Honduras: New laws put communities at a disadvantage

April 19, 2013
by 
Mary Durran, Latin America Programs Officer

The people of the Siria Valley in Honduras may have breathed a sigh of relief in 2010 with the closure of the Canadian-owned San Martin gold mine that sits in their midst, but now they must brace themselves for further environmental destruction and depletion of their water supply. In mid-January, after two years of negotiations and opposition from civil society, a new mining law was finally approved by the Honduran Congress. The effect of the new law will be to cancel the current moratorium on mining operations and open the door to a new gold, silver and iron rush in the country.  The Siria Valley will be particularly affected, as the mining company Goldcorp still holds several mining concessions around the area where the San Martin mine operated.

The new legislation was approved in the context of a severe economic crisis that includes a multi-million budgetary deficit of the Honduran government, which is currently closing city halls and other public institutions for lack of funds. In addition, on the heels of the new mining law, came the Charter Cities law, which basically enacts the privatization of cities. Charter cities, will be like enormous free trade zones in which investors provide their own police, courts and public services, including health and education.

This new mining law comes as a blow to civil society organizations that have been fighting for a mining law that puts first the interests of the Honduran state and affected communities before those of international mining companies. Yet, despite the outcome, it is evident that the long struggle did bring some gains.

“Firstly, our work forced the government to carry out consultation sessions about the new law,” says Pedro Landa of the organization CEHPRODEC, a local partner of Development and Peace. “And we managed to delay the approval of the legislation by more than a year, prolonging the moratorium on new developments.”

The consultation process forced the government to include a clause on free prior and informed consent for communities affected. “It is the only mining law in Latin America that includes an article obliging companies to carry out binding consultation with communities before starting mining operations,” Landa adds.

But that article comes with a hitch: over 300 concessions have already been granted to different mining companies throughout the country. “Communities can say no to these, but at this stage it is too late.  The government knows that if a community says no, and the government cancels the concession, then the mining company can sue the government for cancelling an investment agreement.”

Cancelling such investment deals just won’t happen, Landa says, citing the Canadian mining company Pacific Rim, who sued the government of El Salvador for cancelling a mining concession.

The new law is full of other articles that are disadvantageous to civil society organizations and communities: details of concessions and their environmental impact studies will no longer be available to the public, a major blow to affected communities seeking transparency.

And it is no coincidence that the Charter Cities legislation was approved the same week. China has reportedly promised Honduras more mining investment, on the condition of the Charter Cities legislation being passed, as it plans to mine and build refineries in the new cities, rather than export ore to China.

Rural communities are now bracing themselves for a rush of mining companies expected to arrive in the coming weeks. “We are expecting increased repression from the police, as the communities in this area will oppose the mines and the mining companies will pay for extra policing to repress all dissent,” says Roger Escobar of the Siria Valley Environmental Committee, who organized local opposition to the San Martin mine with support from CEHPRODEC.

The new law contains an article obliging companies to pay a 2% tax for policing. This means police will have an interest in eliminating all anti-mining protest, and they will likely tell communities that if the mine goes, they will too, leaving the community vulnerable to crime.  According to Landa, it is a clever way to get communities to think that a mine means security, as only with the mine, will they have police presence.

Jose Luis Espinoza, director of CEHPRODEC, says that an economic recovery plan based on mining is misplaced.

“In the past, mining here has provided a maximum total of 6,500 jobs, each one short term.  Whereas agricultural investment can provide many more jobs – in 3 years, such investment could provide around one million jobs.”