Firm hopes to keep HudBay lawsuits alive despite sale

Firm hopes to keep HudBay lawsuits alive despite sale
Angelica Choc stands next to a sign that says “Adolfo Ich murdered by CGN. Mining is responsible.” Photo: Daniel Sosa
A Toronto law firm is pushing for lawsuits against Canadian mining company HudBay Minerals Inc. regarding alleged human rights abuses to continue despite the fact the company no longer owns the project where the alleged killing of one man and gang rape of 11 women occurred.
The claims stem from the death of Adolfo Ich in September 2009 and the alleged rapes of 11 women in January 2007 by mine security workers.

Ich, an indigenous community leader and an outspoken critic of Canadian mining activities in his community, was allegedly hacked and shot to death by security personnel employed at HudBay Minerals’ Fenix mining project near the town of El Estor, Guatemala.

Ich’s family brought a lawsuit in Canadian courts against HudBay Minerals Inc. and HMI Nickel Inc., as well as their Guatemalan subsidiary, Compañia Guatemalteca de Niquel. It claimed that on Jan. 17, 2007, Rosa Elbria Ich Choc, Margarita Caal, and nine other women from the community of Lote Ocho were raped by mining company security personnel, police, and military during the forced removal of families from the community. The forced eviction was sought by Canadian mining company HMI Nickel Inc. (previously known as Skye Resources) in relation to the Fenix mining project. The 11 women have also brought a lawsuit against HMI and HudBay.

However, on Aug. 5, HudBay announced it had sold the Fenix ferro-nickel mining project in Guatemala to the Solway Group, a private Russian company incorporated in Cyprus. The sale of the Fenix project for $170 million is considerably less than the $460 million that HudBay paid for the project three years ago.

Despite the sale, the lawsuits against HudBay and HMI will continue, say lawyers working on behalf of the claimants. “HudBay and HMI Nickel cannot avoid liability for their past actions by selling the project,” said Murray Klippenstein in a statement.

“We believe this sale was prompted in part by the severe human rights issues at HudBay’s Fenix project that dogged the company at every turn. The killing of Adolfo Ich and the gang rapes of Rosa Elbira and 10 others at Lote Ocho are albatrosses that weigh heavily on the neck of HudBay,” said Klippenstein, who is acting for the widow of Adolfo Ich and the 11 rape victims in Lote Ocho.

HudBay denies it sold the Fenix project because of the human rights issues, insisting instead that it was no longer a fit for the company.

“We sold Fenix because it did not fit our strategy of focusing on VMS and porphyry,” says John Vincic, vice president, investor relations and corporate communications with HudBay Minerals Inc.

Cory Wanless, a lawyer with Klippensteins in Toronto, told InHouse that despite HudBay’s sale of the project, the firm is pushing forward with the lawsuits saying HudBay was ultimately responsible for the decisions made on the site. “The allegations are that they directly participated in decisions about security at the mine. Our position is the lawsuits will continue on; this is based on past actions,” he said.

There is also a dispute with HudBay about where the case should be heard — here in Canada or in Guatemala.

“We’re headed to a jurisdiction motion as HudBay says it should be heard in Guatemala, not Canada,” said Wanless. “We say because the decisions were made in Canada it firmly belongs in Canadian courts. And because of the severe and continuing problems with Guatemala’s justice system there is no hope of a fair and impartial hearing there.

HudBay says it intends to “vigorously defend the lawsuits until they are disposed of by a court of law,” Vincic told InHouse, adding the next step is for the Ontario Superior court to hear motions that have been brought by HudBay seeking:

a) To strike out the two statements of claim on the grounds they do not disclose a reasonable cause of action; and
b) In the alternative, to permanently stay the two actions on the grounds that Ontario is not a legally convenient forum for the case to be heard.

Wanless says the claim is based in common law principles of negligence, “Obviously, there are related issues of human rights. HudBay has publicly stated they adhere to the voluntary principles on security and human rights, which are a set of standards they say they applied to their projects. They may have said they subscribe to these standards, but we say they didn’t insist upon their application.”

“The question of what happened on the ground isn’t the difficult part of this case,” says Wanless. “The difficult part is showing that HudBay is responsible for it.”

All of the security employed for the project was locally based, says Wanless. “Much of the security was directly employed by CGN, which was the Guatemalan subsidiary.”

The allegations are that it was the head of security who shot Adolfo Ich and a criminal investigation is continuing, but there has been no progress.

“There has been a warrant out for his arrest for almost two years now and despite that no real action has been taken by Guatemalan authorities. That is not surprising,” says Wanless. “Guatemala’s justice system is greatly troubled.”

Wanless says at least three eyewitnesses have gone to police to say they saw the head of security shoot Adolfo Ich at close range in an unprovoked attack. “The entire community was there and all the 11 women have given statements about what happened to them.”

The case came to Klippensteins via a non-governmental organization called Rights Action. “We have been doing on-the-ground grassroots work with this group for years,” says Wanless.

The statement of claim indicates that Adolfo Ich’s family is seeking $11 million in damages while the families of the women who were allegedly assaulted are claiming $5 million each.

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