Table of Contents Page Introduction 2

2.6 Environmental and Social Impact Assessment

Partly because for nearly every impact, there are at least two reports: a positive or defensive one from Goldcorp, and a critical or negative one from the impacted people or their advocates. As expected, most such pairs of reports disagree with each other, with Goldcorp-sponsored reports defending the mine; the others criticizing it (cf: Box 2). It is not the purpose of this paper to adjudicate between conflicting reports. However, the existence of the conflicting reports and strong conflicting opinions, is evidence of the polarization over the Marlin mine.

Water Contamination and Health Effects
Water is the mining sector’s commonest casualty worldwide. The Marlin mine consumes about 2.2 billion liters of water annually. As Guatemala is a severely water deficit nation, the assessment of water should have been the ESIAs central issue. IFC’s CAO found that the ESIA prepared by SRK Consulting for Glamis and judged adequate by the IFC failed to:
• Identify all water users downstream from the mine
• Fully assess the potential for acid mine drainage
• Fully assess the potential for other water contaminants
• Establish water quality standards for beneficial uses.
Responding to the CAO report, the IFC emphasized that a technical annex to the report stated “the fact” that Marlin was unlikely to have a significant environmental impact or pose risks that could not be mitigated in either of the two local communities (World Bank/IFC, 2005).
In 2010, Oxfam America financed E-Tech International to evaluate water quality around the mine and reported that the ESIA “provided limited information on the baseline environmental setting in and around the Marlin Mine” and should have included more information about “water quality, water quantity and levels, and the abundance and health of aquatic biota” (E-Tech, 2010, p. 5). The review also found that the ESIA provided no evidence to support its claim that the “acid generation and contaminant leaching potential of the rocks are low.”
The Pastoral Commission for Peace and Ecology (COPAE), the University of San Carlos, and the Centre for Ocean and Aquaculture (CEMA), in conjunction with the Norwegian University of Life Sciences, has been monitoring water quality around the mine for the past five years. Its fourth report noted high concentration levels of copper, aluminum, manganese, and, in particular, arsenic and nitrates in the Quivichil and Tzalá rivers downstream of the mine’s wastewater reservoir, and concluded that such waters are unfit for human consumption.
The Minister of Health and Welfare noted in 2010 that skin diseases were the third most common medical complaint in both SMI and Sipacapa, whereas in the rest of the country they rank tenth. Van de Wauw, Evens and Machiels (2010) of the University of Ghent also found that concentrations of arsenic in some of the groundwater layers serving people living near the mine were above the standard levels for safe drinking water.
Elevated arsenic concentrations were found in the urine of people living close to the mine and the scattered reports of arsenic related diseases [e.g. serious skin problems], as mentioned by the Global Development and Environment Institute. Zarsky & Stanley (2012, 2011) suggest that this aspect was neglected during the ESIA.
E-Tech’s (2010) report warned that “the mine wastes have a moderate to high potential to generate acid and leach contaminants ... into water resources and aquatic ecosystems .. . and tailings seepage may be migrating to the drainage downstream of the tailings dam.”
Broader independent research is necessary prior to further groundwater extraction. The causes and extent of arsenic in groundwater should be further investigated in the region in a participatory manner.
2.4 The Cyanide Issue
Cyanide, a severely toxic chemical used in the gold mining process, can survive in anaerobic conditions for up to 40 years. Cyanide liberates heavy metals such as mercury, arsenic, lead, and cadmium from gold-bearing rocks.
The International Cyanide Management Institute’s "International Cyanide Management Code for the Manufacture, Transport and Use of Cyanide in the Production of Gold" (ICMI Cyanide Code) is a voluntary industry program for the gold mining industry. The ICMI offers gold mining companies a certification process to determine whether they are in compliance with the code, which is renewed every three years. Goldcorp received a certification for Marlin mine in 2009.¹³
In its comprehensive study, E-Tech International (2010) found evidence that tailings seepage may be migrating cyanide and heavy metals downstream of Marlin’s tailings dam; and that water in the tailings pond exceeds standards. Four other independent studies to date have found evidence that cyanide and/or heavy metals may be seeping into the ground and surface waters surrounding the Marlin mine. Although Goldcorp plans to treat tailings water before discharging it to the environment, the treatment will not address leakage of cyanide and heavy metals into the groundwater (E-Tech, 2010).
Goldcorp dismisses these studies, claiming that its own studies, as well as studies by the Guatemalan government, show that there is no cause for environmental concern (Goldcorp, 2011e). The Guatemalan government has also refused to consider these independent studies as a part of its administrative process to determine whether to implement the IACHR’s precautionary measures.
Lining Tailings Impoundments
The Cyanide Code specifically excludes tailings impoundments, as well as the design and construction of tailings impoundments, as well as the long-term closure and rehabilitation of mining operations. The code is silent on the need for lining the mill tailings or waste lagoons.
Marlin uses only compacted clay in its dams and tailings ponds. Its tailings impoundment will be unlined -- it will have no underseal or liner. ¹⁴ According to both the IFC and Montana Exploradora, selected areas in the underlying rock have been pressure grouted, down-gradient of the tailings dam and along the sides, in an attempt to minimize tailings leakage. This is considered an outmoded, cheaper but riskier, technology.

The IFC states in its Summary of the Marlin Project (2004) that “Lining the tailings dams is not an option at Marlin due to the mountainous setting of the region.”¹⁵ In fact, most modern tailings impoundments constructed in developed countries include some form of liner as standard practice, and they are often constructed in mountainous terrain. Who developed the argument that an unlined tailings impoundment would be acceptable – the mining company or IFC?

All engineered structures, lined or unlined, can leak to some degree. Single layer liners, whether of 6” – 12” of compacted clay/bentonite, asphalt, or synthetic/geofabric/geomembrane sheeting (e.g.: 40-mil HDPE: High density polyethylene) leak sooner than double liners. French drains between the soil subbase and the leach pad are prudent for early detection of the inevitable cyanide leaks. Liners are especially needed in active seismic regions such as the Marlin region, and where the substrate geology is porous (e.g., karst, limestone, or other carbonate rock) and subject to caves, sink-holes, cenotes, fissures, seepage, and underground rivers. In fact, in some karstic landscapes, there may be no surface drainage, but only underground drainage channels in which volcanically heated acidic water plays a role.
A major concern that has not been adequately addressed by Goldcorp is the capacity and stability of the tailings dam and pond. A November 2009 technical review by a geo-consultant retained by Marlin’s owners found that “the Marlin tailings dam is approaching the end of its design life” and that “maximum capacity for [the mine’s] crest height will be achieved by about mid-2011” (Robertson, 2009, p. 8). Pond waters that breach the dam will spill into surrounding waters. Robertson listed three options as being “under consideration,” (1) raising the dam to add storage; (2) developing a second tailings impoundment east of the current dam; and (3) dewatering the existing tailings pond (ibid): “the final dam height of 82 meters is a concern since it is an active seismic area” (KP Consulting, 2010, p. 11). During the July 2012 visit, the author saw an apparently new, major cement canal possibly part of a new tailings impoundment, but we were denied entry to the mine site to confirm its purpose.
Earthquakes pose a risk not only to the operation, but also in the post closure phases of the mine. According to geoconsultant Andrew Robertson, “Post closure, the Marlin tailings dam will continue to contain tailings that would liquefy under seismic loadings or a dam breach. It will therefore remain classified as a high hazard dam,” (Robertson, 2009, p. 10).
In addition, it is not clear whether and how Goldcorp is managing the potential for overtopping of the tailings impoundment due to extreme weather events such as floods and cyclones, especially in the context of climate change. The water treatment plant is designed to contain and control water in a “one-in-a-hundred-year” rainfall event over 24 hours (KP Consulting, 2010). According to the UN, Guatemala is one of 10 countries most vulnerable to the effects of climate change and will become both drier—precipitation is projected to fall by 11-28 percent—and more vulnerable to extreme weather events such as “one hundred year storms” (ECLAC, 2010).
The number of extreme weather events in Guatemala increased dramatically between 1970-1989 and 1990-2008: there were twice as many floods and the number of tropical storms and hurricanes rose from zero to seven. In 2010, Guatemala had the wettest rainy season of the last 60 years, including its deadliest tropical storm, Agatha, in May 2010 (IDB, 2010). An April, 2011 assessment by the World Bank’s Climate Change Team and the Global Facility for Disaster Reduction and Recovery concluded that “overall, the trend over the last 40 years suggests a strengthening of the hydrological and climate cycles, with more intense rain occurring across shorter periods of time that produces greater average precipitation per episode. This trend may continue in the future due to climate change, possibly resulting in a greater frequency or intensity of both floods and droughts” (Climate Change Team, 2011).
Mine Closure Planning
Goldcorp’s own Human Rights Assessment (HRA) found that Goldcorp’s plans for mine closure was “the weakest aspect” of the management of the Marlin mine and “has the potential to leave the community vulnerable to long-term impacts on human rights” (On Common Ground Consultants, 2010, p. 82).
According to the HRA environmental review (KP Consulting, 2010), the major defects of Goldcorp’s closure plan are:

• 
  Short closure period: The closure period is 18 months, when a period of 2-3 years is standard practice.
  
• 
  No long-term monitoring and maintenance: The time period for post-closure monitoring and management is very short when there should be “a provision for continued care and maintenance of the facilities for a very long time, often defined as 100+ years” (p.13). Such activities include annual dam inspections, monitoring and treatment of impacted waters until they meet discharge criteria, monitoring and maintenance of tailings pond and waste rock piles, etc.
  
• 
  Low cost estimate: The full estimated closure cost of $13.6 million is very low. Besides the absence of long-term monitoring and maintenance costs, the costs of revegetation are low compared to norms.
  
• 
  No financial assurance: The only resources available to close the mine in the event of failure for any reason is a $1 million fund voluntarily established by Goldcorp. Financial assurance vehicles such as security bonds, performance bonds, industrial insurance or letters of credit are the standard of good practice for international companies.
  

Climate change will likely make the post-closure phase of the mine riskier than the operating phase for the communities surrounding Marlin. The combination of increasing aridity and extreme weather events is likely to change local water hydrology in unanticipated ways, increasing the potential for more severe and widespread contamination from acid mine drainage. The western highlands of Guatemala are already at the highest level of risk in terms of three hazards: cyclone mortality, flood mortality, and economic loss from drought (Climate Change Team, 2011). Climate risk is exacerbated by Guatemala’s poor capacities for risk reduction and disaster management.

In every case, Goldcorp seems to have denied or belittled the risk detailed by professionals and has adopted the least-cost response, namely to do nothing in many cases. This suggests that Goldcorp may be socializing the costs and privatizing the profits. As risks burgeon after mine closure, they likely will cause problems for the surrounding Mayan communities for decades or longer – long after Goldcorp has vanished.
ESIA Team
The choice of the team to undertake the ESIA is critical, in view of the potential for conflict of interest (the team may find it difficult to be critical of its employer, the company). The standard method to avoid or reduce conflict of interest is to create a Panel of Social and Environmental Experts (PoE) of senior professionals more interested in preserving their scientific reputations than in obtaining more consultancies. The PoE helps the company select a reliable ESIA team and helps ensure that the critical scoping stage is reliably completed. This process does not seem to have been followed in the Marlin case.
The ESIA team that Glamis selected, SRK Consulting of Colorado, USA, is a mining engineering consultancy.¹⁶ A search of SRK’s site for “Guatemala Marlin” yielded no results so it is difficult to know how proud it is of its Marlin ESIA. SRK’s ESIA for a bauxite mine in Suriname was found woeful by an independent assessment (Goodland, 2009). Despite the fact that that mine was almost surrounded by Indigenous Peoples, SRK denied their existence for many months into the ESIA process, then admitted there were some forest tribes, but insisted that they would not be impacted. It took several years of pressure for SRK admit that the local Amerindians would indeed be impacted and that they should be included in the ESIA.
Goldcorp Banned from Two Sustainability Lists
Goldcorp has positioned itself as a socially responsible mining company (Goldcorp, 2011c). Commendably, the company’s website has a portal for “corporate responsibility” containing the company’s corporate social responsibility, human rights, environmental and sustainability, and health and safety policies, as well as annual sustainability reports and an annual monitoring report prepared specifically for Goldcorp. In addition, Goldcorp commendably supports the Extractive Industries Transparency Initiative (EITI).
However, the fact that it has been removed from two industry sustainability lists -- in Toronto and New York – suggests that it does not live up to the principles stated on its website.
In 2008, the Toronto Stock Exchange’s Jantzi Social Index recommended that Goldcorp be declared ineligible for “socially responsible investment” portfolios, citing three concerns:

1. 
   Robust and growing opposition by Indigenous Peoples to the Marlin mine based inter alia on the mine’s environmental impacts.
   

2. 
   The company’s failure to adequately address health concerns associated with its Honduras operations.
   

3. 
   The fact that it had the highest level of environmental fines among mining companies listed on the Toronto Stock Exchange.
   

In addition, in September 2011, Goldcorp was removed from the Dow Jones North America Sustainability Index, amidst ongoing allegations of human rights violations and evidence of environmental contamination in communities affected by Goldcorp’s mining activities.

2.5 Benefits to Guatemala
The Marlin mine is Goldcorp’s cheapest operations site,¹⁷ partly because mitigation and prudentiary measures are not being adequately implemented. At $192 per ounce, cash costs of production at the Marlin mine in 2009 were 35 percent below Goldcorp’s 2009 average of $295 per ounce. The Marlin mine is contributing little to sustainable development in Guatemala. Although it is currently the largest single taxpayer in Guatemala, Marlin’s fiscal contribution will terminate when the mine closes; the same time as when the impacts may burgeon. Marlin’s lack of transparency and accountability suggests that little of the royalty and tax revenue has been invested in public goods such as education, health, infrastructure and especially agriculture that build sustainable productive capacities. Goldcorp’s social investment seems to be low and stagnant, meaning that even weak or quasi sustainability will not be achieved. A substantial portion of the mine’s procurement of supplies and equipment is sourced within Guatemala, mostly for electricity and other forms of energy, though little is sourced locally.
There seems to be little support from Goldcorp to foster local procurement for Marlin. Many mines contract with surrounding communities to supply food (e.g., maize, beans, cassava, potatoes, chickens, eggs, and fruits such as bananas and plantains) to the mine’s canteens, together with agricultural extension to boost productivity. Some governments mandate that a certain fraction of such procurement must be local.
Adding all economic benefits – royalties, taxes, wages, procurement and social investment – Guatemala receives about 42 percent of total mine revenues, substantially below best-practice in global mining operations. Local communities receive only about 5 percent of total mine revenues. Commendably, Goldcorp is updating this to 50 percent of total royalties to bring it more in line with international practice as of 2012. Goldcorp is also financing a new health clinic this year.
ASIES (2010) addressed the range of environmental and social costs, including deforestation, medical care, and purchased water, as well as lost output due to mine protests and the value of “lost royalties,” calculated on a baseline royalty rate of 12 percent. ASIES (2010) found that costs were 3.5 times greater than benefits, even without accounting for long-term environmental liabilities in the post-closure phase. Goldcorp’s shareholders benefit handsomely, but Guatemala’s high rate of poverty keeps financial assets far out of reach for practically all impacted stakeholders.
The long-term economic contribution of the mine to local communities is low for four reasons:

1. 
   Guatemala has a weak royalty and tax regime, setting a maximum of 1 percent royalty on mine revenues.
   
2. 
   Local municipalities receive a very small share—only 0.5 percent—of total mine revenues.
   
3. 
   Local poverty is high; wages for most workers are low.
   
4. 
   There is little local procurement of supplies and materials.
   

3. Remedies and Accountability:

3.1 Suggestions for an Environmental and Social Corrective Action Plan

 

To follow good practice in filling the gaps between applicable standards and the present environmental and social performance of the Marlin mine, corrective actions should be taken, and progress on completing those actions reported to local communities.  However, on Goldcorp’s webpage as of August 17, 2012, no corrective actions were reported. A June 9, 2010 Goldcorp press release actually suggests that no environmental or social issues exist.¹⁸ However, that suggestion is belied by a subsequent posting of its 2010 Annual Monitoring Report covering 2009, in which the Marlin mine reports numerous instances of noncompliance, including exceedances of applicable World Bank Group standards (Goldcorp 2010b). Beyond the 2009 report, Marlin’s website offered no comprehensive environmental and social reporting as of August 17, 2012. 

 

1. Suspend Marlin’s Operations

The first step and the strongest action that has been called for by GoG, OAS, UN ILO, UN CERD, IACHR, the People’s Tribunal,¹⁹ Madre Selva and others is to suspend mining operations at Marlin until a corrective action plan to remedy the most severe impacts is developed and ready to implement.  

 

2.            Engage and Compensate the Local Community

 

The second step is to ensure easy-to-use channels of communication, with mutual dialogue, and a grievance mechanism for remediation of local concerns, and annual environmental and social progress reports.  A trusting and respectful relationship with the impacted stakeholders is the goal.  While this should have started long ago, it is never too late.  Becoming proactive as soon as possible is essential.²⁰  Reparations to impacted people and compensation to impacted communities would go far in engaging the local community.

 

3.             Develop in-House Social and Environmental Expertise

 

Goldcorp’s creation in 2007 of a senior vice-presidency for people and safety was a good start in developing social and environmental expertise for the Marlin mine.  But a significant gap remains.  A robust and experienced in-house team of environmental and social professionals needs to be developed; and thereafter, continuous improvement should be sought.   Marlin’s social and environmental team should be charged with ensuring that all Indigenous Peoples are protected, that UN ILO Convention 169, and that UN DRIP’s FPIC are achieved as soon as possible.  As these steps will take time, Goldcorp should as soon as possible appoint a reliable independent Panel of Social and Environmental Experts (Greenspan 2011; Goodland et al. 2011).

4.             Commission a Reliable ESIA

 

As documented, the ESIA for Marlin did not meet standards deemed necessary by local community members.  Significant gaps remain – and it is not too late to fill them.  Indeed, it is essential to fill them.   Goldcorp should commission a state-of-the art ESIA²¹ to address especially concerns regarding water and air pollution.  It should convert the old environmental action/mitigation plan chapter into a justiciable impact/compensation contract (ICC), or impact/benefit agreement (IBA) with impacted stakeholders.²² Revenue management or impact/compensation contracts in other mines usefully take the form of “community agreements.”  The goal would be to achieve major benefits for both Goldcorp and local community members. 

5.            Set Up a System of Realistic Financial Assurance

 

Goldcorp should contract with reputable independent financial assurance companies to set up a robust system of realistic performance bonds, industrial insurance, and escrow accounts to guarantee beneficial results, together with meaningful penalties, to improve accountability.  Mine closure financial assurances, perpetual treatment of acid rock drainage,²³ and remediation of damages on the Indigenous Peoples should be central.  Justiciability, meaning that any eventually unresolved dispute could be settled in a court of law. This should be guaranteed. The ultimate recourse should be an independent court or arbiter agreed upon in advance between the impacted people and the mining proponent, with the support of the Government of Guatemala.