MINING - BRAZIL
The Globe and Mail. 18 Dec 2017. Gold mine case bolsters Indigenous rights in Brazil. In a political climate widely seen to privilege industry, decision to uphold the suspension of a Canadian miner’s licence is a tidal shift
STEPHANIE NOLEN, RIO DE JANEIRO
A Brazilian appeals court has upheld the suspension of a key licence for Toronto-based Belo Sun Mining Corp., which hopes to build Brazil’s largest open-pit gold mine in the Amazon forest. The decision sets the project back at least a year, and in their ruling, the three-judge tribunal blasted the company for failing to consult Indigenous people sufficiently.
The precedent-setting ruling serves to shore up the rights of Brazil’s First Nations, rights that are, in principle, constitutionally protected, but in practice often ignored in the development of infrastructure and commercial projects. It comes at a time when the political climate strongly favours the mining industry.
The decision, delivered on Dec. 6 by the Federal Tribunal of the First Region, in Brasilia, upholds an April suspension order for the company’s installation licence. The tribunal said that Belo Sun had failed to fulfill obligations, repeatedly made clear after previous court challenges, to study the impact of their planned 175,443-hectare open-pit mine on the Juruna people, who live approximately 10 kilometres downriver from the site of the Volta Grande project, and must do so according to a “consultation protocol” laid out by the Juruna themselves.
“This is a very important decision, not just for Belo Sun – it tells all Brazil that Indigenous people have to be consulted on projects, public or private,” said Ubiratan Cazetta, one of the federal prosecutors who brought the case.
Ian Pritchard, Belo Sun’s chief operating officer, said the company has not made a decision about whether to appeal and that their “current focus is to complete the work with the government agencies.” He added that the company would not comment on the decision, saying only that “the Para government and local municipalities have been very supportive of our company and the Volta Grande Project.”
The mine, called Volta Grande, is located on a 2,000-km tributary of the Amazon River called the Xingu, in the state of Para. The state has vast mineral riches, but one of Brazil’s lowest standards of living and has wooed national and international mining companies, promising to smooth the path of bureaucracy and licensing. The municipality that is home to the mine has also welcomed its promise of 500 jobs and a big bump in tax revenue. Federal agencies – particularly those responsible for environmental and Indigenous affairs – have been less positive.
“Belo Sun weren’t expecting this result – they believe our institutions don’t work,” Mr. Cazetta said. “They have this discourse about how, ‘We are making things better for these people; the Indigenous are so poor and we are bringing progress,’ that they think will convince everybody, and then they will be allowed to do whatever they want. But we are in a different moment in Brazil.”
In a report on the ruling for CIBC World Markets Inc., analysts Jeff Killeen and Daniel Gavin called it a “negative event for the project” and said “the timing for a resolution is unknown.”
The tribunal ruling contains a landmark instruction for Belo Sun to follow the consultation protocol defined by the Juruna people. In it, they define themselves as the “guardians of the Xingu,” who have survived centuries of incursion on their way of life in the name of development. They insist they must be consulted “in good faith and honestly” about projects that will affect them, on their terms – at meetings held on their timetable, in their community, with the participation of children, adults and the elderly, with decisions to be reached by consensus, after as many consultations as it takes to answer all their questions.
The ruling obliges Belo Sun to redo studies of possible impacts on the Juruna and Arara peoples, who say their lands are located 9.5 km and 13.7 km, respectively, from the mine site. The company has repeatedly argued that the nearest Indigenous territory is 11 km from the mine, and so outside a 10-km radius of impact established by federal law.
Mr. Cazetta said the judges on the tribunal were not interested in haggling over whether the mine is 9km or 11 km away from the Indigenous land. “They said, ‘Let’s be serious, your project puts pressure on them; it’s easy to see this.’”
In addition, the mine is 13 km downriver from the massive Belo Monte hydroelectric project, which has been the site of one of the uglier conflicts between Brazil and its Indigenous people. Brazil’s supreme court allowed construction of the dam, which will flood more than 500 square km of land, despite the fact that it was bitterly opposed by First Nations groups who live in the area and who were never consulted.
The dam has already drastically changed water levels and the behaviour of the Xingu river on the Juruna territory and it will be at least another seven years before its full impact is known, said Biviany Rojas, a lawyer for the Socio-Environment Institute, a non-government organization that has been supporting the Indigenous people in their fight against Belo Sun.
That was one factor the judges considered when they ordered broader consultations. A second issue, in the background, was the Samarco mine disaster in southeastern Brazil two years ago, where an open-pit tailings dam collapsed, killing 19 people, destroying a town and releasing a tide of toxic sludge whose reach extended hundreds of kilometres. In the post-Samarco context, Ms. Rojas said, an argument over whether a mine is 9 km or 11 km away from an Indigenous community “is absurd.”
Marcelo Ribeiro Tunes, a director with the Brazil Mining Association, an industry lobby group, said that he believes Belo Sun must appeal the ruling to the Supreme Court. “Our feeling is [the tribunal judges] are overreaching their authority and the spirit of the law – tomorrow, they will say the distance [within which a mine is responsible for impact] is 20 km, then they will say 100 km.”
The mining industry has been enjoying a warm relationship with government since Brazilian President Michel Temer took power 16 months ago. Two new bills, one of which reduces royalty levels and another which relaxes regulatory procedures, are expected to become law as early as next week. Mr. Temer has called the moves necessary to spur foreign investment and help revive Brazil’s economy, which is emerging from one of the worst recessions in nearly a century. In August, he introduced legislation to permit mining in a 28,700-square-kilometre reserve (about the size of Denmark) called Renca, in the northeastern Amazon. He was forced to withdraw the proposal after a global outcry, but another five million hectares of the rain forest are the subject of bills before congress seeking to change their protected status to allow mining.
Mr. Tunes said the licensing situation remains complex: By local standards, Belo Sun has had a comparatively fast process, he said with a laugh. But he does not believe this tribunal ruling will dampen prospects to expand the industry. “If you have a new project, you may think twice about coming in,” he said. “But if you have a very good mining deposit, you will take the risk.”
In the Amazon region itself, public opinion of mining is split between people who fear the environmental impact, including the deforestation that accompanies the mines, and those who see them as vital economic progress. While the federal government clearly supports the pro-development view, courts are increasingly ruling in favour of Indigenous peoples. Canadian-owned Brazil Potash Corp., for example, lost its licence for a mine in Amazonas state in July, 2016, when a court ruled it had not sufficiently consulted Indigenous people in the area.
In a bizarre incident in late November, a group of academics meeting at the Federal University of Para, in the state capital of Belem, to discuss the potential impacts of Belo Sun’s project were locked in a hall by the mayor of the municipality where the mine is located and a group of about 40 mine supporters. Those who were detained – for about 40 minutes – have filed a complaint with federal prosecutors, saying the mayor threatened them with violence.
REUTERS. DECEMBER 18, 2017. Boeing-Bombardier dispute ramps up at U.S. trade hearing
Alwyn Scott, Alana Wise
WASHINGTON (Reuters) - Boeing Co and Bombardier Inc battled on Monday over the U.S. planemaker’s claim that its Canadian rival used billions of dollars in illegal government subsidies and dumped its newest jetliner in the United States below cost.
Boeing said Bombardier had harmed its ability to sell 737s in the U.S. market at a heated hearing of the U.S. International Trade Commission (ITC), one of the final steps in a bitter trade dispute due to conclude in February.
Bombardier argued Boeing’s large 737 order book shows there has been no adverse impact from its CSeries jet.
“Boeing is making money hand over fist. And with a backlog of 737 orders years into the future, there are no signs of difficulty on the horizon,” Bombardier representative Peter Lichtenbaum said in opening remarks.
If the ITC sides with Boeing, as it has so far, it could effectively keep U.S. airlines from using Bombardier’s CSeries jet by imposing duties of nearly 300 percent, one of the largest ever imposed for a market-based economy, Boeing said.
The U.S. Department of Commerce is due to finalize the proposed duties on Monday or Tuesday.
If Bombardier wins, Chicago-based Boeing says its smallest 737 model could face unfair competition from the CSeries for decades.
Canada’s ambassador to the United States, David MacNaughton, warned that a positive finding of material harm to Boeing by the ITC could present a possible violation of World Trade Organization agreements and prompt a more formal complaint with the global trade group.
“Boeing’s assertion that future imports from Canada threaten to cause material injury is necessarily based on just the type of ‘speculation and conjecture’ that is prohibited under both U.S. and international law,” MacNaughton told the panel.
Canada earlier this month scrapped plans to buy 18 Boeing Super Hornet fighter jets, underlining Ottawa’s anger over the trade challenge. Boeing has said it considered all potential risks before deciding to launch its trade case.
The case stems from an April 2016 sale of 75 CSeries jets to Delta Air Lines Inc. Boeing claims Delta paid $20 million per plane, well below an estimated cost of $33 million and what Bombardier charges in Canada.
“A single large order, like Bombardier’s sale to Delta, takes years of demand out of the market. In this industry, if we lose a sale, it’s gone forever. That’s years of lost production and deliveries for Boeing, years of lost work for our employees, and years of lost work for our U.S. suppliers,” Boeing Executive Vice President Kevin McAllister said.
European plane maker Airbus SE, which is buying a controlling stake in the CSeries program and has a competing plane, has said it could move CSeries production to a factory in Alabama, making it a U.S. product.
Boeing says that should not negate the duties because Airbus and Bombardier would import fuselages and wings and merely be assembling in the United States.
But Bombardier argues that Boeing’s case is against full imports of airplanes, not parts, so it does not apply to imports of wings, fuselages and other pieces. Bombardier says more than half of the value of CSeries content comes from the United States, including engines by Pratt & Whitney.
Boeing says the Delta deal was market defining because other airlines will demand the same low price and the planes will be in service for decades.
All jetliners are sold below cost initially because airlines are taking a risk on a new jet model and upfront development costs are high, Bombardier argues. The cost drops over time as the factory produces more planes and gets better at making them.
The U.S. planemaker said Bombardier failed to cooperate in a U.S. investigation providing pricing information to the United States.
Bombardier said it turned over the Delta sales contract but cannot accurately estimate the cost and price of those planes because they are being built and delivered in coming years.
Boeing says the CSeries would not exist without hundreds of millions of dollars in launch aid from the governments of Canada and Britain and a $1 billion equity infusion from the province of Quebec.
Those subsidies are not prohibited because they are either market-based investments or repayable loans, Bombardier said.
Bombardier also argues that Boeing and Airbus do not compete with the CSeries because their planes are larger and have more range. The CSeries’ more direct competitors are smaller jets made by Embraer Mitsubishi.
The CSeries poses no threat to the U.S. aerospace industry because building it at the Airbus factory in Alabama would create U.S. jobs and generate billions of dollars in business for U.S. aerospace companies, Bombardier said.
Reporting by Alwyn Scott in New York and Alana Wise in Washington
REUTERS. DECEMBER 18, 2017. Bombardier, CRRC JV win $271 million contract to build monorail in China
SHANGHAI (Reuters) - A joint venture between Bombardier Inc BBDb.TO and China’s CRRC Corp Ltd 601766.SS1766.HK has won a 1.79 billion yuan ($270.76 million) contract to build a monorail line for a Chinese city, the Canadian transport giant said on Monday.
Bombardier said in a press release that CRRC Puzhen Bombardier Transportation Systems Limited won the contract to supply Wuhu city in eastern China with its automated Innovia monorail system and 240 cars, the unit’s first monorail contract in China.
“We are confident that the monorail will become an icon for Wuhu city and we will see more Bombardier monorail systems in other Chinese cities in the future,” said Bombardier China President Zhang Jianwei in the statement.
Bombardier and CRRC own equal shares in the joint venture, which was established in 2014 to focus on the Chinese monorail market. Bombardier’s railway arm has six other joint ventures in China.
China has been ramping up investment in inner-city mass transit project to alleviate congestion. However, media has recently reported that subway projects in at least three cities have been halted over debt concerns.
Reporting by Brenda Goh; Editing by Robert Birsel
Global Affairs Canada. December 18, 2017. Canada congratulates Chile’s President-elect following election victory
Ottawa, Ontario - The Honourable Chrystia Freeland, Minister of Foreign Affairs, and the Honourable Francois-Philippe Champagne, Minister of International Trade, today issued the following statement:
“On behalf of the Government of Canada, we would like to congratulate Sebastián Piñera on his election as the next president of Chile. This election is a testament to the strength and dynamism of Chile’s democracy.
“Canada and Chile enjoy a close relationship, including our strategic partnership agreement, and share common values such as equality, democracy and human rights. Together, we promote these common values abroad in the UN and other organizations and forums, including the Lima Group, which focuses on restoring democracy in Venezuela, and the Equal Rights Coalition, co-chaired by Chile and Canada.
“Our two countries also have a strong trade and economic relationship through the recently modernized Canada-Chile Free Trade Agreement that reflects our shared commitment to advancing gender equality. We look forward to expanding this cooperation through ongoing negotiations for Canada to join the Pacific Alliance as an associated state.
“The Government of Canada looks forward to working with president-elect Piñera to further deepen the special relationship between Chileans and Canadians.”