DISPOSSESSION AND SECURITY IN CENTRAL AMERICA
While the cases of Honduras and Guatemala, explored at length in previous chapters, are perhaps on the harshest pole of Canadian imperialist intervention in Central America in recent years, the basic patterns established in those countries are nonetheless observable in their essential parameters more broadly through the rest of the region. In this chapter, we systematically document the record of Canadian economic interests and diplomatic efforts in El Salvador, Costa Rica, Nicaragua, and Panama over the neoliberal period, while situating this involvement against the backdrop of each country’s historical development and the rhythms of resistance that encounter Canadian imperialism at every step. After the interrogation of these four cases, we sketch out the content and logic of Canada’s security strategy in Central America as a whole, showing how it flows immediately from the material interests of Canadian capital, as well as being connected to the medium- and long-term geopolitical strategies of the Canadian state in the region.
El Salvador’s twelve-year civil war came to a close in 1992 through a negotiated peace settlement, borne in part out of a military stalemate between the anti-communist, authoritarian regime and the mass guerrilla movement of the Frente Farabundo Martí para la Liberación Nacional (Farabundo Martí National Liberation Front, FMLN). The FMLN was transformed into an electoral political party and the Right found its principal expression in the Alianza Republicana Nacionalista (Nationalist Republican Party, ARENA), which was originally formed in 1981. The source of guerrilla insurgency can be located in the fact that a landed oligarchy rooted in coffee and sugar exports—the infamous “fourteen families”—controlled the bulk of the country for much of the twentieth century, both economically and politically. The poor were exploited or marginalized, and when they refused to bow their heads any longer and organized popular movements at different moments in the country’s modern history, the oligarchy responded by unleashing the military forces of the state in waves of terrific violence. The FMLN’s eventual call-to-arms, and the considerable support it received from layers of the peasant and urban working class population, were indicators of the unbearable character of that scenario.468
Unfortunately, the transition to peace did not witness a simultaneous break with neoliberal economics—indeed neoliberal policies were intensified—and economic inequality and social exclusion persist to this day on a grand scale. Authoritarian legacies have likewise lived on in the form of human rights violations by the Policía Nacional Civil (National Civil Police, PNC), which replaced the militarized security forces. In the years since the peace accords, the PNC has been linked to crime syndicates, torture rings that brutalize detainees, enduring death squads that have targeted vulnerable urban youth in “social cleansing” campaigns orchestrated under a veneer of a war against gangs, and a mano dura (iron fist) approach to fighting crime on the part of the state—all of this in a context of heightened generalized violence across society, making post-war El Salvador one of the most violent places in Latin America and the Caribbean.469
Part of the intensification of neoliberalism is explained by the shifting fates of different sectors of the Salvadoran capitalist class over the course of the civil war, and their attendant effects on the political inclinations of these sectors. The civil war had the effect over time of damaging national economic output and precipitating capital flight. The traditional agro-export sector began to decline in importance. Partly in response to this decline in traditional sectors, neoliberal reforms of trade liberalization and privatization of state-owned enterprises beginning in the late 1980s and early 1990s attempted to shift the model of accumulation toward non-traditional agricultural exports, and new commercial and service sector activities. As a consequence, novel domestic “economic power groups” emerged in alliance with foreign capital, which had been attracted through privatization initiatives.470
When it became obvious that the armed forces could not defeat the FMLN militarily, and that attracting further investment from transnational corporations was being impeded by the instability of prolonged warfare, these emergent sectors of the capitalist class sought to use ARENA as a medium through which to build a conservative coalition, led by business forces that would be able to forge a transition to peace on capital’s terms. The establishment of the ARENA government of Alfredo Cristiani (1989–1994) expressed the success of this new orientation on the part of rising business sectors and allowed the peace process to move ahead and reach its close in 1992. ARENA, governing a political system that sociologist Sonja Wolf has called “electoral authoritarianism,”471 managed to secure victories in the 1994, 1999, and 2004 presidential elections, setting in place the administrations of Armando Calderón Sol (1994–1999), Francisco Flores Pérez (1999–2004), and Antonio Saca (2004–2009). Under the ARENA regimes, the neoliberal process of privatization and liberalization accelerated, with the new emergent business sectors consolidating their recently acquired power, at the same time as some of the traditional oligarchic families reproduced their economic weight by shifting strategically from agro-exports into commerce, construction, and some service sectors, all in alliance with a growing presence of foreign investment by transnational giants.472 During the Flores Pérez administration, the U.S.-Central American Free Trade Agreement (U.S.–CAFTA) was signed, concretizing a secure investment environment for foreign capital in the country, despite fierce opposition from popular movements such as the Movimiento Popular de Resistencia-12 de octubre (Popular Movement of Resistance – October 12) and the Red Sinti Techán (Sinti Techán Network).473
As part of the externally-influenced trend in Central America to create better conditions for foreign investors, a new mining law was written in El Salvador in 1995 to replace the previous one, which had been in force since 1922. The new law included a low royalty rate of 3 percent of net profits. Coming out of the civil war and facing the harsh realites of the neoliberal global order, the Salvadoran government cited the need to be competitive with its neighbours to justify such a low rate, which in turn led Guatemala to reduce its rate from 6 to 1 percent as the countries drove down demands on foreign capital. In response to Guatemala’s reduction, and the Honduran mining law passed following Hurricane Mitch, which replaced royalties with a 1 percent tax, El Salvador reformed its 1995 law in 2001. After heated debate in its legislature, a new 2 percent rate was adopted—though as we discuss below, mining policy would soon become a focus of national debate as Canadian companies made their move on the tiny country.474
Total Canadian FDI into El Salvador is not publicly disclosed, but it is oriented towards mining and banking. Of the active multinational mining companies in El Salvador in the early twenty-first century, the three most important were Canadian: Intrepid Minerals, Aura Silver Resources, and Pacific Rim Mining (Pacific Rim was sold to an Australian company in 2013). Scotiabank bought Banco de Comercio in 2007 for US$170 million and is one of the largest banks in the country.475 There is also a small maquila presence and the recent entry of Bell and Telus in the telecommunications sector. El Salvador was a part of Canada’s FTA negotiations with the so-called Central American Four (CA4), but, as discussed in the previous chapter, those negotiations stalled and Canada successfully singled out Honduras after the coup with the hopes that the remaining three countries would feel pressure to push ahead on Canada’s preferred terms now that their neighbour had done so.
As elsewhere in Central America, however, community resistance has posed a significant challenge to Canadian capital’s ambitions in the country. The potential damage to the country’s limited fresh water supply from large-scale mining has inspired a broad opposition to mining in general and Canadian companies in particular, including protests targeting the Canadian embassy, which express a clear link in the minds of protesters between Canadian companies and the Canadian government.476 Canadian mining activity has been linked repeatedly to devastating environmental fallout in the country.477
Far and away the most notorious Canadian company in El Salvador in the early 2000s was Pacific Rim, which owned three exploration properties in the country. Pacific Rim established an American subsidiary in 2007 in order to take advantage of the U.S. trade agreement with El Salvador, the U.S.-Central American Free Trade Agreement (U.S.-CAFTA, including also Guatemala, Honduras, Nicaragua and the Dominican Republic). It bought the El Dorado property, a gold and silver deposit located one hundred kilometres from the capital in the village of San Isidro, Cabañas in 2002. Considered Pacific Rim’s flasghip operation, initial studies by the company suggested the mine, which is part of a fifty-kilometre-long gold seam that snakes through Guatemala, El Salvador, and Nicaragua could be worth as much as US$3.3 billion. The company was granted an exploration permit in 2005.478 After exploration commenced, representatives of the company began a campaign to get local farmers to sell or lease their land. Local residents report that the company even claimed in community meetings that cyanide is perfectly safe in drinking water. One resident notes that, “the company thought we’re just ignorant farmers with big hats who don’t what we’re doing.”479
But Pacific Rim faced opposition to its project almost immediately, including from communities in Cabañas, environmental NGOs, and the Catholic Church. The deposit is situated close to the Río Lempa, a crucial source of water to Cabañas and San Salvador. Residents are concerned about the potential contamination of a vital water supply from mercury, cyanide, arsenic, and zinc, heightened by the fact that there has been no independent assessment of the environmental impact of El Dorado—all while Pacific Rim, under the extant mining policy, would have paid a mere 2 percent in royalties per ounce of gold mined.480 The mine would also consume, according to one scientific study, between 75 and 110 litres of water per second from the nearby San Francisco river, in a country that already is facing considerable shortages and is, according to a Human Development Report for Latin America, the third most unequal country in the region with respect to access to potable water.481
Facing an election, pressure was felt by conservative National Republican Alliance (ARENA) president, Elías Saca González, as opposition to both El Dorado and large-scale mining grew, including among ranchers, who traditionally support the right-wing party, when the springs they rely on began drying up as Pacific Rim conducted exploratory drilling. Saca publicly raised concerns about the mine in early 2009 and declared that no new permits would be granted to Pacific Rim, despite his party generally being supportive of foreign mining. Twenty-four mining concessions, including El Dorado, had also been suspended by the government as an updated mining law, nominally introduced in response to environmental concerns about large-scale mining, was debated in the Congress.482
Like most other Canadian mining companies, Pacific Rim deployed a CSR campaign in an effort to win over sections of local communities. It has sponsored a number of “social responsibility” initiatives in Cabañas as part of its “green mining” campaign. However, it was unable to successfully buy off the local communities, and some activists accused it of giving the CSR money to selected local mayors more inclined to support it as a way of pushing El Dorado forward. As one activist working with a community radio station observed, “it is a way for the company to control the mayors.”483
But behind the CSR dollars and platitudes was a campaign of terror waged against anti-mining activists.484 This campaign included possibly five assassinations between June 2009 and July 2011, as well as shootings, assaults, kidnapping, and death threats.485 For example, in June 2009, an anti-mining activist and FMLN militant, Marcelo Rivera, was kidnapped, tortured, and strangled to death in San Isidro, his body later found at the base of a well. Police offered the easy and familiar suggestion that the culprits were gang bangers. In July of that year, another movement activist, Father Luis Quintanilla, was threatened by men wearing ski masks after having received death threats over the phone. A couple of weeks later, Ramiro Rivera, a key organizer in anti-mining road blockades received eight gun shots in the back and legs.486 Yet another collective target was a local community radio station, Radio Victoria, which has given voice to the anti-mining movement. Several staff at the radio station were threatened with murder.487 “We’ve had to move people from their houses in the middle of the night,” reports Óscar Beltrán, a journalist with Radio Victoria. “I believe that they haven’t succeeded in carrying out an attack yet because we’ve acted before they could do it. If we hadn’t acted quickly, I think we would be mourning at least five colleagues by now.”488
Pacific Rim insists it bears no responsibility for what is clearly a concerted and organized terror campaign, and that it has been unfairly subject to “false accusations made by certain anti-mining groups.”489 The company and Salvadoran police even went so far as to suggest these were incidents of a non-political nature unrelated to mining (in one case a drunken brawl that got out of hand, for example); however, the fact that the victims’ bodies showed signs of torture, and that there were possibly five anti-mining activists murdered within the region in a two-and-a-half year span, stretches the credulity of claims that this is mere coincidence. Some local organizers accuse the ARENA mayors who presided over the Pacific-Rim-financed CSR fiefdom of ordering or giving the okay for the assassinations and raids on their organizations, and according to reports from community activists one of the persons identified in the shooting of a mining opponent is an associate of ARENA mayors in the region and worked as a paid promoter for the company.490 But even if Pacific Rim cannot be directly linked to the terror campaign, it is clear that its opponents are being systematically targeted, and at the very least it must bear some responsibility as the violence is a result of its controversial and strongly contested presence.
Systematic repression has not been the only threat against local Salvadoran communities. The violence has been matched by a legal assault on the country; one that has been difficult to take lightly given El Salvador’s status as one of the poorer states in Latin America and the Caribbean. As noted above, in the face of widespread opposition, the Salvadoran government did not grant the company further exploration or exploitation licenses. In response, Pacific Rim initiated arbitration proceedings against the government in 2010 at the International Centre for Settlement of Investment Disputes (ICSID) at the World Bank for more than US$100 million in damages, including for the loss of future profits, arguing that the government breached the terms of the CAFTA and its own investment laws.491 The World Bank, it should be noted, as part of its development objectives offers financing to mining projects, and so can hardly be called a neutral arbiter. While ICSID declared that the lawsuit could not proceed under the CAFTA because the company “does not have substantial activities in the U.S.A.,” it did permit it to proceed under El Salvador’s investment laws.492 Pursuing this course in 2013 before ultimately being purchased by an Australian company, the company had arrived at a massively higher figure of US$315 million, which they claim is owed to them by the Salvadoran government.493 Ángel Ibarra, of Unidad Ecológica Salvadoreña (Salvadoran Ecological Unity, UES), called the company’s actions “extortion.” For Ibarra, “it’s false that the company promoted development in Cabañas and El Salvador. They acted in the same style as a criminal organization, robbing and looting the people.”494
The problems Pacific Rim faced in advancing its investments in El Salvador are emblematic of the precarious state of foreign mining investment in the country. Community mobilizing—and the extreme violence activists have faced—has forced the human rights and environmental consequences of large-scale industrial mining onto the national political stage. Nor are Salvadorans ignorant of the controversies of Canadian companies elsewhere in the region, as they begin to organize with their Honduran and Guatemalan counterparts to challenge the destructive impacts of Canadian mining in the isthmus. Indeed, social movements against mining have been sharing information and consolidating alliances across borders. One indication of such a trend was the establishment of a Salvadoran branch of the Movimiento Mesoamericano Contra la Minería Metálica (Mesoamerican Movement against Metallic Mining, M4).495 As a result of this and other initiatives by social movement opposition, mining has stalled. In addition, the right-wing ARENA has, at least in 2009, shown itself to be a fairweather ally of the industry, and Saca’s presidential successor, Mauricio Funes, of the leftist Frente Farabundo Martí de Liberación Nacional (Farabundo Martí National Liberation Front, FMLN), also failed to live up to Canadian expecations for pliability from a Third World leader.
The FMLN spent most of the post-war period wrought by internecine struggles between a leftist current in favour of a commitment to the original revolutionary principles of the organization, the ortodoxos, and a rightist current in favour of moving away from those commitments and shifting the party to the centre, the renovadores. Between 1994 and 2009, the party made electoral gains in the Congress and took the mayoralities of several municipalities, but the ortodoxo candidates for the presidency were unsuccessful. The winning ticket of Funes signalled the departure from this pattern.496 According to two close observers of Salvadoran politics and sympathizers of the renovated FMLN, Héctor Perla Jr. and Héctor Cruz-Feliciano, the FMLN
took power through elections, running a presidential candidate who was not even a party militant but had significant electoral appeal among centrist and middleclass voters. As a result, the journalist Mauricio Funes assumed executive office without a commitment to the Farabundistas’ revolutionary ideals, and his administration is a mixed bag of progressive social policies, occasional confrontation with the FMLN, significant compromise with local elites, and appeasement of the United States.497
Some argue that these compromises extend to a failure on the part of the FMLN government to take sufficiently seriously the problem of violence being regularly meted out against anti-mining activists.498 For example, one left-wing journalist reporting on the intimidation and repression faced by Salvadoran activists squaring off with Pacific Rim notes that Funes “has done little to ratchet down on perpetrators of violence in Cabañas.”499
Nonetheless, alarm bells went off in the industry after the mining press warned early in Funes’ mandate that he wanted to implement a total ban on mining, and that he had appointed a former director of an environmental NGO, Herman Rosa Chávez, as Minister of the Environment. “One of the most difficult issues in his portfolio,” the geographer Anthony Bebbington reports,
was to collaborate with the Ministry of Economy and Commerce in a process that had to culminate in a new national policy on mining in a context in which a number of social movements and movement organizations were demanding an outright ban on mining while parts of the business elite wanted to grow the sector.500
In fact, Funes never staked out such a sharp position (despite one poll showing that two-thirds of Salvadorans would support a ban on precious metals mining), and instead pledged only not to permit new mining exploitation projects during his tenure. A reaffirmation of this position came after the fifth assassination of an anti-Pacific Rim activist in the summer of 2011.501 Funes and the Congress then proactively supported Strategic Environmental Assessment, in order to delay the process and to shift the discussion from political to technical terrain—this process will likely lead to the establishment of a new mining law, which is a double-edged sword for Canada. A new law that is still favourable to foreign investors is of course a step forward for Canadian capital, but given the strong opposition to Canadian companies such an outcome is far from guaranteed; and indeed one proposal calls for a complete ban all metallic mining.
Extra-parliamentary pressure on the FMLN government for a ban on hard rock mining is coming from a number of social movement organizations, the most important of which is the Mesa Nacional frente a la Minería Metálica de El Salvador (National Roundtable Against Metallic Mining in El Salvador, La Mesa). Standing before the Salvadoran parliament in July 2013, Carlos Flores, a leading member of La Mesa, made this position clear, explaining that “we come before the assembly to present a piece of correspondence in which we reiterate our demand of the last six years—that the legislative assembly discuss and approve the Law Prohibiting Hard Rock Mining in El Salvador.” Flores went on to emphasize how, from La Mesa’s perspective, “we have to take concrete and incisive actions prohibiting hard rock mining, the first stage of which is having the assembly prohibit this type of mining in law.” With the prohibition in place in El Salvador, a related communiqué from La Mesa explains, “it would give more legitimacy and moral force to the Salvadoran government to demand that Guatemala and Honduras suspend mining projects along our shared borders.”502
“The number of jobs that mining produces becomes irrelevant when considered against the negative impact on health and the environment,” the communiqué continues. The document recalls the case of mining activity in San Sebastián, in the east of the country, which it says left the adjacent community without water and with rampant health problems among residents:
This scenario of breaking the social web of the community, of destruction and pollution, is being repeated in the entired region where communities are being displaced and obliged to emigrate because of the activation of mega mining projects; and the communities are repressed when they mount any opposition.503
La Mesa’s demand has also been taken up by the office of the Procuraduría para la Defensa de Derecho Humanos (Attorney General for the Defence of Human Rights) in El Salvador. Óscar Luna, head of the office, addressed the legislative assembly in October 2012, “We know that this type of development generates human rights impacts, such as those of life, health, and adequate nutrition, the environment, water, and many other that have to do with the environment.” Ángel Ibarra of UES echoed Luna’s sentiments, criticizing the FMLN government for refusing to adequately respond to La Mesa’s proposals.504
In the midst of the controversy surrounding Pacific Rim, the Canadian ambassador, Marianick Tremblay, and embassy officials nevertheless advocated for the mining industry after the (in the words of one mining representative) “illegal”505 moratorium and the debate on a new law were initiated. Permitting Salvadorans to make an independent decision about the future of mining in their country was simply never an option; Canada would always have to have a say lest El Salvador make the wrong decision. The embassy’s role included a strategy session with representatives of the Mining Association of El Salvador in 2011 that included discussion of how the embassy could advocate for Canadian companies, though it was tempered with a caution from the embassy about the need for both the embassy and industry to proceed carefully in their public advocacy for mining in the wake of the assassinations.
Tempering the push for mining was merely a PR measure, however, as one embassy communication to Ottawa in early 2011 notes that despite the difficulties the industry has faced, “the political debate on mining activities in El Salvador is far from over,” and that certain “positive steps”—including the Ministry of the Economy hiring an environmental consulting firm to study the environmental feasibility of mining in the country in 2011, and the firm’s willingness to seek input from Canadian companies—“indicate that [redacted] the Salvadoran authorities might be getting ready to consider the subject [redacted].” “The Embassy,” the communication adds, “will remain attentive to the concerns of the Canadian companies” and will look into the possibility of bringing a “Canadian expert to El Salvador to discuss mining” with Salvadoran officials and the consulting firm.506 The embassy’s optimism was bolstered further shortly after, following an offer from a mining analyst in the Salvadoran National Assembly—in another tentative opening offered to Canadians to shape the discussion on mining’s future in the country—to discuss mining policies with ambassador Tremblay, which an embassy official notes is another “excellent opportunity to offer some expert advice to the Salvadoran government.”507
As is a common theme in the Canadian diplomatic strategy to defend the mining industry from the criticism of social movements and leery governments, the Canadians also used the annual PDAC conference to build support for Canadian capital among reluctant Salvadoran officials. In early 2011, for example, representatives from the embassy, FAIT, and Natural Resources Canada (NRCan) discussed bringing Salvadorans to Ottawa to meet with mining experts and representatives from various Canadian ministeries and the Mining Association of Canada so that “they begin to appreciate that mining can lead to development.” A FAIT representative adds in an exchange with the embassy that “PDAC offers a unique opportunity to foreign delegations because within the space of a few days they have access to the whole of Canada and things mining.”508
The goal here is clearly to influence the policy-making of well-placed members of the Salvadoran state despite (or in fact because of) the strong public opposition to Canadian mining. Neither the Canadian state nor companies can convince the mass of Salvadorans to accept Canadian investment, but they can target and pressure more influential Salvadorans—some of whom are clearly open to being convinced—and push them towards political decisions the poor majority are against. Talk of how mining is good for development from Canadian “experts” may be insinuated into the discussions at PDAC, but we need to remember the conference is organized, financed, and attended by the Canadian mining industry and its supporters within the Canadian state, who, given their collective track record around the world, including in Canada, can hardly be considered honest or neutral sources of expertise on the potential of meaningful sustainable development achieved through mining.
While the myth of a classless society of yeomen farmers in Costa Rica for much of the twentieth century is a profound exaggeration, it is nonetheless true that the country—folded uneasily into the geopolitical embrace of the anti-communist American empire during the Cold War—exhibited a certain degree of egalitarian exceptionality in development patterns relative to its neighbours in Central America and the rest of Latin America and the Caribbean. Following the resolution of its short-lived Civil War in 1948, Costa Rica entered into a social democratic period of mixed economy, liberal democracy, and extensive social programs, which lasted well into the 1980s. The banking system was nationalized, providing state managers an unusual degree of leverage in guiding growth and development policy. Membership in the Central American Common Market (CACM) by 1962 offered both stimulus to and protection for a degree of industrial sector growth, even while foreign exchange was still acquired in the main through traditional agricultural exports: coffee, beef, bananas, and rice. Public coverage of health care, education, and social security was unusually generous in comparative regional terms.509 Class inequalities, in short, were markedly less extreme than, say, Guatemala, Honduras, El Salvador, or Nicaragua.
However, Latin America’s lost decade of the 1980s did not bypass Costa Rica, and declining rates of growth and terms of trade, as well as escalating levels of debt, meant first stagnation, and then crisis. In the midst of it all, CACM collapsed. While Costa Rica had long been beholden to the political whims of U.S. imperialism, in the 1980s and 1990s the economic face of empire assumed centre stage. The key channels for the translation of external pressures were a range of international financial institutions (IFIs), the IMF, World Bank, and USAID among the most important. Under the auspices of new structural adjustment agreements between these IFIs and the Costa Rican state, the social democratic order of the post-1948 period gave way to a neoliberal model rooted in extreme austerity, trade liberalization, and financial deregulation, all with the aim of shifting accumulation toward export-led development; the expansion of maquiladora production utilizing cheap labour; the extension of non-traditional agricultural exports and tourism; and the export of migrant labour to the United States, such that remittances would become more important than ever to the country’s political economy.510
The ostensibly Centre-Left administration of Luis Alberto Monge (1982–1986), of Costa Rica’s long-standing social democratic Partido Liberación Nacional (National Liberation Party, PLN), set the ball rolling with regard to neoliberal economic restructuring. Óscar Arias, during his first administration (1986–1990), pushed these efforts further still, consolidating the PLN as a neoliberal party. The direction and momentum of neoliberalism has not altered in its broad parameters since, under the respective presidencies of Rafael Ángel Calderón Fournier (1990–1994) of the conservative Partido Unidad Social Cristiana (Social Christian Unity Party, PUSC), José Figueres Olsen (1994–1998) of the PLN, Miguel Rodríguez Echeverría (1998–2002) and Abel Pacheco de la Espriella (2002–2006) of the PUSC, and Óscar Arias (2006–2010) and Laura Chinchilla (2010–2014) of the PLN.
Costa Rican domestic capital experienced processes of rapid concentration around the country’s largest firms, and these developed tighter linkages with major regional capitalists from the rest of Central America and Mexico, as well as big foreign capital from North America and parts of Asia. The area of finance is one example. Between 1986 and 1997, the privatization of the banking sector witnessed an early explosion of private financial institutions from twenty-five to forty-two. But this was quickly reversed as a few private banks concentrated their grip. Since 1997, “the share of the three largest private banks in total assets went from 30.8 percent,” notes economist Diego Sánchez Ancochea,
to 48.8 percent in May 2003. In 2003 the ten largest private banks controlled more than 80 per cent of total assets and 70 per cent of net worth in the private financial sector.…In 2003 public banks had only 1.6 times more assets than private banks, compared to 5.1 in 1989 and 3.3 in 1993.511
The reduction of social programs and the decline in trade union and peasant power vis-à-vis the ruling class precipitated a heightening of social stratification well beyond anything the country had experienced since the early decades of the twentieth century.
The willed disintegration of Costa Rica’s social democracy on the part of the country’s elites and international financial institutions was met with fierce, if ultimately unsuccessful, resistance. According to the detailed analysis of collective actions reported in major Costa Rican newspaper outlets, the sociologist Sindy Mora Solano shows that between 1995 and 2004 there was a total of 3,904 protest events. The intensity of resistance spikes in 1994, 2000, and 2004, with 450, 613, and 648 collective actions across these respective years.512 In 1995, the spike in activity turned around a national teachers strike. The intensity of 2000 has to do with the fact that, early that year, Costa Rica witnessed a campaign against the privatization of electrical power and telecommunications that represented one of the largest mass mobilizations in the country’s recent political history.513 The struggle against Costa Rica’s participation in CAFTA was another quintessential social battle against the new model of accumulation, taking the form of major and repeated national demonstrations across the country. This acceleration of protest accounts for the apogee of extra-parliamentary struggle in 2004. Once Arias resumed office in 2006, the negotiation of the CAFTA treaty was such an intensely contested political issue that he was forced to put the treaty’s ratification to a binding referendum on October 7, 2007. In the event, the pro-CAFTA camp scraped out a victory with 52 percent to the no campaigners’ 48. “That ratification was ever in doubt, however,” sociologist Eduardo Frajman observes,
and that the referendum took place at all when the treaty enjoyed the support of two successive presidents and their cabinets, a sufficient majority of legislators, strong financial capital, the country’s major media conglomerates, and the United States, is testimony to the effectiveness of the opposition through five years of intense struggle.514
As in the other cases of Central America we have examined, the neoliberal transition was essential to Canadian capital’s entry into Costa Rica’s market. Specifically, the generalized orientation toward trade liberalization and export-oriented growth across Costa Rican governments of every stripe provided the basis for the establishment of a free trade agreement between Canada and the Central American country in 2002. Since that time, Canadian FDI has grown considerably in Costa Rica, and is estimated by FAIT to be at close to C$1 billion today. Against the backdrop of the privatization of the banking industry mentioned earlier, this overall uptick in Canadian FDI in Costa Rica includes Scotiabank’s takeover of two banks since 2001, including the largest private bank in the country, Interfin, as well as Groupe EBI, which runs three major waste disposal facilities in the country.515 As elsewhere in Central America, mining features prominently in Canadian investment patterns, and has been at the centre of contentious political developents within Costa Rica.
In 1997, the efforts of Montreal-based corporation Lyon Lake, and its Costa Rican subsidiary Novontar S.A., to establish open-pit gold mines on their Beta Vargas and Guaitilar properties, near the communities of Puntarena and Lourdes de Abangares, respectively, were successfully defeated by local environmental and community groups.516 As of 2013, there are two active mining properties, both owned by Canadian companies. B2 Gold’s Bellavista property was a producing mine until it was shut down due to serious structural problems centred on a shifting heap-leach pad built on the side of a hill. B2’s efforts to reopen the mine have been criticized by environmentalists. But Infinito Gold’s Las Crucitas has drawn the most critical attention in the country, and has been the subject of a popular national opposition movement. Indeed, in the wake of the defeat of the anti-CAFTA struggles, popular movements against mining have gradually assumed the preeminent position in the wider array of resistance to the neoliberal status quo.
Las Crucitas is a massive open-pit project containing an estimated 1.24 million ounces of gold, which has courted controversy for nearly two decades. The mine is located 105 kilometres north of San José close to Río San Juan, near the Nicaraguan border. The usual concerns that attend massive open-pit mines, of poisoning and destruction of local rivers and ecosystems, have been raised by nearby residents, and many Costa Ricans throughout the country.517 Canadian company Placer Dome (subsequently taken over by Barrick) dropped plans to develop the mine in 1997 due to widespread opposition. Vannessa Ventures took over the project in 2000 and was granted an exploitation permit in 2002. That same year, the government of Abel Pacheco issued a moratorium on open-pit mining, but Las Crucitas was grandfathered because it had already received its permit.518 However, opponents of the mine won an injunction against it and in 2004 the Constitutional Court annulled the exploitation permit.519
Vannessa Ventures/Infinito Gold never stood alone in Costa Rica in defence of its interests. Outside the public eye, “the embassy,” in the words of a brief co-written by embassy and FAIT officials in the Latin American and Caribbean section, “has supported the company and has repeatedly conveyed these messages to the senior decision makers of the country.”520 The election of Óscar Arias in 2006 proved useful to Canadian interests. Despite both public and judicial concerns about the mine, in 2008 (the year Vannessa Ventures changed its name to Infinito Gold) Arias lifted the moratorium on open-pit mining, Las Crucitas was granted new environmental and mining permits, and Arias declared the mine to be in the country’s national interest.521 But Arias’ prostration before Canadian demands galvanized opposition to the mine.
Canadian mining interests and their allies in the embassy were duly concerned that they had lost a loyal friend when Arias left office in 2010. Aware of the possible support of a moratorium on open-pit mining by president-elect Laura Chinchilla, embassy and FAIT officials in Ottawa discussed the potential impact on Canadian interests, while Kent was dispatched to meet with several of her key new cabinet ministers shortly after her inauguration.522 Chinchilla did issue a ban on all new open-pit mining, which was approved by the National Assembly in November 2010, but the ban did not touch Crucitas because it had already received its exploitation permits to begin construction.523 In one expression of the anti-mining movement’s discontent with the exclusion of Crucitas from the mining moratorium, protesters carried out a 170 kilometre march from the presidential palace in San José to the open-pit mine in July 2010.524 In one later indication of the anti-mining movement’s ability to squeeze the Chinchilla administration, 2012 witnessed the resignation of her Vice-Minister of the Environment, Andrei Bourrouet, after environmentalists accused him of having had ties to Infinito in the past.525
As public pressure mounted on Chinchilla to stop the project—with the sharp growth of the opposition a subject of commentary in a FAIT briefing526—in late summer 2010 the Tribunal Contencioso Administrativo (Administrative Disputes Tribunal, TCA) declared that it would allow an appeal by an environmental organization, challenging the right for the Crucitas mine to proceed as per the decrees of the Arias government. The rising tide of opposition, and the TCA’s decision, prompted an angry public outburst from the Canadian ambassador, Neil Reeder. Reeder demanded that Costa Rica respect the law and permit Infinito Gold to continue with its plans for Las Crucitas, and warned the Costa Rican government of the potentially bad international image it would develop if it violated Infinito’s rights. In his last public comments as ambassador to Costa Rica before his promotion to Director General for Latin America and the Caribbean in FAIT, Neil Reeder defended the company, declaring that “they (Infinito) have respected all the rules of the game.” He added a few words for the court, warning that it has “sent a very uncertain message to the international investment community at a time when Costa Rica is actively looking for more foreign investment.”527 Infinito’s troubles also apparently caught the attention of the Privy Council Office in Ottawa which later that fall requested updates from FAIT on Las Crucitas.528 Perhaps not coincidentally, Infinito’s largest controlling shareholder, billionaire Ron Mannix, is based out of Calgary, ground zero for Harper’s Conservative Party. While no hard evidence is available linking Mannix to the Harper government on this specific matter, it is nonetheless worth mentioning that in the thousands of pages of Access to Information and Privacy files we have dissected in conducting research for this book, never have we encountered such a request for updates from FAIT.
The opposition to Las Crucitas and open-pit mining remained, for the Canadian state and capital, stubbornly resilient, and on November 24, 2010 the TCA annulled Infinito’s permit, due to what it said were multiple irregularities in how the permit was obtained from the Arias government, precipitating a 60 percent drop in the company’s shares.529 The tribunal also raised the possibility that corruption on the part of Arias and his Minister of the Environment and Energy, Roberto Dobles, played a role in his government’s support for the project. The TCA’s decision was vindicated in the First Hall of the Supreme Court in 2012.530 The court had been asked to annul the TCA’s decision by Infinito’s lawyers. Not only did the court reiterate the validity of the TCA decision, but it also reissued the call for a formal investigation into the actions of Arias and his functionaries that granted the permits to the Canadian company in the first instance.531 For prominent anti-mining lawyer Edgardo Araya, the Supreme Court’s ruling “was a historic sentence…a big lesson the small community of northern Costa Rica are giving to the rest of Latin America on how to get rid of these mining companies that try to undermine the bases of our institutional systems.”532
Perhaps it is not surprising that in the midst of a major demonstration against mining in November 2011, protesters chanting in the streets of San José accused Arias of being little more than the political arm of Infinito Gold.533 And this was hardly the first time Óscar Arias or his family had exercised their political influence for questionable ends or personal gain. From a wealthy family, the ex-president has been an institution in Costa Rican political and economic life for decades, and has been aligned with Canadian ambitions in the region as an ally of Canadian mining, and as a key part of the effort to find a negotiated solution to Honduras’ political crisis following the 2009 coup that would hold President Manuel Zelaya in check. Óscar’s brother and adviser, Rodrigo, successfully led the legal effort to change the law prohibiting multiple presidential terms, to which Canada said nothing despite being quick to criticize the likes of Zelaya or Hugo Chávez with threadbare accusations of attempting to thwart established democratic norms in their countries and concentrate power in their hands. Accusations of influence peddling swirled around Rodgrio in 2005 regarding a sole-source landfill contract with the city of San José, awarded to a Canadian company, EBI. According to a cable from the U.S. embassy, when EBI’s initial efforts to win the contract were thwarted twice by the Costa Rican Comptroller because the sole-source was not properly justified, the company engaged Rodrigo’s law firm, and the brother allegedly made one call to the Comptroller and the contract was approved. Calls for Rodrigo to step down as campaign manager for his brother when the accusations became public were ignored by Óscar.534 The full story behind Óscar Arias’s solid support for Infinito has yet to be told, but in 2008 Mannix offered to donate US$250,000 to the Arias foundation, and made the offer directly in the office of the foundation’s executive director, Arias himself. He insists that he did not accept the money.535
Canada, not surprisingly, has remained quiet on the corruption allegations, as Arias is an ally and Mannix a friend of and donor to the Conservatives.536 In fact, Infinito—together with B2—financed the Canada Day celebrations at the embassy in San José in 2011, despite the controversy and anger it has engendered in Costa Rica.537 For its part, Infinito has tried to publicly discredit scientific studies criticizing the project as “merely speculative” or “poorly executed,” yet company representatives have frequently ducked out on national debates with opponents of open-pit mining.538 After sending representatives for the two previous years, in 2010 and 2011, company representatives of Infinito, as well as lawyers and functionaries from the Ministry of the Environment, Energy, and Telecommunications refused an invitation to participate in the annual debate on the theme of mining hosted by United Nations University for Peace in San José.539 In one debate in 2010 at the Catholic University in the capital city, in which Infinito did participate, the corporation’s representative Juan Carlos Obando’s rhetorical recipe was one part corporate social responsibility and one part veiled threats of legal action against anyone defaming the company’s reputation. Obando emphasized the environmentally-friendly character of Infinito’s projects in Costa Rica and stressed the corporation’s generous openness to public debate and access to information to those interested. He then suggested, more ominously, that the kind of cynical statements made by his opponents in the debate could lead to legal action against them on the part of Infinito.540
Indeed, the corporation has repeatedly threatened various mine opponents with lawsuits for defamation for public comments they made criticizing the company and its relations to Costa Rican authorities, including criticisms that were actually made first by the TCA. Two academics, a lawyer, and two Congressional legislators have been targeted, some for as much as US$1 million, drawing further criticism from anti-Inifinito activists for trying to criminalize the opposition.541 Edgardo Araya spoke for many of the targeted activists when he said, “they want us to shut up, but this is not going to happen, and I’m going to continue saying what needs to be said.”542 Infinito’s harassment of opponents and efforts to challenge the TCA’s decision also inspired a day of protests and mass marches in November 2012 in San José, which called for the government to expel the company.543 It was not long after, with public opposition still strong, and questions of corruption swirling around Arias and Infinito, that the First Hall of the Supreme Court rejected Infinito’s request for it to annul the TCA’s decision to halt development of Las Crucitas.544
The Sandinista Revolution (1979–1990), under the leadership of the Frente Sandinista de Liberación Nacional (Sandinista National Liberation Front, FSLN), was a beacon of inspiration for much of the international Left through the darkest moments of the Reagan-Thatcher era. While never transitioning beyond a mixed capitalist economy, the Sandinistas achieved important gains in poverty alleviation, literacy, education, and health care coverage for Nicaragua’s tiny population of roughly 3 million. All of this was made more extraordinary by the fact that the social gains of the revolution were carried out without an authoritarian concentration of power, in spite of the sustained assault of a counterinsurgency campaign led by the U.S.-financed Contras.545 Besieged from outside, and exhausted from years of civil war, the revolution’s end was ultimately marked by the electoral victory of the Contra-backed candidate of the Unión Nacional Opositora (United National Opposition), Violeta Chamorro, in the 1990 presidential elections. Ruling the country until 1997, Chamorro initiated a dramatic neoliberal economic restructuring of the socio-economic life of Nicaragua, a turn reinforced by her presidential successors Arnoldo Alemán (1997–2002) and Enrique Bolaños (2002–2007), both of the Partido Liberal Constitucionalista (Constitutionalist Liberal Party).
Meanwhile, Daniel Ortega was overseeing a sixteen-year restructuring of the FSLN, one that witnessed a consolidation of power within the party in the hands of Ortega and a few other loyal figures, as well as a concerted shift to the Right, away from the movement’s foundational, revolutionary ideals. This trajectory involved a split in the FSLN in 1995, with the formation of a dissident Sandinista grouping, the Movimiento Renovador Sandinista (Sandinista Renovation Movement, MRS). The MRS left the FSLN in opposition to declining internal party democracy and the accompanying shift to the Right in the party’s social and economic orientation under Ortega’s leadership.546
The remaining FSLN entered into a series of pacts with an array of Conservative forces in an effort to secure electoral success, beginning in 2001 when Ortega forged an alliance with ex-President, and former Somoza official, Arnoldo Alemán in the lead up to the presidential elections that year. This was followed in 2006 by Ortega’s extraordinary pact with Cardinal Miguel Obando y Bravo, an emblematic figure of counterrevolutionary Catholicism in the years of the Contras. This opportunistic alliance was solidified through Ortega’s conversion to the faith, and his related coordination of total FSLN congressional support for legislation enacted during the 2006 presidential campaign period banning abortion in Nicaragua—the extremity of the ban is revealed in the fact that the law is deemed in effect even when a pregnant woman’s life is in danger. Finally, in the same spirit, Ortega chose former Contra leader Jaime Morales as his vice-presidential running mate in 2006. Even with these concessions to the Right, however, Ortega achieved a desultory 37.9 percent of the popular vote, enough to finally put him in the presidency, but on a fragile basis.547
It is perhaps unsurprising, then, to see the governmental discordance since Ortega’s initial victory in 2006, and re-election in 2010, between “traditional anti-imperialist and working-class discourse” and “policies and actions” that “often appear to contradict its words,” including “adherence to the Central American Free Trade Agreement (CAFTA) and the …maintenance of a dollarized economy in El Salvador,” among other neoliberal continuities.548 Financial Times reporter Adam Thomson notes how U.S. officials have praised Ortega’s performance in the so-called “war on drugs,” and that local business leaders have described their relationship with the government as “constructive and fluid.” “Under Mr. Ortega’s brand of socialism,” Thomson highlights in a 2011 article, “foreign trade and foreign direct investment have more than doubled in the past five years. During the first half of the year, the economy showed a growth rate of more than 5 percent—one of the highest in Latin America.”549 Nonetheless, Ortega has simultaneously run into conflict with some of the most powerful countries in the world, due to the fact that his foreign policy initiatives have included alliances with Venezuela, Cuba, Bolivia, and Ecuador, under the rubric of the Alianza Bolivariana para los Pueblos de Nuestra América (Bolivarian Alliance for the Peoples of Our America, ALBA). In a similar vein, Ortega has incurred the diplomatic wrath of the American government most recently for offering asylum to U.S. whistleblower Edward Snowden.550
These are some of the complex facets at the heart of recent political developments in Nicaragua, during a time in which the country has become an important destination for Canadian capital, particularly in the sectors of finance, energy, telecommunications, and mining. Canada was the largest foreign investor nation in 2010 with US$1.3 billion invested, and again in 2011 by a wide margin. Canadian companies were part of major hydroelectricity infrastructure project announcements in 2011, and as of August 2012 all fifteen active mining properties were owned by Canadian companies.551
A leading mining industry periodical comments that Ortega has “been consistent in broadly promoting an investor-friendly environment.”552 While mining tax and royalty rates have not been as low as they are in neighbouring countries, under Ortega they were also not completely out of proportion with the region’s generally low rates. Ortega has also supported the industry in helping to contain labour struggle. During a 2009 strike against one of the larger mining operations in the country, owned by Canadian company B2Gold, the periodical notes that “the government supported B2Gold—labelling the strike ‘illegal’.”553
As another signal of the government’s commitment to enabling foreign direct investment in the country’s mining sector, in March 2013 Ortega sent a large delegation to one of the most important annual mining conferences in the world, hosted by the Prospectors and Developers Association of Canada (PDAC) in Toronto. In attendance were Francisco Campbell, the Nicaraguan ambassador to the U.S. and Canada; Álvaro Baltodano, the presidential delegate for investment; Carlos Zarruk, Director General of mines in the Ortega administration; and Sergio Ríos, President of the Mining Chamber of Nicaragua. According to a press release from the Agencia de Promoción de Inversiones de Nicaragua (Agency for the Promotion of Investment in Nicaragua, ProNicaragua), the seminar which the delegation led at the conference—“Nicaragua, Discover the Opportunities in Mining”—stressed the country’s pro-mining juridical framework, the alliance between the government and the private sector, and the vast opportunities for future investment in mining exploration and exploitation.554
In late November 2010, president and executive director of B2Gold visited Nicaragua to announce that his company would be investing US$7 million in Nicaragua in the following year for gold mining exploration in the municipalities of La Libertad, in the department of Chontales, and El Limón, in the department of León. Mining exploitation would see a further US$27 million invested by B2Gold for the same year. “The country has a good system of legislation,” Johnson remarked, “and also has a very just tax system, demonstrating that it wants investment from international corporations to create employment.”555 In spite of the fall in gold and other commodity prices in the first half of 2013, Pablo Venturo, B2Gold’s manager in Nicaragua, suggested in an interview in May that the company’s medium-term investment plans would not be changing. “It is not the case that the sector is losing power, but rather we’ve entered a new situation, which is characterized by the recent fall in the international prices of gold,” Venturo noted. The drop in prices was “an external variable that is not controllable by companies, but the rate of production and projects will continue advancing in the entire sector in general.” In the interview, Venturo stated that by 2017 B2Gold expects to have invested US$344 million in the country, in the La Libertad and El Limón mines alone.556
B2Gold’s projects of exploitation and expansion in Chontales have been the focus of sustained resistance from various community organizations.557 In late July and early August 2013, for example, five hundred artisanal miners, from an association of small miners called El Cafetal, re-established a road blockade against B2Gold, near Chontales. The blockade had been set up initially in February 2013, but police forces were sent in to repress the activists, resulting in forty-seven detainees, twelve of whom were ultimately convicted of various charges, and seven injuries. Javier Amador, one of the leaders of El Cafetal, said in the August protest:
We will continue on our feet, rejuvenating force and courage in our struggle, in order to continue confronting the monstrous power of B2Gold, which represents death, hunger, and destruction—the enrichment of its associates, while leaving nothing for our people, except misery and illnesses.558
The Centro Nicaragüense de Derechos Humanos (Nicaraguan Centre for Human Rights) has formally presented complaints over the police repression of anti-B2Gold activists to the Inter-American Commission on Human Rights within the Organization of American States (OAS).559
Likewise, B2Gold has faced opposition in the community of Rancho Grande, in the department of Matagalpa, a zone rich in biodiversity, with forests, rivers, and small-producer agriculture, located 213 kilometres north of the capital Managua. There is no active mine in the region as of yet, but B2Gold was granted a concession for exploration in the area in 2010. Since that time, there have been three major marches in opposition to exploration, the latest, on March 21, 2013, involving over four thousand protesters. The grassroots of the Catholic Church in the area, still imbued with the progressive legacy of liberation theology, has been behind much of the anti-mining organization.560
Pablo Espinoza, one of the forty-three priests of the local diocese of Matagalpa opposed to B2Gold, justified the community’s opposition with the following:
Nature is the only wealth here, as a resource of our area. More than that, I would say that [to develop mining here] would be to eliminate the source of life for the entire Matagalpa region, and for Nicaragua as a whole. From here comes the oxygen that we all need to breathe. These mountains, these rivers, are why the local population [has gathered] freely and voluntarily in this assembly to make their presence felt.
Espinoza condemned the petty handouts that he said B2Gold offers those in the community in exchange for allegiance to the corporation’s activities. He described being offered a car and a job with a good salary if he stopped his activism. “Can you imagine the weight on my conscience if I had opened my door to that? It would be like sending all of these people to the slaughterhouse.”561
The Red de Mujeres de Matagalpa (Network of Women of Matagalpa, RMM) is another community organization involved in the struggle against B2Gold in Rancho Grande. One RMM activist, Carola Brantome, notes that “there is very strong resistance from the population of Rancho Grande to the establishment of a mining company.” Brantome laments the fact that the Ortega government has not lent its support to opposition to the project. “We are sure that the government is conscious of the damage that this could do to the environment and population,” Brantome says, “of the damage that will bring misery and death, as occurred in the past in the banana zones.”562 Norma Chavarría is another leading activist in Rancho Grande. “The people are conscious of the damage and consequences that will follow if permits for extracting gold are given to B2Gold,” she says. “The people of the community are not only thinking of the immediate area in which the mine will be located, but the entire region and all of the sources of water in the surrounding communities” that are facing contamination. Rejecting B2Gold’s claims of corporate social responsibility and environmental sustainability, for Chavarría the company “is selling a discourse of bread for today, we are going to have resources today, but it’s bread for today and death for tomorrow.”563
Given the opposition to B2Gold, we can expect similar developments if the open-pit mine planned by Vancouver-based Golden Reign Resources Ltd. goes ahead in San Albino-Murra, in the department of Nueva Segovia. Exploration thus far has suggested large quantities of gold in the area, and Golden Reign, having won a twenty-five-year concession of several thousand hectares in the area from the Ortega government, is optimistic that they will be able to develop an open-pit mine in the near future.564
Despite his support for the mining industry, Ortega’s past and current association with Hugo Chávez has made him a target of Canadian criticism. The embassy and Canadian government have also targeted what they perceive as his attack on Nicaraguan democracy. Following municipal elections in 2008 that the Nicaraguan opposition criticized as fraudulent, the Canadian embassy, with instructions from Ottawa, “urged” the U.S. not to simply ask for a recount of ballots, but to support a more thorough investigation as per the opposition’s wishes. When Nicaragua’s Supreme Court eliminated the constitutional ban on consecutive re-election of officials, opening the way for Ortega’s successful run for re-election in 2010, the Harper government hypocritically attacked the decision, suggesting it “continues the very worrying trend of narrowing democratic space in Nicaragua.” 565
Constitutional change permitting re-election in Nicaragua is unacceptable for the Canadians, despite the fact that, as noted above, nothing was said when the brother of Canadian ally Óscar Arias successfully led the charge in Costa Rica, which enabled Arias to run for presidential re-election—not to mention the fact that Canadian prime ministers, such as Stephen Harper, can run for re-election as many times as they like. During a trip to Nicaragua in 2009—not long before the election of Lobo in Honduras, which Canada fully supported—Kent stressed to Ortega and the Minister of Foreign Affairs, Samuel Santos, “Canada’s concern over the narrowing of democratic space in the country.” Following Ortega’s re-election in the fall of 2009, Canada again publicly criticized supposed “irregularities and deficiencies in the preparation for elections and on election day” and warned of the lack of “democracy and the rule of law,” accusations it repeated at the OAS.566 As a result, the Harper government shifted C$1.5 million in Nicaraguan aid to democratic and electoral reform in the country.567
While it has received comparatively less attention than other countries in the isthmus, Panama has become another important site of struggle against Canadian capital, while the Harper government has actively pushed for stronger access to the Panamanian market.568 These efforts culminated in Harper’s stop in Panama City in August 2009, during one of his regular Latin American forays, in which he signed a free trade agreement and met with current President Ricardo Martinelli of the conservative Cambio Democrático (Democratic Change) party.569 Identified as a friendly and stable economic ally in a region where recent political shifts have not typically favoured the interests of foreign powers, in 2011 Export Development Canada selected Panama as its Central American and Caribbean regional hub, establishing a new office there.570 Martinelli’s election in 2009 marked the consolidation of a long neoliberal turn, beginning with the governments of Guillermo Endara (1990–1994) and Ernesto Pérez-Balladares (1994–1999).571
But stability for Canadian capital in Panama, as elsewhere in the region, has proven elusive. Martinelli is at heart a friend of Canadian mining, which dominates the industry in Panama. From early in his presidency, Martinelli sought to make it easier for foreign companies to access the country’s untapped mineral deposits, many of which lie on or near indigenous lands. In 2010, for example, the government modified over sixty articles of the Charter of the General Congress, in order to limit the rights to autonomy and self-governance of the Ngäbe-Buglé, Panama’s largest indigenous nation.572 This laid the basis for a series of attempts to modify the Mining Law in order to free the way for foreign investors to establish mines in Ngäbe-Buglé territory. Martinelli also sought to expedite environmental assessments. These are the kinds of things that endear someone to Canadian mining leaders and the Harper government.573
But Martinelli’s accommodation to large-scale mining interests has caused a sharp backlash, which has centred, in part, on Canadian company Inmet Mining. In 2011, Inmet became the subject of a national debate, emblematic of the potential environmental destruction associated with large-scale mining and the government’s willingness to sell out to foreign capital. In February of that year, amidst angry protests from indigenous activists outside and inside its halls, the Panamanian Congress repealed a decades-old mining law preventing foreign governments from investing in its mining sector. Under the new legal scenario, Inmet—which was seeking financing from sovereign wealth funds from Singapore and South Korea—could proceed with the construction of Central America’s largest copper mine (it is estimated it will produce 266,000 tons of copper annually), the controversial open-pit Cobre Panama project located 120 kilometres west of Panama City.574 A month later, as protests escalated, Martinelli announced his intention to reverse the repeal and to reinstate prohibitions on investments from foreign governments.575 But Martinelli’s stated intention has never been concretized in a new law. Furthermore, several proposals remain on the table for the potential construction of mines on indigenous lands. The government also announced a tender for another large and controversial copper deposit, the Cerro Colorado. In such a setting, it is unsurprising that protests continued through to the end of the year.
The opposition to mining expanded even further in January and February 2012, with a wave of blockades and marches initiated when thousands of Ngäbe-Buglé blockaded the Inter-American highway in San Félix in the western part of the country, on the border of Costa Rica. The demonstrators demanded the government annul the mining and hydroelectric concessions that had been granted in their territory.576 Martinelli’s government responded by sending in riot police, who shot teargas—and bullets, according to many on the scene—at the protesters, killing two, and injuring thirty-two. Forty more activists were detained. “They sent their riot police. Our demonstration was peaceful and they repressed us,” said Omayra Silvera, an indigenous leader involved in organizing the blockade. Carlos de la Cruz, a Catholic priest supporting the demonstrations, reported that a contingent of police attacked protesters without provocation, and were supported from the air by a helicopter.577 The January-February 2012 revolt was in many ways a re-enactment of similar blockades in February 2011, after which the Martinelli government had agreed to prohibit mining and hydroelectric projects in Ngäbe-Buglé territory. It was only when the government failed to live up to its word that the blockades of 2012 were set in place.578 These violent acts of repression, because they were carried out by an ally, drew no comment from Canada. The repression sparked more blockades and marches across the country, including in Coclesito in central Panama where protesters blockaded entrances to Inmet’s Cobre Panama project, and a mine belonging to the Canadian Petaquilla Minerals.579
Despite opposition to its plans, Inmet’s environmental assessment received approval from the Martinelli government in January 2012.580 However, the Panamanian Supreme Court declared that the area where the project is located is protected as part of the Mesoamerican biological corridor, and so the company would have to apply to the Directorate of Protected Areas to get approval. In April 2012, after continued and sometimes violent protests by indigenous activists, the government was forced to pass a law that cancels all mineral exploitation concessions in or near Ngöbe-Buglé territory.581
In a further development that remains unresolved, Martinelli is alleged to have been involved in a corruption scandal linked to the Canadian companies Financial Pacific and Petaquilla Minerals. According to the testimony of the principal accused figure in the case, Mayte Pellegrini, Martinelli used privileged information and his secret account in Financial Pacific to manipulate the price of shares in Petaquilla Minerals.582 Directors of Financial Pacific have been accused of falsifying documents, among other crimes.583
All of the intricate patterns of violent dispossession of communities, and the policing of dissidents within those communities, that have been associated with Canadian investments in Honduras, Guatemala, El Salvador, Costa Rica, Nicaragua, and Panama have increasingly raised the necessity of reinforcing the coercive apparatuses of these states. Flowing both from the immediate material interests of Canadian capital in the region, and the wider geopolitical concerns of the Canadian state, the expansion of Canadian investment was paralleled by a heightened concern on the part of Harper’s government for security in Central America. The remainder of the chapter highlights some of the most crucial components of Canada’s security strategy in the region.
TOWARDS A REGIONAL SECURITY AGENDA
Given Canadian capital’s growing interests in Central America, and the threats to those interests from both social movements and governments, it should hardly come as a surprise that the region would become a focus of Canadian security policy, as it has under the Harper government. Conservative thinking about the isthmus was captured by Kent, speaking as Minister of State for the Americas in 2009, when he identified it as “a key region where the issues of security, prosperity and democratic governance are crucial.”584 The Conservative’s security strategy for Central America was not clearly worked out at that point, and it would only begin to be gradually unveiled two years later, but linking prosperity with security and democracy was by no means new to the Conservative government or the Liberal ones preceding it. And thus there is little reason to expect significant change under the new Liberal government of Justin Trudeau. These have long been abiding and interconnected themes in the Canadian state’s orientation toward towards the Global South.
Nevertheless, Kent’s observation is exemplary of how the ruling class conceptualizes the region in the present. The reference to “prosperity” is left purposely vague—suggesting they are concerned as much about living standards in the region as they are the growing economic interests of Canadian investors—but, as we have discussed, Canadian foreign policy in Central America and the broader region is clearly driven by the needs of Canadian companies and the challenges they face from hostile communities and, occasionally, less-than-compliant governments. And while not elaborated by Kent, subsequent actions and statements by the Harper government and FAIT, as discussed throughout this book, leave little ambiguity as to the nature of their concerns regarding democracy in the region. It seems hardly coincidental that Kent’s statement came as social movement challenges to Canadian mining multinationals were on the rise in Central America, and three left-of-centre governments held the reins of power in the region in Nicaragua, Guatemala, and Honduras, with another soon to be elected in El Salvador.
Although smaller contributions had been made earlier, the Harper government really began the process of inserting Canada into the security plans of the isthmus and its governments in 2011, including the process of building links with local security forces.585 Citing concern about Guatemala’s “deteriorating security situation,” Foreign Affairs announced C$7.1 million for the country in June of that year to “reform security and justice institutions,” with participation from the RCMP.586 The exact nature of the security deteoriation is not discussed in the announcement; Guatemala certainly has been beset with significant gang violence fuelled by the drug trade (as have Honduras and El Salvador). But we should also not forget that a Canadian ambassador raised concerns about law and order in the country relating to anti-mining activism on national television several years before, while a 2009 National Defence report on Guatemala interestingly notes that “widespread poverty and inequality continue to pose a serious threat to the country’s fragile democratic order”—suggesting at least an implicit recognition that the neoliberal measures Canada advocates could be a source of instability.587
The announcement regarding Guatemala was followed in August of that year with a commitment of another C$9.2 million for security spending for the region, including support for the war on drugs, port security, and the surveillance and investigation endeavors of the post-coup Honduran police.588 Less than a year later, during the 2012 Summit of the Americas, Harper announced a significant expansion of Canada’s security spending in the region with the establishment of the Canadian Initiative for Security in Central America, through which Canada will spend C$25 million over five years. The initiative includes RCMP training for, and donation of navigation equipment to, the Costa Rican national police; the donation of utility vests by DND to Belize’s military; training for security forces in Guatemala, El Salvador, and Honduras in the use of specialized equipment for wiretapping, surveillance, and intelligence analysis; and partnering with Colombia to support police forces in Honduras and Guatemala.589 We can add to these new spending commitments the ongoing engagement by DND with military officers from Guatemala, Belize, El Salvador, Guatemala, Honduras, and Nicaragua through the Military Training and Cooperation Program. What is more, the Canadian military has also participated in the annual Plan Panamex war-game manoeuvers since 2003, which were initiated to exercise responses to threats to the Panama Canal, a key regional transit way for shipping. Canada’s participation has included naval destroyers.590
Compared to U.S. security spending in the region, Canadian spending is small (and Canada of course is a much smaller country without the history of foreign intervention). All the same, the level of Canadian spending is significant for Canadian interests in Central America, as well as for the recipient countries. Canadian security spending is often justified as part of the fight against narco-trafficking. While narco violence in Central America is real, the war on drugs has had significant human rights consequences, with beefed up security forces violently intervening in poor neighbourhoods, trampling on poor and young peoples’ rights, and creating significant collateral damage. None of this has done much to curtail the highest echelons of power within the narco-trafficing industry, which are often tied to political and economic elites within Central American countries. Canada’s financing the war can only intensify these problems further. But the war on drugs has also provided convenient cover to Central American governments and their backers to evict peasant and indigenous communities from their lands in the name of fighting crime. While not every militarized operation in the war on drugs is aimed at dispossessing the poor of their land in order to make way for tourist and resource development, some such operations appear as thinly veiled efforts to do exactly that; a pattern has clearly been established between violent evictions in counternarcotics operations and land coveted by multinational capital.591
But however important the war on drugs is or is not to Canadian foreign policy in the region, Canadian spending is not aimed solely at narco-trafficking; and the Harper government certainly never suggested that. Its broader goal is to strengthen security forces in the isthmus, and its relations with them, in the fight to impose order in the region against any people or groups deemed a threat to that order. That may encompass narco-trafficking, but the security forces Canada is funding and training do not focus on that alone; these are the same apparatuses that attack anti-mining blockades in Guatemala, for example, or target political dissidents for allegedly criminal behaviour in Honduras, Guatemala, and El Salvador. In order to advance this security agenda, Canada is funding police forces with seriously questionable human rights records, and which have faced sharp criticism for their treatment of political dissidents, including participants in anti-mining campaigns, such as in El Salvador, Guatemala, and Honduras. The situation in Honduras has been the most egregious since the 2009 coup, as we detailed in a previous chapter, where the police, both on duty and through participation in unofficial paramilitary units, have been deeply involved in post-coup violence. Any claim that Canadian spending will improve or “reform” the behaviour of these security apparatuses, which is not even a significant claim in the government’s own announcements, is belied by the structural corruption endemic to these security forces, the persistent inequality in the region, and the strong opposition to neoliberalism that will require force to be contained. The fact that in its financing of police training in post-coup Honduras, Canada is partnering with police from Colombia, the country with the worst human rights record in the hemisphere, is indicative of the government’s commitment to genuine police reform and protection of human rights.
This chapter has sought to chart the deep contours of Canadian investment dynamics and diplomatic interventions in El Salvador, Costa Rica, Nicaragua, and Panama. In so doing, it has linked these narratives to our earlier investigation of Honduras and Guatemala. What is plainly evident from the discussion so far is the systematic and structural character of the Canadian state’s defence of the basic material interests of Canadian capital across the entirety of Central America. Our six Central American case studies, and analysis of the security strategy of the Canadian state across the region as a whole, have together pushed aside the thin ideological veneer of democracy promotion and defence of human rights, to reveal the imperialist core of Canadian foreign policy.
In providing such a map of Canadian tactics and strategies in Central America, we have sought simultaneously to recognize in full both the historical complexity of domestic developments in each country, and the agency of Central America’s popular classes in defending their rights and dignity in the face of powerful and violent enemies. As much as this is a story of Canadian imperial extension and control, it is also one of heroic resistance, rather than passive acquiescence, on the part of the regions exploited and oppressed.