claims, I filed a Freedom of Information Act request for “all DFC communications regarding the 18 August 2020 letter from UN Special Rapporteurs to DFC CEO Adam Boehler regarding the Alto Maipo Hydroelectric Project in Chile, including any and all communications to or from Mr. Boehler about the topic.” The few records included in the first FOIA production do not include anything from Boehler; they are a small set of emails to and from Catherine Andrade, DFC Corporate Secretary, in preparation for the June 9, 2021 DFC Board Public Hearing.

Alto Maipo was on the agenda for the day, as it was again at this year’s meeting. Groups that have monitored human rights and environmental issues around Alto Maipo were slated to participate: Juan Pablo Orrego, president of the organization Ecosistemas, and Carla Garcia Zendejas from the Center for International Environmental Law were among the presenters. Observers included representatives of BNP Paribas, Oxfam, US Small Business Administration, Accountability Council, and the Wildlife Conservation Society.

All indications are that this was a meeting Boehler’s DFC wasn’t especially eager to have. In April 2020, the DFC declared itself exempt from the Sunshine Act, which requires federal agencies to open meetings for public observation.

In response, the Center for Biological Diversity and other plaintiffs sued:

They say the rule change means that [DFC] no longer faces any obligation to provide communities with information that could later impact their environments and livelihoods.

The Center for International Environmental Law, a co-plaintiff on the suit, spent years working with communities affected by the Alto Maipo Hydroelectric Project, which Chilean activists argue would threaten the drinking supply of more than 6 million people in the Santiago Metropolitan Region. The OPIC granted $250 million in funding to the project in 2013.

“For many years, we worked to hold OPIC…accountable,” Carla Garcia Zendejas, the organization’s director of people, land and resources, said in an email, “ensuring that communities affected by the institution were able to secure access to information regarding the institution’s decision-making processes and to utilize the accountability mechanism when adversely affected….

Garcia Zendejas emphasized that the DFC’s new exemption “had very practical implications for communities on the ground who are seeking information about the projects that could upend their lives.”

Bill Snape, Senior Counsel of the Center for Biological Diversity, added that he could see little reason for the agency to try to exempt itself from the Sunshine Act, “unless you have things to hide.” The plaintiffs did not prevail, however, and in February of this year, Judge Christopher Cooper granted DFC’s motion to dismiss, writing that the Sunshine Act does not apply to the DFC. For now, at least, FOIA does.

* I looked at Q2 2022 lobbying for the Twin Metals project here:

Cert Denied in MCRC v. EPA

3 Replies
Certdenied4March2019

18-555 among the denied petitions on this morning’s list of Supreme Court orders.

A public agency’s effort to cut a road through the Michigan wilderness for a Canadian mining company has suffered yet another legal setback.

This morning, the Supreme Court published the list of orders from its March 1 conference. The court has denied the petition for certiorari in Marquette County Road Commission v. EPA, the dispute over County Road 595 I’ve been following since 2015. This denial means, simply, that the Supreme Court declines to review the case, without further comment, and the decision by the Sixth Circuit Court of Appeals stands.

The Road Commission’s case turned on the question whether objections by the EPA to the proposal for CR 595 constituted “final agency action.” If so, they would be reviewable by a court. In arguments before the Sixth Circuit, the Pacific Legal Foundation’s Mark Miller insisted that EPA’s objections to the Road Commission’s proposal were tantamount to a “veto,” but his repeated use of that word ended up confusing the judges, and their questions about it exposed the weakness of his argument.. The Road Commission, they reminded him, could always have simply gone back to the Army Corps of Engineers with an amended proposal that took the EPA’s objections into account.

As I’ve written elsewhere, Miller made a lot of other arguments before the Sixth Circuit (and the in pages of the Wall Street Journal) that suggest this case was about more than building a haul road from Eagle Mine to Humboldt Mill. Like others advocating for CR 595, he tried to suggest that the Environmental Protection Agency was in cahoots with environmental groups, and part of an anti-mining conspiracy. These arguments were never intended to go anywhere legally. They were, instead, put forward to raise the profile of the dispute over Country Road 595. They brought in dark money and support from outside groups. They divided people. They helped advance a larger political project.

After a long and fruitless detour through the court system, the Road Commission has come to a legal dead end. But the Road Commission and its allies, within and without Marquette County, still have options. Lundin Mining’s development of Eagle East has extended the life of the mine to 2023 — “at least,” the company says. There is nothing to prevent the Road Commission from revising its proposal, and trying again. The question remains whether doing so would serve the broad public interest, or simply advance the short-term interests of the mining company.

Read other posts about MCRC v. EPA here. 

A Highland Map of Lake Superior Mining

Leave a reply

It would be instructive to lay this map, published today by Highland Copper, over the map of Mines, Mineral Exploration, and Mineral Leasing around Lake Superior published in 2013 by the Great Lakes Indian Fish and Wildlife Commission.

Having acquired all of Rio Tinto’s exploration properties in Michigan’s Upper Peninsula, Highland now dominates sulfide-mining exploration in the UP.

A multi-billion dollar mining behemoth like Rio Tinto could arguably have left these copper, zinc and gold sites idle for a rainy day. The same can’t be said about a junior like Highland. With market capitalization of $62 million, the company paid $2 million at closing, leaving its subsidiary on the hook for an additional $16 million (in the form of a non-interest bearing promissory note), to be paid in regular installments.

According to company’s own press release, “the payments…will be accelerated if Highland publicly releases a feasibility study covering any portion of the UPX properties.” So once exploration begins with test drilling in 2018, we might see efforts to expedite permitting and development for these sites.

If UPX succeeds in taking even a fraction of these sulfide-mineral deposits from exploration to development, and if these new mines are developed under the pressure of an accelerated payment schedule, the risk to the Lake Superior watershed will be significantly heightened.

Sustainable Development, Derailed

Leave a reply

train-derailment-sept-ilesOn Thursday of last week, an avalanche derailed a Quebec North Shore and Labrador Railway freight train owned by Iron Ore of Canada as it made its way north along the banks of the Moisie River.

Divers recovered the body of Enrick Gagnon, the train’s engineer,  just this morning. The train’s lead locomotive is still completely submerged in the Moisie and another is partly submerged. Each locomotive holds about 17,000 litres of diesel fuel, and a 20 kilometer slick — “a silvery layer” — has spread over surface of the Moisie. The train was not hauling ore; its freight compartments were empty for its northbound run.

The Moisie and its watershed are part of a designated aquatic reserve, so the river is technically protected from mining activity; but so far as I can tell, the 16 mile stretch that the Quebec North Shore and Labrador Railway line runs along the Moisie was built in 1954, when mining first began in the region, and more than fifty years before the Quebec government published its conservation plan.

One stated aim of that plan is to protect native species, including and perhaps especially the Atlantic salmon running in the Moisie. As nearly every report on the Moisie catastrophe notes, the pristine waters of the remote northern river are internationally renowned for salmon fishing.

For the Innu of Uashat mak Mani-utenam, whose traditional territory the Moisie crosses, the river is much more: it is, in the words of one newswire report, a thing of “inestimable cultural value.”  So development in Innu territory continues to risk the inestimable for the merely estimable: in this case iron ore, jobs, growth. The Innu, who call themselves “the true owners of the land,” say they never consented to the tradeoff, and that the mining operation in their territory violates “international law, particularly the principle of ‘free, prior and informed consent.’”

Now, with this trainwreck, the Innu have an environmental crisis on their hands; but over the past couple of decades, the Innu say, they have also witnessed a gradual and “cumulative” effect on the environment and their community due to “the intensification of industrial activities” in the Sept-Îles region.

Iron Ore of Canada has a lock on the region’s economy, and development opportunities in the Labrador Trough are, in the words of IOC’s CEO Zoe Yujnovich, “potentially unconstrained.” Rio Tinto, which owns the majority stake in IOC, recently increased annual production capacity for the region from 18 to 23 million tons of ore concentrate, and plans to open a new mine called Wabush 3 to help meet that goal.

A 2013 publication touting Rio Tinto’s “Sustainable Development” plan for the region notes that the additional revenue generated by IOC’s “wholly owned rail company” will keep pace with growth: “use of the railway is set to increase significantly in the next few years as a result of our own expansion projects and junior mining startups in the area.” In other words, more trains than ever will be traveling along the Moisie, from Labrador to Sept-Îles Junction.

The Big Slide at Bingham Canyon

5 Replies

Bingham Canyon slide

“This is something that we had anticipated,” said Rio Tinto-Kennecott spokesman Kyle Bennett, when asked about the huge landslide that shut down the Bingham Canyon Mine last week.

If we are to believe the Rio Tinto press release, it was nobody’s doing. The Canyon Mine simply “experienced a slide along a geotechnical fault line.” The mining company saw this trouble coming since February, we’re told, and once the movement “accelerated…pre-emptive measures were taken.”

Still, the enormity of the slide took Ted Himebaugh, Kennecott’s general manager of operation readiness, by surprise: he told the Deseret News that “he had seen nothing like it in his 36 years with the company.” A black swan event, then — a wonder. Who could have foreseen this?

It’s telling and a little disturbing that the statements the Rio Tinto issued after this disaster (and disaster is the right word here) make no mention of what was going on prior to the slide at Bingham Canyon, which is — it’s hard to believe this needs saying — a whole lot of mining and a whole lot of earth disturbing in close proximity to a geotechnical fault line. In fact, the Bingham Canyon operation is the world’s largest man-made excavation.

Rio Tinto has been very careful to sidestep any acknowledgement of its role, any connection of the mining operation with the slide, any accountability or responsibility for the slide: the Canyon experienced something; Rio Tinto watched. It’s as if some greater powers were at work in the Canyon — as if the earth in Bingham Canyon moved entirely on its own. The company of course moved everyone to safety, and now plans to get the mine up and running again, to “provide not only the jobs for the people but money to the state of Utah and economy.” The only thing that might hold things up is if they can’t resume operations safely: “we will not take a risk.”

I suppose that’s meant to be reassuring. It makes me shudder. What’s missing here is any deeper appreciation of just how risky these industrial mining operations always already are, even when things are running perfectly and according to plan. People concerned about the dangers of subsidence posed by the Eagle Mine operation on the Yellow Dog Watershed (another Rio Tinto /Kennecott project, which I’ve blogged about before — here and here, for instance) might want to have a good look at this Bingham Canyon slide and think about the risks they’re about to run. But it goes beyond — way beyond — the very serious risks of spawning streams collapsing, acid mine drainage, or other kinds of environmental degradation. Industrial mining operations put everything at risk: peace, agriculture, and social stability in many parts of the world, environmental sustainability everywhere mining is done.

That doesn’t mean mining shouldn’t be done at all. It means that when it is done, and done at this scale, people, communities, companies and investors need to understand fully how mining will affect them, what it will require of them, what it will involve, what it will bring and what it will leave behind. Company- and industry-sponsored community outreach and corporate responsibility efforts are insufficient; they are created to conceal the real risks and the true costs of mining.

“Mining is the material basis for life, making it difficult to exaggerate its significance. George Orwell called it part of the ‘metabolism’ of civilization,” Shefa Siegel writes; and yet “the ethics of mining are nowhere to be found.” His essay is a must-read, especially this week, in the wake of Bingham Canyon and the run up to the Rio Tinto Annual General Meeting.

One outcome of mining’s omission from environmental and development ethics is that as other disciplines and sectors gradually integrated concerns about sustainability into their knowledge communities, mining engineering, mineral economics and processing, geochemistry, and other sub-disciplines associated with mining have remained static. As a result, there is less experience with the study and practice of sustainable mining than, say, forestry, agronomy, or soil ecology. There is no mining equivalent, for example, of the Yale School of Forestry & Environmental Studies. And while there is much anxiety about the failure to enact the ethics of climate change or environmental health, mining does not even have an ethical roadmap that we do not follow. With climate change there is broad agreement that exceeding a 2 degree Celsius rise in temperature breaks the planet. Pollution experts know to a microgram the tolerable level of exposure to mercury, lead, and arsenic. But what is expected of a mine?

Only in the last decade has vocal public discourse about global resource policy emerged. The effort to build an ethics of sustainable extraction is structured around two principal concepts: transparency and corporate social responsibility. While transparency initiatives concentrate on exposing revenue transactions between the private and public sectors in extractive industry projects, corporate responsibility efforts focus on the improvement of relations between companies and communities. The transparency movement has sparked advocacy and legislative activity in the United States, United Kingdom, and Canada—the host markets for much of the world’s trading of mining shares. Meanwhile, companies are dedicating more staff and resources to ensure the benefits of mine development reach communities in the form of improved services, infrastructure, and education. These twin concepts are intended to transform resource extraction from a winner-takes-all model to one in which all parties benefit.

The problem is that neither corporate responsibility nor transparency speaks to the reconciliation of extraction with ecological limits, or to the fact that we have entered a period of resource scarcity that necessitates nothing short of monopolization to make the business of industrial mining profitable. This order of magnitude leaves no room for multiple uses of land and resources, especially the smallholder farming and mining economies upon which people depend in mineralized places. Endemic poverty, conflict, and ecological collapse in these regions are rooted in the inequitable allocation of resources. In such cases, win-win solutions are an illusion.

I’ll be live-tweeting the Rio Tinto meeting on Thursday.