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HudBay to face human rights abuse allegations in Ontario

Stockhouse Editorial
0 Comments| February 25, 2013

Lawyers acting for Guatemalan residents who have filed a flurry of lawsuits against HudBay Minerals Inc. (TSX: T.HBM, Stock Forum) alleging abuses of human rights, will have their allegations heard in Canadian courts.

The lawsuits follow shooting incidents (one fatal) that occurred in the vicinity of the Fenix nickel mining project in eastern Guatemala in 2009 and the alleged rape, two years earlier, of 11 Mayan women, which prompted allegations of negligence against HudBay in relation to its mine security operations.

“This is a stunning victory for human rights, and paves the way for future lawsuits against Canadian mining companies,’’ said Murray Klipperstein, a lawyer acting for a Guatemalan villagers, who have filed three lawsuits in the Ontario Superior Court.

HudBay was also claiming victory Monday saying the decision to have the cases heard in the Ontario Superior Court was based on its desire to avoid the complications of trying the cases in Guatemala, particularly in terms of travel and time.

“Our decision does not create precedent or change the law in any way,’’ said HudBay spokesman Dan Weinerman in an email to Stockhouse.

“Based on the cross-examinations referred to by Klipperstein, Hudbay is increasingly confident the cases are without merit and will be favourably resolved on the merits in Ontario.

HudBay’s alleged role in the case stems from its acquisition in August 2008 of Guatemalan mining company Compania Guatemalteca de Niquel (CGN) and its Fenix mine property near El Estor Guatemala, which it acquired via an amalgamation with Skye Resources Inc.

Contested land

The property consists of a dormant mine, a processing plant and exploration concessions covering almost 250 square kilometers.

Before HudBay sold the property to the Russian Solway Group in September, 2011, Fenix was indirectly owned by HudBay Minerals through HMI Nickel, which in turn owned 88.2% of the shares of Guatemalan company Compania Guatemalteca de Niquel S.A. (CGN)

The lawsuits have been filed by members of the indigenous Mayan Q’eqchi’ population from El Estor where farming communities are located on a small portion of the Fenix property.

They include Adolfo Ich Chaman, a respected Mayan Q’Eqchi’ community leader, who was shot dead near his home in El Estor, in September 2009, allegedly by private security forces employed by CGN.

A statement of claim was filed by his widow Angelica Choc in the Ontario Superior Court of Justice in September, 2010. In it, she alleges that the shooting was caused by the negligent management of HudBay Minerals, both in Canada and Guatemala.

The suit alleges that HudBay negligently authorized the deployment of heavily-armed security personnel into the Mayan Q’Eqchi’ communities in September 27, 2009, and negligently authorized the excessive use of force by its security personnel in response to local communities that were opposed to mining.

The suit goes on to allege that prior to Ich’s murder, HudBay’s managers and executives were briefed about an ongoing land dispute, including rising tensions between the company and communities located on contested land.

According to her statement of claim, Angelica Choc is seeking over $11 million in damages.

A second lawsuit was filed on September 26, 2011 in the Ontario Court of Justice by lawyers acting for German Chub Choc, a resident of El Estor, who was allegedly shot by Mynor Ronaldo Padilla, the head of Security for the Fenix project on September, 27, 2009.

Chub was allegedly shot while he was watching a soccer game near the mine site.

He survived the attack, but is now partially paralyzed and is seeking $12 million in damages.

Security Background

Court documents state that from January 7, 2007 to September 28, 2009, under authorization from Sky Resources and later HudBay Minerals, CGN retained a third party company called Integracion Total S.A. to provide further security at that Fenix project.

CGN retained Integracion Total, solely through an informal oral agreement, court filings say.

The Choc lawsuit alleges that HudBay knew that Guatemalan law requires private security providers to be specifically authorized and licensed prior to providing security services.

As a result, it was aware that neither CGN nor Integracion Total had the required authorization or license to provide private security services in Guatemala, and therefore knew that the Fenix security personnel were operating at the Fenix project illegally.

Mynor Ronaldo Padilla, the Fenix project’s head of security, did not have the necessary license to lawfully acquire, possess or carry a firearm as required by Guatemalan law, court documents say.

Choc alleges that HudBay knew that Fenix security personnel had previously used unreasonable violence against local Mayan communities that were opposed to mining. It was also aware that there was a very high risk that is security personnel would commit unreasonable violence in the future, the suit alleges.

The third lawsuit was filed on March 28, 2011 by lawyers acting for 11 Mayan women, who were allegedly gang-raped by police, military and mine security personnel.

It alleges that at in January 2007 at the request of HudBay’s predecessor Sky Resources, hundreds of mine security personnel, police and military forcibly expelled members of a remote Mayan community from contested land near the Fenix project.

During these armed evictions, the women were allegedly gang-raped by police, military and mine security personnel.

The 11 plaintiffs are indigenous Mayan women who reside in a mountain community known as Lote Ocho, located near El Estor, where they depend upon subsistence farming for their livelihood.

Each woman is seeking $5 million in damages for the alleged negligence of HudBay’s corporate predecessor Skye Resources.

In a statement on its website, HudBay refers to the three lawsuits and the allegations contained in them.

It also said CGN has persistent issues with illegal land occupations that began in 2006, two years before HudBay acquired the project. “When the illegal invaders refused to vacate the property and to engage in discussions with CGN, CGN sought remedy through Guatemala’s legal system,” the company said.

“Based on extensive internal investigations and eye witness reports, HudBay believes that the allegations in these matters are without merit and it is vigorously defending itself against them.’’

Trading at $9.67 on Monday, HudBay has a market cap of $1.6 billion, based on 172 million shares outstanding. The 52-week range is $12.43 and $7.36.


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