Canadian mining giant Tahoe Resources came under fresh fire Thursday for bulldozing human rights in Guatemala as two organizations filed a complaint in the United States calling for a probe into whether Tahoe executives lied to investors.
The California-based Network in Solidarity with Guatemala (NISGUA) and the Guatemalan Diocesan Committee in Defense of Nature (CODIDENA) represented by the Canada-based Justice and Corporate Accountability Project, submitted a 36-page report to the U.S. Securities and Exchange Commission (SEC), the federal agency that oversees financial securities laws. The report details why Tahoe should face careful scrutiny and be held liable under U.S. law for failing to disclose to investors key details about local community opposition and human rights concerns swirling around the contentious Escobal silver mine.
“We strongly believe that a thorough investigation into Tahoe Resources’ reporting record would reveal that the company failed to disclose widespread opposition to the project and in fact, has no social license to be operating the Escobal mine,” NISGUA’s Becky Kaump told teleSUR from the organization’s office in Guatemala. She also noted that the group has repeatedly called for international solidarity to condemn “direct violence, threats, and criminalization” against community members and local activists amid “persistent” human rights violations against the communities around the mine.
The organizations call for the SEC to consider whether Tahoe omitted facts necessary for investors to assess the risk of the Escobal mine, including secret local legal action to suppress opposition to the mine, and failed to disclose information about human rights concerns. Depending on what the agency decides, Tahoe could face forced disclosure or personal liability for executives over the company's negligence with reporting key facts.
Tahoe Resources, incorporated in the Canadian province of British Columbia and headquartered in Nevada, has repeatedly faced criticism over its abysmal human rights record and contempt for community opposition in its operations at the Escobal mine through its wholly-owned Guatemalan subsidiary Minera San Rafael. The mine has faced considerable resistance, including sanctioned referendums in seven surrounding municipalities in the last five years, in which communities voted between 95 and over 99 percent against mining activities. In the Quesada community, for example, facing a concession by Canadian mining giant Goldcorp among other projects, 8,027 community members voted against allowing mining and just eight people voted in favor.
“The affected communities have been clear on their position on Tahoe's Escobal silver mine, engaging in rigorously democratic processes to voice their overwhelming opposition to the presence of the project in their territory,” said Kaump. “Our hope is that the decisions communities have already made with respect to mining will be upheld and honored by Tahoe and its investors.”
Shin Imai, a lawyer with the Justice and Corporate Accountability Project, told teleSUR that the complaint against Tahoe "offers the community a voice" in light of the repeated "disparaging remarks" Tahoe has made about opposition to the mine and particularly the local plebiscites. "Hopefully, this investigation will help ethical investors see the truth," Imai said, adding that the Corporate Social Responsibility guidelines companies like Tahoe subscribe to are voluntary and unenforceable.
Human Rights Disaster at Tahoe’s Escobal Mine
The most egregious violations associated with controversy over the mine include the murders of Xinca Indigenous leader Exaltacion Marcos Ucelo in 2013 and 16-year-old youth activist Topacio Reynoso in 2014.
In a separate case, six local farmers were shot in 2013 when Tahoe private security forces opened fire on peaceful protesters against the mine. The victims are now seeking recourse by suing the company in British Columbia. After the incident, Escobal mine’s security chief Alberto Rotondo fled in the face of charges for crimes against humanity based on damning wiretap evidence, but he was recaptured in Peru in January. Rotondo was caught on the wire tap saying, "Let these damn dogs understand that the mine creates jobs." Tahoe denies responsibility for the shooting.
Tahoe also filed at least four undisclosed lawsuits to try to block and override the multiple local plebiscites that overwhelmingly voted against the mine. However, Guatemala's Constitutional Court upheld the outcomes of the plebiscites and the communities’ democratic right to hold such votes. Separately, Tahoe also failed to disclose a lawsuit filed against former Guatemalan President Otto Perez Molina and his government, which aimed to secure protection for the company from protesters.
In light of these and other complaints over the company’s conduct, the new report to the SEC argues that Tahoe’s practice of misstating and omitting facts “necessary for U.S. investors to understand accurately the risks of investing in Tahoe” warrants close scrutiny.
Mining Corporations vs. Democracy
“We raise these issues as illustrations of Tahoe’s careless disregard for accuracy that should form a backdrop in assessing Tahoe’s credibility, supporting the need for further scrutiny of Tahoe’s public disclosures,” the report reads.
The complaint also calls for the SEC to look into Tahoe’s financial status as a Canadian foreign private issuer in the United States. As Imai explained, Canada reporting requirements are much more lax than in the United States. Tahoe itself has written in its annual report that its "regulatory and compliance costs" would be "significantly more" as a U.S. domestic issuer. The change in status would make the arguments of the complaint even stronger, since Tahoe would be subject to more exhaustive disclosure regulations.
The report argues that the fact that Norway’s US$850 billion Government Pension Fund divested from Tahoe Resources over its human rights record — and the company’s failure to cooperate in investigations into allegations — underlines the need for heightened scrutiny. "When investors actually find out what’s going on," Imai said with reference to the Norweigan fund, "some of the ethical investors will make a decision to divest."
David vs. Goliath? Fighting the Corporate Giants
The Tahoe case is also emblematic of broader systemic issues in the mining industry, which rampantly sees multinational corporations perpetrate human rights abuses, land seizures without social license, and environmental destruction with near complete impunity.
“Transnational mining companies often use their international status to evade regulations meant to hold them accountable to the governments and communities in which they operate,” said Nisgua's Kaump, reiterating the importance of “strong and transparent reporting requirements” for the industry.
Separately, Tahoe has also faced complaints over toxic waste pollution in a local river near the Escobal mine. Hundreds of community members facing polluted water sources and threats to their agricultural production brought forward a case against the head of the Escobal mine for industrial contamination.
Canadian mining corporations in general have a notorious record in Latin America and Africa, and local plaintiffs impacted by environmental destruction and grave human rights abuses by multinationals companies in countries like Guatemala are increasingly seeking recourse in international courts.