Blog Entry

REMA Calls Out Mexican Institutions for Recognizing Canadian Mining Company as Leader in Sustainability and Equity

Viviana Herrera

Latin America Program Coordinator

First Majestic Silver, a Canadian mining company, owns three producing silver mines in Mexico: the San Dimas Silver Gold Mine, the Santa Elena Silver Gold Mine, and the La Encantada Silver Mine.

Communities have accused the Canadian mining company of damaging the environment and harming surrounding communities. They have reported diseases as a result of water contamination linked to the mine sites.

The company is also involved in a tax dispute with the Mexican government. The company has been in the Mexican news lately because of recent comments by the Mexican government, saying it is seeking $500 million in taxes from the Canadian mining company First Majestic Silver Corp in what it says are owed taxes for artificially keeping its silver prices low over the past decade. The company calls these "inaccurate media reports" and says that it "pays its taxes in accordance with domestic legislation in Canada and Mexico and to the Company’s knowledge is up to date in all its tax payments."

See REMA’s statement below, and attached in the original Spanish:

Mining Companies in Mexico – Examples of Social Irresponsibility and Best Practices for Plundering

Earlier this month, Canadian mining company First Majestic was recognized by the Mexican Centre for Philanthropy (CEMEFI) and the Mexican Foundation for Sustainability and Equity as a leader in Corporate Social Responsibility for its "ethical and good governance practices" and its "dedication to caring for the environment." Its three mines in Mexico (San Dimas, Santa Elena and La Encantada) received this recognition     

The Mexican Network of Mining Affected People (REMA, from its initials in Spanish) wants to encourage the corporate leaders of CEMEFI to at least disguise a little bit the titles of their awards and not be complicit in laundering the image of mining companies, so that their awards are in more in line with the realities experienced by people living in the towns where these companies operate.

In our opinion, First Majestic should be given an indisputable award for its "dedication to the destruction of the environment." There are many examples, but we could highlight the cyanide spills that have occurred at La Encantada in 2016; the contamination of the San Rafael River and the diseases in the population caused by the Del Toro mine in Zacatecas; the logging of more than 2,000 hectares of forest; and the spillage and burial of toxic waste, which have contaminated rivers and natural springs due to the La Guitarra and El Coloso mines in the state of Mexico. We can also cite the serious attempt to destroy protected areas and sacred sites in Wirikuta for its La Luz mining project.

To associate First Majestic with "ethical and good governance practices" is another oxymoron. In the different territories where it operates, the local population has denounced the irregularities in land rents, the levels of criminalization, and the strategies of social division used by the company. The fact that First Majestic is currently suing the government through international arbitration to avoid paying taxes of up to 4,919 million Mexican pesos ($301M Cdn) does not seem by any means an ethical practice, let alone good governance. This dispute arises out of a disagreement with Mexican authorities over taxes paid on silver sales from the San Dimas mine in Durango between 2010-2014 to another subsidiary of the same company in Barbados. At the time, the San Dimas mine was owned by the Canadian company Primero Mining, which also threatened Mexico with an international arbitration process for the same reason in 2016, although it later backed off after the threat led to a dialogue process. Given the Mexican state's insistence on collecting what is owed, it appears that First Majestic will proceed with its lawsuit.

Generally, mining companies have created a series of mechanisms based on pure self-interest, which are therefore unethical, totally removed from any possibility of legal requirements (they call them voluntary codes) and always sheltered by academics who have developed any number of tricks to clean up the dirty corporate image of the sector.

Regrettably, these lies concerning mining companies' practices have not been limited to CEMEFI or the companies themselves but have recently come from the highest position of leadership in our country. The statements made by AMLO emphasizing the exemplary nature of Newmont-Goldcorp for its Peñasquito mine in Zacatecas, saying it "pays the workers well, helps the communities, doesn't destroy the surroundings, and cares for the environment," are disconcerting and absurd due to the level of deception in this statement. The Peñasquito mine certainly is an example, but an example of the level of depredation which can result from this extractive model. Since beginning operations, it has created a real social and environmental disaster that is completely hidden by this presidential declaration, as has been very well pointed out in a recent letter.

Enough of trying to fool the people and twist public opinion by promoting supposedly socially responsible green companies and practices! The extractive mining model, and those that promote it, only generates waste, misery and devastation.

The only socially responsible, environmentally friendly, and truly good governance practice is TERRITORIES FREE OF MINING.

Translated by Leslie Dolman for MiningWatch Canada.

Empresas Mineras en Mexico “Ejemplo de Irresponsabilidad Social y Buenas Prácticas para el Despojo”