Abstract: Ecuador and the Making of World-class Environmental Disasters

The text puts forward the argument that a certain combination of social, political and environmental
factors can make large-scale mining especially destructive to countries, and often lead to serious
human rights violations. Lax environmental regulations, kleptocratic leaders, rampant corruption,
weak regulatory agencies, and no real independence of powers are some of the factors discussed.
Geological and ecological risks also weigh heavily in creating World-Class environmental and social
disasters. These include steepness of the topography, the ore's composition, earthquake risks, and
high rainfall. The implications of developing mining projects in such scenarios are likewise discussed.
Intag, Ecuador, where I live and work,is presented as a real-case scenario where all these factors
converge

Every country has its own set of conditions that go in the making of environmental disasters. These
range from lax environmental regulations, kleptocratic leaders, rampant corruption, weak regulatory
agencies, to having no real independence of powers, to mention some of the more important
sociopolitical factors. In the case of mining, which is what this text analyses, geological and
ecological risks also weigh heavily. These include, the steepness of the topography, the ore's
composition, earthquake risks, and high rainfall. Put these together, and the scenario is set for a
perfect storm of unimaginable consequences. Intag, Ecuador, where I live and work, and where three
transnational mining companies and ten different governments have tried to develop a large-scale
copper mine, all these disastrous ingredients come together; and then some.

For some countries, a major factor in determining the scale of the destruction could be lax regulations
that allow, or even encourage, extractive industries to cut operating costs and pass on environmental
liabilities to local, state and national governments, and future generations. As in the case of fiscal
incentives discussed below, these de-regulatory measures can be a result of rules laid down by
International lending institutions, such as the World Bank, the IMF, or state-control lending entities,
such as Export-Import Banks. It is also not unusual for large mining corporations to dictate to
governments what they expect to see in mining legislation before they invest; a task often aided and
abetted by embassies from the company's home country. Changes in the law or basic policies often
follow these kinds of thug strategies. For a close-to-home example, for decades, mining was
prohibited in Ecuador's network of Protective Forests (Bosques Protectores). However, in the last
three years, over forty of these legally protected areas have been opened up for mining. In addition,
hundreds of mining concessions are also within buffer areas of national parks and wilderness areas,
putting them at risk of land invasions, and worse.

Favorable fiscal legislation to the mining industry can be an important drive for fueling human rights
abuses and environmental degradation. This refers to, among other things, economic and fiscal
incentives meant to attract mining companies- regardless of their record- to invest in a country. The
incentives can be so generous to corporations that they often lead to mining not only not economically
benefiting the country, but also encouraging the opening of mines where they otherwise would be
economically not viable. By receiving all kinds of tax breaks, for example, a marginal mine in a very
socially or environmentally difficult environment could all of a sudden become viable. On the other
hand, by restricting a mining company's responsibility in things like shouldering the costs of mine
closure and rehabilitation, companies are able to legally pass on these very costly activities to local
and national governments. In such cases, local communities are the ones that end up paying the costs
in terms of health impacts, which can last for generations. Similarly, if regulations are lax enough, it
becomes much cheaper for companies to pay symbolic fines for violating regulations rather than
invest in fixing expensive problems.

The noxious mix of lax regulations sprinkled with corruption calls to mind the horrible tragedy that
wiped out the town of Bento Rodriguez in Brazil in 2015. In what Brazil has called its greatest
environmental disaster, in November of that year, the wall of a tailings dam containing 40 billions of
liters of semi-liquid toxic mining waste ruptured, sending a tsunami of poison almost three meters
high, wiping out the town and snuffing the lives of 19 of its inhabitants. The effluent eventually
reached the Atlantic Ocean hundreds of kilometers away, affecting the drinking water supplies of
hundreds of thousands of Brazilians in towns along the river's course. The tragedy could have been
prevented had the country had tougher regulations and enforced them. The other factor that comes up
over and over again in these kinds of tragedies is the company's zeal in prioritizing profit over the
lives of people and the environment. It is worth noting that one of the companies involved in the
disaster, BHP, is one of the world's largest, and considered by the industry to be environmentally
responsible.

Institutional (In)Capacity
For other nations institutional incapacity to regulate and control mining industries plays a key role in
the making of extractive nightmares. A government could be so hell-bent on collecting rents from
mining and other extractive industries, that it will drastically and purposely cut funding to its
regulatory institutions. The other powerful source of pressure to deregulate comes from big business.
Regardless the source of the pressure, the lack of regulatory capacity will make environmental and
human-rights catastrophes all the more likely. This de-regulatory mania was a main objective of some
of the world's international financing institutions a couple of decades ago, especially the World Bank.
The stated goal of the World Bank back then was to promote development. Its real intent was to
benefit transnational mining interests and the economies of powerful nations. The end result? Cheap
resources for northern economies. The Bank implemented such a program here in Ecuador in the early
2000s called PRODEMINCA. One of the areas funded was the overhaul of the country's mining
legislation in order to make it “more competitive”. Two of the most successful results of the
modifications to the law was doing away with royalties the resource tax companies pay nations, plus
eliminating most environmental controls.

How deregulation works is fairly straight forward: The less regulations and oversight, the cheaper and
easier it is for extractive industries to exploit resources, thus more attractive to invest the country and
more profitable for shareholders. Cheap resources means cheaper end-products, which fuels the
economies of countries that are able to transform the commodities into finished products; such as
China. The Asian giant consumes approximately 50% of the many of the world's metals.
.
On the Coattails of the Big Ones
It is not only the large corporations that benefit from lax regulations and other similar dysfunctional
policies and human behavior. These also allow small-scale and artisanal mining to get away with
terrible environmental and human-rights crimes. The world is tragically full of these cases, such as
widespread deforestation, violent land invasions, mercury-laden rivers, and murder of activists. Many
of these impacts are affecting indigenous as well as non-indigenous people all over the world, usually
in places far from the public's eye and where few journalists visit.

Corruption and Impunity

Endemic corruption is another key ingredient empowering devastation. Corrupt officials facilitate
quicker licensing and demand much less compliance which, for companies, means cheaper operation
costs. For a few thousand dollars, for example, regulators can approve deficient studies that are meant
to identify mitigate or avoid impacts of the proposed mining operations on people and nature. In the
mining project close to home, I've seen how deeply deficient Environmental Impact Studies have been
approved by government agencies in spite of lacking the most elemental information necessary to take
informed decisions on how to avoid impacts by the proposed mining activities. For example, climatic
information was used from a completely different ecosystems than from where the mining project is
located. Nor did the Study have nearly enough information about on annual and distribution of
rainfall, nor of ecological water flow of rivers. Omission also is part and parcel of these “purchased”
licenses. These vary wildly, but can include omitting the presence of species facing extinction, not
reporting on the acid mine drainage generating potential of the ore, skipping reporting on known
earthquake faults, and so forth. Importantly, corruption also helps corporations green-wash their
image when regulators issue clean bill-of-health reports for obviously dirty, or dubiously illegal
operations. This is especially important for companies to calm the fears of investors and pacify
possible local resistance.

Closely tied to corruption is a climate of impunity. In essence, impunity reflects a lack of respect for
the rule of law, which though not as visible as other factors, is a powerful force in giving birth to some
of the world's greatest environmental disasters and human rights violations. It should, therefore come
as no surprise to discover a strong correlation between the murders of human-rights and
environmental-rights activists and high rates of impunity, as in the case of Mexico, Colombia and
Brazil; countries with shamefully high murder rates of activists).
Trading One's Way to Environmental Hell
Another little known factor supporting environmental disasters are international, regional or bi-lateral
free-trade and investment protection treaties; agreements countries sign to promote “free trade” and
protect and foster foreign investments. These, often, are extremely onerous to developing countries,
who often sign them under pressure from International Financing Institutions in order to attract
foreign investments. Noncompliance with any part of the agreements- especially the Bilateral
Investment Agreements, can trigger multi-million or even billion dollars lawsuits by corporations
against a signatory country. It is not uncommon, therefore, for countries to take no action to protect its
citizens or its environment for fear of ending up in one of several international tribunals facing a
multinational corporations, whose revenues may exceed a nation's annual fiscal budget.

In the case of Ecuador, for example, its 2017 budget was 32.3 billion dollars. The revenues for the
same year for BHP, one of the world's largest miner with a notable foothold in the Andean Nation, was
38.27 billion dollars. The pressure to comply with free trade and bi-lateral agreements can be so
intense, that they can force nations to change their legislation. Because of these instruments, a country
is often powerless to apply its own legislation to remedy or prevent environmental crimes, or protect
its citizens.

An example of the consequences of these investment treaties is that of Copper Mesa versus Ecuador;
a case very close to home, and in which I participated as a witness against the company. The Canadian
Junior miner, in spite of many illegalities committed in Intag, recently won a 20 million dollar award
from Ecuador. They won in spite of the fact the tribunal recognized the company violated Ecuadorian
criminal law by using paramilitaries to shoot at defenseless individuals. Instead of throwing out their
claim against Ecuador, the UNCITRAL tribunal only fined Copper Mesa 30% of the initial award.
Compared to several other cases where hundreds of millions have been awarded to corporations, the
20 million is loose change.

Ecological Considerations
Political and social considerations aside, there are a number of other factors which, taken together,
contribute significantly to the making of environmental and human-rights disasters. These geological
and ecological aspects are numerous, but include a site's annual rainfall, the steepness of the terrain,
the amount subsurface water present, the type of vegetation covering the mining area, and the number
of species threatened with extinction. No less important is the composition of the ore and depth of
where it is located. Other factors like a site's seismic risks also could play a very important role.

Depth of Damage
Most people don't realize that most of the world's metals come from ore deposits that are hundreds of
meters deep. The deposits close to the surface were mined decades ago. Companies, thus, have to dig
deeper and deeper to access and extract the ore. And the deeper these massive craters are, the more
forest cover, topsoil and subsoil need to be blasted, removed and discarded in order to access the ore.
Hundreds of millions tons of rocks and subsoil can thus end up in toxic waste dumps this way. The
material is toxic because the subsoil in mining sites is anything but “sterile”. The discarded subsoil
(called overburden) usually contains heavy metals, including lead, arsenic, mercury and cadmium, and
other toxic substances in quantities not economically viable to process. It is not uncommon for waste
rock from mines to contain iron pyrite, a compound, responsible for generating Acid Mine Drainage
(AMD), which exponentially increases a mine's contaminating potential.

The impacts of Acid Mine Drainage are difficult to grasp. There are mines in Europe still
hemorrhaging contaminated acid waters, such as the Río Tinto mines in Spain, which were opened
centuries before the Roman era. It's a problem still plaguing mining operations today, and one that all
the technology in the world cannot correctly predict, nor fully control. Some mines in the U.S. for
example, are predicted to require remediation in perpetuity. The contaminating potential of AMD is
specially troublesome in high-rainfall areas, where most of Ecuador's proposed mining sites sit.

A Lethal Mix
Besides the presence of iron, other minerals are key in determining a site's environmental impacts.
Most copper ore in western South America, for example- where most of the world's copper originates-
contains arsenic, in addition to other heavy metals, including lead and/or mercury. These poisons will
end up in local ecosystems and beyond once it is removed from the rocks by the acid water, and
transported by surface waterways as well as by underground aquifers far from a mine's location.
Indeed, a mine's upland location can be the cause drinking water contamination kilometers away from
a mine, and can contaminate crops irrigated by the poisoned water. And, as all rivers eventually
discharge into the oceans, the heavy metals flowing out from mines can also end up in coastal
ecosystems, wreaking havoc on shell-fish collectors, aquaculture businesses and others who depend
on healthy marine ecosystems for survival.

The Perfect Storm

Unfortunately for Ecuador, it is single-mindlessly pursuing mining development at a point in time the
country embodies almost all of the above factors, guaranteeing that it will be home to more than a few
world-class environmental disasters. In the last three years, for example, Ecuador severely gutted its
environmental regulations, while approving a long list of generous tax break and other fiscal
incentives in order to attract mining investment. That, in itself, would be plenty to fuel environmental
crimes, but Ecuador is also one of the world's most corrupt countries! The small Andean nation is also
no light weight when it comes to kleptocractic leaders. Ex president Rafael Correa and several others
in his administration are being investigated in relation to a series of corruption scandals, which has
already landed his ex-vice president in jail.

Alas, the woes don't end there. The country's institutional capacity to control mining is deplorably
inadequate. The lack of control has given rise to numerous illegal mining operations that, while being
reported on national media, the government is incapable of shutting down. In the meantime, they are
trashing the environment and inflicting cultural havoc in indigenous peoples and campesino
communities. In fact, most human rights, environmental and indigenous organizations in Ecuador
firmly hold that not a single mining concession in the country is legal- including those awarded to
large corporations- because they were granted in violation of the community's Constitutional right to
be consulted prior to permitting mining to go ahead. The lack of prior consultation is gearing up to be
the major issue confronting the government's mining initiative.

Another important, but little talked-about, factor in the making of extractive disasters, is the lack of
separation of powers. It can become a very important litmus test in determining how devastating
economic activities like mining can be. Until very recently, there was no independence of powers to
speak of in Ecuador, thus affected populations felt they had no legal recourse to defend their rights,
lands or livelihoods from powerful corporations or illegal small miners. Even today, after some very
positive changes under the country's new president, Lenin Moreno, many communities distrust the
country's courts.

Environmental Components
As is the case for the sociopolitical factors, the environmental factors contributing to mining
nightmares are all in place in Ecuador. To cite a project I am familiar with, the Llurimagua mining
concession in Intag's biodiverse Toisan Range, the copper found under the primary cloud forest is
mixed with arsenic, lead, cadmium and chromium (the project is in the advanced exploration phase
and operated by Chilean-owned Codelco). Given that the percentage of copper in the ore is only 0.5%,
it means that 99.5% of the hundreds of millions of tons of the ore will end up as mine waste. Crucially,
because of very high-rainfall conditions and acid-generating pyrites, the ore and subsoil will generate
Acid Mine Drainage for centuries to come. Greatly compounding the problem was that the ore was
discovered laying several hundreds of meters deep.

Extreme Biodiversity
Although lying outside the Amazon basin, the Llurimagua mining project, as well as most of
Ecuador's mining concessions, lies within the Tropical Andes Biodiversity Hotspot; the most
biodiverse region of our planet. To have a better idea of this area's biological importance, the mining
concessions in this part of Ecuador overlay forests that are the home to hundreds -not "merely"
dozens- of animal species facing extinction; including several in critical danger. The forests withing
the Llurimagua concession's forest is the habitat of a species of frog that, until 2016, was thought
extinct, and found nowhere else. These same mountain forests are used by communities for ecological
tourism, and protect dozens of pristine rivers and streams. If that wasn't enough, the site where the
copper was discovered in Intag is located in a seismically active zone, and the topography is
ridiculously steep. It also gets between three and four meters of rain yearly. In short, there are very
few sites in the world that, given all these factors, would be as environmentally destructive as this one,
if exploitation is allowed to proceed.

Yes, But...
There are no lack of individuals who would argue something along the line of: “we need metals for
our well-being”. Undoubtedly, but we also need a lot more than metals in order to live well. Starting
with a balanced climate, clean air and water, and healthy rivers and oceans; not to mention natural
places to re-create ourselves. Just as one would never dream of tearing down the Notre Dames of the
world or turn places like the Gran Canyon into open pit mines to satisfy the hunger for metals, so too,
there are many places on the planet that would constitute environmental and cultural crimes to trash in
order to feed the unquenchable thirst of industry. Ecuador is full of such places. Consider this also:
most metals go into gadgets and luxury items humans can live without, and which often end being
tossed after a couple of years use. On the other hand, one has to wonder how many individuals from
the developing world will be able to afford consumer goods like electric vehicles, that will take
millions of tons of copper, nickel, cobalt and other rare metals to build. The inconvenient truth is that
most metals are consumed by the citizens of a handful of rich nations, while the environmental, social
and cultural consequences are assumed by citizens of the poorer nations where the metals are mined.

Foundations
One could look at the constructing of a world-class environmental disaster in the same way as the
building of a mega high riser. For the building not to collapse and cause loss of lives, it has to have,
among other things: high-quality material, perfect plans, efficient and impartial oversight, and tough
regulations from start to finish. It's specially important that it has strong foundations. In the case of
mining in general, and the problem is applicable to most of mankind's economic activities, if the
foundation is flawed, it puts the whole operation at risk. The flaw in the foundations has to do with the
value that most members of our species put on economic development and growth-for-growth's-sake
over everything else; including Life Itself. It is in the enactment of this flawed human perspective that
politicians find their inspiration and psychological support to approve mining projects that will
undoubtedly violate human rights, impact ancestral tribes, destroy the habitat of hundreds of species
facing extinction, contaminate the air and land with heavy metals, and make it profitable for
companies to contaminate rivers for hundreds of years.
This same upside down value system has severely undermined the planet's climate control and taken
it to the brink of global collapse. And yet, government officials keep approving mining and other
destructive economic activities in indigenous lands, pristine areas, native forests and other highly
fragile ecosystems. And here's the crazy(er) thing; those of us who are trying to fix the flawed
foundations are accused of everything from being anti-growth, infantile environmentalist, to outright
ecoterrorists. The failing life-support systems, however, tells us that we are right.

Hope
It is easy to lose hope when confronting the scenario described above. However, the response by
Ecuador's civil society to the threat posed by the nation's mining policy has been heartening. In the
past three years, for example, human-rights, environmental and indigenous organizations in Ecuador
have joined together like never before to oppose what they see as an outdated model of development.
A model based based on extractivism and on valuing more what is under the ground than what is
above it. One of the more successful, and diverse, groups in Ecuador focused on resisting the path of
extractivism is the collective called Caminantes. Our objective is to try to stop mining from destroying
the country's real wealth: its unequal biological diversity, its rivers, forests, paramos and other fragile
ecosystems, as well as its fertile land and, most of all, its people and cultures. In essence, it is about
securing a sustainable, safe and balanced system of life for our, and future generations.

Although some large-scale mines are very close to starting, to date, Ecuador is the only Andean nation
free of large-scale open-pit metal mines. We believe there is still hope, especially since the two recent
court victories by indigenous groups, based on the government´s violation of their Constitutional right
to prior consultation. Disappointingly, but perhaps not surprising, the rulings are being aggressively
appealed by the Executive Branch- including the Ministry of the Environment.

A lot is riding on these, and other similar cases communities are preparing to present. If the courts can
once again reclaim their independence- as there is some indication they are doing- and if other key
factors can be addressed, such as clamping down on corruption and strengthening the country's
regulatory institutions, then Ecuador stands a good chance of avoiding being the home to world-class
environmental disasters and, at the same time, guaranteeing a sustainable future for its citizens.