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Q&A: Sen. Allende on Barrick Gold�s controversial Chilean mine

by Kalynne DakinSantiago Times
May 8th, 2013

As controversy continues to swirl around a massive gold mining project in the northern Atacama Region, with locals wanting it closed out of environmental concerns and workers worried if it does, one of the region�s senators drew a line in the sand. 

Socialist Party (PS) Sen. Isabel Allende returned to Chile during its democratic transition after spending 17 years in political exile. Her father, former President Salvador Allende, was deposed in a bloody coup d'etat that paved the way for Gen. Augusto Pinochet�s military dictatorship.

Currently, Allende represents the region where the controversial mine from the world�s largest gold producer is under legal attack for failing to meet its environmental obligations.

A Chilean court suspended operationsat Barrick Gold�s Pascua-Lama mine in early April, responding to the indigenous Diaguita community�s allegations that the company is endangering the fragile ecosystem they share on the Argentine border. 

Barrick contested the court�s authority to halt operations in a preliminary hearing later that month, but the injunction stayed in place. 

Chile�s recently created regulator has also levied charges against Minera Nevada, S.P.A., the Barrick subsidiary running Pascua-Lama, after the company admitted it had failed to complete mandatory drainage infrastructure in January. The company accepted 22 of 23 charges filed by Environmental Superintendent last week, facing a fine of up to US$10 million.

Mounting costs, delays and resistance have compelled Barrick�s directors to threaten permanently closing the idle mine. 

Allende heard the concerns of Pascua-Lama�s four labor unions in a meeting with the Senate�s Environmental Commission. 

Workers are counting on paid leave until May 30 and hoping recent changes in Barrick�s South American leadership will sustain progress on the mine which, in its final stages of construction, is preparing to extract 18 million ounces of gold over the next 25 years.

The Santiago Times spoke with Allende to get her take on the controversy surrounding the project.

Did meeting with Barrick�s labor union directors change your opinion about the Pascua-Lama mine suspension?

Not entirely. I think that, until this point, the company has been incapable of complying with environmental standards and hasn�t met its agreements. It has accumulated sanctions, including various fines relating to work conditions. 

It�s true that I also have to acknowledge the concerns the workers have about the future of their jobs. We are talking about more than 4,000 workers, but I think that [the current situation] is an enormous act of negligence by this company. 

What are the workers� concerns?

The labor union, as is normal, wants job security and for the mine to remain operational. However, they also understand that the company has to comply with environmental regulations. They want to continue working, but they understand it has to be within a legal framework that until now has not respected. 

What sort of protection do the workers have if Barrick has to leave?

Well, the company has to offer a severance package, but the project has only been under construction for around four years, so this means the payout would not amount to much. But neither can the company claim extenuating circumstances [forced its closure] since there were none � nothing grave, like an earthquake. They simply failed to comply with the rules. 

How do you reconcile the expectations of various members of your constituency � for example, those of the Diaguita community � with those of the labor union?

In that regard, the company has no other option than to improve its relationship with the community, guaranteeing all the mitigation and compensation necessary. It has to profoundly address its poor management of this project. It can�t continue operating as it has until now, with a tremendous emission of particulate matter that obviously affects the health of the community, and the workers too. Therefore, the onus is on the company to improve and make changes. 

If Barrick stays, what would be the benefits for the Atacama Region and Chile in general?

First it has to comply with the law, because if they do not, the company simply should not stay. In order to remain they have to adhere to rules. We also need a guarantee from the regulating institutions that will be involved that they will obligate the company to comply. 

Four thousand jobs is an important statistic for the labor force but in the future, once the project is in full production, the mine will produce a whole lot fewer jobs. This is an important stage for the workers, but the most important thing is that they respect our institutional framework and obviously that there is very, very rigorous oversight which guarantees they will comply.

For Chile, would it be worthwhile for Pascua-Lama to continue operating?

It is a significant investment and is at a relatively advanced stage. We need the company to adhere to environmental quality rules � to the rules that govern us � and respect our institutional framework.

Only then does it make sense for it to stay. Otherwise, no: It isn�t worth the trouble if the company isn�t prepared to comply with the rules. Until now it has been very indolent, incapable and irresponsible as a company. It needs to comply with the demands. 

How do you respond to the Diaguita community, which believes their rights to water and a healthy environment have been undermined?

For this reason, [the Diaguita community] has to be assured that their land won�t be polluted, that [Barrick] won�t take half a liter [of water] more than they�ve been authorized and that there is a full guarantee that they will not comprise the Diaguita families in regards to water and, of course, health � with respect to dust and all other contaminants. 

We want the company to respect the region�s glacier and create a freshwater reserve that it will not contaminate. So we agree [with community demands]. In this case the Diaguita community has to feel that it can trust that [Barrick] will comply and will be supervised. The truth is that it doesn�t make sense for a company to continue moving forward if it has been poorly managed. It has to improve, it has to change and it has to be regulated. 

At least [the government] is doing inspections, something which did not happen in the past. In the last few years, and particularly in this year, the company has been subject to regulations and been severely fined. Regulation can always improve, but at least this year [the Environmental Superintendent] imposed two or three rather severe penalties, precisely because they conducted on-site inspections and saw that the company was not meeting its commitments.

The Andean region has historically lured foreign investors eager to convert its natural resources � from saltpeter to hydroelectricity � into capital. Are Chileans especially displeased with these companies?

Not necessarily. The key issue for companies, whether Chilean or foreign, is to negotiate, to be generous with settlement payments and with compensation. We have to take into consideration local communities and, above all, ensure the future of our environmental stability. 

Today, when a company submits a project to [the Environmental Ministry] it has all the time in the world to study it before presenting. Once they do, the community has just 180 days to respond, and must do so without with the enormous human resources, technical skill and specialists available to a company.

That is the challenge that we are yet to overcome � ensuring that consultants are available to communities, so that they can participate. To this day, we have not achieved that. I think these are issues that need to change and be studied. 

Another community asked the same court hearing the Diaguita community�s case for a protection order last week against Barrick�s recently-approved Cerro Casales mine.

But Cerro Casales, in contrast with Pascua-Lama, won�t happen because they do not have enough money. The Pascua-Lama project has been so poorly managed that the initial projection was US$4 billion, then US$4.5 billion and is now more than US$9 billion. They don�t have the capacity to do both. 

I recently toured a mine called Caserones, with which the community does not have any problems, because [the company] entered into dialogue, reached an agreement and invested in the community. It�s an example which shows that shows what is possible. That is what [Barrick] has not learned to do. 

Moreover, and I�d like to end on this, I think the future of the projects should not only be sustainable in relation to the environment. When they occur near indigenous communities, or affect their water resources, I think those projects should now consider a direct investment in these people � or perhaps, consider it part of the project�s costs to compensate the communities in a satisfactory manner for potential damage.

That is my position. It�s what happens in Australia, where indigenous people are incorporated in mining projects. The Maori, for example, own the land today in New Zealand. When they create geothermal projects, for example, the Maori directly benefit, because they continue as landowners. The company carries out the project, but always considers the local population, making them partners.

This is something that we are going to have to learn to do.

By Kalynne Dakin (
Additional reporting by Alejandra D�az (


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