The conflict between traditional miners in Marmato and Canadian transnational mining companies: Another ISDS dispute over natural resources in Colombia

This paper briefly analyzes the conflict in the municipality of Marmato (Caldas) between traditional small-scale mining and Canadian transnational mining firms. The Marmato case is one of the most controversial mining conflicts in recent decades in Colombia and is related to large-scale mining projects promoted by several Canadian companies in the municipality. As has occurred in other cases involving disputes over natural resources, the actors that have participated in said conflict have brought various legal actions both internally and internationally, which have resulted in the activation of ISDS.

Accordingly, this article will explain the transformation from the traditional mining regime to the transnational mining regime in Marmato and the role of the different actors involved in the disputes over the territory, mines, and law, which have in turn resulted in the current ISDS lawsuit filed by Canadian investors against Colombia.

Marmato has historically been known as a “mining” town, where mining activities have been carried out since pre-colonial times when various Indigenous peoples such as the Quinchías, Supías, and Cartamas lived there.[1] At the beginning of the 19th century, when the Republic of Colombia had just been created, the new government handed over the Marmato gold mines to British investors, which had previously, during colonial times, been exploited by the Spanish crown in order to finance the wars of independence.[2] British companies controlled the Marmato mines for almost one and a half centuries, causing Colombia to acquire huge debts that it was only able to pay off in the first half of the 20th century.

British investors remained until the mid-20th century, when the IMF intervened in world gold sales to control the economy and monetary policy after World War II. Later, during the second half of the 20th century and under the new developmentalist discourse that was promoted in the post-war period, a state model of control and exploitation of natural resources was adopted. It lasted approximately 40 years, until the end of the 1980s, when neoliberalism began to take centre stage.[3]

Marmato’s mining tradition has given rise to a kind of “coexistence” regime around mining, in which different types of mining and different actors have managed to coexist. These include traditional miners who carry out small-scale mining and others actors who carry out medium-scale mining. Likewise, Marmato is characterized by its multicultural composition, being a municipality where Indigenous peoples, Afro-descendant communities, peasants, traditional miners, and even foreign investors live or have lived, some of whom have respected the traditional agreements that have arisen historically between the different actors on how to develop mining activities. Such is the case of the agreement on the division of the Marmato hill between the upper part and lower part, which, in turn, was recognized by Law 66 of 1946 and by Decree 2223 of 1954. According to this agreement, the upper area of the mountain was intended for small-scale mining, and the lower area of the mountain was intended for medium-scale mining.[4]

However, since the end of the 1990s, with the emergence of neoliberalist economic policies and under a new mining regime especially favourable to foreign investors—created under the auspices of international organizations such as the World Bank[5] and other transnational actors such as the Canadian Agency for International Development[6]—a series of Canadian companies began to arrive in Marmato. Their main interest was to promote large-scale mining projects that challenged traditional small-scale mining and the “coexistence” regime historically established in the municipality. The first company to arrive in Marmato was Gran Colombia Resource Inc. between 1995 and 1997. This company was succeeded by Conquistador Mines Ltd. (Corona Goldfields) between 1997 and 2000; Colombia Goldfields Ltd. (Empresa Minera de Caldas) between 2005 and 2009; Medoro Resources Ltd. in 2010; and Gran Colombia Gold, now CGM Mining, which arrived in the municipality in 2012.[7] Currently, the Canadian company Aris Gold Corporation, formerly Caldas Gold company, is operating in the municipality.

The arrival of Canadian companies in the municipality and the transformation of the traditional mining culture due to the implementation of large-scale mining projects caused a series of social and economic conflicts that led to different actions carried out by both the company and state authorities, as well as by the local communities themselves. On the one hand, the company and the local authorities promoted various actions aimed at guaranteeing the realization of the company’s project, which ranged from actions framed by corporate social responsibility programs to more repressive actions, such as the closure of mines and the destruction and confiscation of work tools from traditional miners and of the gold-bearing material extracted by them.[8]

On the other hand, traditional miners carried out a series of actions, including social mobilization actions and legal actions, aimed at protecting their rights and defending traditional small-scale mining. One of the legal actions filed by the local communities was the well-known “writ of protection” (acción de tutela). Through this, the plaintiffs asked for the protection of their fundamental rights to due process, to the freedom to exercise their trade as traditional miners, to work, to a minimum subsistence income, to participation, and to not be displaced from their territory. In response to this legal action, the Colombian Constitutional Court issued judgment SU-133/2017 in favour of the Marmato communities. The Court ordered the protection of the traditional miners and inhabitants of Marmato’s right to participation and Indigenous and Afro-descendant communities’ right to prior consultation.

The Court argued that, with the large-scale mining project promoted by Canadian investors, local communities’ relationship with their territory could be radically altered. As demonstrated in the proceedings before the Court, this relationship is closely linked to the performance of traditional small-scale mining. In this sense, the Court ordered firstly the identification of the impacts derived from the mining titles granted to the companies, and secondly, the adoption of measures addressed to protecting the right of traditional miners to carry out small-scale mining activities in the upper part of the hill, to guarantee their subsistence through the so-called “autonomous small-scale mining enterprises.”[9]

In this regard, it is important to note that before Judgment SU-133/2017 was issued, in response to the writ of protection (acción de tutela) filed by the communities, the Court had already issued Judgment T-438/2015[10] 2 years earlier. In this judgment, the constitutional tribunal had also ruled in favour of the local communities of Marmato. However, the Canadian company filed an action for annulment against that ruling, arguing some procedural errors. The action for annulment was resolved by decision A583/2015,[11] and the procedural errors indicated by the company were corrected in the second judgment: SU-133/2017. However, through the National Mining Agency and the company Minerales Andinos de Occidente S.A., the company filed a second action for annulment against the second judgment issued in 2017 by the Court. This second action for annulment was supported legally by the National Agency for Legal Defense of the State, which is the competent authority to defend the Colombian state in international litigations.

The Constitutional Court resolved this action for annulment through the decision A511/2017,[12] in which the Court reprimanded the company for their inappropriate use of the action for annulment. The Court explained that said action constitutes an exceptional procedural remedy, and therefore it cannot be used indefinitely or be resorted to again and again to challenge the decisions of the constitutional tribunal nor to question the merits of its decisions.

Subsequently, and similarly to what has occurred in other cases where conflicts have arisen due to disputes over natural resources between foreign investors and local communities—and in which the Colombian Constitutional Court has previously ruled in favour of the latter—the Canadian company Gran Colombia Gold filed a lawsuit against the Colombian state using the ISDS mechanism. Since 2016, when the Swiss company Glencore filed the first lawsuit against Colombia, the state has had to face 17 cases, 10 of which deal with disputes over natural resources. Gran Colombia Gold, today known as GCM Mining, sued Colombia for USD 700 million, invoking the free trade agreement between Colombia and Canada, and specifically, the minimum standard of treatment (Article 805), indirect expropriation (Article 811), and national treatment (Article 803).

The company argued that the Colombian state did not provide it with fair and equitable treatment and did not guarantee its right to full security and protection. According to the company, the state violated the standards established in the treaty because it allegedly did not respond to some of the legal actions filed by the company at the domestic level, did not protect the company in the context of strikes and social mobilizations carried out by local communities, and did not comply with some judicial and administrative orders issued by the local authorities, such as those that referred to the eviction of miners who were considered “illegal” from the mines. Likewise, the company argued that the inaction of the Colombian state also constituted a form of indirect expropriation of its investments in the mines, which were, in turn, protected by the mining titles that had been previously granted.

Concluding reflections

The Marmato case illustrates, on the one hand, the tensions between different legal orders such as constitutional law, international human rights law, and international investment law that operate both globally and locally; and on the other hand, how such tensions can influence the behaviour of the different actors involved in the conflict described and define the ways of life of local communities and their own views of development.[13]

The conflict in Marmato demonstrates how the institutional and legal mechanisms in the mining sector that are shaped at the transnational level operate at the domestic level within the framework of the Colombian constitutional state, and how they favour foreign investors (mainly from countries in the Global North) so they can control and take advantage of natural resources. Investors can count not only on the endorsement of state authorities, but on a whole transnational system aimed at promoting and protecting foreign investment, in which the participation of some actors at the global level—such as international financial organizations and the so-called development agencies—is key.

The legal and institutional apparatus that has been established in the mining sector in Colombia is strongly linked to transnational dynamics that are regulated by international investment law, and in particular, by a regime that promotes and protects foreign investment and has granted special conditions of legal certainty and predictability to investors.[14] It allows these actors to resort directly to ISDS when they consider that their rights or their legitimate expectations have been violated.

This system, which emerged in the context of disputes over natural resources that arose in the decolonization period between new states and foreign investors who were settled in the former European colonies, led to the development of a “transnational law” that is favourable to foreign investors. The notion of transnational law came about following the introduction of the Charter of Economic Rights and Duties of States (Resolution 3281) in 1974, which gave preference to domestic law over international law. Internationalist lawyers who served as arbitrators in resource dispute cases that arose after this promoted a doctrine that such provisions were not binding on capital-exporting countries. Ultimately, it led to the sovereignty of new states being ignored and the exaltation of the role of mechanisms such as conflict resolution arbitrations.[15]

The way in which this system currently operates has caused the so-called “regulatory freezing” of states’ capacity to regulate autonomously, particularly in the Global South, as these countries are the main importers of capital in the world economic system. The self-restraint of state entities to regulate in favour of public interest occurs under the threat of multimillion-dollar sanctions, within the framework of a system where the investor is the only actor who has the possibility to sue for possible unfulfilled obligations.[16]

In the case of Marmato, the foreign investment promotion and protection system that started being promoted at the end of the 1990s—and which had a particular influence on the mining sector—facilitated the transformation of the traditional small-scale mining regime into a transnational large-scale mining regime, which was particularly favourable to foreign investors. This has led to the modification of the territories and ways of life of local communities based on a hegemonic vision of development that is linked to mining projects promoted by mining corporations. This unequivocal vision of development implies an “emptying of the territory” and a system of “mining without people,” in which the profits for the state are derived mainly from the income received from royalties, which in the case of gold in Colombia, are equivalent to only 4%.[17]

ISDS continues to operate as an unequal mechanism protected by international investment law,[18] which powerful transnational actors rely on. These actors also end up influencing the internal policies of states and the actions of state authorities in accordance with the demands of global capital. In the face of the threat of paying multimillion-dollar sanctions that could affect their financial stability, states end up yielding to the pressure of foreign investors, who are the most favoured actors in this system.

Finally, it is important to highlight how the dynamics that are interwoven in these powerful transnational mechanisms also allow the reinforcement of binary categories such as savage/civilized, backward/modern, underdeveloped/developed, which have been very useful in colonial and postcolonial contexts to impose certain models of civilization.[19] These binary categories are reflected in mining conflicts such as the one in the municipality of Marmato, where artisanal or traditional small-scale mining is understood as “backward” while transnational large-scale mining is perceived as “modern” mining. This binary classification, which is protected by the transnational legal order in the mining sector and unfolds both locally and globally, does not take into account aspects such as the scale of mining, the amount of water resources required by large-scale extractive projects, the high levels of unemployment caused by this type of mining, the displacement of entire communities, the radical alteration of the ways of life of local communities and of their relationships with the territory and its main subsistence sources, among other factors.

In the case of Marmato, the legal and institutional apparatus that allowed for the transformation of traditional small-scale mining to transnational large-scale mining can reinforce these types of binary categories. On the other hand, they can blur public interest with the private interests of transnational economic actors in such a way that the latter end up defining both the substantial rules of democratic systems, as well as the way in which local communities are allowed to “develop” themselves and to identify and interact with gold, the mountains, and their territory within a system of “global coloniality.”[20]

Author

Ximena Sierra-Camargo is a Catalyst Fellow and Lecturer on Transnational Mining at Osgoode Hall Law School, York University.

Notes

[1] Gärtner, Á. (2005). Los místeres de las minas. Crónica de la colonia europea más grande de Colombia en el siglo XIX, surgida alrededor de las minas de Marmato, Supía y Riosucio. Editorial Universidad de Caldas; González Escobar, L. F. (2002). Ocupación, poblamiento y territorialidades en la Vega de Supía, 1810 – 1950. Ministerio de Cultura.

[2] Palacios, M., & Safford, F. (2012). Historia de Colombia: País fragmentado, ociedad dividida. Universidad de Los Andes.

[3] Sierra-Camargo, X. (2018). Derecho, desarrollo y extractivismo. La disputa ontex oro en Colombia en un ontext de colonialidad global [Doctoral Dissertation]. Universidad del Rosario.

[4] Lopera, G. (2015). La parte alta del cerro es para los pequeños mineros. Sobre la vigencia del régimen minero especial para Marmato y su influencia en la construcción de territorialidad”. Revista Derecho del Estado. Universidad Externado de Colombia. Nº 35.

[5] Banco Mundial y Banco Internacional de Reconstrucción y Fomento. (1997). Documento técnico del Banco Mundial Nº 345S: Estrategia minera para América Latina y el Caribe. División de Industria y Minería, Departamento de Industria y Energía.

[6] North-South Institute. (2002). Informe: Appendix 4: Canada’s role in mining development in Colombia. In Through Indigenous eyes: Toward appropriate decision-making processes regarding mining on or near ancestral lands.

[7] Corte Constitucional Colombiana, sentencia SU-133/2017. Magistrado Ponente: Luis Ernersto Vargas Silva.

[8] Corte Constitucional Colombiana, sentencia SU-133 de 2017. Magistrado Ponente: Luis Ernersto Vargas Silva.

[9] Corte Constitucional Colombiana, sentencia SU-133/2017. Magistrado Ponente: Luis Ernersto Vargas Silva.

[10] Corte Constitucional Colombiana, sentencia T-438/2015. Magistrado Ponente: Jorge Ignacio Pretelt Chaljub.

[11] Corte Constitucional Colombiana, A583/2015. Magistrado Ponente: Luis Ernesto Vargas Silva.

[12] Corte Constitucional Colombiana, A511/2017. Magistrado Ponente: Carlos Bernal Pulido.

[13] Sierra-Camargo, supra note 3.

[14] Velásquez Ruiz, M. A. (2016). The colliding vernaculars of foreign investment protection and transnational justice in Colombia: A challenge for the law in a global context [Doctoral dissertation]. York University, Osgoode Hall Law School.

[15] Anghie, A. (2004). Imperialism, sovereignty and the making of international law. Cambridge University Press.

[16] Sornarajah, M. (2010). The international law on foreign investment. Cambridge University Press.

[17] Fierro Morales, J. (2012). Políticas mineras en Colombia. Instituto Latinoamericano para una sociedad y un derecho alternativos.

[18] Van Harten, G. (2013). Sovereign choices and sovereign constraints: Judicial restraint in investment treaty arbitration. Oxford University Press.

[19] Escobar, A. (1998). La invención del tercer mundo. Construcción y deconstrucción del desarrollo. Grupo Editorial Norma.

[20] Grosfoguel, R. (2008). Developmentalism, modernity and dependency theory in Latin America. In M. Moraña, E. Dussel, & C. A. Jauregui (Eds.), Coloniality at large: Latin America and the Postcolonial Debate. Duke University Press.