Banque Mondiale, Conflict of Interest, Dominican Republic, Eurasian Minerals, failed development, Haiti, Haiti Mining Law, IFC, international development, international development failures, Loi Miniere Haiti, Newmont Haiti, Public policy, unigold, World Bank
The International Finance Corporation (IFC), the investment wing of the World Bank, has invested in Eurasian Minerals, partner to Newmont Mining in Haiti. As of the end of 2012, the IFC owns 7.1% of Eurasian Minerals stock (see Eurasian Minerals, Corporate Overview, March 2013). Meanwhile the World Bank intends to help Haiti rewrite its Mining Law. Is there something wrong with this picture? This is most certainly conflict of interest and outrageously so.
While giving lip-service to having other priorities, the IFC’s major concern appears return on investment. Thus, what favors Eurasian Minerals-Newmont, favors the IFC. In short, it is essentially letting a mining company help rewrite the mining law. In fact, one can suspect that they have let Newmont and others help them write policy and laws. The IFC seems very warm and snuggly with Newmont, and the closeness between Newmont and Eurasian must certainly have been instrumental in their decision to invest. The decision was made prior to the earthquake. Newmont owns 6.3% of Eurasian Minerals and Eurasian CEO, Dave Cole, worked for Newmont, prior to Eurasian, and was part of the Newmont exploration team for the notorious Yanacocha mine in Peru.
The UK registered charity, Christian Aid, “has documented the pressure from the World Bank on developing countries to lower royalty and tax rates for mining companies.” They note that “Developing countries have been encouraged by the World Bank to lower royalties and taxes charged on minerals as a key part of strategies to attract foreign investors to their countries.” Furthermore, “The World Bank’s role in both encouraging inappropriate taxation regimes and in investing in mining companies should not be ignored. The World Bank’s International Finance Corporation (IFC) holds shares in the Yanacocha and Antamina mines in Peru.” http://www.christianaid.org.uk/Images/undermining-the-poor.pdf And, here we go with Haiti — Deja vu all over again! We can be certain that, if the World Bank rewrites the law, Haiti will lose the few protections, which exist in its current mining law.
The IFC is well-known for investing in or giving loans to large multi-national corporations in poorer countries — corporations which have the means to make their own investments. They were instrumental in obtaining funding for, 51% Newmont owned, 5% IFC owned, Yanacocha Mine. A proposed Marriott Hotel in Haiti is another example of investing in companies, which could invest on their own, without help.
The World Bank-IMF helped Peru with “reforms” in 1990s, when its debt (and inflation) was at its peak. These favored foreign mining investment. At the same time, the IFC also invested in mining, including the infamous Yanococha Mine in Peru. The IFC also invested in Newmont Ghana. Both have a serious legacy of pollution, both chronic and acute. The acute pollution included mercury and cyanide spills. The Yanacocha Mine in Peru is said to have polluted waters, thus ruining animal husbandry and agriculture and killing fish 150 km downstream.
Dominican Senators were trying last November to revoke Unigold’s exploration permit in the Dominican Republic, not only because they will endanger a National Park, protected area, within the Dominican Republic itself, but also because the mines would poison the Artibonite River and Haitian agriculture. http://www.stockhouse.com/bullboards/messagedetail.aspx?p=0&m=31846520&l=0&r=0&s=gqc&t=list http://www.panoramadiario.com/articulo/articulo/239/senado-investigara-proyecto-minero-en-parque-manolo-tavarez-justo/
Never concerned with such considerations as the environment (although alleging otherwise), the IFC, announced last month (April 2013), that it is considering investing in Unigold Dominican Republic! By all means after polluting the environment and water in Peru, go after a National Park in the Dominican Republic and Haiti’s largest river, the Artibonite, too!
Christian Aid, in “Unearthing the Truth”, 2005, explained the Peruvian situation: “Claims by the mining industry and international financial institutions (IFIs), such as the World Bank, that mining investment would contribute to sustainable development in Peru, have not been borne out. In fact, poor people and their environments have suffered, while companies have seen profits rise….This brief analysis…suggests that the questionable benefits at both national and local levels, which often accrue to the already well-off, are easily outweighed by the high costs borne by the poor. Rather than reducing poverty, the evidence suggests that mining may be entrenching it. Furthermore, things now appear to be getting worse. New technology means that far fewer people are employed by the mining sector today than 20 or even ten years ago.” http://www.christianaid.org.uk/images/unearthing_the_truth.pdf
How much did the IFC invest in Eurasian? 10.3 million US dollars (10.6 Canadian dollars) were approved according to the IFC web site, but it may have been more, for it is hard to tell from the information given. The stock is now worth $1.75 and they purchased it from between $2.06 and $2.88, but there seems to have been a dilution of stock.
What has Eurasian Minerals (EMX) and Newmont done for Haiti thus far? If you read Newmont’s August 2012 Haiti Factsheet, on initial glance, you may be led to believe that they have done a lot. They say that “The majority of Newmont-EMX’s investment in Haiti since 2008 has gone toward Haitian salaries and the purchasing of local goods and services”. Ok, that is from January 2008 to August 2012 or 56 months. So, just how was this done? They tell us: “To spread employment and training opportunities to as many people as possible, Newmont-EMX has directly employed more than 12,000 Haitians on a temporary rotational basis from the local communities near the exploration projects, as well as 80 full-time Haitian staff and contractors. Combined, the total Haitian payroll since 2008 is in excess of US$4 million.” Ok, that is $71,429 per month for 56 months or $857,143 per year. But, for how many people? Over 12,080 people! If everyone were paid equally then that would be seventy-one dollars per year or 19 cents per day. But, of course they were not paid equally. And, the cost of living “well” in Haiti is high. So, we can imagine that the head person in Haiti, Dominique Boisson, would make at least $80,000 to $100,000 per year — we suspect more, as he would be the key to their being there. That would leave $757,143 or $63.00 per person, yearly, or five dollars and twenty five cents per month ($5.25) for the other 12,079 people. 79 are full time. We checked these figures many times. Somehow, when you involve so many people (12,080) over close to five years that $4 million becomes rather insignificant. Everyone would have fared better if the IFC had just given them the money, as would the environment.
In 2011, the Newmont CEO, Richard T. O’Brien had a calculated total annual compensation of $5.27 million compared to the Haitian payroll of $4 million for almost 5 years! Dave Cole, Eurasian Minerals CEO, earned $385,000 for fiscal year 2012. Currently Newmont Stock is worth $31.97 and Eurasian (EMX) is $1.75.
The World Bank came into being to rebuild Europe after the Second World War. That has nothing to do with mining in Haiti or Peru or anywhere else. Enough is enough. It is time for the IFC and the rest of the World Bank Group to go away. We concur with a victim of the Yanacocha Mine who said that this is not development. Rather it is simply a pretext. We would add that the IFC is a wolf masquerading as a sheep among lambs. The IFC is nothing but poisoned posset.
But, don’t take our word for it. See for yourself what kind of development the International Finance Corporation brought to Peru with the Yanacocha Mine. Without their financing the Mine would most likely never have been opened in 1993 nor expanded in 1999. http://www.ifc.org/ifcext/spiwebsite1.nsf/ProjectDisplay/DataConversion9502
(REFERENCES BELOW VIDEOS AND DESCRIPTION)
3 minute trailer for the documentary about the Yanacocha Mine: Open Pit by Gianni Converso
According to the Sociologist Ivan Salas, the Department of Cajamarca where Yanacocha is located went from being the 4th poorest Department in Peru, to being the 2nd poorest after 10 years of mining. Full Documentary Open Pit, one hour and twelve minutes:
Full Documentary about the mercury spill near Yanacocha:
Choropampa: The Price of Gold, Documentary, 1 hr, 15 min.
Description of Choropampa Documentary: “A devastating mercury spill by the world’s richest gold mining corporation transforms a quiet peasant village in Peru’s Andean mountains into a hotbed of civil resistance. A courageous young mayor emerges to lead his people on a quest for health care and justice. But powerful interests conspire to thwart the villagers at every turn in this 2-year epic chronicle of the real price of gold. THE SPILL On June 2, 2000, a truck from the Yanacocha gold mine spilled 151 kg of liquid elemental mercury along a 40 km stretch of highway passing through Choropampa and two neighboring towns. Villagers were not told the mercury was toxic. Assuming it was azogue, an ancient cure-all, they collected mercury in bottles and jars using their hands, sticks and brooms. Children were especially fascinated with the alluring silvery balls of liquid that sparkled in the bright sun; they played with it, spilling mercury on dirt floors and beds, near gardens and animals and inside the local school. Elemental mercury, or metallic mercury, evaporates rapidly at warm temperatures like those found in Choropampa at the time of the spill. Gregory Camacho, an industrial hygienist at the University of Columbia hospital in New York, specializes in cleaning up mercury spills. “Mercury is very difficult to clean-up on regular floors,” says Camacho in the film, “because it goes into every nook and cranny that it can find… On a dirt road or dirt surface it would definitely burrow.” Camacho explains that even after all visible liquid mercury has been cleaned-up, mercury vapors may remain in the air, condensing and evaporating as temperatures rise and fall. Elemental mercury is most toxic to humans in its evaporated, vapor-form. The World Health Organization says that when elemental mercury is inhaled, approximately 80 percent of the mercury remains in the body where it can damage the lungs, kidneys and central nervous system. Chronic exposure may cause birth defects and miscarriages. Symptoms of poisoning can include skin rashes, nausea, muscle and kidney pain, respiratory difficulty and loss of consciousness. Elemental mercury can be transformed into organic mercury or methyl mercury through contact with organic matter in the environment. Organic mercury is extremely toxic to humans because it can accumulate and move up the food chain. A World Bank report on the mercury spill in Choropampa acknowledged that ‘a certain proportion of the mercury that remains in the environment, either in the soil or transported into nearby waterways, can be expected to be transformed into organic methyl mercury.’ Chronic exposure may include neurological disorders, severe birth defects and mental illness. Perú, 2002 ”
CALL IT DEMOCRACY — Since there is no song about the IFC, per se, here is a song about the IMF (also part of the “World Bank Group”). It describes some characteristics of the IFC too. So, we dedicate this song and video to the International Finance Corporation (IFC). Here are the lyrics:
REFERENCES AND FURTHER READING
“Newmont Haiti Exploration, Fact Sheet, August 2012”, 2 pp.
We are told that Newmont funds and manages exploration of six joint venture projects [i.e. with EMX] La Miel (including the Savane La Place & Grand Savane prospects); La Mine Venture; North-Central Haiti Venture (including the Mapou project); Northwest Haiti Venture (including the Terre Neuve and La Montagne projects); Northeast Haiti Venture; Grand Bois Surrounding Property Venture. However, as we have already noted: “In April 2012, Newmont relinquished its interest in the Grand Bois Research Permit to EMX” But, they clarify that, “Newmont still retains its exploration interest and will continue to fund and manage exploration work in the Designated Project surrounding the Research Permit.” http:// www .newmont. com /sites /default/ files/Newmont%20Haiti_FACT%20SHEET%20Final. pdf
Eurasian Minerals, Corporate Overview, March 2013, 44 pp.
http:// www. eurasianminerals. com/i/pdf/CorpPres-Mar2013. pdf
“World Bank says its helping Haiti draft mining legislation”
By Trenton Daniel, The Associated Press MAY 17, 2013
Unigold investment pending
IFC Funding for Yanacocha