SEPTEMBER 1996 · VOLUME 17 · NUMBER 9
T H E F R O N T
SEPTEMBER 1996 · VOLUME 17 · NUMBER 9
T H E F R O N T
THE RICHEST 358 PEOPLE in the world -- the global billionaire club -- possess assets which exceed the combined income of countries accounting for 45 percent of the world's population.
That is the most startling finding in the United Nations Development Program's (UNDP's) "Human Development Report 1996," which concludes that income and wealth inequality is skyrocketing worldwide.
While almost all industrialized countries have experienced at least slow growth over the last decade and 15 countries, mostly in Asia, have registered spectacularly high growth rates in the last 10 years, 89 developing countries are poorer today than they were a decade ago, according to the report. In 70 developing countries, today's income levels are less than those reached in the 1960s or 1970s.
"The advances [in the high-growth Asian countries] have often been at rates exceeding anything seen since the start of the industrial revolution some two centuries ago," the report says. "The declines have also been unprecedented, far exceeding in duration, and sometimes in depth, the declines of the Great Depression of the 1930s in the industrial countries."
The result of the disparity in growth levels is that income is concentrating in the hands of the global rich. The richest 20 percent of the world's population saw their share of global income rise from 70 percent to 85 percent in the past 30 years. The share of the poorest 20 percent has dropped from 2.3 percent to 1.4 percent.
"The imbalances in economic growth over the past 15 years are clear enough. But if allowed to continue well into the next century, they will produce a world gargantuan in its excesses and grotesque in its human and economic inequalities," the report concludes.
Domestic inequalities are staggering as well, the report finds. Among the rich countries, the report finds high inequalities in Australia and the United Kingdom -- where the richest 20 percent earn 10 times more than the poorest 20 percent -- and in the United States and Switzerland -- where the richest earn nine times more. Among poor countries, the disparities are greatest in Latin America. In Guatemala and Panama, the richest 20 percent earn 30 times more than the poorest 20 percent; in Brazil, the richest earn 32 times more. Income inequality has also increased dramatically in recent years in Eastern Europe and the former Soviet Union.
The report shows that internal inequality is increasing in those countries -- including Brazil, Chile, Guatemala, the United Kingdom and the United States -- which already exhibit the greatest concentration of wealth.
A central theme of the report is that, contrary to longstanding economic dogma, income and wealth inequality actually harms growth. "The new insight is that an equitable distribution of public and private resources can enhance the prospects for further growth," the report states.
The report does not romanticize growth, however. It criticizes policymakers "mesmerized by the quantity of growth," and warns of the danger of jobless growth, ruthless growth (where new wealth is concentrated in the hands of the rich), voiceless growth (growth without democracy), rootless growth (causing people's cultural identity to wither) and futureless growth (accomplished at the expense of natural resource depletion).
The overarching purpose of the UNDP's annual human development report is to a promote a broader measure of human well-being than narrow economic standards, and to encourage policymakers to assess their performance by the broader standard.
The Human Development Index (HDI) is a composite figure based on life expectancy at birth, educational attainment and real income. The 1996 report ranks Canada atop the list, with Cyprus and Barbados first among developing countries. After Canada, the top countries in the HDI ranking are, in order, the United States, Japan, the Netherlands, Norway, Finland, France, Iceland, Sweden and Spain.
The report analyzes human development and growth in the last several decades to conclude that, while there is not an absolute link between the two, they mutually reinforce one another in a "virtuous circle."
"Short term advances in human development are possible -- but they will not be sustainable without further growth. Conversely, economic growth is not sustainable without human development," says Richard Jolly, chief author of the report and special adviser to the administrator of the UNDP.
But while concluding unequivocally that "healthy, well-educated people make an economy more productive," the report is just as firm in asserting that "the development of human capabilities is an end in itself."
-- Robert Weissman
BHP Strikes in
Dominica ...
ROSEAU, DOMINICA -- Following its reluctant settlement with landholders in Papua New Guinea over damage caused by its Ok Tedi copper mine, BHP is quietly planning another copper mine in another small developing country on the opposite side of the planet.
Until six months ago, few citizens of Dominica, a tropical island nation in the eastern Caribbean, had ever heard of BHP, Australia's largest mining company and one of the world's largest copper producers, or Ok Tedi. Now many Dominicans fear that BHP will replicate in their country the destruction of ecology and lifestyles it wrought in the Fly River watershed of Papua New Guinea.
Dominica is a mountainous island of volcanic origin, only 290 square miles in area. Its population of about 75,000 people comprises a deeply religious and agrarian society with cultural influences from West Africa, Amerindians and French and English colonizers.
"This mine is the greatest threat to Dominica since Columbus," says Atherton Martin, president of the Dominica Conservation Association. "We are just courting a major environmental disaster to even consider mining here."
More than two thirds of Dominica is covered by tropical forests, the largest and last remaining area of primary oceanic rainforest in the Caribbean, with plant diversity alone of more than 1,200 species. It is these ecological assets -- the forests, rivers, lakes, waterfalls and marine life -- that allow Dominica to promote itself as a premier ecotourism destination and postcards to proclaim the country "the nature island of the Caribbean ... unspoiled ... untouched ... natural!"
BHP has applied for exploration permits covering 10 percent of Dominica's land surface, an area of 75 square kilometers centered on protected rainforest. The permits would allow BHP to cut roads and drill in two important forest reserves if its application is approved. Dominicans believed their rainforests to be protected until a new Mines and Minerals Act was rushed through Parliament without public discussion earlier this year.
BHP assisted the government in devising a mining law by providing examples of mining laws in other countries in the region and preparing a draft exploratory license at the government's request, according to company spokesperson Steadman Ellis. Ellis says the company has been "open and straightforward" about the assistance provided to the government, providing copies of material submitted to the government to the DCA and others.
Phillip Pyle, BHP's exploration manager for the western hemisphere, defended BHP's operations in the Trinidad Guardian, saying that mining "has a bad reputation but it's only exposing materials which normally lie below the earth's surface. All of man's activities have their own impact, but we anticipate a mine would cause minimal surface disturbance."
"We feel the project doesn't mean we'd be spoiling the natural beauty of Dominica," he added. "When a mine is finished, soil and vegetation are restored."
With high rainfalls (up to 10 meters a year in the central highlands), steep terrain, highly erodible soils, seismic activity (at least four live volcanoes, with the last lava flow in 1985) and a hurricane every 15 years on average, Dominica presents substantial tailings and chemical disposal challenges.
A major accident at a large mine in tiny Dominica could be devastating. "Environmental disasters of the scale we see in Papua New Guinea and with the Omai cyanide spill in Guyana would wipe out Dominica," warns Martin. "The threat of BHP's proposed mine is much more direct and enormous than anything we have faced before."
A copper mine operated by a multinational company with an annual profit 15 times larger than Dominica's national economy would also drastically alter the development path of the entire country. The main economic sector in Dominica is agriculture, particularly bananas and coconut products, and nature-based tourism is a new and rapidly growing industry. The forest reserves are an integral part of the natural attractions for tourists, and 2,000 direct and indirect jobs in the tourism industry could be jeopardized if a copper mine in the forests compromised Dominica's "nature island" image.
In addition to encompassing some of Dominica's most diverse rainforests, BHP's proposed exploration area partly covers and is directly upstream of the Carib territory, the lands of the last surviving indigenous Amerindian culture in the Caribbean. Exploration and mining could degrade three of the country's major rivers with siltation and acid drainage, two of which border the Carib lands and are used by the 3,400 Caribs for drinking, washing, fishing and agriculture.
"It will be very bad for the Caribs if the forest is damaged; we rely on it for our waterflow and canoe building," Carib Chief Hilary Frederick says. "In the final analysis it means the Caribs will be diminished."
Ellis says BHPhas established a dialogue with the Caribs to incorporate their concerns and participation into the exploration process.
More generally, Ellis says, "it is premature to judge the company's intentions in Dominica." The company is only preparing to engage in an exploration process, not a development one. If BHPdiscovers a significant ore deposit in Dominica, he says, then it would be possible to weigh the potential benefits and risks, including environmental dangers and threats to the Caribs. "All stakeholders" would have a chance to express their informed views then, he says.
Moreover, he says, Ok Tedi has taught the company a lesson. At Ok Tedi, "we got some things wrong" and had to fix them after the fact. "We don't want to do it again," he says. As a result of Ok Tedi, "we think we will pay more attention [to environmental and indigenous rights issues] than most companies, not the reverse."
Many Dominicans -- led by the Dominica Conservation Association and the island's ecotourism industry -- are not convinced. They are pressuring their government and considering legal action to prevent the issue of exploration permits, and to ensure that mining by BHP or any other company does not occur. Along with the Australian Conservation Foundation and the Berkeley-based industry watchdog, Project Underground, they are appealing directly to the shareholders of BHP that if they must invest in Dominica, to invest in sustainable rather than destructive development.
The DCA's Martin will attend BHP's annual shareholder's meeting in Sydney in late September.
"Consider that what [BHP shareholders] are going to gain in Dominica is at the expense of an entire nation, an entire people, and one of the last remaining tropical environments in the world," says Martin. "If that is what shareholders want as a legacy, then go forward with the mining in Dominica, but over our dead bodies. I believe there is a bond that exists between the people of Dominica and our natural rivers, waterfalls, lakes, forests and soils, that cannot and will not be broken."
... and BHP
Strikes in Canada
TORONTO -- Think of it as Klondike II, only this time, it's diamonds.
A Canadian Environmental Assessment Review Panel gave the green light to North America's first diamond mine, projected to be the third-largest diamond find in the world, on June 21. Australian mining company BHP is scheduled to begin construction of the mine later this year in anticipation of commercial production in 1998.
The $17 billion find is located near Lac de Gras, 300 kilometers northeast of Yellowknife in Canada's Northwest Territories. It is expected to earn BHP $500 million per year, a figure comparable to the total current value of the Northwest Territories' mining and exploration industry.
In an area where unemployment hovers at 17 percent, the mine is expected to provide 650 permanent jobs over its 25-year life span, making it the largest private employer in the Territories.
The project has also spurred a flurry of spin-off mining projects as smaller companies stake dozens of claims nearby. Six future mines are already on the drawing board for the region over the next 10 to 20 years, including planned projects by British conglomerate RTZ and South African industry giant De Beers Consolidated Mines.
The region's mayors, local shopkeepers and the territorial government are among the mine's cheerleaders. Yellowknife Mayor David Lovell was "quite pleased" with the panel decision. "We need an industrial base to support the population in the Northwest Territories," he says. "And that's going to have to be [resource] extraction."
But while they generally support opening a diamond mine in the region, environmentalists, indigenous leaders and scientists are alarmed at the lack of scrutiny and the pace with which the approval process proceeded.
"The environmental review was not comprehensive, rigorous or fair," said the Ottawa-based Canadian Arctic Resources Committee in a letter to federal Environment Minister Sergio Marchi following the ruling. The group points to the absence of land claims settlements for Native groups, the lack of a rigorous technical review of the project, the limited scope of the panel and the need for effective monitoring of mining operations.
On July 23, the World Wildlife Fund (WWF) Canada filed for judicial review of the panel's procedures.
The proposed site lies in the migration path of the Bathurst caribou herd, the largest free-roaming herd in the Territories. This sub-arctic wilderness is also home to grizzly bears, wolves and other species.
BHP plans to drain -- or "dewater" -- five lakes, covering 890 hectares, in order to access the diamond-bearing rock, and it would dump 826 million tonnes of waste rock annually into a sixth lake.
BHP contends that the environmental effects of the mine are "predictable and mitigatable," according to Karen Azinger, manager of external affairs at BHP Diamonds, the BHP subsidiary that owns 51 percent of the project (Vancouver-based Dia Met Resources owns 29 percent, and the two people who discovered the site, Charles Fipke and Stewart Blusson, each own 10 percent). "Diamond mining is the most benign form of mining that there is," she says.
But scientists have complained that the company's environmental impact study was shoddy, and that the scope of the environmental assessment panel's review was inadequate.
David Schindler, an aquatic ecosystems expert at the University of Alberta, says BHP's environmental impact assessment is "superficial" and "totally inadequate [in assessing] the effects of the mine on the environment."
"Frankly, we don't have enough left in Canada to write off another region of lakes and fish," Schindler adds.
The federal government has also not reached a land agreement with Native Dene peoples who reside on land where the mining will take place. Without such agreements, Native groups are worried that they risk becoming an "embittered minority" as new residents move into the area, drawn by mining development. In addition, they are concerned that industrial development will not be balanced with conservation of the ecosystem, and that they will not receive any revenues from the mining activity.
"Our people are the ones who are going to be here a hundred years from now, having to cope with what gets left behind," says Dene Chief Felix Lockart.
The federal government's Department of Indian Affairs has rejected Native claims to any part of the 4,000-kilometer BHP site. Beaulieu says the Department has a conflicting mandate, since it oversees both aboriginal issues and Northern development.
The other major aboriginal group involved, the 3,000-member Dogrib nation, also supports the development of diamond mining in the region, but wants to sign a joint-venture agreement to help construct the mine site.
BHP is negotiating impact benefit agreements with preferential hiring, scholarships and training provisions for Natives with both the Dene and the Dogrib. But the key issue for Natives is enforcement of these agreements, since there were no such provisions in the Review Panel's decision.
"I don't have faith in their intentions," says Dene Chief Don Balsillie.
BHP's poor track record in dealing with indigenous people in Papua New Guinea concerns many Native leaders. The company dumps 80,000 tons of mine tailings daily into the Ok Tedi River, poisoning rivers used by tens of thousands of indigenous people.
One of the PNG indigenous leaders, Alex Maun, testified at the Canadian environmental hearings. "We can't drink the water" in the Ok Tedi area, he said. "The river is dead."
"Up until now, we have only heard about BHP's reputation as a good corporate citizen," said Kevin O'Reilly, a spokesperson for the Northern Environmental Coalition, after Maun's testimony. "We are utterly shocked. We must be more determined than ever to see this mine become the most stringently regulated in Canada."
-- Aaron Freeman