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Guatemalan Lawsuit Against Canadian Mining Giant May Set Precedent

by Jennifer KennedyCorpWatch Blog
April 19th, 2013

Angelica Choc stands next to a sign that says “Adolfo Ich murdered by CGN. Mining is responsible.” Photo: Daniel Sosa

A group of indigenous Mayan Q'eqchi' have filed three civil lawsuits in Canada against HudBay Minerals Inc. of Toronto for alleged human rights atrocities committed by its subsidiaries - HMI Nickel, Skye Resources and Compañía Guatemalteca de Níquel - at the company's nickel mine in eastern Guatemala.

The outcome of this cross border lawsuit is being closely watched by human rights activists after the U.S. Supreme Court rejected a case against Shell for aiding and abetting human rights abuses in Nigeria on the grounds that Shell did not have sufficient ties to the U.S.

However the Supreme Court decision left open the possibility that U.S. companies could be sued in U.S. courts for human rights abuses abroad. Thus a legal decision that allows Canadian companies to be sued in their home country, would also help fill the legal vacuum that multinationals have often taken advantage of historically to escape liability.

One reason that these cases are important is because of a legal doctrine known as "forum non conveniens" (which literally means an inconvenient forum) under which lawsuits brought against multinational companies for abuses in other countries are often rejected in most courts. Indeed HudBay sought to have the lawsuits dismissed on the grounds that under Canadian law, a parent company cannot be held responsible for its subsidiaries' actions. The company argued that the case should be heard in Guatemalan courts instead.

But this past February, in a surprise move, HudBay abandoned its earlier defense that Guatemala was the proper legal forum for the lawsuits. This was after Amnesty Canada, acting as a court intervener, argued that HudBay could be be held legally accountable for alleged negligence.

"I think it's a stunning victory for human rights. I think it's historic," Murray Klippenstein, the lawyer for the Guatemalan plaintiffs told the Toronto Star. "It should send shockwaves through the boardrooms throughout Canada."

For its part, the company claims that it made the decision based on cost. Analysts also believe that the company also made a calculated gamble that it could win the case in Canada because the witnesses for the plaintiffs were perceived as weak. Not least was perhaps the worry that they might lose the lawsuit, given that Chevron took the chance of being sued  in Ecuador as the most “convenient” forum only to lose badly and receive a multi-billion dollar judgment against it.

Backrgound to the Lawsuit

In 1956, two years after the 1954 military coup d'état, the government granted mining licenses to Hanna Mining Company, a U.S. corporation. In 1960 INCO, a Canadian nickel mining giant, bought a majority share in Hanna Mining Company's Exmibal nickel mining project in El Pastor in the department of Izabal, an area with a history of land conflicts. (A department is roughly equivalent to a province. There are 22 in Guatemala).

The Guatemalan government granted Hanna Mining Company and INCO a 40 year nickel mining license - on land that mostly belonged to Mayan Q'eqchi' occupied ancestral territory. Communities were evicted and violence erupted.

According to a report produced by the Catholic Organisation for Relief and Development Aid (CORDAID), the Exmibal project caused social conflict "related to indigenous protests against land dispossession and ensuing human rights violations against community leaders."

The Exmibal mine operated briefly from 1978-1981. After decades of inactivity, another Canadian mining company, Skype Resources, bought the concession in 2004. Land conflicts resurfaced. In 2006, Mayan Q'eqchi' families began laying claim to ancestral land that Skye Resources and its subsidiary, CGN, were using to develop the Fenix nickel mine.

In 2008, HudBay bought Skye Resources, its subsidiary CGN, and the Fenix mine - it was renamed HMI Nickel. HMI/Skye then merged to form a single company, HudBay Minerals. Klippenstein, on a website dedicated to the lawsuits, explains that "as a result of the merger, HudBay is legally responsible for HMI/Skye's liabilities and past actions."

In October 2011, three lawsuits were brought by 13 plaintiffs from the Ocho Lote community in the municipality of El Pastor against HudBay Minerals. Eleven of them are women who allege that in 2007, during a series of violent evictions to make way for Skye Resources' Fenix mine, they were gang raped by the military, police officers, and mining security employees.

"This is where they threw me to the ground and started ripping my clothes off. I thought only one of them would rape me but it was all nine men," Rosa Elbria told human rights organization, Rights Action, in a video testimony as she sat on the remains of her stove in the ruins of her former home.

Another plaintiff, Angelica Choc has filed on behalf of herself and her deceased husband, Adolfo Ich. The lawsuit claims that on September 27, 2009, Ich, a respected community leader, teacher, and father of five from the community of La Union, was hacked and shot to death by mining security personnel as he peacefully tried to intervene in a protest.

"I believe he was killed because he spoke out about the rights violations caused by Canadian mining in Guatemala. I believe he was killed because he was encouraging communities to stay united against the harmful practices of the mining company," Choc said in her legal statement.

German Chub, a young father of three, says he was shot by the same mining personnel the very same day. The attack left Chub paralyzed from the waist down. "Look at me. Look at what I've become. I'm not lying," he told a CBC reporter as he pointed to his wheelchair.

The plaintiffs took their case to Canada arguing that the weak Guatemalan legal system would fail to provide justice. According to a Human Rights Watch report, "[d]eficient and corrupt police, prosecutorial, and judicial systems, as well as the absence of an adequate witness protection program, all contribute to Guatemala's alarmingly low prosecution rate." A staggering 99.75% of violent crime in Guatemala went unpunished as of 2009.

HudBay vehemently contests the alleged charges and has written a detailed response on its website, entitled, "The facts: Hudbay's former operations in Guatemala."  Amongst others things, HudBay claims illegal squatters were legally evicted and that it "does not believe that the allegations that sexual assaults occurred during these evictions is credible and no complaints of this nature have been filed with the authorities in Guatemala."

With regard to the 2009 shooting of Ich, HudBay claims that, "based on internal investigations and eye witness reports, Hudbay believes that CGN personnel were not involved with his death."

Setting a Precedent

The Guatemalan plaintiffs have been supported by Amnesty International Canada, which was granted leave by the courts to intervene at a hearing last month after HudBay agreed to allow the lawsuit to proceed.

"Canadian companies are under an obligation to respect human rights wherever they operate, particularly where the business is operating in a conflict-affected or high risk area, and where the indigenous peoples' lives and livelihoods are at risk,” Tara Scurr, Business and Human Rights campaigner for Amnesty International Canada said in a statement. "This … reflects the interest all Canadians share in ensuring that victims of gross human rights abuses have an effective and meaningful avenue to seek justice and accountability."

The arguments were head by Madam Justice Carole Brown of the Ontario Superior Court, who is expected to issue a decision soon.

Activist lawyers are hoping that the lawsuits like the HudBay case will help make the case that companies should have to abide by their home country laws or face real sanctions.

"Given corporate complicity in egregious abuses around the world, respect for human rights should not be a function of voluntary compliance but instead a matter of enforceable legal rights," writes Lauren Carasik, director of the International Human Rights Clinic at Western New England University School of Law. "The international community must demand accountability, and reinforce and reaffirm the practices of corporations that do take seriously the impact of their behaviour."

Pratap Chatterjee contributed reporting.