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PERU: Villagers Seek Justice

Mercury contamination near Peru mine leads to legal showdown in Denver court

by Peter HechtSan Francisco Chronicle
March 20th, 2005

As the flatbed truck left the largest gold mine in South America, it rumbled down a remote Andean highway, laden with dangerous cargo that shifted with each twist in the road.

Soon after leaving the Yanacocha mine, an empty chlorine gas cylinder rolled
into two metal canisters filled with liquid mercury, a byproduct of gold
extraction that was being trucked to Lima for use in thermometers.

Unbeknownst to the driver, at least one canister leaked 330 pounds of
glittering silver droplets onto the highway, attracting curious residents of
the small farming community called Choropampa.

Rocio Guzman's three young daughters picked up the droplets with spoons and
played with them in their rooms. Others gathered the liquid with pieces of
paper or their bare hands, thinking it was a precious metal or a medicinal
elixir. Children tasted it. Adults heated it in their kitchens, hoping to
extract gold.

Guzman, her husband and three daughters were soon hospitalized for several
months with mercury poisoning. A purplish rash covered Rocio's body. A
neighbor, 23-year-old Consuelo Chuguitucto, developed searing headaches and
lost her vision. "She can't see anything," said her mother, Lucy Levya,
standing outside the family home.

Four and a half years after the June 2, 2000, mercury spill contaminated
Choropampa and two neighboring towns, Denver-based Newmont Mining Corp., the
principal operator of Yanacocha, and lawyers for 1,100 Peruvian peasants
appear headed for a high-profile legal showdown that could involve millions
of dollars in damages.

Most of the plaintiffs earn a few dollars a day harvesting onions and
grains. If they win, their lawyers say, it would be the first time a U.S.
firm has been held accountable in a U.S. court for an environmental
contamination committed outside the country.

The peasants' lawsuit accuses Newmont, the world's largest gold mining firm,
of "fraudulently concealing the true hazard to human health and safety of
the spilled mercury." Newmont blames the Peruvian trucking contractor for
the 2000 spill.

After a three-year fight to keep the lawsuit out of U.S. courts, Newmont
agreed to settlement talks before two retired Colorado judges after a state
appellate court ruled that the lawsuit could proceed. But mediation talks in
Denver Jan. 19-20 failed to produce a settlement over unspecified damages
for "severe and permanent physical injuries and disabilities."

The plaintiffs then announced that they will go ahead with the lawsuit
before Denver District Judge Robert Hyatt.

"We're ready to go back into active combat," said the plaintiffs' lawyer,
Ken Crowder. "We believe our clients suffered devastating consequences as a
result of the spill."

In 1996, Crowder's firm, Engstrom, Lipscomb & Lack of Los Angeles, worked
with then-legal secretary Erin Brockovich to uncover how water supplies
contaminated by Pacific Gas and Electric Co. caused health problems among
town residents of a small San Bernardino County town -- a case dramatized in
the movie that bears her name. PG&E settled the lawsuit for $333 million.
Crowder said Brockovich is working on the Choropampa case, though she has
yet to visit Peru, where gold mining is the most lucrative growth industry.

Newmont's legal team includes the prominent law firm of Latham & Watkins,
whose San Francisco office is currently handling the case. Ernest J. Getto,
an attorney for the firm who has represented PG&E, ChevronTexaco and Newmont
in environmental and toxic tort litigation, referred all questions to
Newmont's Denver headquarters.

Newmont spokesman Doug Hock said the mining company still hopes to avoid a
trial, even though the plaintiffs have "very disparate views" over a
financial settlement. "We wanted to continue the settlement efforts, but the
plaintiffs' counsel did not," he said.

James Otto, an environmental law professor at the University of Denver
School of Law, said Newmont's attempt to negotiate a settlement doesn't
necessarily mean the company fears losing in court, but likely reflects a
strategy of appearing socially responsible given the problems at some of its
overseas operations.

Last September, Indonesian police detained six Newmont officials over
allegations of pollution from a company mine in Sulawesi province. Villagers
there charged that they had suffered illnesses and that their economic
livelihoods, which depend on catching fish, had been damaged by mine waste.
Five of the executives are still under house arrest, awaiting criminal
changes.

"Any company that wants to mine internationally now must not only have the
legal right to mine but also a social license to operate," Otto said. "Peru
has been a wake-up call."

Meanwhile, the Peru mercury spill has become a rallying cry for protests
against other foreign mining firms over alleged environmental damage and
political corruption. Mining accounts for half of Peru's annual exports and
makes the single largest contribution to the national economy.

"The people are rising up in a call to conscience," said Choropampa Mayor
Lot Saavedra, 26, who says he suffers from chronic kidney pain as a result
of the spill. "They are discovering the totality of abuses by companies only
seeking to get the gold."

Marco Morales, Yanacocha mine's environmental director, told a visiting tour
group that special protective seals are now required on all mercury
containers to prevent canisters from opening when toppled, and trucking
firms can no longer transport such material in uncovered vehicles.

After protests last fall, Newmont backed off from a planned expansion of
Yanacocha near the northern city of Cajamarca, where Spanish conquistadores
captured the Inca leader Atahualpa in 1533. His subjects were forced to fill
a room full with gold and silver as ransom. They did, but the Spanish
executed him anyway.

Choropampa residents have also protested against Yanacocha officials who
they say endangered them by offering as much as $30 a kilo (2.2 pounds) to
recover the mercury after the spill. Local residents were later hired
without protective gear to sweep and remove sediment from the highway. A
Yanacocha director, who asked not to be named, called that decision "a
mistake."

But a company report released a year after the spill said the decision was
intended to get residents to hand over mercury already in their possession.
The company also said it asked local authorities to send an ambulance with a
loud speaker "to warn locals of the toxic nature" of the chemical the day
after the accident.

Newmont spokesman Hock said even though "no cases of chronic injuries
related to the spill have been diagnosed," Yanacocha mine has already spent
$10 million to treat villagers, clean up the spill and monitor the
environment, and has doled out cash settlements of up to $6,000 each to more
than 700 residents who are not part of the U.S. lawsuit. For the hundreds
who tested positive for mercury exposure, Yanacocha agreed to provide
medical insurance until the end of 2005.

But the imminent end of the medical coverage worries those who say they
still suffer from blindness, neurological damage, memory loss and muscular
pain.

Erico Cerquin Saavedra remains hospitalized in Lima with uncontrollable
tremors. Violeta Mirando says her 7-year-old daughter, Jenny, still has
fainting spells. Rosaura Cuenca, whose family received a $2,500 settlement,
says she has a tumorlike growth on her calf and suffers from constant
headaches.

"The doctor told me it's not from contamination. I think it is. I'm sick.
I'm dizzy and I'm in pain," Cuenca said. "They say there's no reason to
worry. But all I do is worry."



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