Noranda, from Canada to Patagonia, a Life of Crime

Publication - 6 November, 2003
One of the world’s largest integrated mining and metals companies, the Canadian-founded Noranda, Inc. has left a trail of pollution across the Americas. Noranda has accumulated over US$1.2 million of fines for breaching environmental regulations in Canada alone and in 1998 its arsenic and lead emissions were the highest in the country.

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Executive summary: Dismal though Noranda’s environmental record is, it continues to seek approval for what is likely to be one of its most destructive projects ever, a massive aluminum plant in the pristine wilderness of Patagonia in Chile. The Alumysa Project will involve the construction of six largescale hydroelectric dams to power an aluminum smelter that will emit 1.5 million tonnes of gaseous and solid waste each year. Noranda’s proposed location for Alumysa is the densely forested region of Aysén, home to the endangered Huemul (South Andean deer) and the Colo Colo Pampas cat, among other threatened and rare species. Aysén is a landscape of glaciers, unpolluted lakes and rivers and a wealth of ancient forest. Its ecosystem supports a human population dependent largely on eco-tourism, fishing and farming for its livelihood. Wishing to preserve and expand their potential to live sustainably, its inhabitants have declared Aysén a Reserve of Life. Noranda argues that Alumysa will bring jobs and economic prosperity to Aysén. In reality only ten percent of jobs created will be offered to local people. Of the US$290 million per year the project is expected to generate, less than five percent will remain in the local economy, while Chile’s Treasury will receive less than 18 percent. Large-scale dams are well known to harm both the ecosystems and the communities where they are located. River habitats supporting a diversity of fish and bird life give way to relatively uniform reservoirs; migration routes are cut off, and species become isolated up– and downstream of the dam. Where biodiversity is particularly rich, local extinction rates may reach as high as 90 percent. Globally, 40 to 80 million people have been displaced from their homes by large-scale dams. Research shows that for the majority, economic well-being and health decline after relocation. Those who live downstream from dams may find their livelihoods seriously damaged by the alteration of the natural floodplain and fisheries. Given Noranda’s track record, it is hard to imagine the Alumysa project’s impact on Aysén’s environment will be less than disastrous. This report catalogues a number of case studies related to companies which are, or have been, owned or part-owned by Noranda, including: • Magnola plant, Quebec, prompted angry community protests after becoming Canada’s single largest emitter of highly carcinogenic dioxin; • MacMillan Bloedel’s highly destructive clearcut logging practices in Canada’s temperate rainforest led to a war in the woods between the company, environmental groups and First Nation communities; • Strike-breaking companies were employed to disrupt labour strikes at Noranda’s Murdochville Copper Mine and Falconbridge subsidiary; • A twelve-year lawsuit with the US government over clean-up costs of Noranda’s Blackbird mine resulted in a US$60 million settlement; • An attempt to mine for gold on the edge of Yellowstone National Park was blocked only after intervention from the former US President Clinton; • Large numbers of local inhabitants were resettled to make way for the Antamina Copper and Zinc mine in Peru; protests mounted as local communities experienced environmental damage resulting from the mine; • Emissions of sulphur dioxides have reached emergency levels and communities suffer respiratory problems at Noranda’s Altonorte smelter in northern Chile. More than once, Noranda has managed to persuade the Canadian governments to pick up the tab for the environmental mess it has created, by paying for new emissions control technology or by cleaning up polluted sites. However, as the financial costs of operating in North America have mounted, Noranda has shifted its focus towards countries where labour is cheaper and environmental regulations are more lenient. Even these lower standards are too much for Noranda. In a 2002 Prospectus, Noranda indicated that it may not be able to comply with Chilean environmental regulations at its global operations, and that to do so may “materially adversely affect our business, financial condition, liquidity and results of operations.” Over time, Chile has become the heart of Noranda’s investment strategy. Chile’s eagerness for economic growth has led it to accept projects such as Alumysa, which would not be permitted elsewhere because of social and environmental concerns. However, in August 2003, following a visit to the Aysén region, the Chilean President Ricardo Lagos Escobar suggested that another site should be found for the project. A few days later, Noranda decided to “temporarily suspend” its official application for the Alumysa project, but would continue to work to overcome these new “obstacles.” While the future of the Alumysa project on the face of it looks uncertain, the reality behind the scenes is very different. Noranda continues to pursue its goal of building the Alumysa project in Patagonia by quietly working with the few allies it has within the Chilean government, and is a long way from dropping this project. Additionally the Chilean government has not yet established any formal protection against this kind of industrial development in Patagonia. Until these two issues are addressed, the future of this Patagonian ancient forest itself remains uncertain. Rich in forests, properties of local landholders would be flooded if the Alumysa Project is given approval. The ‘Reserve of Life’, proposed by the communities of Aysén, would provide essential protection for the Huemel, which is under threat of extinction.

Num. pages: 34