Front Burner - Protests grip Panama over Canadian mining deal

Episode Date: November 15, 2023

Protests that began over a mining contract with a Canadian company have seized Panama for weeks, with key highways blocked, schools shut down, and a port choked with boats. Why has the situation reignited a century of anger over North American interests?  Freelance journalist Michael Fox has been covering the protests from Panama. The first season of his upcoming podcast, Under the Shadow, looks at the lingering impact of U.S. intervention in Central America. For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts Transcripts of each episode will be made available by the next workday.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Damon Fairless. This is the sound of the rage that's gripped Panama for weeks over a deal with a Canadian mining company. In October, BC-based First Quantum Minerals signed a 20-year contract to work Cobre, Panama, the largest open-pit copper mine in Central America. Since then, protests have escalated to an anti-government movement. Schools have shut down, unions have

gone on strike, boats have choked a port, and key highways have been blocked with little reprieve. On one highway last week, a driver held up by a protest blocking traffic shot and killed two demonstrators. First Quantum's stock has lost over 45% of its value since the protests began. The company says there's huge economic benefits here, that the mine is about 5% of Panama's economy, second only to the Panama Canal, and that tens of thousands of jobs rely on it. But protesters point to a long history of North American businesses taking their land and resources for profit, not to mention what it does to the environment. So for more on how this Canadian contract has rocked Panama, I'm speaking today with Michael Fox. He's a freelance journalist

who's been covering the protests. He's also behind the upcoming first season of Under the Shadow. It's a podcast about the impacts of U.S. interventions in Central America. Hey, Mike, thanks so much for coming on FrontBurner. My pleasure. Okay, so can you give me a sense of the sheer scale of these protests? Over the last month, things have really been impacted, but can you give me a good sense of what that impact's been on day-to-day life in Panama? Yeah, I mean, first off, the protests have been massive.

Some of the largest protests the country has seen in a long time. And we saw three weeks of protests last year. Those were against rising inflation and gas prices. Protesters now want more than the government's plan to reduce the price of fuel, medicine and food. Unions and indigenous groups are now demanding a national negotiation to address political corruption and discuss larger political reforms. These have been, at this point, even longer, longer than three weeks. The impact has been profound because it hasn't just been protests, right?

There have been massive roadblocks that have literally shut down the main east-west corridor for Panama. That's the Pan-American Highway. And it's been blocked up and down the country through the length. And Panama is this really kind of long, snaky-looking country. And it's just been shut down from one end to the other and up and down. And what that means is that many places have been out of gas. Where I am, we just got a shipment of gas at some gas stations yesterday. It was the first one we had seen in weeks. And it's going to be cut off again for the next week and a half. The same thing, stores have been running out of product.

You know, schools have been out. Unions, many unions on strike. So it's really just shut down the country. I saw one figure from a businessman that it may be hitting the business sector in Panama at roughly $80 million per day might be the cost of what we're seeing. So it's just been massive and it's been kind of the issue that Panama has been dealing with now for the last month. And it's not just this interruption of economy and transit and stuff too, but you know, there've been some serious

violence too in the last little bit, right? So two people were killed last week. Can you tell me about the violence? Yes, absolutely. So there has been violence. At least four people have been killed. The two people who were killed last week were actually protesters at a roadblock. A man came up who was trying, he wanted to drive through, he had a gun and he shot them. And if you look at the images, it's just shocking because he just walks up. It looks like he's kind of discussing with them. And then he just pulls out the gun and shoots them. Now, he was detained by police, but this is the level of intensity things are getting to at this point, because actually in the beginning, it was a very broad social protest. But now that it's dragged on for another month, it's obviously hitting workers, businessmen, restaurants, hotels, everything really, really hard. Intentions are high. I'll just note here that First Quantum says the shooting wasn't near or connected to the Cobra Panama mine and that the highway was in a different part of the country.

More generally, how have the police been responding to the protests? So it depends on the locations. Obviously, the most intense protests in Panama have been, obviously, in Panama City. There has been quite a lot of repression. Some videos that you see of just massive amounts of rounds, rubber bullets and tear gas being shot, right? And so it has been intense. We know that at least one photographer lost an eye when he was shot with a rubber bullet. That was something we saw a lot in the Chile protests back in 2019. So obviously that's been at a level that a lot of people have been upset about. I want to get into some of the reasons why people in Panama are so frustrated.

But before we do that, I want to get into the mine at the center of this. So can you just help me understand what is the Cobra Panama mine? How big is it? Give me a lay of the land. So it's a massive open pit copper mine. It's the largest open pit mine in Central America. They're pulling out, extracting roughly 300,000 tons of copper a year. It's been under operation since 2019. Obviously, it's on the coast. It has its own port there.

It's a little over two times the size of the island of Manhattan, New York City, right? So, it's a very big area. Like I said, the largest in Central America. So, this was operated by a BC-based company called First Quantum Minerals. They started working the mine back in 2019 on an original contract. So not the contract we're talking about now, but can you tell me what happened to that first contract with the mine there? Yeah. So it was a contract that actually dates back like 20 years that had been signed actually dates back like 20 years that had been signed with another mining company when they first started to look into the possibility of exploiting copper in the region. And then it was handed over or purchased by First Quantum. That mining contract, the Panama Supreme Court, even before

First Quantum started to operate the mine, had already declared it unconstitutional for not providing enough sufficient public good for pandemonians there was a lot of appeals that went on at the time and then finally back in 2021 the supreme court said yes this cannot happen any longer we need a new contract and that's what the government's been doing just over the last two years has been renegotiating this new contract the new one is 10 times more year in royalties we're looking at 375 million dollars a year so that's been a large portion of what's been going on now the mine has continued to be extracting its copper and other minerals and this kind of brings us up to

date right now where the government renegotiated the contract, took a very long time. It was then fast-tracked through Congress over three days. The president signed it, and that's essentially when protests started. It was signed into law back on October 20th, and then the protests really kicked off on October 23rd. So the government right now is pitching this as being very good for public good, right? Oh, very much so. And in fact, the president, Laurentino Cortizo, they did several kind of promo videos about it. They've been talking about how important this is for Panama, and particularly because of the funding they will receive or could potentially receive per year. Just a couple of days after the protest started, he came out saying, well, look, we're

going to increase pensioner benefits for 120,000 Panamanians to $350 a month, which is in some cases almost double from what they're receiving now. He's been talking about a substantial portion of these funds from the mine would be going to kind of shore up the social security system, which is not doing well in Panama. So he's really seen this and the government has really seen this as a possibility to create kind of windfall profits for the country. And of course, the people on the streets have been saying, we don't care at all about your windfall profits. We don't want the mine. But that's been the major shift that we've seen in the new contract and why the government believed that this new contract would

be approved as constitutional. I'm going to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo. 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Couples. Okay, so Mike, let's start unpacking the reasons why protesters are so upset over the contract. And let's start with the environmental concerns.

So First Quantum says it has over a 14,000-page environmental and social impact assessment, which has been approved by the government of Panama, and it's regularly audited. And then they also say that the copper that is being mined from there helps with a green transition. So last year's production, for instance, they argue, can make over 6 million electric cars. So the question I have is why are protesters still concerned about the environmental impact of the mine? So if you look at it, it's the image that you have in your mind of an open pit mine, right? Where it's just this massive area of dirt and its entire region has been just gutted. And it's that image that's really impacting Panamanians. That's what really

weighs heavy, right? It's an area that that corridor along the Caribbean is rich, one of the most richest of biodiversity in the world. As far as we understand, it's been authorized to use as much as 1 billion cubic meters of water per year. And this comes at a time, remember that one quarter of Panamanians don't have potable running water 24 hours a day. And at a time of drought, where if you remember just a couple months ago, the Panama Canal was hitting the lowest levels. And in fact, there was a massive ship that was stuck there for a period of time. And it was because of the low levels of the Panama Canal. And so this is really happening, you know, with climate change, the times of drought, so major concerns for the impact on

hydroelectric dams, Panama Canal. So they're saying, are we really trading off our future, our environment for this? They've also seen these images of tapirs and animals kind of lost in this dystopian desert of the mine. And of course, it's the images that really stick in people's heads. So all of this is really weighing heavy on Panamanians. Beyond just the environmental concerns, people in Panama have brought up an important part of Panama's history, the Panama Canal, which has obviously been really important to trade for the last century because it allows ships to go from the Atlantic to the Pacific and back. I'm curious how the protesters are

thinking about the history of the canal as it relates to this current situation with the mine. So this is a great question. And in fact, I would say that this question about the Panama Canal is the most important thing why people are in the streets. And it's fascinating because it's really all about Panamanian sovereignty, right? If you remember, the Panama Canal was built by the United States. I mean, began by France, but finished by the United States. And the U.S. had control over the Panama Canal throughout the 20th century. So from 1903 until finally they handed that land back in 1999.

Outside, protesters rung in the event their own way. These demonstrators were angry about America's 75-year control over the canal. Jimmy Carter acknowledged that the original canal treaties were unfair, and he told the crowd that handing the waterway back to Panama was the right thing to do. But there was an entire region called the Canal Zone, which the United States-controlled Panamanians could not come in. It was this little enclave, U.S. enclave inside of Panama, and people rejected it. Panamanians fought against it for decades. They finally received that back, but they see this new contract handing this property,

this land over this foreign company as essentially doing the exact same thing what they had just fought against for 100 years, right? So that is more so than any place in Latin America. And I've worked and I've covered, I've been in almost every country in Latin America and I've worked in at least half of them. And I can tell you that more than any other place I've ever been into, this question of sovereignty runs extremely profound and it's deep.

And really that is at the heart of what we're talking about and why the people are protesting against this Canadian mind. Okay, so there have been other recent protests in Panama where folks have shown their frustrations about their economic situation. And you alluded to the ones that shut down Panama last year. The current protests obviously have some different factors, but can you tell me a bit about the economic situation that's been simmering in the background of all these protests? So it's interesting. The one last year, like I said, was against inflation, rising inflation, gas prices. You know, obviously, we're looking at a situation where Panama is not a country that's been

doing well economically. Coronavirus and the pandemic was hard and hit local business people hard. And that's one of the things that everyone's been talking about. When finally they started to come out of that and look like there was going to be this return to normalcy, then you had the massive protests last year that hit the country hard again. And now you have these protests. And here's something that's extremely important. We're right now in the middle of Panama's Independence Day month. This is supposed to be the beginning of the high season. And where we are right now in the Western part of the country is kind of one of the major tourist hubs.

They depend on these weeks for the economy that can last throughout the entire year. All of their losses, they make it a positive now. And everything has been shut down. The hotels have been shut down. Restaurants have been closed. I mean, you've had some places that'll open up for a couple of days, but many places haven't been able to get propane. So they can't even cook, even if they could keep themselves open. And so this is something that a lot of business owners have been talking about. This is really, really hard economically and financially. And then in another five months from now, we're going to see a new election. And so leading up into electoral season also finances are tight. And so this is just an ongoing economic financial

crisis for many people in Panama. And that is, I would say, the underlining way in which kind of last year's protests lead into this year's protests, which lead into the reality for Panamanians right now. Okay. So then there's the impact of these protests on the mining. On Monday, First Quantum put out a statement saying it reduced the amount of ore it was processing at the mine because of a quote, illegal blockade of small boats at the port. It said it respects the right to safe and lawful protests, but it highlighted the cost of these protests to the country. First Quantum says it's open to constructive dialogue, but I'm curious, do you think it's possible this new contract could be revoked by the courts?

That is the big question. And that's what we're all waiting for right now. So November 23rd is the day that Supreme Court is supposed to rule on this. They could rule that it is still not enough in Panama's favor. There have been eight different lawsuits about unconstitutionality that have been handed to the courts at this point. Understanding the situation in the country, they absolutely could rule it unconstitutional. I think that's what most people in the country are waiting for, because in a lot of ways, and this is important to look back what happened, roughly a week after the protest started, the president came out and said, look, I'm going to call for a referendum and we'll just do a referendum on the contract. We'll do that in

December. And if you want the contract, great, then we approve it. And if not, well, immediately after that, the electoral court said, well, we can't, we don't have no authorization to do that. So then Congress authorized the electoral court to do it, but still there's been no movement. It looked like Congress was going to try and roll back the law that approved the contract. So it looked like Congress was going to try and rescind the contract for a second. And then they stopped, this was a couple of weeks ago, and they said, you know what, we're just going to leave it upind the contract for a second. And then they stopped. This was a couple of weeks ago. And they said, you know what? We're just going to leave it up to the courts. So it's absolutely possible that the Supreme Court come back and say, you know what?

This contract is still unconstitutional. And you have to understand that this is a Supreme Court in a country where via the Constitution, a contract like this with a mining company has to actually be in the good of the population. So that kind of leaves it up to discussion, debate amongst the Supreme Court itself. So it's extremely possible also that they might say, listen, this is still unconstitutional. And we also, we can't have these protests going on for any longer.

And we need to stop this now. So we've got a Canadian mining company operating in Panama. Panama's really quite affected by this, and yet here in Canada, we're not really hearing much about this in the media. So why do you think that is? It's a great question, and this is what I've been asking myself for weeks. I mean, obviously, the most important thing is the issue that is the most important issue in the world right now, which is Israel and Gaza, right? I know, trying to pitch this story to many outlets, that many just haven't had the bandwidth for it because everything is the Middle East right now. But I think that there's another question here. If Panama was Venezuela, Nicaragua, Cuba, or any of the so-called bad socialist countries in Latin America, this would have been a front page story regardless, even with the things

happening in Gaza because of the ongoing protests. If this were not an issue that was impacting a Canadian mining company with financing from the United States. It's important to remember that it's Canada, but there's also has Chinese investors, Korean investors, major US investors, including the US Capital Group, Fidelity, Vanguard, BlackRock. So it has major investment. So it's an interesting moment right now because this is powerful interest, both in the United States and Canada. If this were a different situation, if this were maybe from a different country, a Chinese

mind, I think we might be hearing more about it right now, but there isn't really interest at least from the Canadian government, nor from the U S government to try and lift up what's happening here right now. But it is, it's, it's a major issue and it's, it's, I mean, it's been shutting down the country for weeks. It's a major issue. And it's been shutting down the country for weeks. Mike, before I let you go, I know that you've been in Central America working on your new podcast.

I guess what I'm interested in is beyond the Cobra mine. You've been talking to people who are impacted by foreign companies extracting resources in the region. What have they been feeling about this? You know, this goes back a long way and it's not just right now, but what we see time and time and time and time again is a foreign company, be it Canadian, US or European, who abides by the laws in their own countries. But the minute they come to Latin America, they feel like it's the wild west and they can do whatever they want.

And this is people across Latin America. I mean, we're talking about indigenous communities in the Amazon. We're talking about indigenous communities in Oaxaca that have been fighting wind farms there from European wind farms, which you would think green energy, it's great. But people have to fight for the minimum for those companies to respect the laws in that country. We're not even talking about the companies respecting the laws in their own countries. We're talking about them respecting the local laws. And for some reason,

this continues to happen. And it's almost like this extension of foreign imperialism from Europe and the United States and North America that continues to happen. And yet we don't talk about it enough, but it is absolutely something that people feel disrespected across the region. And it happens time and time again. And obviously it's playing into what's happening right now in Panama. All right, Mike, thanks so much. It's great talking to you. It's been a pleasure. Thanks so much. That's it for today. I'm Damon Fairless. Thanks for listening to FrontBurner, and I'll talk to you tomorrow. For more CBC Podcasts, go to cbc.ca slash podcasts.