Monthly Archives: October 2017

Labor plans to force Australian mining companies to disclose taxes paid overseas

Labor says it will make large Australian oil, gas and mining companies disclose the taxes they are paying to governments in every country, including Australia. Photograph: Bloomberg via Getty Images

Exclusive: Mandatory reporting regime would apply to large Australian oil, gas and mining companies working overseas

Gareth Hutchens | The Guardian |30 October 2017

A Shorten Labor government would force Australian mining companies working overseas to disclose the taxes they are paying to foreign governments to extract their minerals.

The mandatory reporting regime would apply to large Australian oil, gas and mining companies, and be designed to ensure that communities in countries such as Papua New Guinea understand how many tax and royalty payments they are receiving and for which mining projects.

Labor says it wants Australia’s resource companies to be “good corporate citizens” and to maintain transparent accounting practices that combat corruption.

It says many of Australia’s neighbours, including Timor-Leste, Papua New Guinea, the Solomon Islands and Nauru, have multibillion-dollar resource projects that are operated by foreign multinationals but are home to some of the poorest people in the world.

Labor will announce on Tuesday an “extractive industries transparency plan” that will require large Australian companies to disclose the taxes they are paying to governments in every country, including Australia, and for every mining project.

Large companies shall be defined as a company that meets at least two of three criteria:

  • Total assets exceeding $50m
  • Annual turnover exceeding $100m
  • The average number of employees exceeds 250

A single or series of taxes and related payments within a financial year would have to be disclosed if the payments were worth at least $150,000.

Payments to be disclosed include: taxes on income, production or profits; royalties; dividends (except where the dividend is paid to a government as an ordinary shareholder); fees including licence fees, rental and entry fees; signature, discovery and production bonuses; production entitlements (such as profit resources) and payments for infrastructure improvements.

The scheme has been costed by the parliamentary budget office at $2.2m over four years. Between 80 and 100 companies would be affected. Subjected companies would be required to begin reporting payments to governments from 1 July 2020.

A multi-stakeholder committee would be established to help the government implement the reporting regime, including defining project-level reporting and establishing an online reporting mechanism to ensure public transparency.

Labor says the legislation would include equivalency provisions so companies captured by other jurisdictions due to cross listing on stock exchanges would only be required to produce one report. The scheme has been modelled on the extractive reporting regime in the UK.

Matt Thistlethwaite, the shadow assistant minister for Treasury, will announce the plan on Tuesday in a speech to the Australian Council for International Development’s national conference in Melbourne.

“Currently Australian companies do not meet world’s best practice for transparency and accountability,” he will say. “Labor is determined to change this.”

Mal Larsen, Oxfam Australia’s mining and extractives policy adviser, has welcomed the policy, saying he has been calling for something like this for a long time.

“This policy could help lift people out of poverty,” Larsen told Guardian Australia. “Australia would join the growing list of countries around the world that require large companies to reveal how much tax is being paid, in which country and for which mine.

“This sort of disclosure will allow the public to hold companies accountable for how much tax they pay and governments for how they spend it.

“Disclosure of tax payments is an emerging international standard. It is key to driving out corruption and building community faith that mining taxes are being spent on essential services like health and education.”

In May 2016 the Turnbull government announced Australia planned to join the Extractive Industries Transparency Initiative, an international standard for increased transparency and accountability in the oil, gas and mining sectors.

It will require Australia to disclose information on taxes and other payments made by companies to the Australian government as well as other information such as licences, contracts, production and exports.

Larsen says Labor’s policy goes further because it would require Australian companies to disclose the payments they are making to foreign governments, not just to Australia’s government.

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Panguna LOs still against BCL

Meredith Kuusa | PNG Loop | October 27, 2017

The chairman of the Special Mining Lease Osikaiyang Landowner Association has expressed annoyance by the recent Shareholder Release by Bougainville Copper Limited.

Phillip Miriori says BCL is profoundly misleading and shows complete disrespect for the facts, the SMLOLA and the views of many of its members who are standing up for their rights and say, “No to BCL Forever”.

He said the SMLOLA petition against the return of BCL now represents around 2,000 members and continues to increase.

“BCL’s ex Rio management has refused to meet with the Board of the SMLOLA or its chairman,” claims Miriori.

“That does not qualify as ‘respectful community engagement programs’.

“They have not stepped foot in Panguna in over 28 years yet they say, they continue to make progress on implementing our staged development plan for a new Panguna.”

Miriori gave a number of reasons why BCL was not welcome on Bougainville.

“It is just another clear example of the continuing colonial arrogance of BCL and the disrespectful treatment of landowners, with the constant attempt by BCL to mislead and misinform.

“They have not changed,” said Miriori.

Miriori recollected the following:

  • President Momis himself under ffiadavit has stood up for his people and said BCL caused the civil war that led to the death of around 20,000 of our fellow Bougainvilleans;
  • We were treated as irrelevant in the past and that is continuing, calling us an “impediment” they will simply go around – we, the SMLOLA, now own the minerals and have the ultimate say on who will redevelop Panguna;
  • BCL was the mining permit holder all those years ago, and it was under their operation that we were left with this horrific environmental damage which President Momis himself has suggested caused billions of dollars of destruction. To this day, BCL has not taken responsibility for or compensated us in any manner – not one kina.

On Monday, Bougainville Copper Limited announced the appointments of Mel Togolo and Peter Graham to BCL’s board of directors.

BCL chairman Robert Burns said the company was delighted that both gentlemen had agreed to join the board given the extensive experience and unique perspectives each would bring during an important period of development for the company.

“Mel and Peter are highly regarded in PNG and have intimate knowledge of the resources industry both here and abroad which they have gained through what can only be described as long and distinguished careers,” Burns said.

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Namatanai MP Schnaubelt queries Lihir Royalties

NBC News/PNG Today 

Namatanai MP Walter Schnaubelt has tasked the New Ireland Provincial Government to explain the whereabouts of his district’s share of mine royalties, as per an Agreement with the Lihir Gold Mine.

He says since the start of the mine’s operations in 2007, his District has not received its 20 per cent share of the funds.

Mr Schnaubelt told NBC Radio the New Ireland Government must furnish expenditure reports of the payments.

“The concern now is the 50% portion blong New Ireland Provincial Government which is responsible to dispatch 20% to Namatanai district and 20% to Kavieng district na 10 percent is retained by the provincial government blo administration purposes.

“Orait, the provincial government component paid to date is K264m and you know since 2007 i kam nao, Namatanai district and Kavieng district have missed out on their 20% share.”

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High corruption risks in several areas: Mining Report

Cedric Patjole | PNG Loop | October 26, 2017

A Transparency International PNG Country Report has revealed high corruption risks in several areas of the Mining Licences Process.

The report, which was launched today, has highlighted key areas that need to be addressed urgently to minimise the risk of corruption.

The report comes from TIPNG’s participation in a global research initiative called the Mining for Sustainable Development (M4SD) program.

TIPNG says the need to identify risks in the mining licence process is because the awards process is the start of the mining value chain and any effects of corruption there will be passed along, eventually impacting the country’s sustainable development.

TIPNG Chairman, Lawrence Stephens, said regulatory systems should be improved so that the wealth generated from the mining sector should be used for the welfare of Papua New Guinea.

“Through reports like this that we can start to make a difference, start to assist people whose job it is to try to make sure all the people of this country benefit,” he said.

The high risk areas highlighted in the report include cross-institutional capacity; human resources of regulatory agencies; coherence of feasibility studies and MOAs, lack of a national geospatial agency; consultation, representative bodies and associated business entities; lack of CSR reporting requirements; and risks concerning women, vulnerable persons and marginalised groups.

Present at the launch was Mineral Resources Authority Managing Director, Phillip Samar, who said some of the issues highlighted are not new to them but are ongoing.

However, he said the MRA will continue to have dialogue and work with TIPNG to address the issues raised.

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Vanuatu civil groups against seabed mining, challenge govt

The National aka The Loggers Times | October 26, 2017

CIVIL society groups in Vanuatu have called for a ban on seabed mining activities in its waters.

They held a consultation on experimental seabed mining at Port Vila last week.

The civil society groups included the Vanuatu Cultural Centre, National Council of Women, Malvatumauri National Council of Chiefs, Vanuatu Council of Churches, Vanuatu Association of Non-Governmental Organisations and Vanuatu National Council of Youth.

They passed a resolution last Thursday challenging the national government to impose a ban on seabed mining activities in Vanuatu waters.

The resolution was supported by the Media Association of Vanuatu, Vanuatu Environment Advocacy Network, Vanuatu Indigenous Land Defence Desk, Presbyterian Church of Vanuatu, Vanuatu Environmental Science Society, Vanuatu Provincial Tourism Council and Youth Challenge Vanuatu.

The resolution comes after revelation that over 145 seabed mining exploration licences were issued between 2009 and 2013 without proper procedural permission and consultation within the government of Vanuatu, let alone, the people.

A national consultation in 2014 later called for a wider consultation in Vanuatu, and non-renewal or new issue of seabed mining exploration licenses.

The coalition of CSOs through its resolution now challenges the Vanuatu government to impose a definite ban on all seabed mining activities in the country’s waters.

“We Ni-Vans, similar to other Melanesian and Pacific Islands nations have strong connection to our ocean. Rushing ahead with such an experimental project may destroy our ocean, which means destroying our home and our source of life,” Wendy Garai, vice-president of the Vanuatu National Council of Women, said.

Garai said it was important Vanuatu took a precautionary approach and impose a ban that will safeguard “our fishing industry, our local coastal communities who depend heavily on the ocean, our tourism sector and Vanuatu as a whole”.

Marie Joemermer of Youth Challenge Vanuatu said:

“There is so much talk about the potential economic benefits of seabed mining, but there is still a lot of unknown and uncertainties relating to science, economic and possible impacts, and we the young people of Vanuatu support this call for a ban as it has the potential to affect our future opportunities if we are not careful.”

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Mining waste dams threaten people and the environment: UN

UN Body Urges Mining Companies To Put Safety First

New UNEP report “Mine Tailings Storage: Safety Is No Accident” finds mining waste dams threaten people and the environment

Earthworks, MiningWatch, Amnesty, London Mining Network | 23 October 2017

An international coalition of non-governmental organizations welcomes the new Assessment Report Summary released last week in Geneva by the United Nations Environment Programme (UNEP), which urges States and the industry to end deadly and damaging mining waste spills by enforcing a “zero-failure objective.”

The joint UNEP-GRID Arendal assessment, “Mine Tailings Storage: Safety Is No Accident,” highlights over 40 mining waste failures over the last decade, including eight ‘significant’ spills since 2014 alone. These failures have killed some 341 people since 2008, damaged hundreds of kilometers of waterways, affected drinking water sources, and jeopardized the livelihoods of many communities.

The report was prompted, the authors write, by mining waste “disasters and rising global concerns about the safety, management and impacts of storing and managing large volumes of mine tailings.” They cite examples such as the Ajka-Kolontár operation in Hungary in 2010 (MAL Hungarian Aluminium), the Mount Polley disaster in Canada in 2014 (Imperial Metals), the Buena Vista Del Cobre spill in Mexico in 2014 (Grupo Mexico), the massive Samarco dam breach in Brazil in 2015 (Vale and BHP Billiton), and the very recent Tonglvshan Mine spill in China in 2017 (China Daye Ltd.).

UNEP and GRID-Arendal point to thousands of mining waste dams worldwide that pose a potential threat to people and the environment located downstream, noting that: “The increasing number and size of tailings dams around the globe magnifies the potential environmental, social and economic cost of catastrophic failure impact and the risks and costs of perpetual management. These risks present a challenge for this generation, and if not addressed now, a debt we will leave to future generations.” — UNEP-GRID Arendal Assessment Report Summary, October 2017

The summary report makes 18 recommendations, including two overarching ones:

  • “The approach to tailings storage facilities must place safety first by making environmental and human safety a priority in management actions and on-the-ground operations. Regulators, industry and communities should adopt a shared zero-failure objective to tailings storage facilities where ‘safety attributes should be evaluated separately from economic considerations, and cost should not be the determining factor’ (Mount Polley expert panel, 2015, p. 125)”
  • “Establish a UN Environment stakeholder forum to facilitate international strengthening of tailings dam regulation.”

Other recommendations include:

  • Transparency: “Establish an accessible public-interest, global database of mine sites, tailings storage facilities and research” and “Fund research into mine tailings storage failures and management of active, inactive and abandoned mine sites.”
  • Accountability: “Expand mining regulations to include independent monitoring and the enforcement of financial and criminal sanctions for non-compliance.”
  • Best Practices: “Avoid dam construction methods known to be high risk,” and “require detailed and ongoing evaluations of potential failure modes, residual risks and perpetual management costs of tailings storage facilities.”
  • Financial Securities: “Enforce mandatory financial securities for life of the mine;” “establish a global financial assurance system for mine-sites,” and “fund a global insurance pool.” Also, “ensure any project assessment or expansion publishes all externalized costs, with an independent life-of-mine sustainability cost-benefit analysis.”

The undersigned organizations support the UNEP recommendations and urge all UN member States and governments to implement them swiftly in collaboration with all concerned, including non-governmental organizations and affected communities.

The UNEP-GRID-Arendal summary report and recommendations are available here.

QUOTES

“Mine waste storage facilities are like ticking time bombs, putting communities and waterways in harm’s way in the event of catastrophic failure. Even after the Mount Polley and Samarco disasters, which should have served as urgent wake-up calls, governments and companies have done far too little to prevent future disasters. Mining trade associations have tried to create the impression for regulators and investors that mining waste containment failure has been addressed, when that is far from accurate. We welcome the independent assessment by UNEP and urge companies and governments to act on these recommendations.” Payal Sampat, Earthworks

“Catastrophic mining waste failures are on the rise worldwide and on all continents. These environmental disasters indiscriminately hit developed and developing countries alike, and clearly appear to be driven by financial factors, not technical ones. This timely and much needed UNEP assessment should act as wake-up call for all States involved in regulating the mining industry. Safety must come before costs.” Ugo Lapointe, MiningWatch Canada

“We believe the recommendations from this UNEP summary report pose a serious challenge to mining companies to improve the rigour of their management of tailings facilities. Last week, we quoted the report in a challenge to the BHP Board in their London AGM to explain how they would ensure their responsibility for rigorous waste management. Their lack of a clear answer demonstrates how far these companies still need to go.”  Richard Harkinson, London Mining Network

“The long-reaching human rights impacts of catastrophic dam failures must not be underestimated. Indigenous peoples and marginalized communities around the globe face enormous uphill struggles for justice and accountability in the wake of mining disasters. Companies must not be permitted to short-cut their human rights responsibilities for the sake of cost, nor governments abdicate their human rights obligations when approving and regulating tailings storage facilities. The UNEP assessment is a welcome acknowledgement of the importance of tailings storage safety in the protection of human rights. “ Tara Scurr, Amnesty International Canada  

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PNG envairaman grup bai kisim gavman igo long kot

Caroline Tiriman | Radio Australia | 23 October 2017

Wanpla laen em oli no laikim ol wok mining aninit long solwara long Bismark sea long Papua New Guinea itok bai oli kisim gavman igo long kot bihaenim ol wari long despla mine.

Odio: Peter Bosip Executive direkta blong centre for environmental law and community rights long PNG itoktok wantem Caroline Tiriman

Nautilus Minerals blong Canada i laik statim mining long ol solwara namel long East New Britain na New  Ireland province long 2019.

Sopos despla mine igo hed, em bai kamap olsem nambawan  mine em i kamap long wanpla kantri long wold, na planti pipal long PNG iet na ol narapla kantri i wari tru long wonem emi nap bringim bikpla heve tru long ol pipal blong despla tupla provins.

Despla grup, Solwara warriors alliance i laikim gavman long givim ol documents em gavman na kampani igat long environment  na ol wonem samting oli nap mekim long stretim heve emi nap kamap long solwara blong larim ol pipal i lukim.

Peter Bosip Executive direkta blong centre for environmental law and community rights long Port Moresby itokim Radio Australia olsem, ol pipal blong PNG imas save gut long wonem ol kaen heve em despla mine bai kamapim na tu wonem kaen ol gutpla samting em despla mine inap bringim long PNG.

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Large-scale Mines and Local Politics: Between New Caledonia and Papua New Guinea

Download the chapters in PDF format

  1. Large-Scale Mines and Local‑Level Politics (PDF, 0.2MB) – Colin Filer and Pierre-Yves Le Meur 
  2. From Anticipation to Practice: Social and Economic Management of a Nickel Plant’s Establishment in New Caledonia’s North Province (PDF, 0.8MB) – Jean-Michel Sourisseau, Sonia Grochain and David Poithily 
  3. Social and Environmental Transformations in the Neighbourhood of a Nickel Mining Project: A Case Study from Northern New Caledonia (PDF, 1.7MB) – Matthias Kowasch 
  4. The Boakaine Mine in New Caledonia: A Local Development Issue? (PDF, 0.1MB) – Christine Demmer 
  5. Conflict and Agreement: The Politics of Nickel in Thio, New Caledonia (PDF, 0.1MB) – Pierre-Yves Le Meur 
  6. Contesting the Goro Nickel Mining Project, New Caledonia: Indigenous Rights, Sustainable Development and the Land Issue (PDF, 0.2MB) – Claire Levacher 
  7. Dissecting Corporate Community Development in the Large-Scale Melanesian Mining Sector (PDF, 0.4MB) – Glenn Banks, Dora Kuir-Ayius, David Kombako and Bill F. Sagir 
  8. Negotiating Community Support for Closure or Continuation of the Ok Tedi Mine in Papua New Guinea (PDF, 0.3MB) – Colin Filer and Phillipa Jenkins 
  9. Disconnected Development Worlds: Responsibility towards Local Communities in Papua New Guinea (PDF, 0.3MB) – John Burton and Joyce Onguglo 
  10. Gender Mainstreaming and Local Politics: Women, Women’s Associations and Mining in Lihir (PDF, 0.1MB) – Susan R. Hemer 
  11. Migrants, Labourers and Landowners at the Lihir Gold Mine, Papua New Guinea (PDF, 1.4MB) – Nicholas A. Bainton 
  12. Bougainville: Origins of the Conflict, and Debating the Future of Large-Scale Mining (PDF, 0.2MB) – Anthony J. Regan 
  13. Between New Caledonia and Papua New Guinea (PDF, 0.1MB) – Colin Filer and Pierre-Yves Le Meur 

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Filed under Environmental impact, Financial returns, Human rights, New Caledonia, Papua New Guinea

Harmony is over its near-death experience

Harmony Gold CEO Peter Steenkamp. Picture: FREDDY MAVUNDA

Allan Seccombe | Business Day | 20 October 2017

Harmony Gold’s recovery from a “near-death experience” a few years ago was further evidenced by its bold R4.1bn purchase of a suite of gold and uranium assets from AngloGold Ashanti and positioning the company to make a decision on what to do with the Golpu copper and gold project in Papua New Guinea.

Harmony CEO Peter Steenkamp hailed the purchase of the profitable Moab Khotsong mine and its sister Great Noligwa mine, which was mothballed, along with 70-million tonnes of gold-carrying tailings and the entire Nufcor — SA’s only uranium calcining operation, which treats material from Moab and third parties.

Nufcor is SA’s only uranium calcining operation, which treats material from Moab and third parties.

“When I got the job two years ago, Harmony was in very big trouble. It had very high levels of debt of R5bn, half its market capitalisation.

“It had a near-death experience, but since then we’ve stabilised our production at 1-million ounces a year, a sustainable level, we’ve done good acquisitions at Hidden Valley in Papua New Guinea and now these assets from AngloGold,” Steenkamp said.

Analysts said Harmony was paying a full price for the AngloGold assets, including Nufcor, which Steenkamp said he doubted Harmony would keep considering the prevailing low uranium price of about $20 per pound.

“There is lots of value that can be unlocked, but this will require capital and a bit more risk in terms of mining, as a lot of this upside will come from mining pillars not in the AngloGold plan,” said Nedbank mining analyst Arnold van Graan.

“Pillar mining obviously carries a higher safety risk, but Harmony is expert in pillar mining. From the market’s perspective though, there is probably a perception that the risk increases,” Van Graan said.

While the purchase of the cash-generative Moab puts Harmony in a better position when it comes to deciding on Golpu, Steenkamp sounded an unusually noncommittal note when referring to a great asset and one for which a final feasibility study is under way and due for completion in 2018.

“If we have to put 50% of the capital in we will never have that kind of money.

“If the Papua New Guinea government takes their 30% of Golpu, then we can have a look at what we have.

“Everyone sees Golpu as a threat for Harmony, but it’s not. It’s an opportunity. We could sell right out of Golpu, or we could remain partially in the project or keep our full stake,” Steenkamp said.

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Signs of lasting trauma in people evicted to make way for giant mine in Ecuador

Shuar women have been the sole residents of Tsuntsuim since most of the men have gone into hiding following warrants for their arrest after they fought against eviction from the village. Photograph: Kimberley Brown

Battles with the government and army over land and mining rights has caused indigenous Shuar people long-term psychological damage, report says

Kimberley Brown | The Guardian | 17 October 2017

Months after they were evicted from their homes to make way for a mine, almost half the population of an Ecuadorian village is suffering from psychological damage, experts have said.

Psychiatrists found 42% of the indigenous Shuar people of Tsuntsuim village suffering from mental health problems and trauma. Many of the villagers had been involved in violent confrontations with Ecuador’s military as they were removed from their homes.

The mental ordeal has manifested itself in depression, severe headaches, insomnia, tremors and tachycardia (a racing heart rate). Trauma caused by the displacement and anxiety about what would happen to them next were the main triggers for these symptoms, said the authors of the report, which was released by a group of doctors, psychiatrists and indigenous rights activists.

Children were particularly traumatised by the noise of the helicopters and drones that had circled overhead during the eviction, according to medical researchers.

Residents said the soldiers destroyed crops and set animals loose. “They were left without any kind of economic or food options and were pushed into forced migration,” said Fernanda Solíz, one of the report’s authors and a doctor with the Movement for the Health of the Peoples of Latin America. “This is a process of impoverishment and a loss of subsistence and sovereignty.”

People began returning to their homes in Tsuntsuim in May, five months after they were forcibly removed, when military and police abandoned their posts there. Photograph: Kimberley Brown

Tsuntsuim is one of the latest communities affected by Ecuador’s mining industry, which is being promoted as necessary for growth in the developing nation. According to Ecuadorian law, everything in the ground belongs to the state. The money earned from extracting its bounty – be it minerals or petroleum – funds public services.

But researchers say the opposite is true. “This development model impacts communities,” said Erika Arteaga, a doctor with the Latin American Association of Social Medicine (Alames), a co-author of the report. “The mine displaces people, and the impact is direct. It’s this industry that makes children lack nutrition.”

The territorial conflict around Tsuntsuim peaked in August 2016 when those living in the Shuar village of Nankints were forcibly evicted from their homes by the army because they were living on the site for the planned San Carlos Panantza copper mine.

Ecuadorian government officials claim the Shuar had no land rights and were living there illegally, while the Shuar community claim the region as part of their ancestral land.

After the eviction, residents made several attempts to re-enter Nankints leading to an aggressive standoff with the authorities in December 2016. The then president, Rafael Correa, called a state of emergency in the province of Morona Santiago and sent in extra forces, who raided homes and made several arrests in Tsuntsuim, where most of the people from Nankints had fled. Nankints is now a military protected mining camp, surrounded by barbed-wire fencing.

“We suffered a lot,” said Maria Natalia Nankamai, who was chased out of both Nankints and Tsuntsuim. “The kids were screaming when the helicopters flew overhead, but we couldn’t do anything.” She stayed with relatives for months before moving back to Tsuntsuim in May.

Shuar children who returned with their families play in Tsuntsuim. Photograph: Kimberley Brown

The Shuar have been resisting major development projects in the area for more than 10 years – not only to save their homes but also because they have begun to benefit from mining for gold on a small scale.

Guillermo Nayash, a local resident, said artisanal mining allows him to work independently and under better conditions than working in a large mining company, or doing manual labour in the cities.

But small-scale mining continues to be controversial among community members – many believe the rights of nature and sustainability should come first.

Tensions in the region have recently subsided as the Panantza copper mine project has stalled. The Shuar hope they can reach a deal with the new government of Lenín Moreno – who became president in May – to stop its development.

The Ecuadorian government did not respond to a request by the Guardian to comment.

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