A Response to the Minister of International Trade

To read communication previous to what’s given in this post, please click here.

On February 23, 2010, I sent a response to our minister of international trade. By that time, Minister Day had moved on to his current position as President of the Treasury Board, and his previous position as Minister of International Trade has now been occupied by the Honourable Peter Van Loan. I don’t necessarily believe that the email that I received from Minister Day was written exclusively to me. Regardless of anything though, I should make clear the gratitude that I feel for the fact that my government is willing to involve me in this discussion and to put a single degree of freedom between me and one of their ministers. Before reading my response to Minister Day’s email, please understand that he deserves serious respect and credit for acting in such a way that the communication of an ordinary Canadian was responded to, especially since in doing so he was associating himself with a liability-laden political issue. Also, keep in mind that the opinions that he expresses are on behalf of the government that he’s representing. That said, I can’t help but be disturbed by the fact that my government wrote a response of that nature to concerns I had expressed about the possibility that people, livestock and wildlife are having their water and soil rendered toxic. At a time when nothing short of condemnation should be acceptable, it seems that perhaps they were trying to sweep the issue under the rug. My email to the Honourable Peter Van Loan follows.

February 23, 2010 Dear Minister Van Loan: I’m writing to you today in response to an email that the Honourable Stockwell Day sent to me on January 11, 2010. His email was written in reply to some concerns that I had expressed to the Prime Minister and to the Minister of Foreign Affairs regarding an apparent lack of control that Canadians have over the environmental and human rights impact of companies that are registered in Canada. At the time that Mr. Day sent me his email, he was occupying your post of Minister of International Trade, but has since moved on to a new position where I wish him great success. If you’re interested in reading the rest of the communication that has taken place between our government and me on this matter, then you may find it attached at the bottom of this letter. I’m writing to you now since I feel that Mr. Day did not address in a meaningful way the concerns that I had expressed. In the previous emails that I had sent to the Prime Minister and to the Minister of Foreign Affairs on this subject, I mentioned two examples that had caused me concern. The first example was regarding a failure on the part of Barrick Gold Corp. of Toronto to contain waste at their North Mara mine in northern Tanzania. The second example was regarding a mine in central Mexico that’s run by a subsidiary of New Gold Inc. of Vancouver. The mine in Mexico is in the process of demolishing the small mountain of Cerro de San Pedro, the emblem that supports the patron saint of San Luis Potosí on its coat of arms. San Luis Potosí, a city of a million people, is mentioned on Mexico’s Tentative List of UNESCO World Heritage sites where Cerro de San Pedro, which is located about twelve kilometers outside the city, is mentioned as being of specific historical significance. I also referred to the fourteenth report of the Standing Committee on Foreign Affairs and International Trade [1] which indicates clearly that Canadian companies are being allowed to operate in a fashion that is in violation of human rights and environmental standards, and specifies unequivocally that action should be taken to ensure that such standards are respected. In his letter, Mr. Day expressed an appreciation for the importance of improving Canada’s competitive position in a global market and offered the opinion that the best way to respond to concerns of the kind that I had addressed was through the promotion of voluntary initiatives. He listed some examples of the action that his government had taken, and expressed the opinion that in taking this action his government had responded to the points discussed in the aforementioned report of the Standing Committee on Foreign Affairs and International Trade. You are probably already familiar with the initiatives that he referred to. I won’t list them here, but have attached Mr. Day’s letter to this one, so that you may read it if you wish. First and foremost, I would like to thank Mr. Day, and those who worked for him in the post that you currently hold, for recognising the importance of Canada’s competitiveness in a global market. This issue is obviously one that we do not want to lose sight of. I would also like to thank Mr. Day for recognising, and to some extent addressing, the failings that the Committee has referred to in their report. Finally, I would like to thank Mr. Day for not only sending me a reply, but for also involving me and other ordinary Canadians in a discussion on this issue. Now I would like to explain why I feel that Mr. Day’s letter did not address my concerns in a meaningful way. I believe it’s likely that some Canadian companies, their subsidiaries, and the local communities and governments that host them, may end up improving their operations by voluntarily taking advantage of the services that were discussed in Mr. Day’s letter. However, it’s my belief that voluntary initiatives do not go far enough when dealing with the kind of issues that we’re talking about. Having read through the Committee’s report, it’s clear to me that they are not simply asking for an encouragement of voluntary initiatives. For example, they state that their Subcommittee on Human Rights and International Development was concerned that Canada does not yet have laws to ensure that the activities of Canadian mining companies in developing countries conform to human rights standards, and had urged our government to establish clear legal norms in Canada to ensure that Canadian companies and residents are held accountable when there is evidence of environmental and/or human rights violations. This doesn’t sound to me like a question of voluntary initiatives. As such, I’m not convinced that the initiatives that Mr. Day mentioned respond to the Committee’s concerns. I would encourage anyone who reads Mr. Day’s letter to also read the Committee’s report and to decide for themselves. Regarding the specific examples that I have mentioned previously, I won’t refer any more in this letter to the Cerro de San Pedro mine, except to point out that it is still in operation. Regarding the North Mara mine, let me be clear that I do not myself know how the containment failure happened or what the extent of the damage was. Like most Canadians, I have to rely on second-hand accounts of what took place and what the possible consequences might have been to the local people and to the environment. The account available from Barrick Gold is that there was an incident in which heavy rains led to a failure to contain acid rock drainage from a waste rock storage area [2], and that this failure was exacerbated by vandalism. They explain that the failure was detected in May of 2009 [3] in the form of decreased pH levels at a section of river located a kilometer downstream of the mine. As may be expected, there have been conflicting reports regarding what occurred and what its impact has been on the local environment. What is troubling to me is not that there have been conflicting accounts, but rather that we do not seem to be watching what’s going on. Independent of this concern, it’s my understanding that the risks associated with acid rock drainage and accompanying toxic metal contamination are sufficiently important to alert our concern, and remain a concern for a considerably longer period of time than other contaminants such as cyanide [4]. With this last thought in mind, let me bring to your attention a study led by a research scientist from the Norwegian University of Life Sciences. The study is published in the form of a report titled IPM-Report 2009: Investigation of Trace Metal Concentrations in Soil, Sediments and Waters in Vicinity of "Geita Gold Mine" and "North Mara Gold Mine" in North West Tanzania [5]. In this report, it’s indicated that the North Mara spill likely gave rise to severe toxicity of water, and to some extent degradation of soils and sediments nearby, particularly due to high arsenic content. Barrick Gold have expressed concerns regarding the conclusions of this study [6]. I respect their right to defend themselves and to express their opinion. Let me express my own opinion that the concerns expressed in a study led by a qualified research scientist from a Norwegian university is sufficient reason for us to seriously consider paying more attention to this issue. To add to the two examples that I provided in my two previous emails, I would now like to mention another situation that has caused me some concern. In January of 2009, the Norwegian Ministry of Finance issued a press release stating that they had decided to exclude Barrick Gold from their government pension fund [7]. This decision was based on a conclusion made by their council on ethics [8] which explained that it had conducted an extensive review [9] of the environmental issues associated with the Porgera mine in Papua New Guinea, 95% owned and operated by a subsidiary of Barrick Gold. The council provided the assessment that investment in Barrick Gold entailed an unacceptable risk of their pension fund contributing to serious environmental damage. Central to the Council’s judgement was the fact that the Porgera mine practices riverine tailings disposal, a waste management practice that the Council understands as being in breach of international norms. Barrick Gold discusses the issue of waste management at the Porgera mine on their website. I would like to bring your attention to a particular paragraph on that site [10]: Porgera Joint Venture operates based on a stringent, government-approved Environmental Management Program. Prior to disposal, the tailings undergo treatment. This includes neutralizing the tailings in the processing plant neutralization circuit, cyanide destruction of the carbon-in-pulp tailings, and extraction of dissolved metals through the addition of lime. The mine conducts extensive biological testing to determine the impact of the discharges on the aquatic environment. All discharges are within the water quality limits established by permit. Monitoring results are sound and the mine has never exceeded its compliance levels. At the webpage were I found that paragraph, I didn’t find any information to alleviate my concern that the government-approved Environmental Management Program that Barrick Gold refers to might not be appropriately referred to as stringent. With that in mind, please read the following extract from the Council’s report: Applicable as long as the mine is in operation, a concession has been granted by the authorities for the use of and discharge to water. In 1991, [the Porgera Joint Venture] was given permission to discharge tailings into the Maiapam River, a tributary of the Porgera River. The government requires that the water quality of the river, measured some 165 km downstream of the discharge point, does not exceed certain limits. These refer to concentrations of cyanide, ammonium, dissolved metals, as well as pH. The area from the discharge point to the compliance point (i.e. 165 km) is defined as a mixing zone where no requirements are made regarding discharge or water quality. In other words, the Council determined that there is no government control on what contaminants are present in the river for an entire 165 km-long stretch of river downstream of the mine. In addition, the Council mentions that, even at the so-called compliance point, there is no compliance level for mercury. The location of the compliance point and the egregious absence of a compliance level for mercury are independent of concerns that the Council expressed regarding an increased sediment load on the river, and the fact that the compliance levels for toxic metals do not take into account total metal content since they are based only on dissolved metal content. Finally, I would like to bring attention to the following two paragraphs that have been extracted from the Council’s report: Barrick Gold is a Canadian mining company, which, in several countries, has been accused of causing extensive environmental degradation. The Council has investigated whether riverine tailings disposal from the Porgera mine in Papua New Guinea generates severe environmental damage, and finds it established that the mining operation at Porgera entails considerable pollution. The Council attributes particular importance to the heavy metals contamination, especially from mercury, produced by the tailings. In the Council’s view heavy metals contamination constitutes the biggest threat of severe and long-term environmental damage. The Council also considers it probable that the discharge has a negative impact on the population’s life and health, including both the residents of the actual mining area and the tribal peoples who live along the river downstream of the mine. The environmental damage that riverine disposal may cause are well known, but the company has not implemented any appreciable measures to prevent or reduce this damage. Neither has the company been willing to present data to underpin its allegations that environmental and health damage does not occur. It may also be worth making note of the Council’s view that Barrick Gold demonstrated a "lack of openness and transparency in the company’s environmental reporting" and that they found "reason to believe that the company’s unacceptable practice will continue in the future." In his reply to my concerns, Mr. Day expressed the opinion that voluntary initiatives are the best way to advance principles of corporate social responsibility in a flexible, innovative and effective fashion while improving the competitive advantage of Canadian companies operating abroad. He did not, however, mention whether corporate irresponsibility may in some cases be voluntary. He also didn’t state whether he thought that the possibility for life-sustaining water supplies to be rendered toxic is acceptable. I would therefore like to ask if you could provide me with the answers to two questions. First I’d like to ask whether, with Canada’s competitive position in the world duly considered, our government considers an allowance for the harmful and voluntary pollution of the environment to be beneficial, acceptable or detrimental. Second, I’d like to ask whether or not our government believes that there’s validity to the concern that we’re currently allowing for a harmful and voluntary pollution of the environment to occur. I realise that you and the people in your office work very hard at a difficult and important job. You clearly address many issues in addition to the ones that we’ve been discussing. I’m nonetheless very interested to know what answers my government can provide to the two questions that I’ve posed in the previous paragraph. If you can find the time to reply then I will be very grateful. As usual, please understand that I plan to share all correspondence on this matter with fellow Canadians and with other people who care about and are affected by the issues that I’m addressing. You’ll notice that I’ve copied this email to some human rights and environmental organisations so that they can be aware that I’ve been communicating with my government on this issue. Before I close, I want to be clear that although I have discussed some mining operations that have caused me some concern, I do not consider mining to be an inherently bad thing. Mining clearly offers economic benefits to many people around the world. Although I don’t work in the extraction industry myself, it’s clear that much of what I benefit from on a daily basis is made possible by the exploitation of natural resources. Furthermore, there are clearly many good people who work in the mining sector, and mining is not by any means the only industry that can have both negative and positive impacts. I look forward to receiving a reply on this issue. cc: The Rt. Hon. Stephen Harper, Prime Minister of Canada The Hon. Lawrence Cannon, Minister of Foreign Affairs Amnesty International Canada Human Rights Watch, Toronto office Oxfam Canada Sierra Club Canada Canadian Wildlife Federation World Wildlife Fund Canada [1] The report is this one. [2] See the reports by Barrick Gold Corporation titled (i) Barrick Gold Corporation’s response to allegations that leakage from the North Mara gold mine has contaminated water sources in the Mara district of Tanzania with arsenic and other metals which is available from a link dated Dec 15 2009 here; and (ii) Submission to the Standing Committee on Foreign Affairs and International Development which is available here: http://www.barrick.com/CorporateResponsibility/KeyTopics/ Bill-C-300-Submission-to-the-Standing-Committee/default.aspx [3] Towards the end of Tanzania’s long rainy season which typically lasts from March to May. [4] Clearly if the heavy rains of early 2009 gave rise to a separate incident involving a release of cyanide to the environment, then that would also have also been a serious problem. Barrick Gold, however, states in report (ii) from footnote [2] that no cyanide was released into the environment. [5] This report, by Åsgeir R. Almås, Charles Kweyunga and Mkabwa LK Manoko, is available from the website of MiningWatch Canada here. [6] They express these concerns in report (i) from footnote 2. [7] The press release may be found here. [8] Referred to fully as the Council on Ethics for the Government Pension Fund — Global [9] The Council’s report recommending exclusion of Barrick Gold from Norway’s government pension fund may be found here. [10] You may read this paragraph and the full context that it appears in here: http://barrick.com/CorporateResponsibility/Environment/ WasteRockTailings/default.aspx More information from Barrick Gold on their tailings management at the Porgera mine may be found at their website here: http://barrick.com/CorporateResponsibility/KeyTopics/PorgeraJV/ TailingsManagement/default.aspx

To read the communication that follows, please click here.

New Gold’s 2008 Sustainability Report

In a New Gold press release dated Dec 14, 2009 that’s titled New Gold Granted Injunction to Temporarily Lift Shutdown Order at Cerro San Pedro Mine, you can find the following statement ¹ :

New Gold Inc. (“New Gold”) (TSX and NYSE AMEX-NGD) today announces that it has been granted an injunction related to the suspension of operations at its Cerro San Pedro mine in Mexico. The court ruling temporarily overturns the Mexican environmental enforcement agency’s order to suspend mining operations at the Cerro San Pedro mine. New Gold’s wholly owned Mexican subsidiary, Minera San Xavier (“MSX”), filed the appeal seeking to overturn the suspension order on December 3, 2009. Mining operations will recommence at the Cerro San Pedro mine and are expected to continue through the duration of the appeal trial.

New Gold is one of the companies that I mentioned in my second letter to the Prime Minister of Canada. Out of concern for the possibility that they might not be running their mine at Cerro de San Pedro responsibly, I recently read through New Gold’s 2008 Sustainability Report ². My comments in this post are regarding that report.

In the report, you can find lots of positive statements about the importance of workplace safety and environmental and social responsibility. For example, on page 2 you can find reference to “a company-wide commitment to corporate social responsibility.” Given the data that they provide of zero lost-time injuries and zero fatalities for 2008, they do appear to have a good workplace safety record for their mine at Cerro de San Pedro. Their statements on environmental responsibility in particular are nonetheless extremely vague and unsatisfying to me, and some important concerns are not even addressed. Allow me to explain.

First of all, there’s a reference to ISO 14001:2004 which does nothing to allay my concerns for reasons that I discussed in a previous post. There is no mention in this report by New Gold that ISO 14001:2004 does not state specific environmental performance criteria, nor is there any mention of what specific environmental performance criteria their ISO 14001:2004 certification would entail.

Secondly, nowhere in New Gold’s 2008 Sustainability Report are the concepts of acid mine drainage or heavy metal pollution mentioned. As was explained in the video about Marcopper in the Philippines, some types of mining waste have been known to pollute local water with sulphuric acid and heavy metals. If a problem of acid mine drainage and heavy metal pollution were to develop at Cerro ³ de San Pedro, then it could persist for centuries, if not millennia, after the closure of the mine. The question of whether or not this problem could arise was not mentioned in New Gold’s 2008 Sustainability Report.

Another important question is the one of cyanide management. Cyanide heap leaching of gold typically involves soaking enormous amounts of crushed rock in a solution of sodium cyanide and water. Tonnes of sodium cyanide and millions of litres of water are used every day in the operation of a mine like the one at Cerro de San Pedro. Gold mining companies are of course aware of the public relations nightmare associated with soaking mountains in sodium cyanide. If the word cyanide on its own weren’t enough, then catastrophes such as the spills at the Baia Mare mine in Romania and the Omai mine in Guyana would be. So it’s clearly in the interest of gold mining companies to manage the cyanide responsibly, at least to the extent that doing so will provide for a maximal balance between the image of the company and the other benefits seen by the people, such as the shareholders, that each company answers to.

It’s also true that people deal every day with all kinds of dangerous substances, not just cyanide, and that within many developed countries regulations exist to ensure that hazardous operations are carried out properly. Towards the end of New Gold’s 2008 Sustainability Report, on p. 19, there’s mention of the International Cyanide Management Code. I quote directly from their report:

While cyanide has its inherent toxic properties, its safe transport, handling, use and destruction are well understood and manageable. New Gold mine operations use cyanide as part of the process of extracting gold from the ore using strictly controlled procedures for the safety of personnel and the environment alike. The International Cyanide Management Code (ICMC) provides an excellent international reference standard for transporting, storing and using cyanide. The ICMC is renowned as the international benchmark for cyanide management. For more information go to: http://www.cyanidecode.org/cyanide_use.

It’s interesting that they don’t state there whether or not they actually adhere to the ICMC guidelines that they mention. Take a look at the list of signatory companies of the ICMC. New Gold isn’t on that list ⁴.

Independent of anything to do with New Gold Inc., there’s a question in my mind of whether or not a company’s presence on that list indicates that it necessarily deals with cyanide responsibly in all of its operations. Two additional points come to mind however, as a result of New Gold’s statements regarding the ICMC:

• If New Gold is implementing a “company-wide commitment to corporate responsibility,” then it would seem natural to assume that the “strictly controlled” cyanide management procedures that they refer to would be good ones. But if they are good ones, then why would they appear to not satisfy what New Gold itself describes as “an excellent international reference standard for transporting, storing and using cyanide”? If on the other hand their procedures do satisfy the ICMC criteria, then what’s holding them back from either explicitly saying so in their 2008 Sustainability Report, or from being a signatory member of the ICMC?

• If New Gold is implementing a “company-wide commitment to corporate responsibility,” but did not see fit to become a signatory member of the ICMC, then why are they talking about how good the ICMC is?

Cerro de San Pedro is elevated above the city of San Luis Potosí, the latter being located at the bottom of the Tangamanga Valley. The outskirts of the San Luis Potosí urban area are about 10 kilometers from the leaching pad and about twelve kilometers from the extraction site. According to some 2005 data from the INEGI, Mexico’s federal agency specialising in the collection of statistical and geographical information, the neighbourhood of Cerro de San Pedro where the extraction occurs was at an altitude of 2040 meters and the neighbourhood of La Zapatilla where the cyanide leaching occurs was at an altitude of about 1950 meters ⁵. The municipality of Soledad de Graciano Sánchez, on the east side of the San Luis Potosí urban area, the side that is closest to the mine, has an elevation varying between 1740 meters and 1870 meters ⁶.

Including only the municipalities of San Luis Potosí and Soledad de Graciano Sánchez, the city of San Luis Potosí had just under a million inhabitants in 2005 and was growing at a rate of 2 % per year ⁷.

update May 2, 2010: One thing that also shouldn’t go unmentioned is the aquifer. I left out mentioning San Luis Potosí’s aquifer since it was harder to find details about it and I hoped to investigate it later, and assumed that the information that I’d presented was enough to explain why I was concerned. But it should go without saying that the aquifer is of extreme importance, not only due to the fact that the mine is dealing with a lot of toxic material, but also due to the fact that mines such as this one use immense amounts of water, and San Luís Potosí does not have an abundance of water to begin with.

---

[1] The press release is available at http://www.sedar.com or from New Gold’s home page at http://www.newgold.com.

[2] A link to New Gold’s 2008 Sustainability Report is currently prominent on their home page, so please go ahead and read that report along with any other information that they have to offer.

[3] In case you’re wondering what cerro means, it’s a Spanish word with a definition that would fall somewhere between the definitions of the English words hill and mountain. Cerro de San Pedro is in the Sierra Madre Oriental mountain range.

[4] At the time of writing, this list had been last updated on December 1^st, 2009.

[5] Both neighbourhoods are in the municipality of Cerro de San Pedro. They’re referred to as localidades by the INEGI.

[6] The INEGI data can be found here (in Spanish).

[7] That census information is also available from the INEGI, and can be seen here (in Spanish).

What is ISO 14001:2004?

First of all, where will you find reference to it? If you read information made available by New Gold Inc. about their Cerro de San Pedro mine, then you’ll see they state that they have received ISO 14001:2004 certification for their environmental management system. For example, in their annual report for 2008, you can find the following statement:

Cerro San Pedro’s environmental management system received recognition from the International Organization of Certification, achieving ISO 14001:2004 status.

So that’s the context that it exists in. Let’s see if we can find out what it is. Let’s first figure out what ISO is. Some information on what ISO is is available at the ISO website. It’s a non-governmental organization formed out of a large number of member institutes around the world, many of which are themselves mandated by governments, with a central office in Geneva. They publish international standards in the interest of allowing businesses to operate in a way that meets not only the needs of the business in question but also the broader needs of society as a whole.

That sounds good. But then what is ISO 14001:2004? Again, an explanation is available on the ISO website. Look at the following paragraph that’s taken from that link:

ISO 14001:2004 specifies requirements for an environmental management system to enable an organization to develop and implement a policy and objectives which take into account legal requirements and other requirements to which the organization subscribes, and information about significant environmental aspects. It applies to those environmental aspects that the organization identifies as those which it can control and those which it can influence. It does not itself state specific environmental performance criteria.

That last sentence in particular caught my eye, although I’ll admit I had to read it a few times before convincing myself that I was reading it correctly. Read it again yourself. So in the case of ISO 14001:2004, ISO does not specify the environmental performance criteria that are decided upon by the company and the people who tell the company what it can do. I’m guessing that whether or not that’s satisfactory would depend on factors such as what country you live in, what kind of laws exist there, how well those laws are recorded and respected, what kind of influence you have in that country, what company is being certified, and how much you value environmental safety.

It seems therefore that the answer to the question of what ISO 14001:2004 actually is is not as straightforward or consistent as the answer to what it isn’t. I don’t want to trivialize the amount of hard work that I imagine is often involved in achieving this certification. But the amount of work or expense that might go into doing that can’t discredit the value of what we’ve been able to determine from a bit of reading.

If you don’t know what New Gold Inc. or Cerro de San Pedro are and would like to find out, then you can do so by reading my second letter to The Prime Minister of Canada, or visit their website at http://www.newgold.com.