Plans by the G8 to make international mining operations more transparent are to be welcomed. But the agreement is limited in scope and the extractive industries still have a long way to go to clean up their act.

The Group of Eight announced last week a plan to ensure poor countries receive the full benefit of their natural resources. But will it do more than scratch the surface in tackling the widespread problems caused by mining?

The G8 plan is aimed at making mining operations more transparent, with companies and host countries signing something called the Extractive Industries Transparency Initiative.  But the plan only covers a handful of countries and a proportion of the world’s mining corporations.

Ironically, while more developing countries are being urged to sign up, the most notable absentee is Canada, where most of the mining companies are based and whose government actively promotes their interests, often against those of the countries that host their operations.

Central America isn’t covered by the new initiative but it is one of the regions most exploited by mining companies.  The problems extend way beyond the transparency (or lack of it) in their operations, into land-grabbing, poisoning of water supplies and a host of other environmental depredations. Here are just a few examples.

In Guatemala, the government has had to declare a state of emergency because of protests against silver mining operations in four different communities.  In El Salvador, massive community resistance to a planned gold mine has been met by claims of intimidation.  In Costa Rica, a national ban on open cast mines was overturned to allow a gold mine, now blocked by the courts, that would have threatened one of the country’s most precious wildlife areas.

In Honduras, communities have suffered severe water shortages from mining operations. People have been found to have toxic levels of arsenic, lead and mercury in their bodies. In one area, although drinking water tested positively for these contaminants in 2007, the results were not released until 2011 and no action has yet resulted.

The response of the mining companies has usually been to deny that problems are caused by their operations, and many of them boast their environmental credentials on their websites. Rather than addressing the concerns as they arise, the companies often use their high-level government contacts to get round the rules.  In some cases, where governments or the courts have rescinded mining permits to address community concerns, the companies have replied with massive law suits for lost profits.

These snapshots only give a hint of the long-term suffering of communities afflicted by having gold, silver or other minerals discovered in their lands, whose legal protections can easily be overcome by the economic power of the mining companies.

Anyone who wants to see more evidence of the problems caused by mining in Central America can take a look at a map of the contentious sites, or for a global view look at the work of Mining Watch Canada.  Even if the transparency initiative being pushed by the G8 covered regions outside Africa, most of the companies involved in contentious mining proposals in Central America aren’t members of the scheme.

The problem with mining is that for most consumers it’s invisible.  People worry about their food because they eat it. They may not worry where the petrol for their cars comes from but when oil gets spilt, as it recently did in Arkansas, people can see what a messy and toxic substance it is. As Primark has discovered, clothes manufacturing can be linked back directly to dangerous or exploitative conditions in factories in countries such as Bangladesh.

But gold, diamonds or the rare earths in mobile phones appear to be such clean, harmless substances, used in tiny quantities.  Yet their extraction involves huge quantities of water, land, poisonous chemicals like arsenic and mercury and – all too often – corruption and violence.  The extractive industries have a long, long way to go to clean up their act.

Original post and comments: Public Finance International

Author note: The published article was amended to leave out details of company names. More information on individual cases can be found at these links:  Goldcorp’s mine at San Martin, Honduras, here; Amnesty’s report on Radius Gold’s plans for mining in El Tambor, Guatemala, here; a report on the consequences of Pacific Rim’s mining proposals in El Salvador, here; and plans by Infinito Gold to sue the Costa Rican government about its Las Crucitas mine, here.