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Byen Konte, Mal Kalkile? Human Rights and Environmental Risks of Gold Mining in Haiti

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Byen Konte, Mal Kalkile? Human Rights and Environmental Risks of Gold Mining in Haiti Byen Konte, Mal Kalkile? Human Rights and Environmental Risks of Gold Mining in Haiti Haiti Justice Initiative University of California Hastings College of the Law About the Authors The Global Justice Clinic The Global Justice Clinic (GJC) at New York University School of Law1 provides high-quality, professional human rights lawyering services to individual clients and nongovernmental and intergovernmental human rights organizations, partnering with groups based in the United States and abroad. Working as legal advisers, counsel, co-counsel, or advocacy partners, GJC students work side by side with human rights activists from around the world. Since its founding, GJC has worked on human rights issues in Haiti. The Haiti Justice Initiative The Haiti Justice Initiative is an umbrella organization for a variety of ongoing projects at UC Hastings, including the Hastings-to-Haiti Partnership, a sixteen-year partnership with the École Supérieure Catholique de Droit de Jérémie that includes educational exchanges and collaborative work toward creation of a legal services clinic in Jérémie; legal assistance, community trainings, and related work to address gender-based violence in Haiti conducted by the Center for Gender & Refugee Studies; and other student and faculty projects, including this Report on gold mining in Haiti. Byen Konte, Mal Kalkile? Human Rights and Environmental Risks of Gold Mining in Haiti © December 2015, Global Justice Clinic & Haiti Justice Initiative 1 Communications from NYU law clinics do not purport to represent the school’s views, if any. Table of Contents Acknowledgements i Executive Summary 1 Methodology 9 Recommendations 18 Chapter I: Haiti’s Gold, Past and Present 23 I. Historical, Political, and Environmental Context 24 A. Brief Historical Context 24 1. The Nation’s Founding 24 2. Nineteenth Century: Freedom and Exclusion 24 3. Twentieth Century: Occupation and Dictatorship 25 4. Late Twentieth Century Through Present Day: Crisis and Intervention 25 5. Politics in 2015 27 B. Communities at Risk 33 1. Predisposed to Natural Disaster, Unable to Respond Effectively 33 2. Human Factors 33 II. Haiti’s Gold: Conquest and Controversy 34 A. History of Gold Mining on Hispaniola 34 B. Modern Gold Mining in Haiti 36 1. Gold Mining in the Late Twentieth Century 37 2. Gold Mining in the Early 2000s 38 3. Disagreement over Exploitation Permits 39 C. Communities Affected By Mining Activity 42 1. The Affected Communities: Moun Andeyò 42 2. Communities’ Experiences: Exclusion and a Lack of Access to Information 45 Chapter II: The Modern Gold Mine and Mining in Haiti Today 58 A. The Geology of Gold 59 B. Gold Exploration 61 1. Phases of Exploration 61 2. Permit Holdings and Exploration Activities in Haiti to Date 61 a. VCS Mining LLC 65 b. Majescor-SOMINE 65 c. Newmont-Eurasian Joint Venture and Eurasian Minerals 66 C. The Extraction of Gold 69 D. Gold Processing and Refining 71 Chapter III: The Environmental Risks of Mining 81 A. Environmental Risks of Mineral Exploration 81 1. Test Drilling and Related Construction 81 2. Risks to Soil 82 3. Risks to Water Resources 82 4. The Debated Environmental Impacts of Mineral Exploration in Haiti 83 5. Communities’ Experiences with Majescor-SOMINE 83 6. Communities’ Experiences with Newmont-Eurasian 85 a. Grand Bois 85 b. La Montagne 86 B. Environmental Risks of Mine Construction and Exploitation 87 1. Dust 87 2. Water Use and Water Contamination 88 C. Mineral Processing and the Environment: Cyanide, Smelting, and Pollution of Water and Air 89 1. Transport 89 2. Cyanide Processing 90 3. Smelting 95 4. Heavy Metals and Metal-Like Elements 95 D. Mine Closure and the Environment: Surface Rehabilitation and the Persistence of Water Pollution and Threats to Public Health 100 E. Haiti’s Capacity to Manage the Environmental Risks of Mining 104 F. Conclusion 105 Chapter IV: The Economics of Gold Mining for Haiti 120 A. The Economic Drivers of Mining 120 B. The Financial Terms of Mining 123 1. Taxes and Royalties: A Comparative Analysis of Fiscal Regimes for Mining 123 a. Taxes 124 b. Royalties 124 2. Haiti’s Fiscal Policy Options 126 C. Haiti’s Financial Stake in Mining 130 1. Tax Limitations and Uncertainties 131 2. Potential Exemptions from Corporate Income Taxes under Haiti’s Investment Code 132 3. Corporate Income Taxes: The Risks of Transfer Pricing 134 4. Fiscal Sustainability 136 5. Fiscal Transparency 137 D. Potential Financial Benefits of Mining: A Cautionary Hypothetical 138 E. Conclusion 140 Chapter V: The Legal Framework for Mining in Haiti 153 A. The Haitian Constitution 153 B. The Mining Decree of 1976 155 1. Mining Permits 156 2. Financial Requirements 157 3. Environmental Protection, Land Rights, and Community Interests 158 C. Reform of the Legal Framework 160 D. Governance and the Rule of Law 162 E. The August 2014 Draft Mining Law 164 1. Transparency and Disclosure 165 2. Environmental Review and Oversight 166 3. Particular Environmental Standards and Protections 168 a. Applicable environmental law 169 b. Reserve areas 169 c. Deforestation 169 d. Buffer zones 170 e. Water 170 4. Permitting System 170 5. Financial Requirements 171 a. Royalty rates 172 b. Tax avoidance safeguards 172 c. Surface use fees 174 d. Fiscal stabilization 174 e. Remediation 175 6. Land Use, Compensation, and Dispute Resolution 176 7. Community Development Protocols 178 8. Labor and Local Content Provisions 179 9. Model Mining Convention (“Convention Minière Type”) 180 Chapter VI: Human Rights and Gold Mining in Haiti 199 A. Introduction: Rights Affected by Mining 199 B. Rights Related to Participation and Deliberation 199 1. Relevant International Law: Rights Related to Participation and Deliberation 199 2. The Experience of Mining-Affected Communities: Rights Related to Participation and Deliberation 200 a. Overview 200 b. Residents of Patricko and Roche Plat demand access to information 203 3. Haitian Advocates Testify about Lack of Access to Information 204 C. Social and Environmental Rights 206 1. Relevant International Law: Social and Environmental Rights 206 2. The Experience of Mining-Affected Communities: Social and Environmental Rights 207 a. Overview 207 b. The experience of mining-affected communities: land access agreements 211 c. Case study: land access agreements in La Montagne 212 i. Conclusion of Agreements 217 ii. Signing by Third Parties 220 iii. Refusal 221 iv. Absence of a Grievance Mechanism 221 v. Case Study Conclusion 222 D. Who is Responsible? Duties Corresponding to Rights Affected by Mining 222 1. Introduction 222 2. Human Rights Obligations 223 3. The Responsibility to Respect, Protect, and Fulfill 223 4. Obligations of the Haitian State 225 5. Obligations of Other States 226 a. States’ extraterritorial obligations under international human rights law 226 b. States’ obligations when acting As members of the international community 226 c. Obligations of mining companies’ home states 227 6. Obligations of IFIs 227 7. Responsibilities of mining companies 230 a. Institutional commitments 232 i. Relevant Policies and Standards at IFIs 232 ii. Company Commitments 233 E. Conclusion 234 Appendices: Land Access Agreement Used by Newmont-Eurasian in Haiti 258 Appendix 1: Land Access Agreement 258 Appendix 2: Transcription of Creole Agreement 260 Appendix 3: Translation of Creole Agreement 262 List of Boxes Box 1-1: United Nations Peacekeeping Force in Haiti 26 Box 1-2: Relevant Haitian Government Actors 29 Box 1-3: Bauxite and Copper Mining in Haiti in the Twentieth Century 35 Box 1-4: Mining Permits Under Haitian Law 37 Box 1-5: International Financial Institution Support 40 Box 1-6: The Kolektif Jistis Min (KJM) 44 Box 2-1: Artisanal Mining in Haiti: Lakwèv 59 Box 2-2: Gold and Copper Permits in Haiti 62 Box 3-1: Green(er) Mining 96 Box 4-1: Comparison of Ad Valorem Mineral Royalty Rates in Select Countries 125 Box 4-2: Questioning the Haitian Government’s Capacity and Will to Collect Taxes 129 Box 5-1: Inspection Panel Complaint 139 Box 5-2: Labor Rights in Haiti and the Need for Strong Worker Protections in the Mining Sector 182 Box 6-1: International Human Rights Treaties Ratified by Haiti 200 Box 6-2: Free, Prior, and Informed Consent (FPIC) and Haitian Communities Affected by Mining 205 Box 6-3: Health Conditions in Haiti 208 Box 6-4: Land in Haiti 209 Box 6-5: Text of the Land Access Agreement 213 Box 6-6: Local Officials of an Absent State 224 Box 6-7: Mining, Security, and Human Rights 228 Box 6-8: International Finance Corporation Support for Eurasian Minerals in Haiti 233 Acknowledgements Principal Authors of the Report & Research Directors Brian Gray, Professor Emeritus, University of California Hastings College of the Law Ellie Happel, Haiti Program Attorney, Global Justice Clinic Nikki Reisch, Legal Director, Center for Human Rights & Global Justice (CHRGJ); Adjunct Professor of Clinical Law, GJC, NYU School of Law Margaret Satterthwaite, Director, GJC; Faculty Director, CHRGJ; Professor of Clinical Law, NYU School of Law COLLABORATING PARTNER Kolektif Jistis Min (Justice in Mining Collective, or KJM) CONTRIBUTING AUTHORS Blaine Bookey, Co-Legal Director, Center for Gender & Refugee Studies Samuel Nesner, Kolektif Jistis Min Ijeamaka Obasi, Law Student Advocate, Global Justice Clinic (2015) Mary “Mimi” Powel, Law Student Advocate, Global Justice Clinic (2015) Joanna Pozen, Fellow, Global Justice Clinic (2013-2014) Rebecca Riddell, Law Student Advocate, Global Justice Clinic (2013-2015) Nancy Schneider, UC Hastings Law Student (2013-2015) Lauren Stewart, Senior
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