Why Central American stays poor

Staff Columnist

“Environmental activists succeed in closing a

silver mine despite no violations.” By Mary Anastasia O’Grady  ( The Wall Street Journal, Monday October 8, 2018 )

“The July 2017 idling of the Escobal silver mine in south-eastern Guatemala displaced more than 850 workers and endangered  the livelihoods of thousands more whose jobs are indirectly supported by the project.  The loss of family income has harmed communities in the municipality of San Rafeal las  Flores  and in some cases sent the unemployed to look for work in the U.S.

   Nature can be cruel in underdeveloped countries.  Yet it wasn’t fire, flood, mudslide or volcano that served this economic gut punch.  This is a man-made travesty, courtesy of Guatemala’s Constitutional  Court.  It is a saga worth recounting because  it goes to the heart of the country’s intransigent poverty.

The mine is owned by Minera  Rafeal, or MSR, a Guatemalan subsidiary of Nevada-based Tahoe Resources.  Tahoe spokesman Edie Hofmeister told me that since 2010 MSR has invested $1.7 billion in the ‘development and operation’ of the mine.  ‘This includes more than $ $136 million paid to the Guatemalan government in taxes, royalties  and voluntary payments’ as well as well as $66 million in salaries’ and ‘600 million spent on local suppliers,’Ms. Hofmeister said last week.

Tahoe put more than $10 million into ‘local investment and economic development programs,’including ‘community  education , health and nutrition , infrastructure, capacity development, entrepreneurship and local governance initiatives,’ Ms Hofmeister said.  One notable project was a vocational training center into which it invested more than

$1 million.

Then came a local complaint filed against the government’s Ministry of Energy and Mines at the Supreme Court by the Center for Legal, Environmental and Social Action, an intimining nongovernmental organization known in Guatemala by its Spanish acronym Calas,

There was no charge of environmental or labor violations on MSR’s part. Instead  Calas said the Ministry of Mines hadn’t adequately consulted alocal indigenous eople – known as Xinca – about the mine before granting  MSR a license to extract silver in 2013.

The mine isn’t on Xinca communal lands.  But the United Nations International Labor organization’s Convention No. 169 states that indigenous peoples living in the area of development projects need to be consulted.  Guatemala is a signatory to the convention.  Yet its  Congress has never passed  the implementing legislation that would  spell out the process required for compliance.

On July 5, 2017, Guatemala’s Supreme Court sided with Calas in a preliminary injunction ordering the ‘provisional suspension’ of the mine.  The ministry of mines immediately appealed to the Constitutional Court, the highest court in the country.  The high court upheld the lower court.   The mine remained closed.

Tahoe says this ignored a precedent set by the constitutional court only months before in a similar case involving a hydroelectric project.  In that case the company was allowed to  continue operations while consulting with local indigenous people.”

More from Ms. O’Grady:     “On Sept. 10, 2017 the Supreme Court issued a final ruling:  The mine could be reopened while the government conducted the indigenous consultations simultaneously.  Calas  appealed, and the mine remained closed while the Constitutional Court called a public hearing for Oct. 25, 2017.  By law the high court should have ruled within five days after the public hearing.  Instead it delayed for nearly a year.  This Sept.3 it issued a preliminary ruling in which it acknowledged a 2002 national census that found only two Xinca  living  in the municipality of San Rafael Las Flores, where the mine is located.  Nevertheless it ordered that the mine remain closed and instructed the ministry of mines to investigate further whether there are perhaps more.  By law, the high court was obligated to issue a final ruling in 48 hours.  The parties are still waiting.”

So, at this point, 635 words into the saga, you all must get the point.  The mine was not, and maybe will not ever be opened.  The local courts have again triumphed over reason – maybe triumphed for reason, eh?

Mary Anastasia O’Grady, an experienced reporter,  led us through this sad tale to show us how our Latin American friends can often be victims of their own national  programs – to keep themselves poor.  A good lesson?

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1 Response for “Why Central American stays poor”

  1. Roberta Berger says:

    2. 8. 2019 Please send this article to every Council Member, Senator and Congressional Representative before our government send billions of dollars into these countries, for nothing.
    Puerto Rico owed many of the largest banks in the world billions of dollars, never repaid. UNable to borrow more, they applied for US citizenship, which was denied. Now, they are living in the USA.

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