Clean capitalism gets mixed results in the Andes – by Catherine Solyom (Montreal Gazette – December 17, 2012)

This series was made possible thanks to a Bourse Nord-Sud grant attributed by the Fédération professionnelle des journalistes du Québec and financed by the Canadian International Development Agency.

Barrick Gold has been funding projects near its controversial Pascua Lama mine, in the name of corporate social responsibility. But local citizens wonder what will happen to them when the gold runs out

ALTO DEL CARMEN, CHILE/SAN JUAN, ARGENTINA — Houses for the homeless, wireless Internet for remote villages, new computers for the local school, kite-sailing competitions, a centre for the disabled.

These are a few of the things Barrick Gold has helped finance during the last few years in communities living near its controversial Pascua-Lama mine, under construction in the Andes mountains on the Chile-Argentina border, as part of its commitment to corporate social responsibility (CSR), or as it is called in Spanish, “mineria responsable.”

If these programs sound like they are beyond the normal purview of a Canadian gold mining giant, that’s because they are. Barrick often works with local non-governmental organizations (NGOs) who are better acquainted with health and social problems in their own communities. The NGOs share their expertise; Barrick puts up the money. It’s hard to be against CSR, now part of the playbook of most Canadian mining companies wherever they have set up shop around the world.

Who could argue that the children of Jáchal, Argentina, for example, should not get to see a dentist, courtesy of Barrick? Or that the people of Vichuquén, Chile, left homeless after the devastating earthquake of 2010, do not need the houses Barrick can afford to build?

And why shouldn’t a company that stands to make more than $1 billion a year off the gold and silver buried high in the Andes give a little back to improve the quality of life in the valleys below?

In part thanks to its commitments to CSR, Barrick Gold in November was ranked No. 1 among Canadian mining companies on a sustainability index by Corporate Knights, a media and investment research company based in Toronto, which bills itself as “the company for clean capitalism.”

Barrick’s top position was due especially to its performance in water productivity (revenue generated per cubic metre of water used) and “pay equity” (ratio of highest-paid executive compensation to average employee pay). It’s a somewhat surprising result given that Barrick’s former CEO Aaron Regent — fired in July — earned $9.2 million last year, while a mine worker at Pascua-Lama typically earns about $20,000.

But CSR has become controversial because, observers said, it does not necessarily make the mining more responsible — it makes it easier to sell.Rod Jimenez, the vice-president of corporate affairs for Barrick South America, said the company has done a lot to build trust in the community, likening the battle for hearts and minds around Pascua-Lama to a marriage.

“You go through phases and have to work at it,” Jimenez said during an interview at his office in Santiago’s posh Providencia neighbourhood in the Chilean capital. “It’s been a challenge.”

In Argentina and Chile, Barrick has spent millions on advertising. In San Juan, Argentina, for instance, giant billboards tower over some of the town’s busiest intersections with slogans like “We take care,” while television ads for Barrick Gold feature satellites and cellphones, lesser-known uses for its product than jewelry and gold bullion. (Industrial uses accounted for 10 per cent of the demand for gold in 2011.)

And in both countries, the company has stepped in where cash-strapped local governments have failed to provide basic necessities.

“We know if we don’t do things right here, we can’t go to other countries,” Jimenez said. “We want to make sure when we leave we don’t leave behind a ghost town … We want to leave a legacy.”

Just what kind of legacy Barrick leaves remains to be seen, however.

As more money has been pumped into local communities during the last decade, concerns over the Pascua-Lama mine’s potential environmental legacy, in particular its impact on scarce water resources, have faded into the background.

And unlike government funding of health and social services, ostensibly available to all, Barrick can pick and choose what to fund in the name of CSR, thereby creating winners and losers in every community.

Those studying to become mine operators in the Huasco Valley receive funding, for example, students of agronomy or oenology don’t.

Daviken Studnicki-Gizbert, a history professor at McGill University who is also the coordinator of the McGill Research Group Investigating Canadian Mining in Latin America (MICLA), said CSR, which is supposed to be about consultation and respecting local laws and human rights, is really mitigation.

A mining operation is a high impact, high intensity, low duration enterprise, Studnicki-Gizbert said, whether in terms of how it affects social relations, and how everyone gets along, or the environment that supports a community’s way of life.

“The social and physical environment won’t necessarily be destroyed, but it will be hard hit,” Studnicki-Gizbert said. “So with CSR the company recognizes that and proposes ways to mitigate it through these kinds of programs. But CSR simply allows a company to continue its operations.”

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