Blood of Extraction
Page 4
In truth, very little of the company profits are invested in local communities. Barrick and Yamana’s combined “community investment” spending—part of companies’ Corporate Social Responsibility (CSR) agendas to create the fiction that they give back to communities whose land they exploit and whose political problems they accentuate—was a miserly 1.4 percent of net earnings in 2012 and 0.9 percent in 2011 (comparable figures for Goldcorp were not available). But beyond the supposed “community investments,” after construction is completed there is very little new inflow of money from these companies into the countries in which they are operating mines; and the construction costs of new mines are usually made back within the first few years of the mines’ operations. New capital expenditures on operating mines by Barrick and Goldcorp averaged 39.9 percent of previous years’ net profits during the period studied. These are thus reinvested earnings, not new inflows. Most of their profits, in other words, leave the country, and after the construction period, mining represents a significant net outflow of value. It is important to keep in mind, as well, how poor a job creator large-scale industrial mining is, on top of the human displacement and irreparable ecological damage these mines, by necessity, cause. In short, these companies and their owners are getting incredibly rich from Latin America’s mineral wealth, at the expense of the often impoverished communities that are left to deal with legacies of dislocation, poisoned water sources and, not uncommonly, the violence that makes all this possible.60
CANADA’S STRATEGIC ENGAGEMENT WITH LATIN AMERICA
Predatory Instincts
While a proper accounting of the wreckage caused by Canadian MNCs when they invade Latin America is studiously avoided in the mainstream Canadian media and academic literature, the reputation of these MNCs now precedes them in the region. People living in places where Canadian investment is significant and influential know full well the practices of which Canadian companies are capable. Residents of communities in mining regions flying Canadian flags with skulls and crossbones over the maple leaves have no illusions about what Canadian capital represents. The real stories of Canadian investment in Latin America that lie behind the fairytale representations found in the pages of Corporate Social Responsibility (CSR) on company websites thus feature prominently in our book. The lies of the big mining companies, sweatshop manufacturers, and other investors need to be demolished so that the economic elites behind them, as well as their political backers, can be held to account. With super-profits awaiting them, the owners of Canadian resource companies, for example, have proven unwilling to brook meaningful political challenges from impacted communities. Any dissent quickly becomes a security matter—sometimes at a very high price for those resisting. Between 2009 and May 2014, at least twenty-three people were murdered in Latin America in conflicts involving Canadian mining companies.61
That is the bloody tip of the iceberg, however. A 2009 report by the Canadian Centre for the Study of Resource Conflict, commissioned by the industry organization Prospectors and Developers Association of Canada (PDAC), found that Canadian companies have the worst record in the world for human rights, environmental, and occupational incidents, accounting for one-third of all those incidents studied—a much higher rate than other countries. The PDAC did not publicly release its findings; they had to be leaked instead.62 Of course, conflict, human rights abuses, and environmental damage do not end at the mining sector, even if that sector offers some of the most egregious examples. Canada’s Gildan Activewear has become one of the largest manufacturers of t-shirts and socks in the world through its terrible working conditions in the export processing zones of Honduras, Nicaragua, the Dominican Republic, and Haiti. Meanwhile, Scotiabank was the focus of violent protests during Argentina’s economic meltdown in 2002, after the bank stopped middle class and poorer Argentinians from withdrawing their savings during a banking collapse, and refused to recapitalize its Argentinian operations, instead closing shop, exiting the country, and leaving many Argentinians destitute.63
Capital and the State
Canadian capital’s penetration of Latin America has not been accomplished on its own; it has received the steadfast support of the Canadian state—from the Prime Minister’s Office (PMO) to Foreign Affairs, the Canadian International Development Agency (CIDA) (as of 2015 Foreign Affairs, CIDA, and International Trade are now part of Global Affairs Canada), National Defence, Natural Resources Canada, and Health Canada—as we discuss in detail throughout this book. Canadian foreign policy in Latin America has been intimately bound up with the outward expansion of Canadian capital, both responding to the imperatives and shaping the actions of Canadian MNCs as their investment in the region has steadily grown and encountered various political and social obstacles. Canadian state managers have prioritized new and aggressive engagement with states in the region, hoping to create the best possible conditions for the accumulation of profit. Further expansion of Canadian investment into the region has become a strategic goal of policymakers. Latin America was clearly on the radar of the Jean Chretién and Paul Martin Liberal governments of the 1990s and early 2000s, who signed the initial free trade agreements (FTAs) in the region, as well as a series of bilateral investment treaties (or Foreign Investment Protection Agreements as they are called in Canada), including the North American, Chilean, and Costa Rican FTAs. But foreign policy engagement in Latin America was given an extra boost, and received clearer articulation, under the Harper Conservatives, who signed another four FTAs while attempting to sketch out—publicly and privately—an agenda for Canadian intervention.64
This observation should not be taken as suggestion that Canadian foreign policy is reducible to the whims of a particular government, whether Conservative, Liberal, or even New Democratic. Justin Trudeau, leader of the Liberal Party, replaced Harper as Prime Minister in October 2015. While it is too early in his administration to make any decisive claims about its foreign policy orientation in Latin America, there is little reason to expect any significant rupture with the Harper legacy. Clearly the Harper Conservatives left their cynical imprint on Canada’s relation with the Americas (and the rest of the world for that matter), and, having been in power from 2006 until 2015, their actions bear a lot of scrutiny in this book. But, to stress a point raised earlier in our discussion of contemporary forms of imperialism, Canada’s external policies, like those of other countries, are framed by the rhythms of capitalist accumulation, with all its economic and political demands, contradictions, and ecological limits, and by the country’s place within the privileged hiearchy of the world system. These policies will persist—with changes in inflection, priorities, and aggression to be sure—in the absence of a fundamental reordering of the deep structural roots of global capitalist imperialism, even in the absence of Harper. Sober reflection of Canadian engagement in Latin America over the last two decades reveals that the Conservatives did not represent a radical departure from their Liberal predecessors, and with Trudeau now in the helm we should, once again, expect more continuity than change.
The Harper government formulated its Strategy for Engagement in the Americas in 2007, with the economy, democracy, and security the stated interests. The Strategy was cited approvingly by many observers as Canada’s strategic foreign policy turn to the hemisphere after decades without a broader, more coherent plan. The Harper government was subsequently criticized by some media commentators and academic observers, however, for not following through on the plan or adequately resourcing it. For instance, it was argued that Canada under Harper was unable to assist in the security of the region because it was overextended in Afghanistan or that its efforts to promote democracy in a region where it is facing serious hurdles (and such critics of the Harper government usually had places like Venezuela and Ecuador in mind) was inconsistent and lacked a sufficiently clear strategy. These criticisms miss the larger point. For one thing, as this book demonstrates, the goal of the Harper government’s Americas Strategy was never
the promotion of genuinely robust democracy, and certainly not anything that would challenge the exceedingly narrow parameters of neoliberal democracy. The overriding goal articulated in the document is the protection of the rights of global capital in general, and Canadian capital in particular: the creation and reinforcement of those conditions conducive for the accumulation (and repatriation) of profit by Canadian investors, including mechanisms to promote market liberalization, strong private property rights, and the weakening of any institutions that could challenge this paradigm.
Security/Democracy
It is important to point out that while the majority of Canadian security spending and thinking was devoted to Afghanistan between 2001 and 2014, Latin America, as we argue, has not fallen off the radar. With much less fanfare than in its intervention in Afghanistan, Canada has been cultivating security ties with governments in Central America and the Andes that share its flexible attitude towards the protection of human rights. In short, such a utilitarian view of democracy and security—ignored by most commentators—has led Canada to support regimes of the extreme-Right (Guatemala) and authoritarian rule (post-coup Honduras).
Optimal Conditions
Reproducing the optimum conditions for foreign investors in Latin America involves, to use Canadian foreign policy speak, a “whole of government” approach. It is not just Foreign Affairs and CIDA being mobilized (both of which, undoubtedly, play central roles), but various departments of the Canadian state apparatus: Natural Resources Canada, Health Canada and, of course, various Canadian security agencies. Natural Resources Canada and Health Canada, while ostensibly not part of the foreign affairs portfolio, nevertheless frequently bring their respective forms of expertise to bear, particularly in contexts where governments are wavering on the question of Canadian resource development projects, usually due to challenges from below. The expertise of these departments rests in demonstrating the putatively safe, environmentally responsible, and economically beneficial nature of Canadian mining. Canadian security agencies, such as National Defence and the RCMP, as noted above, have increased their presence in training, combat exercises, and arms and technology trafficking, following the Harper government’s call for Canada’s deeper engagement in the region. The Harper government eschewed any over-reliance on soft diplomacy in Canadian foreign policy more broadly. In a speech to Conservative Party members, Harper intoned that in a world of increasing threats, “Strength is not an option; it is a vital necessity.”65
This is a sentiment that clearly bleeds into Canada’s foreign policy towards Latin America. Obviously, Canada cannot throw its military weight around on the scale of the U.S. or other major imperial powers, but nor is it a marginal military minion: Canada was the fourteenth largest global military spender in 2012 (behind a number of former colonial powers, as well as countries whose militaries are essentially financed by the U.S.) with budgets above US$20 billion for the last several years, considerably higher than its spending during the Cold War (accounting for inflation). The Harper government’s Canada First Defence Strategy, announced in 2008, forecast continued budget increases up to 2027–2028. Even though the government scaled back spending estimates and made cuts to military spending following the 2008 global financial crisis and the winding down of its participation in the occupation of Afghanistan, total spending projections from the Strategy still reach approximately C$400 billion over its lifespan. And that spending is evidently not earmarked for peacekeeping: the investment in fighter jets, armoured personnel carriers, naval destroyers, unmanned aerial drones etc., is designed to improve the ability of Canada to project its hard power.66 Further, the Canadian military has played a central role in major interventions in the last decade, such as Afghanistan, Libya, Mali, Iraq, and Syria, demonstrating a capacity and willingness to project its hard power abroad.
In fact, the second major Canadian military engagement of the new millennium (after the original invasion of Afghanistan, but before taking over in Kandahar in 2006) was in the western hemisphere: the 2004 coup against the democratically-elected president of Haiti, Jean-Bertrand Aristide, and the subsequent military occupation.67 That coup—under a Liberal government in Ottawa—sent a signal that Canada is willing to project its military power in the hemisphere against governments and movements that fail to sufficiently demonstrate their subservience to the imperial project. Although that is the only direct example of military intervention against a government and its supporters by Canada in the hemisphere, the Canadian security agenda also comes in other, perhaps more subtle, forms, such as financing and training corrupt police forces that routinely violate the human rights of political dissidents, as in Honduras and Guatemala.
In Jamaica, with whose military Canada has long-established relations, Canada has established a military base for future rapid reaction needs in the region. The Canadian government, of course, cites ongoing counterterrorism and counternarcotics efforts when discussing its increased security engagement in the region, but as this book shows, these are only a small part of what is actually at play here. The security forces with which the Harper government cultivated relations are systematically located in countries that share the Canadian government’s political and economic outlook, and/or countries in which Canadian capital has significant interests and faces meaningful opposition, such as Honduras, Guatemala, and Colombia.
Canada’s security relations with Colombia offer a good litmus test of its thinking (and the role of human rights therein). Colombia has the worst human rights record in the hemisphere; those violations are carried out with regularity by the military and paramilitary deaths squads—the paramilitaries enjoy barely concealed (informal) ties to the military. This well-known scenario did not prevent Canada from signing a security cooperation agreement with Colombia in April 2012, which also includes cooperation on technical assistance to security apparatuses in Guatemala and Honduras.68
Most of the heavy lifting of the Canadian imperial project, however, is undertaken by Foreign Affairs, International Trade, and CIDA. Foreign Affairs, with some direction from the Prime Minister’s Office, constructs and directs the broader architecture of Canadian foreign policy, both in Latin America generally and in strategic countries specifically. It is, for instance, usually cabinet ministers with international relations and international trade portfolios that carry the Canadian message of free markets and limited democracy to the region, and of course it is officials with International Trade that craft the Free Trade Agreements. One component of Canadian foreign policy that receives surprisingly little attention from Canadian observers, especially given its importance, is the network of Canadian embassies throughout Latin America. As is made clear in this book, embassy staff (ambassadors, trade commissioners, CIDA agents) are the frontline missionaries of the Canadian imperial project. From applying various kinds of diplomatic pressure on governments, to being the eyes, ears, and mouthpieces for companies and Ottawa abroad, embassy officials play a crucial role in intelligence gathering and policy implementation. They often assume a behind the scenes role as facilitators for Canadian investors. It is embassy staff who navigate the local political terrain, advocate for investors, push for economic liberalization, and report to Ottawa when greater pressure is needed to advance Canadian interests. Embassy staff throughout the region also discuss among themselves opposition to Canadian mining in different countries to develop more effective and consistent responses.69
This role is captured inadvertently by one academic researcher of the natural resources industry in the Americas, Anthony Bebbington, who during testimony to the Standing Committee on Foreign Affairs and International Development in Ottawa paraphrased a Latin American government official who reportedly said to him, “As far as I can tell, the Canadian ambassador here is a representative for Canadian mining companies.”70 With coordination by embassies, Canada regularly pays for both journalists and officials in natural resource-related ministries from select countries to travel to th
e Prospectors and Developers Association of Canada annual conference where they meet directly with industry and Canadian government officials. Jennifer Moore from Mining Watch aptly describes this yearly ritual as an effort “to manage the message…of mine conflicts.”71 The countries from which journalists and other representatives are selected invariably feature strong Canadian mining interests which are frequently under threat by social conflict, or by specific policies assumed by the government in question. As our book makes clear, the defense of Canadian capital is not a new development for embassy staff. Thus the Harper government’s announcement in November 2013 that “All diplomatic assets…will be marshalled on behalf of the private sector,” with a particular focus on the Global South, was not a policy change, as some have suggested, but rather a long-belated official confirmation of what Canadian diplomats have long done under the cover of darkness.72
DEVELOPMENT AID
Development aid must also be situated centrally in any critical study of Canadian intervention in Latin America. The Canadian government’s claim that its aid programming is both robust and directed at the well-being of Latin Americans themselves simply does not stand up to scrutiny. Canadian development aid is in fact in the bottom half of international donor countries when controlled for by Gross National Income.73 It was a paltry C$187.7 million to Latin American countries in 2011–2012. To put that in context, in 2012 Canadian mining companies alone, as we have seen, earned C$19.3 billion, and three gold mining companies—Barrick, Yamana and Goldcorp—earned a combined net profit of C$2.8 billion from their operating mines. Remittances—money sent from migrants resident abroad to their home countries—from Canada to Latin American countries in 2012 totalled C$768 million, roughly four times official aid expenditures. Any discussion of aid also needs to acknowledge that aid budgets include money spent on bureaucracy and, in the case of Canada, supporting resource development in various ways, which we discuss below. In other words, the budget figures CIDA provides are not an accurate representation of what Canada is spending on aid, or how effectively its spending is doled out.74 A World Bank study of the major donor countries and International Financial Institutions (IFIs) ranked Canada twenty-ninth out of thirty-eight countries for the quality of its aid program.75