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World Social Forum 2022 Workshop “Resistance to mining extractivism in Latin America and Canada: A Global Vision"

The following is a presentation by Canada Program Co-Lead Jamie Kneen on May 30, 2022 as part of the 2022 World Social Forum. An important primer on the Canadian mining industry, this piece details the role of junior companies in exploration and speculation, describes Canada's unbridled support for mining companies, and points to the ways mining companies are using the climate crisis to promote 'green growth' to significantly expand resource extraction. 

Mining companies operating illegally, in violation of key environmental permits, or without ever having had them. 

Mining companies running roughshod over Indigenous land rights, destroying sacred sites and priceless cultural heritage. 

Mining companies tearing up protected areas, critical habitat, and destroying precious glaciers and fresh water supplies. 

These are all-too-frequent realities on every continent except Antarctica, and there are those who are even trying to extend industrial metal mining to the deep ocean floor. You are probably very aware of some examples, and you will hear more today, but first let me set the stage. How is this allowed to happen, and what can be done about it?

When we look at the mining sector globally, we see an industry that extracts mineral wealth for the benefit of investors, producing commodities to supply wealthy consumers and militaries. In keeping with the power concentrated in governments, and increasingly in the financial sector, mining companies enjoy active government support to establish and expand their operations, and great impunity for their abuses of human rights and the environment. And the Canadian mining industry, meaning both Canadian corporations and the Canadian government, plays a much larger part than Canada’s modest population and economic clout would suggest. Figures vary, but something like 75% of the world’s several thousand mining companies are Canadian, about 60% trade on the Toronto Stock Exchange, and at least a third of global mining finance is done in Canada. 

There are some details that are important to understanding this. The vast majority of mining companies, including Canadian ones, are small or “junior” exploration companies – companies that own exploration leases but do not operate any mines. Investment in junior mining companies is highly speculative, since the vast majority of their properties never become mines. If they are very lucky, they find a promising orebody and can sell it to a larger company for a lot of money. 

In the meantime, they cause significant social and environmental disturbance, building roads, drilling – and making promises of wealth and good fortune to communities and local elites. Canada used to be home to several really big mining companies, but they have almost all been bought out by transnational behemoths like Glencore, Vale, and Rio Tinto. What’s left is a lot of merely large companies, most of which are focused on gold. Canada also serves as a ‘flag of convenience’ for mining companies based elsewhere that are seeking to take advantage of Canada’s ready access to mining finance – and lax regulations.

Mining in Canada is also heavily focused on gold. Mining gold can be very profitable, but it is also fundamentally pointless, since very little of it is used in industry, and most of it is essentially dug up, at huge environmental cost, only to be reburied in some vault somewhere.

Mining in Canada is heavily mythologized as a key part of our economy and as part of the country’s foundation. Both of these myths have only a partial base in reality. Mining did indeed “open up” many regions of the country for industrial development, but it did so at great expense to the environment, and to the Indigenous peoples whose land it is, and who now find themselves permanent custodians of toxic sites they never asked for. It also created great fortunes – for the promoters, speculators, and investors, not for workers or contractors. And while mining does form the base of the local economy in some parts of the country, it remains a volatile, boom-bust economy, employing fewer and fewer people with increasing automation. Its contribution to the national GDP is less than 1%, though it is claimed to be up to 4% by including quarrying and related processing. Meanwhile, Canada’s economy remains heavily extractive. To a large extent, we ship raw materials out and buy back finished products.

At the same time, while mining in Canada is more regulated and not as militarised as in many of the places Canadian companies operate, we need to recognise that land defenders in Canada, especially Indigenous ones, are criminalised and persecuted, and mining companies are routinely allowed to continue operating in violation of environmental laws – or else they can just get the law changed to allow them to do things like use lakes and natural waterbodies as mine waste dumps. Or they can have park boundaries drawn, or modified, to exclude mines and promising mining zones.

The Canadian government, at home and internationally, ardently promotes mining – not because it is needed, or because it brings development, despite what they may claim, but because it is profitable. And it doesn’t even matter if those profits stay in tax havens and don’t even enter the country, because the same investors and financial institutions benefit. Federal and provincial politicians have very close relationships with the mining industry, frequently going to work in the sector after retiring from politics.

Canada’s global role in mining is mostly quite recent. Since about the mid-1990s, Canada has worked with the World Bank and the IMF to restructure the mining industry in countries around the world to favour foreign, and specifically Canadian, investment. Mining codes and relevant laws have been rewritten as part of IMF structural adjustment programs or as World Bank loan conditions, to reduce taxation and environmental and labour protections, facilitate the repatriation of profits, etc. At the same time, Canada has enthusiastically negotiated multilateral and bilateral investment treaties, or – like NAFTA – free trade agreements that contain investment provisions. All of these measures directly or indirectly restrict governments’ ability to act to protect their own people, their own economies, and their own lands and waters. Using investor-state arbitration, companies can – and do – actually sue governments for millions and sometimes billions of dollars if they are not allowed to proceed as they wish. 

Mining companies are hardly shy in building relationships and lobbying foreign governments. But the Canadian government also directly supports Canadian mining companies in everything from basic permitting processes to negotiating taxation and lease agreements, often intervening at the highest political levels, and regardless of how “Canadian” the company is. Interestingly, as soon as allegations of human rights or environmental abuse surface, government officials are quick to point out if the company is headquartered elsewhere and ‘not really Canadian.’ Canada even has a state corporation, Export Development Canada, that provides billions of dollars in loans, loan guarantees, and political risk insurance to companies, without any meaningful public accountability.

So what can we do?

The problem is that mining companies represent an entrenched interest in politics, and a very powerful lobby. They also have considerable economic power, at the national level to offer investment or to threaten to withdraw it, and at the local level to pay, or promise to pay, local workers, contractors, and taxes. Our strategies have to counter this power by identifying and isolating these interests to reduce their influence – or outmanoeuvring it by mobilizing early, before local interests can become entrenched. Our strategies also have to be complementary and based in solidarity so that we can simultaneously work to change conditions on the ground and systemically, nationally and internationally.

The mining industry requires access to land and access to capital, as well as the ability to externalise the human and ecological costs of its operations in order to maximise profits. 

Access to land can be affected by legal processes – requirements for community consent, regulations on staking, land and water use, environmental impact assessments, or the establishment of protected areas or no-go zones – or by popular processes and direct action for territorial control. Popular consultas can be both – building education and mobilization into a challenge to legal processes, or a foundation for legal action.

Legal action locally provides important leverage, even if it is not ultimately successful, because it can create space for other actions, but also because it provides a measure of legitimacy to the struggle, and additionally provides a foundation for later actions. For example, the fact that permits were challenged or environmental impact statements were contested can become very significant in subsequent legal challenges or complaints to regulatory bodies or international bodies like the Inter-American Commission on Human Rights or IACHR.

Access to capital can also be affected by legal controls on finance and investment, ranging from anti-corruption measures and due diligence requirements to foreign ownership and residency restrictions. It can also be affected, at least to some extent, by corporate reputation or “good will”, though investors and financiers often seem more interested in whether a company can navigate difficult situations competently, rather than the concrete impacts of its operations, however grievous they may be. 

Financial institutions, and financialisation more broadly, are therefore important targets as well, given their role in providing support for mining as well as justification and legitimacy for mining investment. There are many complementary areas in which to work to challenge the structures of financialisation in general and mining investment in particular, from the role of public funds and pensions, to tax justice and offshore finance. 

At the same time, popular pressure to impose stricter conditions on mining, including community and Indigenous consent as well as environmental regulations and human rights protections, work to limit the impunity of mining companies and their ability to externalise costs. In Canada, having failed to create useful mechanisms to investigate and rectify Canadian mining companies’ malfeasance internationally, we are now working on legal initiatives to establish mandatory human rights and environmental due diligence for mining companies. They would be required to evaluate human rights and environmental risks, and would be held liable for failing to do so. Other controls, for example, meaningful enforcement of Canada’s anti-bribery laws, or restrictions on the use of corporate subsidiaries in tax havens and secrecy jurisdictions, remain far off.

Fundamentally, capitalism’s hunger for wealth, extracted in the form of natural resources, will continue to apply deadly pressure to communities and ecosystems until it is forced to stop, whether locally by local resistance and the implementation of different models of development, or globally by restructuring whole economies away from growth and towards equity and justice. 

The climate crisis is being appropriated by capitalism as an opportunity for “green growth”, continuing runaway overconsumption by the wealthy at the expense of the poor, pushing for a renewable energy transition that aims to put an electric car in every driveway, while leaving those without driveways even worse off than before, driving mining to ever-greater expansion and profits – and destruction. 

Far from providing relief from extractivist pressure, the energy transition is being harnessed to accelerate it – unless and until we succeed in collectively pushing it back. Unfortunately, the idea that climate change can be meaningfully addressed just by switching to electric vehicles, without deep restructuring of all aspects of the global economy, is an easy sell to privileged overconsuming societies in the Global North. Too many climate advocates have bought into this model, correctly decrying false solutions like nuclear power and carbon capture and storage, but buying into electric vehicles and continuing unbridled overconsumption.

More than ever, we need to work together in solidarity to control this extractive economy, stop its expansion, and start to rehabilitate and repair its damages.