Nervousness and lack of transparency surround three new mining permits

Cadouche and Port-au-Prince, HAITI, 20 February 2013 – The population of Cadouche, a small village about 12 kilometers south of Cap-Haitian in Haiti’s North department, is nervous about three new mining exploitation permits granted last December in an opaque and secretive process.

Located near the Morne Bossa deposit, the Cadouche economy is based mostly on agriculture. In this hamlet of a little over a hundred small houses, which has no clinic or other services, families work day and night to take care of their families needs. And they ask themselves if they are invisible to the authorities in Haiti’s capital, because negotiations about their region’s future go on behind closed doors, without any local representation, they say.

A view of the Morne Bossa plain. Photo: HGW/Ben Depp

Until today, not one single member of the government or of the company has consulted the population to hear our complaints or ask for our agreement to the mining of the Morne Bossa deposits,” said Mezadieu Toussaint, a teacher and farmer in his fifties. “If the mine benefits the population, that would be wonderful. But we are worried that it will poison our environment.”

Steno Chute, a member of the Democratic Movement for the Development of Quartier-Morin (Federation du movement démocratique pour le développement de Quartier-Morin - Femodeq) and a farmer of corn, beans and sorghum, said he is afraid of mining.

"Mining can have disastrous consequences,” he told the crowd. “We are really anxious and nervous. The water and environment will be polluted.”

Old permits

News that the government mining agency (Bureau des Mines et d’Energie – BME) had approved three gold or copper “exploitation” permits late in December recently sent reporters and elected officials scrambling. In articles and interviews, journalists speculated what Haiti had lost or would gain, and accused the government of granting “illegal” permits, and pointed questions from Haitians senators brought BME director Ludner Remarais to tears.

The three “new” permits – for mining deposits in Morne Bossa, Douvray and “Faille B” in Haiti’s North and Northeast departments – are not new. They are the conversion of three permits for “exploration” into permits for “exploitation.”

The three permits were originally granted in 1997 by the René Préval government via two mining conventions with two “Haitian” companies – St. Genevieve S.A. and Sociète Minière Citadelle S.A. [Download the original conventions - 6 and 8 MB - here: St. Geneviève, Citadelle] Because they were sold or they changed their names, these conventions are held by two small firms: Société Minière Delta and Société Minière du Nord-Est SA (SOMINE S.A.). But in both cases, the power rests overseas, in the hands of foreign companies and shareholders.

Map showing location of Morne Bossa property (VCS / Société Miniere Delta).
Source: VCS website 

SOMINE property location. Source: Majescor website

The Société Minière Delta is the property of VCS Mining, a small US private company registered in the state of Delware, infamous for its policies which permit firms to hide their profits, keep their operations secret and pay minimal taxes, according to a recent New York Times article.

SOMINE S.A. is a subsidiary of the Canadian mining company Majescor which says it specializes in “emerging” regions. Last month, Majescor offered for sale US$2.5 million worth of shares for “the SOMINE project." Majescor says it controls SOMINE because it controls a company called SIMACT Alliance Copper-Gold Inc., which in turn controls the majority of SOMINE shares.

These three permits are the most advanced of the dozens of permits for about 2,500 square kilometers handed out in recent years. The new permits will convert into concessions once the companies start mining.

Map from 2011 showing the permits controlled by another foreign company,
Eurasian Minerals. Source:  Eurasian Minerals website

Parliamentary protest

According to many senators, the three new permits violate the Haitian Constitution because they are based on conventions that were never approved by the parliament. A Senate Commission organized a special hearing on January 22 2013, where they accused BME director Remarais.

“In 20 years the parliament has never ratified any mining conventions,” Senator Steven Benoit (West) thundered, while Senator Andris Riché (Grande Anse) shouted: “We must not accept wacky contracts that seek to bury the people.”*

“I am sorry the Senate was never contacted,” Remarais responded, tears in his eyes.

The Constitution says that the parliament must “approve or reject international treaties and conventions” (Art. 98-3). According to attorney Mario Joseph, director of the Office of International Lawyers (Bureau des Avocats Internationaux – BAI): “The conventions are illegal, because the parliament did not ratify them.” But it appears that these conventions are not “international” because they concern the government and companies that – at least on paper – are Haitian.

The former director of the BME, Dieuseul Anglade, maintains that the conventions are not “illegal” because the government decided to sign and publish them as decrees, i.e., without ratification.

“Decrees have the same authority as laws. If someone wants to be a demagogue or make political hay, he can call the conventions ‘illegal,’ but the are legal,” Anglade told HGW in a telephone interview on February 6 2013.

In another telephone interview, a spokesman for VCS Mining, the company working in Morne Bossa, said the same thing, insisting that his people have followed regulations from the beginning. Last year, they submitted the required “feasibility study” for the site, which maps out the steps they will take in order to prepare for mining, and it was finally accepted by the BME in November, he said.

The representative – who asked not to be identified by name because his company has decided to keep a low profile until the resolution of the BME-Senate conflict – insisted: “We have done the work as required by law. The permits are legal.”

The VCS representative also said that his company has invested over US$4 million on the Morne Bossa site so far, and that since gold was first discovered by UN prospectors in the late 1970s, “over US$38 million has been spent.” The mine would eventually employ 300 people, he said.

Seeking verification and clarification, HGW requested an interview BME director Ludner Remarais. The interview was three times promised, and then denied. HGW wanted to confirm what VCS said, wanted to ask for a copy of the feasibility studies and also wanted to ask about the illegality of the original conventions.

Many other questions

The question of legality is not the only area of doubt surrounding the three permits. Both of them award the Haitian state with very low royalties: only 2.5 percent of the value of the minerals extracted. A number that is “really low,” according to mining royalties expert Claire Kumar. 

“Anything under five percent is just really ludicrous for a country like Haiti. You shouldn’t even consider it. For a country with a weak state, the royalty is the safest place to get your money,” Kumar told HGW in 2012.

Majescor President and CEO, Marc-André Bernier, with a copper-oxide enriched
volcanic rock sample from a recently outlined showing in the North section
of the SOMINE property (May 2009).
Source: Caption and photo from Majescor website.

According to Haitian mining law, the financial agreements in a convention can be “revised,” but so far, no government official has mentioned the possibility, nor has discussed Haiti’s “ludicrous” royalty rate.

The other major concerns are lack of transparency in general, the eventual social and environmental impacts of open pit mines documented by HGW in its series last year and the lack of participation from and benefits to local communities.

The feet of a farmer next to a VCS marking indicating the location of a test drill
in Morne Bossa. Photo: HGW/Ben Depp

Recently over a hundred people living in the a hamlet not far from the Morne Bossa deposit met to learn more about the mining industry. One after another, they asked questions and expressed their frustrations.

“The [Jean-Bertrand] Aristide, Préval and [Michel] Martelly governments are opening up the country to pillagers in the name of the untouchable neoliberal plan, without thinking of the devastating consequences,” said Francisco Almonord, a member of the Federation for the Development of Cadouche (Fédération pour le développement de Cadouche - Fedec), bitterly.

Without information, and apparently without local authorities willing to defend them, the smallholders of this community have trouble identifying their opposition. Mezadieu Toussaint put it this way: “Against whom should we fight? The Haitian government or VCS?”