Ejido communities in Mexico, Blackfire Explorations & the Canadian Embassy

What Happened

A 2013 MiningWatch Report (MiningWatch) summarizes documents obtained through access to information requests that, while heavily redacted, raise concerns regarding the actions of the Canadian Embassy in Mexico in relation to Calgary-based Blackfire Exploration Ltd. and its Payback Mine in Chiapas between 2007-2010. The mine site and access roads were located on the communally-owned lands of two agricultural communities (Ejido Grecia and Ejido Nueva Morelia).  Before mining operations began, the Embassy was aware of potential issues regarding the lack of consent from affected communities and difficulties reaching land-use agreements. The Embassy was also informed of growing protest and opposition due to allegations that the company was not fulfilling its agreements and of the concerns surrounding its social and environmental impacts. In spite of this, the Embassy pressured Mexican government officials in order to ensure that the mine became operational. Community concerns went unaddressed, and tensions and protests escalated to the point that community leaders and activists faced threats of violence and unfounded criminal accusations. Community leaders communicated their concerns to Embassy officials, but rather than impartially investigating their concerns, the Embassy adopted the company’s characterization of the opposition as criminal and potentially violent, and the characterization of community concerns as illegitimate or unfounded. It lobbied Mexican officials to ensure business-as-usual for the company. In this context, community leader Mariano Abarca was assassinated. All suspects had some link to Blackfire, including three former Blackfire employees detained shortly after Mariano was assassinated. One person was charged and convicted of the Abarca’s murder. Shortly after the murder, Mexican authorities shut down the mine for environmental violations. Meanwhile, corruption allegations against the company surfaced in Canadian national media. Even after Abarca’s death, the mine’s closure and the emergence of corruption allegations, the Canadian Embassy continued to actively support Blackfire by providing legal advice and advocating for its interests with Mexican authorities. 


Background

In 2005, Blackfire Explorations Ltd. acquired the Payback mining project in Chiapas, Mexico (MiningWatch, p. 1). It sought to construct the mine in Ejido Grecia with access roads through the neighbouring Ejido Nueva Morelia.  These communities are part of the municipality of Chicomuselo. Embassy reports from the time state that the company had claimed it had consulted with local community leaders and negotiated payments and programs to improve local infrastructure, water sources, and crops. (MiningWatch, p. 5-6).

Embassy Supports Blackfire in Spite of Tensions and Lack of Clear Community Consent

At the outset, Embassy officials visited the proposed Payback project and met with Blackfire executives alongside local and state authorities and local NGOs.  At this early stage, there was already evidence that Blackfire had not in fact engaged in proper consultations. An Embassy official reported that Blackfire’s attempts to construct access roads to the site had been met with local opposition and protests.  The official also speculated that Blackfire’s approach to negotiations may have been problematic (MiningWatch, p. 5-6).

In spite of these observations, there is no evidence that the Embassy made any efforts to encourage Blackfire to engage in more meaningful consultations with the Ejidos or that the Embassy conditioned its support of Blackfire on compliance with local laws or corporate social responsibility standards (MiningWatch, p. 5-6). Rather, the Embassy proceeded to provide active support to the company. Internal reports indicate that the Canadian Ambassador met with the state Governor and that Embassy officials influenced local politicians in order to help put the mine into operation, including by pressuring Mexican officials to issue an explosives permit to Blackfire (MiningWatch, p. 7).

In early 2008, the Payback Mine went into operation. A few months later, Blackfire signed land use agreements with Ejido Grecia (MiningWatch, p. 7). However, the affected communities quickly became unhappy with the impact of the company's operations and its failure to live up to its commitments.  A number of protests ensued, including a three-and-a-half-month long blockade (MiningWatch, p. 9).

Despite the mounting tensions concerning the project, Embassy reports referenced statements from Blackfire that work was progressing at the site, that the state of Chiapas had contributed funds to the project, and that relations with the Ejidos were “back to normal” (MiningWatch, p. 7).  In correspondence with the Canadian Embassy dated September 2008, Blackfire acknowledged the significance of the Embassy’s interventions, writing that “[all] of us at Blackfire really appreciate all that the Embassy has done to help pressure the state government to get things going for us. We could not do it without your help” (MiningWatch, p. 5).

Protests Escalate and People Opposed to Blackfire are Threatened and Criminalized

In October 2008, the Embassy received a copy of an anti-Blackfire presentation that was circulating throughout the state of Chiapas (MiningWatch, p. 9). In April 2009, an Embassy media scan picked up news of a 3,000 strong march in Chiapas calling for the cancellation of Blackfire’s mining licenses (MiningWatch, p. 9). Embassy staff characterized these protests as opportunistic attempts to get more money from Blackfire.  One official stated: “Blackfire is being challenged by the Ejidos and in Chicomuselo to give more money above and beyond the agreements that Blackfire has in place” (MiningWatch, p. 10).  In fact, community members were mainly concerned with the environmental impacts of the open pit mine and the company’s alleged failure to fulfill its promises. The community was particularly concerned about environmental contamination given the importance of the rivers that flow from the Sierra Madre highlands of Chiapas.

Throughout June and July 2009, the Payback mine was again the subject of protests (MiningWatch, p. 9). In late July, activists from Chiapas engaged in a 36-hour sit-in in front of the Canadian Embassy in Mexico City (MiningWatch, p. 10). Video evidence shows community leader Mariano Abarca speaking with Embassy officials about the environmental and infrastructure damage the mine had caused in affected communities. He also stated that about 40 Blackfire workers were acting as armed (MiningWatch, p. 28)  “shock troops,” and threatening violence against those opposed to the project (MiningWatch, p. 11).

In August 2009, Mariano Abarca was informally detained by police in a practice called “arraigo” for eight days after a representative of Blackfire filed a complaint accusing Abarca of criminal acts against the mine. While Abarca was in custody, approximately 1400 letters flooded Embassy offices, expressing support for Abarca and concern for his safety.  During this time, the Embassy contacted local officials to clarify what was happening, but ultimately sided with Blackfire and concluded that Abarca’s detention was legal (MiningWatch, p. 11). Internal Embassy reports indicate that the Embassy’s investigation was not prompted by concern for Abarca or the public outcry, but rather was part of an effort to prevent negative publicity from impacting Canadian investment interests (MiningWatch, p. 11). Abarca was released after 8 days without charge (MiningWatch, p. 11-12).

There is no evidence that the Embassy took the growing conflicts and protests around the mine seriously. Rather, they were dismissive and disparaging toward the community’s opposition. There is no evidence that the Embassy questioned Blackfire after it heard directly from Abarca about the community’s concerns over threats of violence on the part of the company’s workers. There is also no evidence that the Embassy expressed concern for Abarca’s safety to Mexican authorities or questioned the circumstances of his detention. While brief investigative detentions are legal in Canada, the practice of arraigo, which can result in an informal detention without charge for up to 90 days, would not be constitutional in Canada. Moreover, it has been repeatedly condemned by Amnesty International and other human rights organizations for undermining the fundamental rights of a person during detention and encouraging the use of coercion to obtain confessions.

After Abarca’s release, communications between Blackfire and the Embassy show that Embassy officials accepted Blackfire’s allegations against Abarca and fears of violent protests despite the lack of evidence for such claims. For example, Embassy officials pressured local authorities to quell what Blackfire believed was a planned protest scheduled for later in the month (MiningWatch, p. 12). In its communications to Mexican authorities, the Embassy adopted Blackfire’s characterization of the planned event as potentially dangerous. In reality, it was a forum of the Mexican Network of Mining-Affected Communities; 240 people attended the gathering, and no violent activity was reported (MiningWatch, p. 13).

In contrast, local community members continued to denounce threats from Blackfire. In September 2009, members of Ejido Nueva Morelia issued a statement decrying the Payback mine and stating that Blackfire was mining on their land without permission. They also alleged that mine workers had seriously threatened those who opposed this activity (MiningWatch, p. 14).

In October 2009, Embassy officials visited Chiapas to discuss the “negative climate” Blackfire and other Canadian mining projects were facing. During the visit, Embassy officials visited the mine site with a Blackfire director and other company executives. After the visit, Embassy officials reported only positive impacts from the project with respect to employment and infrastructure (MiningWatch, p. 15-16), and praised its “modest environmental footprint” (MiningWatch, p. 16). In follow-up communications, Embassy officials sent reports to Blackfire describing Embassy meetings and communications with Mexican government authorities, emphasizing advocacy done on Blackfire’s behalf (MiningWatch, p. 16-17).

There is no evidence that the Embassy met with concerned community leaders during this site visit or that it attempted to investigate their allegations with respect to environmental impact and the use of armed “shock troops” against protestors.

Community Leader and Blackfire Critic is Murdered

On November 27, 2009, Mariano Abarca was fatally shot at close range outside his home. A witness to the murder was also shot and sustained injuries. The witness stated that while he could not identify the shooter, he was certain that Abarca’s death was due to his opposition to Blackfire (MiningWatch, p. 18).

Shortly after Abarca’s murder, the Embassy was aware that three individuals associated with Blackfire had been detained by police and that all of Blackfire’s Canadian staff had left Chiapas or the country (MiningWatch, p. 18). When drafting briefing notes for press releases, including speaking notes for then Governor General Michelle Jean’s visit to Mexico, the Embassy denied having any knowledge of potential violence against Abarca. It also decided not to publicly urge the Mexican government to investigate, reasoning that this could be interpreted as patronizing. The messaging ultimately provided to Canadian and Mexican press was: “The Embassy of Canada in Mexico is not involved in the investigation; this is a matter for Mexican officials” (MiningWatch, p. 19-21).

A few days later, on December 8, 2009, then Governor General Michaëlle Jean visited the site accompanied by then Minister of the State of Foreign Affairs (Americas) Peter Kent. Local activist groups were unable to secure a meeting with these parties to discuss their concerns with Blackfire and Abarca’s murder (MiningWatch, p. 21). During the visit, the Governor General condemned the violence against Abarca without calling for a full and impartial investigation.  For his part, Minister Kent made positive statements about Canadian companies operating in Mexico (MiningWatch, p. 22).

As such, neither the Embassy nor the Government of Canada urged a full and impartial investigation into Abarca’s murder. There is no evidence that the Embassy ever questioned Blackfire about what took place or urged it to conduct its own internal investigation, despite knowing that its employees had left the country and that all suspects had links to the company. Rather, immediately after Abarca’s death and during the Governor General’s visit, the Embassy attempted to distance itself from the conflict and avoided contact with affected groups.

Blackfire Suspended for Environmental Infractions; Corruption Allegations Surface

The day before the Governor General’s visit, the State of Chiapas suspended Blackfire’s operations after a State Environmental Inspection found inadequate permits, oily water running from the site, steep and dangerous roads, and dust pollution (MiningWatch, p. 21).

Just a few days later, on December 11, 2009, the Globe and Mail reported that Blackfire had been making payments into the personal account of the Mayor of Chicomuselo. Apparently, the company had itself filed a complaint with Mexican authorities in June of that same year, revealing that it had been making regular deposits to the Mayor’s personal bank account from March 2008 to May 2009 in order to prevent affected communities from, in the company’s words, “taking up arms against the mine” (Globe and Mail). Blackfire also admitted that it had decided to report this only after the Mayor began demanding more money and bizarre favours (MiningWatch, p. 22-23).

Following these reports, the Trade Commissioner at the Canadian Embassy asked the Ambassador for direction on whether he should continue engaging with Blackfire.  In reply, the Ambassador suggested that the Commissioner should not initiate contact with the company unless directed by HQ or following a collective decision (MiningWatch, p. 23). There is no indication that Embassy officials questioned Blackfire executives about the payments, undertook their own investigation, or urged Mexican authorities to investigate. There is also no evidence that Embassy officials questioned Blackfire about the environmental infractions resulting in its closure. Rather, in the coming weeks and months, the Embassy’s support for the company continued (MiningWatch, p. 23).

In early January 2010, a Political Counsellor for the Embassy visited Chiapas to consult with concerned community groups and local NGOs for the first time. The Counsellor’s report stated that the Eijidos widely viewed Blackfire as corrupt and responsible for Abarca’s death. The report recorded the view that Blackfire had failed to live up to its commitments, including providing a water tank and paving or maintaining roads. The report also detailed the alleged violence protestors faced from mine employees. Community members also criticized the Canadian Embassy and, by extension, the Canadian government, for failing to properly oversee the company’s conduct and fulfill its international commitments (MiningWatch, p. 24-26).

The Political Counsellor’s report was widely distributed within the Embassy and to various levels of the Canadian government, including the RCMP. However, there is no evidence in the documents that the Embassy took the concerns described seriously, launched its own investigation into the allegations, or altered its relationship with the company. Instead, it continued to support Blackfire (MiningWatch, p. 26). On February 8, 2010, an Embassy official wrote to public servants in Ottawa on behalf of Blackfire to find out how the company could file an international lawsuit against the state of Chiapas under the investor protection provisions of the North America Free Trade Agreement (NAFTA) for having suspended the mine. A few days later, Embassy officials circulated a media article reporting that Blackfire intended to file an $800 million lawsuit for what it characterized as the illegal closure of the Payback mine (MiningWatch, p. 26).

In March 2010, representatives of the United Steelworkers Union, MiningWatch Canada, Common Frontiers, and local NGOs visited Chicomuselo, Ejido Grecia, and Ejido Nueva Morelia to investigate the communities’ concerns. The delegates heard testimony that Blackfire had inadequately consulted, failed to fulfill commitments with affected communities, caused serious environmental impacts, and contributed to violence and threats against critics. The delegation also met with Embassy officials, but the Embassy refused to share any information or reports (MiningWatch, p. 1). That same month, nine Canadian NGOs called on the RCMP to investigate corruption allegations against Blackfire (MiningWatch, p. 22).

In May 2010, the Embassy reported to Blackfire that it had met with Mexican officials who expressed concern with the company’s actions in Chiapas. Embassy officials reported to the company that they had responded by defending its track record (MiningWatch, p. 26).

On July 20, 2011, the RCMP raided Blackfire’s Calgary headquarters in relation to Blackfire’s payments to the mayor of Chicomuselo (MiningWatch, p. 22). After three and a half years, in February 2015, the investigation was closed without any charges being laid.

Government Complicity

Former Supreme Court of Canada Justice Ian Binnie and the International Commission of Jurists have defined complicity as “when a party, whether by an act or a failure to act, enables abuse to occur or exacerbates specific abuse” (JCAP, p. 28).

Access to information documents reveal that the Embassy failed to properly investigate repeated and numerous allegations against Blackfire. These allegations related to lack of adequate consultation and community consent, environmental contamination, failure to fulfill commitments, and intimidation and threats against community opposition. Rather, the Embassy appears to have provided unquestioning support for the company when it encountered difficulties with local and state governments or community opposition. It accepted Blackfire’s characterization of its critics as either criminal or as seeking to extract more money from the company. Even after Abarca’s murder, after accusations of corruption had surfaced, and after Mexican authorities had shut down the Payback mine for environmental infractions, the Embassy failed to call on authorities to fully and impartially investigate and continued to support the company. 

The Canadian government's complicity with criminalization and violence against human rights defenders in this case is consistent with other documented studies of embassy responses to conflicts between Canadian mining companies and communities in Latin America. Other examples documented by Voices-Voix include the Excellon case study, in which the Canadian Embassy again pressured the Mexican government to break up community protests and advance mining interests and failed to address formal complaints that had been filed in Canada. Another example is the case of Steven Schnoor, a Canadian filmmaker who successfully sued the former Canadian Ambassador to Guatemala and the Attorney General of Canada for libel and slander after the Ambassador stated that his film on the impact of mining activity in the country was fabricated.  For another example, see documents made public by Wikileaks in January 2011 that recorded plans by Canadian, American and other Ambassadors to lobby Peruvian authorities and take other measures to weaken and repress opposition to mining, and examples of similar activities in other Latin American nations.

Government Failure to Regulate Canadian Embassy and Company Conduct

Since at least 2005, Canadian civil society organisations have been calling for a legal response to the concerns of communities like Ejido Grecia and Ejido Nueva Morelia with the conduct of Canadian resource companies.  They argue that “there are virtually no regulations in Canada to prevent companies from taking advantage of weak environmental and labour laws or to hold them accountable for violations of human rights.” Civil society has pushed for the Canadian government to regulate these companies, to develop eligibility criteria for government support and to withdraw government support and assistance in cases where companies refuse to abide by human rights and environmental standards.

The need for a regulatory response has been widely recognized by international human rights bodies, civil society in Canada and abroad, and in a 2005 report by the federal government’s Standing Committee on Foreign Affairs and International Trade (SCFAIT). In spite of this the Canadian government has continued to favor voluntary policy responses, including the Doing Business the Canadian Way and Voices at Risk policies.

In late 2016, the Canadian Network for Corporate Accountability (“CNCA”) proposed draft legislation for the creation of an independent ombudsperson for the Canadian extractive sector. The proposed legislation is titled The Global Leadership in Business and Human Rights Act: An Act to Create an Independent Human Rights Ombudsperson for the International Extractive Sector. The proposal is part of the CNCA “Open for Justice” campaign launched in 2014.

Under the proposed legislation, the ombudsperson would have a mandate to receive human rights complaints against Canadian extractive companies.  It would have the power to investigate complaints and could apply to a judge to compel the production of documents and testimony under oath. The ombudsperson would be mandated to make findings of fact with regard to any harm (or serious risk of harm) caused or contributed to, and would be required to issue public reports with any appropriate recommendations. If the company does not follow these recommendations, the Ombudsperson could ask the government to withdraw its support. If the government does not comply, then the Ombudsperson could ask the government to provide reasons for non-compliance and could apply to Federal Court for judicial review of the government’s decision (CNCA Draft Legislation, ss.14-15).

During the 2015 federal election, the Liberal Party stated that it “shares Canadians’ concerns about the actions of some Canadian mining companies operating overseas and has long been fighting for transparency, accountability and sustainability in the mining sector.” More recently, in November 2016, the Liberal government assured advocates that it is “seriously considering” the creation of an independent ombudsperson that could investigate Canadian companies’ actions abroad. However, since being elected in October 2015, the Liberal government has failed to fulfil these promises.

Relevant dates

2005: Blackfire Explorations Ltd. acquires the Payback barite project in Chiapas, Mexico.

November 29 – December 1, 2007: Embassy officials travel to Chiapas to meet with Blackfire, local and state authorities, and NGOs. Embassy reports note that there are already local opposition and protests against Blackfire’s project and identify the company’s approach to negotiations as potentially problematic.

Early 2008: Payback Mine becomes operational.

March 2008-April 2009: Blackfire makes regular payments into the personal bank account of the mayor of Chicomuselo.

June 2008: Blackfire enters into land use agreement with Ejido Grecia.

September 2008: Communications between Blackfire and the Embassy indicate that the Embassy influenced the Mexican government in order to put the mine into operation, including pressuring officials to provide Blackfire with an explosives permit.

October 2008 – April 2009: Embassy officials are routinely informed of protests against the mine, including a three-month blockade and a 3,000 strong march in Chiapas. 

July 2009: Another two-month protest occurs and community members undertake a 36-hour sit-in at the Embassy. Community leader Mariano Abarca speaks with Embassy officials about damage to the environment and infrastructure, as well as threats against local leaders and activists.

August 2009: Police detain Mariano Abarca after Blackfire files a complaint. Abarca is held for eight days without charge. Approximately 1400 letters flood the Embassy offices, expressing support for Abarca and concern for his safety.  The Embassy accepts Blackfire’s characterization of Abarca and others as potentially violent and his detention as legal, despite Amnesty International and other human rights organizations having repeatedly denounced the Mexican state for the abusive practice of pre-charge detentions (“arraigo”). The Embassy advocates on Blackfire’s behalf.

September 2009: Ejido Nueva Morelia issues a statement opposing the Payback Mine, stating that its lands were being mined without their permission and that protesters opposed to this activity were met with violent threats from mine personnel.

October 2009: Embassy officials characterize community blockades as attempts to extract more money from Blackfire. 

October 2009: Embassy officials visit Chiapas with a Blackfire Director to “troubleshoot” with regard to the “negative climate” faced by the company. In subsequent reports, Embassy staffers state their view that the environmental impact of the mine is modest. The Embassy also reported to Blackfire that it had met with local authorities and advocated on the company’s behalf.

November 27, 2009: Mariano Abarca is murdered outside his home; a witness is also shot and wounded.

December 3, 2009: The Embassy becomes aware that three individuals associated with Blackfire were detained in relation to Abarca’s murder and that Blackfire’s Canadian staff had left Chiapas or the country. In a press release and in briefing notes, the Embassy denies any prior knowledge of potential violence against Abarca.

December 7, 2009: Chiapas state officials suspend the Payback Mine for environmental violations and a lack of proper permits.

December 8, 2009: The then Governor General of Canada visits Chiapas and condemns Abarca’s murder, but fails to call for a full and impartial investigation. Minister of the State of Foreign Affairs (Americas) Peter Kent makes statements supportive of Canadian mining projects.

December 11, 2009: The Globe and Mail reports that Blackfire had been regularly paying the Mayor of Chicomuselo “to prevent locals from taking up arms against the mine.”

January 18-19, 2010: A Political Counsellor for the Embassy visits Chiapas to meet with community groups and local NGO’s. He reports that the community widely views Blackfire as corrupt, unable to keep its promises, and responsible for Abarca’s death. Community members criticize the Canadian government for failing to provide oversight or to fulfill international human rights commitments.

February 2010: Seeking advice on Blackfire’s behalf, Embassy officials ask public servants in Ottawa how Blackfire could sue the state of Chiapas for what it alleges was an “illegal” mine closure under the terms of NAFTA. Media reports indicate Blackfire threatened to sue for $800 million.

May 2010: Embassy defends Blackfire’s track record in a meeting with Mexican authorities.

October 2015: The Liberal Party of Canada publicly states that it shares civil society concerns surrounding the actions of some Canadian resource extractions companies operating abroad, and states that the party has long fought for “transparency, accountability, and sustainability in the mining sector.”

October 2015: The Liberal Party of Canada is elected and forms a majority government.

November 2016: The CNCA proposes draft legislation for the creation of an independent Human Rights Ombudsperson for the International Extractive Sector.

November 2016: The Liberal Government assures advocates it is “strongly considering” the creation of an independent ombudsperson that could investigate Canadian companies’ actions abroad.

Role or Position

Blackfire Explorations Ltd. is a privately-held, Calgary-based resource exploration and extraction company that owned and operated the Payback Mine, an open-pit barite mine in Chiapas, Mexico from late 2007 to late 2009 (MiningWatch, p. 5).

Ejido Grecia and Ejido Nueva Morelia: Ejidos are agricultural communities in Mexico that own, administer, and manage their land communally.  Until constitutional reforms in 1994, Ejido land could not be privately owned. The Payback Mine was located in Ejido Grecia and the mine’s access roads passed through Ejido Nueva Morelia (MiningWatch, p. 1).

Implications and Consequences

Human Rights

  • The Canadian Embassy failed to show concern for the human rights impacts of the project. This includes the environmental impact on water supplies necessary for the viability of the farming communities where the mine was located, the absence of free and informed prior consent to the project and the company’s alleged failure to fulfill its commitments. Rather, the Embassy supported Blackfire’s efforts to sue in response to the environmental protection measures undertaken by Mexican authorities.

Right to Protest

  • The Embassy repeatedly failed to show concern for safety of protestors when informed that those opposing the project had been violently threatened by mine workers. Rather, the Embassy accepted and repeated Blackfire’s characterizations of protestors as criminal, potentially violent, and merely seeking money.  On at least one occasion, it went even further and pressured local governments to intervene and stop planned protests.  As such, the Embassy was complicit in the criminalization of the right to dissent and the right to protest and contributed to the hostile environment wherein Mariano Abarca was murdered. 

Accountability

  • The Embassy failed to investigate credible and repeated allegations of human rights concerns and continued to provide support to Blackfire, ultimately making no efforts to ensure the company was held accountable for its actions.

Rule of Law

  • The Embassy failed to investigate and to call on authorities to investigate corruption allegations. The corruption of public officials threatens the rule of law and democracy worldwide.  It is also illegal under Canada’s Corruption of Foreign Public Officials Act.

 

Published:  20 June 2017

Photo: Mining Watch

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