Friday, August 3, 2012

Bolivian Government Expropriates Mine Operated by Canadian Mining Company

Bolivian President Evo Morales
On August 2, 2012, the Bolivian government under President Evo Morales expropriated a silver and indium mine operated by the Canadian mining Company, South American Silver.

The Bolivian government says it never gave South American Silver permission to operate the mine in the community of Malku Khota. In addition, the Bolivian government has contracted an independent company to assess the amount of investment by South American Silver, and after which the Bolivian government will give reasonable compensation to South American Silver.

The Canadian federal government led by the Conservative Party of Canada has expressed its disappointment with the Bolivian government's decision to expropriate. Apparently, the Canadian federal government believes that a company which invests in a foreign country should have priority over the rights of citizens (including indigenous groups) living in the foreign country.

There is mounting evidence of poor conduct by Canadian mining and oil companies in Colombia. See the FDA podcast interview of Asad Ismi for more information on the Canadian government and companies relations with Colombia: Asad Ismi interview

The FDA has requested interviews on Canada/Colombia relations from the Canadian federal government's trade minister Mr. Ed Fast (request emailed on August 31, 2012) and MP Devinder Shory, who works in international trade (requests emailed on July 14 and 23, 2012). The FDA has so far received no response from these persons.

Unlike Colombia, Bolivia under Morales has comprehensive and enforceable laws which protect the environment and the rights of indigenous groups. (See the FDA Report on the Bolivian Presidential and Parliamentary Systems)

The opening statement to the 2009 Bolivian Constitution:

In ancient times mountains were erected, moved rivers, lakes were formed. Our Amazon, our Chaco, the altiplano and our plains and valleys were covered with greenery and flowers. Populate this sacred Mother Earth with different faces, and we knew since the current plurality of all things and our diversity as human beings and cultures. So settle our people, and never understand racism until we suffer from the dismal days of the colony.

The Bolivian people, of varied composition, from the depths of history, inspired by the struggles of the past, the Indian anti-colonial uprising in independence in people's liberation struggles in indigenous marches, social and trade union in Water Wars and October, in the struggles for land and territory, and the memory of our martyrs, we build a new state.

A state based on respect and equality among all, with principles of sovereignty, dignity, complementarity, solidarity, harmony and equality in the distribution and redistribution of social product, which dominates the search for living well, with respect to the plurality economic, social, legal, political and cultural life of the inhabitants of this land in collective living with access to water, labor, education, health and housing for all.

We in the past the colonial state and neo-liberal Republican.

We assume the historical challenge of collectively build the state Social Law Unit Multinational Community, which integrates and articulates the purpose of moving towards a democratic Bolivia, productive, and inspiring bearer of peace, committed to developing comprehensive and self-determination of peoples.

We, women and men, through the Constituent Assembly and the original power of the people, express our commitment to the unity and integrity of the country.

Fulfilling the mandate of our people, the strength of our Mother Earth and thank God, refound Bolivia.

Honor and glory to the martyrs of the constituent and liberating gesture, which have made possible this new story.

Bolivia's fundamental and constitutional civil rights:
Article 21. The Bolivians have the following rights: 1. A cultural self-identification. 2. To privacy, honor, self-image and dignity. 3. A freedom of thought, spirituality, religion and worship, expressed individually or collectively, in public or private, for lawful purposes. 4. A freedom of assembly and association, in public and private, for lawful purposes. 5. To freely express and disseminate thoughts or opinions by any means of communication, oral, written or visual, individually or collectively. 6. To access the information, interpret, analyze and communicate freely, individually or collectively. 7. A freedom of residence, stay and movement in all of Bolivia, including entry and exit of the country.

Bolivia expropriates Canada-run mine
August 3 2012 at 04:33pm By SAPA

Bolivia on Thursday expropriated a silver and indium mine operated by a local unit of Canadian firm South American Silver - a move criticised by Ottawa and likely to put off foreign investors.

Mining Minister Mario Virreira said a decree had been issued authorising the state to “control from now on activities related to exploration and planning” at the mine located in southwestern Bolivia.

Bolivian officials denied the government had ever signed an agreement with South American Silver to operate the mine in the community of Malku Khota, located about 340 kilometres (210 miles) south of the capital La Paz.

“It is clear that Bolivia, as a state, has no direct contact with South American Silver,” Virreira said.

The government has contracted an independent company to evaluate the investments made in the mine over the next 120 days. Results of that study will be used to determine the amount of compensation paid to South American Silver.

Canada said it was “very disappointed” by the move.

“This action sends a negative signal to Canadian and all other foreign investors,” trade ministry spokesman Rudy Husny told AFP.

“Canadian officials remain in contact with the company and the Bolivian government and call for a resolution that respects the investment made by the company,” Husny added.

Canada “strongly believes that a stable and predictable legal, fiscal and regulatory framework is a vital prerequisite for increased private sector involvement, investment and confidence in the extractive sector,” he said.

Since leftist President Evo Morales came to power in 2006, Bolivia has moved to nationalise firms deemed strategic - a policy similar to one followed by his key ally, Venezuelan leader Hugo Chavez.

In June, Morales raised the possibility of making all natural resource-related industries property of the state.

That attitude has put off investors. Last month, India's Jindal Steel and Power scrapped plans to invest $2.1 billion in a Bolivian mining project and blamed the nation's “non-friendly business attitude” for the deal's collapse.

The decision to expropriate the Malku Khota mine follows weeks of recent protests at the site by indigenous leaders calling on La Paz to take over the facility.

In June, farmers and mine workers, some armed with explosives, forcibly occupied the site.

One person died and several were injured during a prolonged standoff last month that also saw protesters take a total of seven hostages, including five Bolivians employed by South American Silver. Four of the captives escaped and the three others were later released.

South American Silver in July expressed “extreme disappointment” at the government's possible decision to expropriate the mining project.

The Malku Khota project boasts one of the world's largest untapped resources of silver and indium, a rare metal used in flat-screen LCD televisions.

South American Silver had planned to invest $50 million until 2014 into the mine, which also explores gallium deposits, over the past five years. A subsidiary of the Canadian firm has managed the mine since 2007.

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