‘Pascua-lama is a third country in the Andes cordillera’

Barrick Gold’s Pascua-Lama mine project will have its own hospital, complete with operating room and X-ray facilities, an indoor sports centre, and housing for up to 10,000 people.

It has its own customs and immigration office at one of the highest border crossings in the world, at an elevation of 3,700 metres.

And exclusive charter flights leave La Serena, Chile, and the country’s capital, Santiago, carrying engineers, mine workers and the occasional journalist, just barely clearing the tops of the jagged Andes mountains before landing on the PascuaLama airstrip.

It even has its own soccer team — probably a successful one, given the altitude at which the players train.

It is governed by a special tax treaty, which establishes how it will pay taxes and royalties to Chile and Argentina, and by the rules set down in the Bi-National Integrated Mining Treaty signed between the two countries in 1997.

Among other things, the mining treaty gives a company exclusive rights to use the water and other natural resources found within the territory, and suspends both countries’ constitutional prohibitions on economic activity or foreign property ownership near the border.

The Specific Pascua-Lama Protocol, an addendum to the treaty, cedes the 438-square- kilometre territory to Barrick Gold and establishes where exactly the mine pit and processing plant will be, among other details.

For Barrick Gold, the unique legal framework of Pascua-Lama — the first binational mine in the world — is all about practicalities. It has its own immigration office so that workers, once they have entered the territory won’t have to show their passports every time they cross the Chile-Argentina border to travel between the mine pit and the processing plant, for example.

And it ensures that Barrick won’t pay taxes twice on the same goods and services.

Barrick’s intention, said Rod Jiménez, the company’s vice-president of corporate affairs in South America, is to develop mining all along the border.

“The entire industry is watching this very closely,” Jiménez said. “Others are looking at how they can do it, too.”

But while Barrick and other Canadian mining companies see unfettered opportunity i n the peaks along the border, critics see Pascua-Lama as a dangerous precedent, in which a mining concession for all intents and purposes acts as an independent country, wedged between two others — and, they fear, controlled by none.

It’s an image reinforced by a photo taken at the G20 Summit in Toronto in 2010 — and widely circulated among opponents of the mine — which shows Barrick founder Peter Munk sitting with Argentinian President Cristina Fernández de Kirchner, in front of three flags: Argentina’s blue and white, the Canadian maple leaf, and the gold and white Barrick flag.

“Pascua-Lama is a third country in the Andes cordillera — it has its own borders, its own police, its own standards, even its own flag,” said Enrique Viale, the president of the Argentine Association of Environmental Lawyers, based in Buenos Aires.

“The (bi-national) mining treaty gives corporations so much power and unlimited use of natural resources, as if both sides agreed they could use whatever they need without answering to anyone. It’s a dangerous pre- cedent.”

Argentina may still be fighting for the Malvinas (Falkland Islands), opponents said, but they are giving away the cordillera.

Lucio Cuenca, the director of the non-governmental organization Latin American Observatory of Environmental Conflicts ( OLCA) in Santiago, said there are already four other special protocols for mine projects taking advantage of the bi-national treaty: Pachón (Xstrata Copper), Las Flechas (Tenke Mining) Vicuña (Tenke Mining), Amos Andrés (Rio Tinto) and Cerro Cuadrado (Canadian Gold Hunter Corp).

He said the bi-national mine “archetype” is also spreading to other countries, with mines being developed on the border of Ecuador and Peru, and on the border of Brazil and Bolivia.

“We’re not just worried about one company or one mine, we’re fighting an archetype and model for how these mega-mineswillbe—without limits,” Cuenca said. “Whatever mining demands, it gets. Everything else is secondary.”

In the case of Pascua-Lama, Cuenca continued, Chile and Argentina have left it up to Barrick to regulate itself.

Officials at Barrick Gold said that’s simply not true. Government inspectors can and do visit regularly, said Rodolpho Westhoff, the environmental manager at Pascua-Lama.

Indeed, at the end of October, the Chilean government suspended all pre-stripping at the mine — blasting off the very tops of mountains that don’t contain valuable ore — because of concerns that workers were breathing in too much noxious dust, in violation of Chilean health and safety laws. That order has not been lifted.

And on both sides of the border, Barrick spokespeople said they have involved community members in monitoring water quality themselves, if they don’t trust that the government or Barrick is doing a good job.

“We wanted to bring peace to these questions, so people can see for themselves, and act as police themselves,” said Miguel Martin, Barrick’s director of communications in San Juan.

But the mine is not yet open, and the reality is that at such altitudes it is difficult to reach for inspectors and for members of the public. Those who would make the effort need Barrick’s permission to be taken on a guided tour.

And given the extreme conditions at the mine, even government inspectors can be turned away because of bad weather or road conditions, because they don’t pass Barrick’s health tests given at the base camp.

Besides, Cuenca said, the Chilean and Argentinian governments have been fully supportive of the PascuaLama project, and he fears they will not be going out of their way to find problems.

If and when the mine does open, the ultimate test of whether Pascua-Lama has become a state onto itself will be whether it abides by the laws of Chile or Argentina, both or neither.

There is evidence that in the past, before the 2010 Glacier Protection Law came into force in Argentina — which bars all economic activity on or near the glaciers — Barrick was directly responsible for damage to three glaciers on the site, which have shrunk by 50 to 70 per cent.

In response to allegations it is violating the glacier law, Barrick said its environmental impact assessment reports have been approved by the Chilean and Argentinian governments, and that it is not touching or otherwise affecting the glaciers.